Data released:
06:00 GMT Germany Factory Orders n.s.a. (Mar) y/y 1.5% _ 6.5%
06:00 GMT Germany Factory Orders s.a. (Mar) m/m -2.8% 0.3% 0.9%
The main currencies trade in ranges. The combination of low inflation and rallying EUR is certainly enough to introduce policy action and raises the risk but instead we expect the introduction of a more dovish tone, opening the door fully to action at the June meeting.
EURO
The euro was near almost eight-week high versus the greenback before European Central Bank policy makers meet tomorrow.
The ECB Governing Council will keep the benchmark interest rate at a record low of 0.25%, according to the median estimate of economists.
EUR/USD trades near $1.3920. Above the initial resistance remains near 2014 highs on $1.3967, extending to $1.4000. The closest support comes at $1.3880/90 and around $1.3810 (Friday’s lows), extending to $1.3790/85. Below losses may widen to $1.3760 (61.8% of the $1.3670 - $1.3900 rally).
POUND
The pound remains very well bid as economic data surprise in the upside and concern about an over-heating housing market continues. GBP/USD ‘baby models' suggest that the pound can spike further, up to 1.72 or so this week
GBP/USD holds a bit below $1.7000. Further resistance comes at $1.7040 (Aug 2’2009 high). Below $1.6820 support comes at $1.6780 with a break under widens losses to $1.6700 and around Apr 15 lows on $1.6660.
YEN
Most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2%, according to minutes of central bank’s April policy meeting released today.
Former BOJ’s Hayakawa says he sees Japan inflation reaching 2% around end-2015.
USD/JPY currently at Y101.60. Initial resisatance is around Y102.75. Further resistance comes at Y103.40 and around Y104.00. Stronger one remains at Y104.30/80. Below support comes at Y101.30 (Apr 10 lows) and Y100.70 (Feb 7 lows).
DATA AHEAD
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