The Dollar continues to push lower in the European session as the risk-on mood holds firmer. Commodity currencies rally as China hopes to ease lockdown restrictions. European stocks come in mixed and US stocks surge higher.
USDCAD shaded off Friday`s gains by losing -0.70% despite CAD`s Victoria Day holiday. The pair is currently trading below the 1.2800mark after sweeping above a 17-month high at 1.30200 this month. China`s hopes for lockdown relief have given the commodity currency`s bulls an upper hand. Bears power is faced with a test at 1.27196 support a break below that gives room to 1.26800 mark. Traders are to look out for US flash PMI data and FOMC meeting minutes on Tuesday and Wednesday respectively.
AUDUSD rallied +0.57% kickstarting the week on a positive note. The Dollar continues its selloff as risk holds firmer and US President Biden said they are considering reducing tariffs on Chinese products and a recession is nonavoidable. Aussie bulls continue up from Friday after breaching 0.7040 and have left daily support there post RBA`s Assistant Governor Kent`s speech. A break above 0.7131 resistance may take the pair to 0.7261, a 3-week resistance.
EURCHF soared by +0.21% taking a break from last week`s losses. The EUR is up following the German Ifo Business Climate Index for May at 93.00 vs 91.9 previous. This shows German`s positive business confidence despite Ukraine/Russia feud. The pair has immediate support at 1.02865 and is rallying towards 1.0335 and 1.0363 in the short term. Investors are to pay attention to tentative Eurogroup meetings today.
European stocks are sending in mixed signals during the European trading hours. FTSE index gained +0.91% a continuation of Friday’s bullish mood. The FTSE index is faced with 7475and 7547 resistances along with 7413 support. CAC40 is down -0.14% with a day`s range between 6354.3and 6257.2. To the downside, bears are limited by 6196 support and bulls by 6400 and 6461 to the upside. DAX extended its rebound by+1.73% with a low at 14023.
US stocks rose after Biden`s comment on reducing tariffs on Chinese products. Dow Jones Industrial index is up by+0.83% with support at 31338.58 and near-term resistance at 31620 and 32000. S&P 500 futures gained + 0.88% as bulls rallied towards the 4000 level and critical areas to watch out for are 3958 resistance and 3915 support. Nasdaq rallied by +0.82% although upside gains are capped by the 12200.00 support turned resistance and a break above that area may see bulls rally towards the 12600 level.
US 10-year treasury yields rallied by +1.62% early European session, although upside gains are capped by the 2.90%. A failure to challenge that area may see bears extending targets towards 2.62% in the near term.