North Korea ready to denuclearize
- North Korea said on Saturday it was suspending nuclear and missile tests and scrapping its nuclear test site, and instead pursuing economic growth and peace. World leaders welcomed the statement, but some remained hesitant towards Kim’s real intentions. However, in Kim’s declaration, it was not clearly stated that existing nuclear weapons and missiles will be destroyed. On Friday, the first North Korea-South Korea meeting will take place after more than a decade. Light could be shed on the matter as to what the future holds for the relationship between the two neighbor countries and where the nuclear matter is really heading.
- USD/JPY traded in a sideways manner, testing the 107.90 (R1) resistance line. As the earnings period in the US stock market continues we could see the pair continue to trade in a sideways manner with some bullish tendencies for today. Should the bulls take over the pair, we could see it breaking the 107.90 (R1) resistance line and aim for the 108.57 (R2) resistance hurdle. On the other hand, should the bears take the driver’s seat we could see the pair reaching or even breaking the 106.95 support line.
May ahead of pressure over customs union
- The Labor party could be working with Tory rebels in the House of Commons and May could be facing another defeat in Parliament regarding the customs union issue. On the other hand, the Prime Minister may also be facing a possible revolt within the Cabinet among hardline brexiteers. Such a revolt could be triggered by the suspicion that Theresa May could be breaking her promise to pull the UK out of the EU customs union. Should the UK's inner instability increase, we could see the battered pound weakening even further.
- Cable continued its drop on Friday, aiming for the 1.3980 (S1) support level, however, it stabilized somewhat during the early Asian morning today. On the technical side, please note that cable clearly broke the upward trend line incepted since the 13th of November, surrendering any gains it made so far during the month. The pair could continue its drop should there be further negative headlines about the UK, however, the pound seems to be having some support currently. Should the pair continue to be underselling interest we could see it breaking the 1.3980 (S1) support level and aim for the 1.3912 (S2) support barrier. On the other hand, should it find buying orders along its path we could see it reaching or even breaching the 1.4095 (R1) resistance line.
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In today’s other economic highlights:
- During today’s European session we get France’s, Germany’s and the eurozone’s preliminary PMI for April while in the American session we get the US preliminary PMI for April and the Existing Home sales figure for March.
As for the rest of the week:
- On Tuesday, Australia’s CPI rate for Q1, Germany’s Ifo Business Climate, US Consumer Confidence, on Thursday, we get Riksbank’s Interest rate decision, ECB interest rate decision and finally on Friday we get the BoJ interest rate decision, France preliminary CPI rate (EU Norm.) for April, Germany’s employment data for April, UK’s preliminary GDP and US preliminary GDP growth rates for Q1.
USD/JPY
·Support: 106.95 (S1), 106.43 (S2), 105.85 (S3)
·Resistance: 107.90 (R1), 108.57 (R2), 109.20 (R3)
·Support: 1.3980(S1), 1.3912(S2), 1.3836(S3)
·Resistance: 1.4095(R1), 1.4168(R2), 1.4345(R3)