More US data disappoints as industrial production falls -0.5%
Industrial production in the US has fallen 0.5% in April, but once again the market has ignored the data and the USD remains on the front foot. The obvious choice to sell here will be either USD/JPY and USD/CHF, as the EUR, GBP and the rest of the risk related currencies have their own issues which are deterring buyers - perhaps unwarranted in the case of the CAD.
USD/JPY is holding fast onto the low 109.00's, but if stock markets react negatively again, then we can expect a dip lower. If we take out 109.00, then 108.50 is the next level to watch. USD/CHF needs to clear 1.0050 in order to show any weakness in the USD, but this pair has tested and held this level so far today and we are going nowhere fast at present.
We can only see safe-haven demand as the key driver of trade, and the USD stands out as yields also carry favour.
Cable is making new lows on the day into 1.2840, with key support now coming up. 1.2775 is the level to watch if we do fall through the 1.2800 level. EUR/USD is holding its ground, but this is largely due to EUR/GBP buying which is now through 0.8700. 0.8725-30 is key resistance here.