USD/CAD retreats on higher oil prices as OPEC+ signals more cuts over the weekend

USD/CAD lingers near session lows close to 1.3430

USD/CAD H1 20-05

The ping pong price action between 1.3400 and 1.3500 for USD/CAD continues as we begin the new week after price fell slightly from 1.3500 towards the end of last week before retreating further this morning. The drop mainly comes from a more buoyed loonie after OPEC+ talked up an extension to its output cut deal ahead of the final decision next month.

As such, oil is up by more than 1% on the day to $63.47 with Brent now up by 1.2% to $73.10. And that is helping to underpin the Canadian dollar as we start the session.

USD/CAD now holds close towards minor support around 1.3427 but notable near-term support is seen closer around 1.3400-07 alongside some light bids at the figure level. Over the past two weeks, it has been a case of bouncing between 1.3400 and 1.3500 for USD/CAD as traders continue to do battle around the key hourly moving averages.

For now, sellers are establishing a more near-term bias but unless price manages a meaningful break below the 1.3400 handle (firm close below the figure level), the ping pong price action is still expected to continue.

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AUD/USD near-term bias more neutral as election result give buyers some confidence

AUD/USD sits in between both key hourly moving averages currently

AUD/USD H1 20-05

The aussie opened with a gap higher today as the election result was more friendly with the incumbent government surprisingly winning out what appears to be a majority to stay in office. That is easing some political risk fears in the currency as the government looks set to follow through with their fiscal stimulus (tax cuts) to help boost the economy.

AUD/USD touched a high of 0.6938 on the move higher in the early morning before retracing back under the 100-hour MA (red line) to a low of 0.6890 but has now climbed back above the key near-term level to trade around 0.6920.

As such, the near-term bias remains more neutral now as price hovers in between both key hourly moving averages. The 200-hour MA (blue line) is seen @ 0.6949.

So, what's next for the aussie?

The election result is no doubt a short-term relief for the currency and it should be enough to prevent a significant fall at the start of the week - barring any massive collapse in risk sentiment that is.

But all eyes will be on tomorrow instead. First up, we'll have the RBA meeting minutes due before getting to the more anticipated speech by RBA governor Philip Lowe. The latter is the spot to watch because if the RBA is going to announce a rate cut on 4 June, Lowe's speech tomorrow will be the perfect platform to communicate that bias.

That will be the key risk event for the aussie in the coming sessions. Otherwise, pay attention to the near-term levels above with near-term support seen around 0.6914 and light offers between 0.6890-00 currently.

Meanwhile, topside resistance is seen around 0.6937 and then the 200-hour MA @ 0.6949.

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USDJPY makes a break toward topside targets

USDJPY breaks above its 100 hour MA and trend line

The USDJPY has made a break above its 100 hour MA at 109.559 (blue line) and a trend line on the hourly chart near the same level. That is a bullish play. Staying above the level keeps the bullls in charge (it is risk for longs as well).

USDJPY breaks above its 100 hour MA and trend line

The run higher has stalled so far in the swing area defined by the highs this week at 108.769 to 109.825.  The high today reached 109.795 so far - between that swing area.  A move above that area will have the 200 hour MA at 10988 and then the 38.2% and the swing highs from May 10 at 110.01-045 to get above. So there are some resistance land mines to get above, but breaks above would help to turn the beat around if down.  

So bulls are trying to take more charge on the breaks today, but there is work to be done.  Look for dips toward the 100 hour MA to find buyers (with stops on a break below). The hope is that the low is in and the aforementioned levels can be busted at some point....

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EURUSD falls below 100 bar MA on 4-hour chart/50% midpoint of the month's range

Test above 100 hour MA in the EURUSD at the high, failed.

The EURUSD is trading to a new sesssion low on USD buying after the better Philly Fed, and initial claims data. Building permits and housing starts were also better than expectation (last month). 

Test above 100 hour MA in the EURUSD at the high, failed.

The fall in the EURUSD has taken the price to a new session low of 1.1119. In the process, the price is below the 100 bar MA on the 4-hour chart at 1.11949.   That is also below the 50% of the May trading range at 1.11987.   Moving below those leveles helps to tilt the bias more to the downside. They are also risk levels for shorts now. 

Earlier at the highs today, the price moved above its 100 hour MA  at 1.12202 currently. That MA was tested yesterday and stalled. The failed break today, gave buyers cause for pause, and the price rotated lower.  The fall below the 200 hour MA at 1.12105, kickstarted the fall lower.

The 61.8% is being tested at 1.11835 currently and belwo that the low for the week at 1.1177, the low from last week at 1.1172 and 1.1166 will be eyed.  

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AUDUSD moves back lower on reports that RBA will cut at the next meeting

Terry McCrann of Australia's Herald Sun says the RBA will cut after weaker employment  report disappoints

The Herald Sun's Terrry McCrann came out with an article earlier saying the RBA will cut rates at the next meeting in 18 days.  The employment data that was released earlier today, was mixed, with better employment growth, but in part-time, not full-time, but that was off a huge full-time growth the previous month. Further muddying the picture was a move higher in the unemployment rate to 5.2%, with the previous month revised higher to 5.1%. McCrann cites the higher unemployment rate as the reason.

The AUDUSD is trading at the lowest level since the January 3 flash crash day. Looking at the hourly chart, the high today stalled near a topside trend line at 0.6924 currentlly. On the downside, a swing low (after the fall to the day low) is at 0.6905. The low for the dya reached 06891. In between is a lower trend line at 0.6897.  Those are the lower steps that if broken, increases the bearish momentum.  

AUSUSD traded at lowest level since January 3

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EURUSD stays toward session lows after weaker US data

Below MA lines

The EURUSD traded lower and to new lows into the retail sales data. There was a brief run higher on the weaker numbers but the highs stalled between a broken trend line and the brokne 100 bar MA on the 4-hour chart. That MA was tested in the London session on the way down, but was later broken. Staying below the trend line (at 1.1190 and the MA at 1.11958 keep the sellers in control today. Moves above, muddies the waters a bit.  

Below MA lines
Helping the bears today, was that at the highs, the pair stalled right at what is a key swing area at 1.126-184 area (see yellow area  and post from yesterday outlining the level).  Sellers leaned against that area, and the pushes below the 200 hour MA and 100 bar MA on the 4-hour helped to encourage more selling.   Knowing those key levels  (like the swing area), gives traders a low risk advantage. 

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USDJPY moves to new session lows

USDJPY looks toward the lows for the week after weaker retail sales

The USDJPY is moving to new session lows after the weaker than expected US retail sales for April. Later today, estimates for Q2 growth will be revised lower as a result. 

USDJPY looks toward the lows for the week after weaker retail sales

The pair is moving to test the lows from yesterday and Monday at 109.137 and 109.01. Breaks below are the next targets for the bears.  Earlier today, the pair tried to edge above the 100 hour MA, but could not really get too far. In the London morning session, price action started to trade below the 109.44-46 area (lows from May 9, 10 and was a swing low from yesterday).  That is a risk level for shorts now.  We currently trade at 109.19. 

On the daily chart, the 50% of the move up from the January flash crash comes in at 108.63.  THat would be a target on the break of the 109.00 level. The USDJPY has a rare gap from the weekend gap on the Pres Trump 25% tariff threat (which came to fruition)

The JPY crosses are also under more pressure with the GBPJPY trading to the lowest levels since January 17th. It moves toward the 50% retracement of the move up from the January flash crash low (from Bloomberg) which comes at 140.29. THe low just reached 140.36. See Adam's post on the farce in the UK politics again.  

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USDCAD runs into the swing area

The USDCAD retraces the employment move

On Friday (just a few days ago), Canada announced a strong rise in employment. The USDCAD tumbled lower (stronger CAD), but could not fall below the April 30/May 1 lows. In fact, buyers leaned.  The correction was on.  

The USDCAD retraces the employment move

Yesterday, that move got another boost from the flight out of risk (out of CAD too) 

Today, the pair moved lower, BUT found support buyers near the 100 and 200 hour MAs (blue and green lines). We are seeing a modest run higher.  

What next?

The big swatch of yellow in the chart above is about 18-19 pips. Going back to April 26th that area between 1.34797 and 1.34973, has been home to a number of swing highs (11 of the last 13 days has a green numbered circle).  Last week (on Thursday) there was a try above the upper extreme, but that failed miserably.   

Today the middle of the big swatch has stalled the rallies twice (green circles 13 and 14).  We are below that area now.  Has the most recent peak been made?  It is a trade thought, with limited risk (can get out if start to move back in the area). 

If so, the 100 and 200 hour MA becomes the target to get to and through at 1.3458-59 now.  

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GBPUSD makes new lows as technicals point lower

GBPUSD steps to a new session low

The GBPUSD has stepped to a new session low.  As it does the technical picture points lower.

GBPUSD steps to a new session low

Looking at the hourly chart the pair has been stepping lower.  It all started at the high yesterday which stalled at a well defined swing area (ceiling).  It continued through a floor area at the 1.29808 area, and then the lows from last week at 1.29669 area. Today the highs, took small peeks above the 1.29669 to 1.12970, but that's it.  PS. the price is also moving away from the 200 day MA at 1.29564 (although price action was above and below earlier).  The sellers remain in control.

Now there is also ups and down today, and as mentioned, traders toyed above and below the 200 day MA.  That is a problem, but can be explained away as "the market trying to decide what's next".  That "next' is to new lows and moving away.  Risk can be that 200 day MA. A closer risk might be the low from yesterday at 1.2941.  

Looking at the daily chart below, the pair is moving away from its 100 day MA (blue line) and the 200 day MA (green line). The 50% of the move up from the Jan 3 Flash Crash low, is at 1.29163 area.  On more downside, the 1.2888 and 1.28637 are downside targets (see chart below).  Move below the 1.28637 and The 1.2800-060 area becomes the next target.

GBPUSD on the daily chart is looking toward 1.2888 and 1.2863 on more weakness

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AUD/JPY falls to the lowest since the January 3 flash crash on trade war fears

AUD/JPY down more than 1%

AUD/JPY is at session lows, down 84 pips to 76.13 as trade worries fears intensify after China revealed plans to hit US goods with tariffs on June 1. This isn't entirely unexpected but it highlights the risk that the US and China will be in a protracted trade war. 

AUD/JPY down more than 1%

Technically, there isn't a lot to prevent this pair from sinking all the way back down to the January low. There is some scope for Australian firms to take Chinese market share away from the US but softer global growth will be a huge headwind if this trade battle continues.

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