Tuesday April 14th, 2020

China’s export & import data beat expectations in March as factories re-opened production and exporters clear backlog orders after the forced closures. The US$ slipped and equity markets firmed slightly on the Chinese data. Euro and GBP both extended gains as investors eased away from US$ safe haven buying. Investors are focusing on comments that the US President hopes to re-open the US ahead of schedule and is looking to issue guidelines within the next couple of days. Markets will continue to monitor coronavirus updates and track the US plans to reduce lockdown restrictions. 

Oil prices drift lower as investors appear unsure that the 10m bpd may not be sufficient to balance current global markets. C$ paired back its gains after testing 1.3865 overnight on weaker oil prices. No key data releases today so C$ will focus on oil for short term direction. Intraday 1.4000 will provide initial resistance, with 1.3730 the next key support level.

Euro firmed slightly finding support from positive China import/export data and signs that virus cases in Europe are peaking. France and Germany will remain in lock down until May, but Spain is allowing non-essential jobs back to work. Encouraging signs for Europe as timelines for the recovery are becoming clearer. 1.1050 remains a major resistance point with 1.0880 providing a minor support level for Euro. Intraday with no key data investors will monitor US opening updates for direction.

GBP strengthens to a fresh monthly high boosted by China’s data, a weaker US$ and the recovery of the PM. Expectations are that the UK will extend current lockdown restrictions to early May, could put pressure on GBP. A break of 1.2575 could see an extension to 1.2710 next, while support remains at 1.2280.