Euro Weakness continues as possibility of non standard policy measures in May increase

[RTFX-Trading]

What's new:
US: March CPI -0.1%, exp 0.1%
US: March Core CPI 0.2%, exp 0.2%
US: April New York Fed Manufacturing Survey -14.65, exp -35.0
US: March Real Earnings 0.0%, previous -0.3%
US: Net capital flows (ICT) in February fell $22B, previous -$43B

Today:
15.15 United States: Industrial production in March, due -1.00%, previous -1.50%.
15.15 United States: March capacity utilization, expected 69.6%, previous 70.2%.
19.00 United States: index of home prices in April NAHB, expected 10, previous 9.
20:00 United States: publication of the Beige Book.


European Session Rates:

EURUSD: 1.3298 - 1.3149
USDCHF: 1.1488 - 1.1390
GBPUSD: 1.5036 - 1.4821
EURCHF: 1.5155 - 1.5095.
USDJPY: 99.66 - 98.25
Gold: $ 890.35

Comments:

Figures published at 14:30 CET in the United States contrasted: The "Empire State" index, which measures the evolution of manufacturing in New York improved in April, from -38.23 in March to -14.65 in April. Retail prices have fallen against all odds in March, they recorded their lowest annual contraction since 1955. The drop in demand affects in particular the price of energy and food products. The CPI index was down 0.10% in March, after rising 0.10% in February. Excluding food and energy, the index is up 0.20% in March as in February.

The greenback gained ground versus the Euro, as the CPI numbers were not a big surprise. The Euro’s decline is being credited to comments made from ECB Weber regarding the possibility of non standard policy measures come May.

Looks like EURUSD should be testing the 2nd daily support at 1.3134, breach of this support could signal a break towards 1.3000 levels. On the upside Euro bulls could find resistance at 1.3196.  
 
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Nicolas Longchamp

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