I moved to a new city with my family last week and have been at my desk very little. But I obviously didn't miss much in the main currency pairs I regularly look at here. The dollar index (DXY) cannot even hold above the 102 mark, although the 14 April reversal looked very promising. Accordingly, little has happened in the individual currency pairs.
There are a few economic data this week (just a selection)
wed
US Durable Goods Mar
thu
US GDP prel
fri
GER GDP prel
EUR HICP Apr,
but actually next week's central bank meetings (FED 03may - ECB 04may, see calendar) are already moving into focus. Whether a breakout from the range 100.80 / 102.20 can succeed already this week under these circumstances remains to be seen. In general, I still prefer the upside.
EURUSD -- 1.1019
Apart from the psychological 1.1000 level the recent highs (1.1068/76) should form the decisive resistance zone. Above the last high, the euro is then also very likely to reach the next target around 1.1185/1.1200. In the bigger picture, I still think the 1.1000/1.1200 range is a dollar buy zone. If you don't like trading delta 1, you might want to take a look at my last volatility update. The idea of buying shorter-dated 25 delta calls (hedged) still looks promising: “For active players, I tend to advise short-dated (2w to 2m) hedged 25 delta calls. Should the euro really go higher, one could even consider leaving the hedges at the top and outright shorting the euro” (Market update #15).
GBPUSD -- 1.2456
Sterling is slowly trading higher along the mid Bollinger band (1.2421) at the upper end of the big 1.1841/1.2447 range. I am a little surprised by the strength of the pound, but above the 1.2447 level, shorts are very vulnerable. I would look for shorts again in the direction of 1.2515/25.
USDCHF -- 0.8886
In Morning Call #140 we had already expected the 0.9000 to fall. However, if risk sentiment does not deteriorate significantly, the currency pair could have reached a buy zone here in the medium term. Of course, the market is now already eyeing the 2021 low (0.8757), but one could add to the position there. Alternatively, those who want to avoid the delta 1 risk can also consider buying 25 delta USD puts (hedged) here with the same reasoning as above. Attention: weekly chart below.
Good luck,
Sebbo