Today’s focus turns to AUD, GBP & US data

Weaker-than-expected German data hurt EURUSD yesterday highlighted the European Central Bank was no nearer to unwinding its stimulus program.

German monthly retail sales unexpectedly dropped in March, whilst Regional data showed annual inflation in four German states was steady in April.

So the EURUSD dribbled down from 1.2125 down towards 1.2060 on the day but still lies within recent ranges. If anything it sets it up for another solid tumble below 1.2000 if we can get a strong result out of today’s US Manufacturing data.

On the USD side of the equation, U.S. data on Monday showed that U.S. consumer prices accelerated in the year to March, with a measure of underlying inflation surging to near the Federal Reserve’s 2% target as weak readings from last year dropped out of the calculation.

The USD index rose 0.25% to 91.76 but held below Friday’s high of 91.98, its strongest level since Jan. 11.

Economists and Fed officials had anticipated the rise in the annual inflation measures reported by the Commerce Department on Monday, so it was not expected to alter the U.S. central bank’s gradual pace of interest rate increases.

The Fed is not expected to raise interest rates when it concludes its two-day meeting this Wednesday though traders will be watching for indications that a rate hike is likely in June.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

The RBA rate decision & Statement is the major focus for traders today. The RBA has head their head in the sand for the past year so these events have been DEAD.

But the numbers are starting to consistently come in weak, so maybe we get some hint of ‘Dovishness’ from the RBA in the Statement.

If we do, it’ll be on for young and old as the trend is down and that will signal a change in sentiment from the central bank.

Keep an eye on it, but I’m not expecting them to hit my wish list.

European Session

It’s May Day in Europe so direction for EURUSD will come solely from the USD.

We do have some key UK Manufacturing data due so that will be the major focus for traders.

Sterling has been belted on a major turn around in economic data…….BOE Gov Carney was right after all.

The trend is down for Sterling, so weak UK data means further losses on the downside. That’s the easiest trade![/vc_column_text]

North American Session

We have a solid session today with solid releases out of Canada and the US.

Canadian GDP will be the major focus for the CAD although the Marketing data due out an hour later will be of significance if it’s variant.

On the US side of things, we have the ISM Manufacturing & Prices Paid PMI data. Both a highly respected numbers.

We’re looking for more of the same and that’s strong US numbers. The trend for the USD is up so strong numbers make the move that much easier.

Technical Set Up – What’s Happening with the Majors

The USD continues to make gains against the AUD, NZD, EUR & GBP whilst it’s starting to trade sideways against the JPY, CHF & CAD.

Today’s Fundamental Drivers

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!

Brad