Forex - Traders await US housing data today; Dollar gains some ground

Forex News and Events: The EURUSD traded in a tight range overnight before breaking down to 1.5834 in this morning’s session. Investors are highly focused on thirty-nine S&P500 companies that release their reports today. With crude oil at $117/barrel and Gold spot at $916/oz, the greenback is struggling to gain support. Reports out from Japan indicate that investors continue selling the dollar and buying Japanese Yen. US Existing Home Sales and the House Price Index will be released today; the market hoping to see some stability in those numbers. The Bank of England announced a robust mortgage rescue plan under which the central bank will swap commercial banks’ securities for UK treasury bills in the hopes of easing lending fears in the money market. Whether the plan deems to be a success remains to be seen. The GBPUSD continues its downtrend, trading down to 1.9745 in this morning’s session. The Bank of Canada is widely expected to cut rates. The market is showing a high probability of a 50bp cut to 3.00%, however some analysts are forecasting a 25bp cut. Despite strong fundamental data out of Canada in the last six months, inflation has dropped to 1.4% in March from 2.5% in November.

Today's Key Issues (time in GMT): 10:00 EUR Euro-Zone Budget Def/GDP Ratio Dec-31 10:00 EUR Euro-Zone Govt Debt/GDP Ratio Dec-31 14:00 CAD Bank of Canada Rate Apr-22 3.00% vs 3.50% 15:00 USD Richmond Fed Manufact. Index APR 15:00 USD Existing Home Sales MAR 4.95M vs 5.03M 15:00 USD House Price Index MoM FEB 15:00 USD Existing Home Sales MoM MAR 22:00 USD ABC Consumer Confidence Apr

The Risk Today: EurUsd is at the end of its wedge formation of the past four weeks. There seems to be mounting pressure for a major break out; the only question remains in which direction. On the upside, 1.5983 is a target and important level. On the downside, if 1.5700 is broken, this could open the door to 1.5000. GbpUsd sees strong support at 1.9745 and breaking through will open the next target to 1.9600. On the upside, a daily close above 2.0050 would continue the previous rally. UsdJpy retracing to 104.64 and finding strong resistance. A break will expose 108.54. Risk remains high on the downside for a move to 100.00 UsdChf will push to 1.0535 if the retracement persists. 1.0000 holds as a major support and the bottom trend line of the latest consolidation.

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.6200 2.0577 111.92 1.0500 1.6000 2.0447 110.10 1.0285 1.5979 2.0100 105.00 1.0200 1.5923 1.9800 103.09 1.0092 1.5528 1.9650 102.95 1.0000 1.5400 1.9337 100.00 0.9639 1.5000 1.9105 95.74 0.9500 S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot