Currencies
EUR/USD – dropped below the support levels amid strong data out of the US which is signaling that the US economy is in good shape and that increases the chance of a rate hike in June by the FED. This morning we see a small move up, as there has been another agreement to help out Greece.
USD/JPY – reversed course as the day progressed as the USD strengthened. This was further boosted by the stronger data out of the US as well. We are able to see some support and resistance between the 109.28 and 110.18 levels (marked in orange), although these are not major levels.
GBP/USD – has a very strong day yesterday as more polls showed that it is very unlikely that a Brexit will take place, with a majority in favour of remaining in the EU. The worse data lately out of the UK is also blamed on the Brexit fears, and as such, when this fear dissipates, the data should start to improve as well.
USD/CAD – we will be looking forward towards the interest rate decision by the BOC. We are seeing that the CAD is a bit strengthening on the backdrop of the higher oil price, although less than usual due to a stronger USD as well.
Indices
DAX 30 – managed to find support again around the 9800 level and then attempted to breach the resistance of the downwards trend line, which succeeded this time and as expected we saw a nice follow through move.
S&P 500 – also managed to break through the downwards trend line as fears of an interest rate have been put aside (for now) and the focus has shifted that a higher interest rate might benefit banks, so the financial sector is what boosted equities. Obviously also the energy sector got a lift with the higher oil price.
Commodities
Gold – with the USD strengthening further, gold has moved even further down and reached the next support level around the 1224 level and is hold around that level for now.
Oil – reversed again in the course of the day after getting close to the lower 47 level and is currently trading again near the resistance. We saw a larger drawdown in the crude stock which also helped oil to move up and we are expecting a drawdown of nearly 2.5 million barrels in the inventories this afternoon. We have seen that production is dropping less than before, so it will also be interesting to see if that trend continues, or maybe we can even already see a slight increase in production.
Stocks
Bayer (DE:BAYGN) – remains in the headlines as Monsato has rejected the $62 billion takeover bid, while also saying it was open to continue talks. Bayer for its part is still confident that it will be able to reach a deal.
By Shawn Koopman