Second tier US data makes little difference as the USD rules - what to watch
This afternoon's data releases out of the US are very much second tier, with housing starts rising 5.7% vs 6.2% expected - still a healthy number. Building permits also rose by 0.6% and this was a touch above forecasts.
The weekly claims data was better than expected at 212k, coming in below the 220k forecast for the week.
We also got the Philly Fed manufacturing index which came in at 16.6 vs 10.0, so this was also a beat.
However, coming off the back of soft retail sales and industrial production seen yesterday, it is clear the market has eyes for little else but the USD this week, and we continue to see buyers across the board, with the exception of the CAD which has been resilient throughout.
March Canadian manufacturing sales rose by 2.1% vs 1.5%, so this should add some relative support to the CAD vs the rest of the currency pairs, though we did see a test of 1.3400 vs the USD earlier on.
EUR/USD is trying to press lower as we continue to target the 1.1175-80 zone, and this level has held firm so far. Stops noted below 1.1165, and if this is breached, then we could see a return to test the 1.1110 lows from late April.
GBP is an easy target these days, so no surprise to see Cable testing 1.2800. We note some support below here, but the spot rate has been hurt badly by persistent buying of EUR/GBP in recent weeks. The cross rate is trying to touch 0.8750 despite overbought levels in the short term. Cable stops expected through 1.2775-70.
USD/JPY is once again moving towards the 110.00 mark, though we expect to see strong resistance at these levels. USD/CHF is back to parity also, so once again, all things USD reign supreme.