FOREX Updates:
The dollar traded unchanged or lower against the other G10 currencies during the European morning Thursday. It depreciated against NZD, SEK, CHF, GBP, JPY and EUR, while it remained near its early morning levels vs AUD, CAD and NOK.
This morning the only economic releases were from the UK. The day started with the Nationwide house price index which accelerated to +1.2% mom in April, beating market estimates of +0.6% mom. A few hours later, the BoE mortgage approvals for March missed estimates but at the same time the UK manufacturing PMI for April exceeded expectations. The index rose to 57.3, beating market expectations of 55.4, while the March number was revised up to 55.8 from 55.3. GBP/USD moved higher on the better-than-expected manufacturing report, breaking above yesterday’s highs of 1.6900. Under normal circumstances such a break could have larger bullish implications targeting the key barrier of 1.7000, but considering the positive expectations for Friday’s NFP number, we may experience a corrective wave before the close of the week.
WTI continued its decline after a report yesterday showed that crude stockpiles increased by 1.7mn barrels to 399.4mn the week ended April 25, the highest level of stockpiles since the EIA (Energy Information Administration) started reporting weekly data in 1982. After pausing near the 99.35 support barrier, WTI fell below it, thus I would expect the price to meet support at 98.85.
USD/SEK Trend:
USD/SEK moved lower this morning to meet the support at the purple return line and the 6.4765 (S1) barrier. The overall short-term path of the rate remains to the downside, since the pair is trading below the blue downtrend line and below both the moving averages. However, considering positive divergence between both our momentum studies and the price action, and the fact that the RSI exited its oversold zone, I would expect the forthcoming leg to be to the upside. A clear move above the 6.5025 (R1) support could confirm the rebound and may target the next hurdle at 6.5195 (R2). In the larger picture, the 6.4765 (S1) support coincides with the 50% retracement of the 19th March - 21st April uptrend, which makes the aforementioned support even stronger.
• Support: 6.4765 - 6.4385 - 6.3965
• Resistance: 6.5025 - 6.5195 - 6.5530
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