Action Insight Mid-Day Report 5-5-20

Euro Tumbles as German Court Judges ECB Bond Buying Partially Contravenes the Law

Action Insight Mid-Day Report 5-5-20 Euro Tumbles as German Court Judges ECB Bond Buying Partially Contravenes the Law Euro tumbles broadly today, together with the Swiss Franc, after Germany's constitutional court has ruled that ECB's stimulus program is partly in conflict with the country's law. ECB has to prove that it's QE program isn't providing monetary financing to heavily indebted governments. The German government is also required to get assurance from the ECB that economic and fiscal impact of QE was properly balanced against its monetary policy objectives. Otherwise, the Bundesbank may no longer participate in the implementation and execution of ECB's program. Staying in the currency markets, as lifted by rebound in oil prices and stock markets, Canadian Dollar is currently the strongest one, followed by Australian. Dollar is the third weakest following Euro and Swiss. Technically, EUR/USD's decline today now put 1.0727 support back into focus, break will target 1.0635 low. Similarly, USD/CHF is eyeing 0.9802 resistance again and break will target 0.9901 high. Also, EUR/GBP and EUR/JPY are also eyeing 0.8670 and 115.44 support too. Break will resume recent declines. In Europe, currently, FTSE is up 1.66%. DAX is up 1.83%. CAC is up 2.03%. German 10-year yield is down -0.010 at -0.572. Earlier in Asia, Hong Kong HSI rose 1.08%. Singapore Strait Times rose 0.34%. China and Japan were still on holiday. Full Report Here US trade deficit rose to USD -44.4B, deficit with China shrank Bundesbank Weidmann: Rapid and strong economic recovery unlikely UK PMI composite finalized at 13.8, suggest -7% GDP contraction in... Swiss SECO consumer climate dropped to -39, CPI dropped to -1.1% RBA stands pat, scaled back bond purchases as markets improved Australia AiG construction dropped to 21.6, record low US Treasury to raise USD 3T debts in Q2 to fund... Gold extending consolidation from 1747, upside break still expected Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol BOE to Keep Stimulus Measures Unchanged in May. Could Announce QE... CFTC Commitments of Traders – Bets on Higher Safe Haven Currencies... From Coronavirus Lockdown Exit to New US-China Tariff war Central Bank Views | China Watch | Oil N' Gold | Special Topics EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0871; (P) 1.0925; (R1) 1.0955; More... EUR/USD's sharp fall today and breach of 1.0833 minor support suggests that rebound from 1.0727 has completed. Intraday bias is turned back to the downside for 1.0727 first. Break will target 1.0635 low next. On the upside, break of 1.1019 will turn bias to the upside for 1.1147 resistance. After all, corrective pattern from 1.0635 low is still in progress. But in case of rebound, upside should be by 61.8% retracement of 1.1496 to 1.0635 at 1.1167 Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings US Futures Rebounding on Increasing Oil, Watch DD, FCAU, MPC, SWKS, AIG, LB Energy Leads The Way GBP/USD Outlook: Better Than Expected UK PMI Data Keep Pound Afloat Despite Weaker Euro And Firm Dollar USDCAD Flirts With Bullish Cross Within SMAs, Neutral Mode $3 Trillion Tsunami Looms On US Markets Gold Intraday: End Of Technical Rebound? EURJPY Back Into The Bearish Area, Focus Shifts To The 115.00 Zone WTI Futures Double Bottom Pattern Completed To The Upside, Bullish Bias GBPUSD's Advances Suppressed By Stifling 200-Day SMA Wall Street Snaps Back, But FX Not Convinced Fundamental Analysis | Technical Analysis In-depth Reports China Outlook: From Output To Demand Crisis, CNY Stability Set To Continue Crude Reality RBNZ OCR to Go Negative Later this Tear The RBA's Target Cash Rate is Likely to Hold at 0.25% Until End 2023 Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 22:30 AUD AiG Performance of Construction Index Apr 21.6 37.9 22:45 NZD Building Permits M/M Mar -21.30% 4.70% 5.70% 01:00 NZD ANZ Commodity Price Apr -1.10% -2.10% -2.00% 04:30 AUD RBA Interest Rate Decision 0.25% 0.25% 0.25% 05:45 CHF SECO Consumer Climate Q2 -39 -40 -9 06:30 CHF CPI M/M Apr -0.40% -0.10% 0.10% 06:30 CHF CPI Y/Y Apr -1.10% -0.50% -0.50% 08:30 GBP Services PMI Apr F 13.4 12.3 12.3 09:00 EUR Eurozone PPI M/M Mar -1.50% -1.20% -0.60% -0.70% 09:00 EUR Eurozone PPI Y/Y Mar -2.80% -2.40% -1.30% -1.40% 12:30 CAD Trade Balance (CAD) Mar -1.4B -2.2B -1.0B -0.9B 12:30 USD Trade Balance (USD) Mar -44.4B -41.0B -39.9B -39.8B 13:45 USD Services PMI Apr 27 27 14:00 USD ISM Non-Manufacturing PMI May 37.5 52.5

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