News & Data:
It was a very quiet Asian session, but with the US Dollar slightly bid. USD/CAD dropped sharply in yesterday’s NY session, after Canadian GDP beat expectations, but it recovered quickly and is trading back above 1.25. Price action suggests further gains are ahead and we should see the 1.2550/60 resistance getting tested soon. AUD/USD is still above 0.78, but upside momentum failed to build after the RBA left rates unchanged. The market sees an April rate cut as very likely and hence demand for the Aussie Dollar is rather weak. It would take USD weakness across the board to trigger a larger short squeeze in AUD/USD and push it towards 0.80. Meanwhile, NZD/USD is doing a bit better after the Fonterra auction yesterday. While the NZD has been well bid for a while now, the pair faces heavy resistance in the 0.7615/20 area and it will not be an easy target for bulls.
EUR/USD traded in a 1.1165-85 session. Offers are reported at 1.1240 and in better size towards 1.1270/80, with leveraged names still having large selling interest in the pair. GBP/USD is slowly approaching the pivotal 1.5315-30 support area and clear break lower would pave the way for a move down to 1.52. USD/JPY is expected to find good support at 119.30, while intraday resistance is seen at 120.30 and then 120.50.
Looking ahead, the focus today will be on Euro Zone & UK Services PMI and the Bank of Canada rate decision.