U.S. equities jumped higher on better than expected labour data and better than expected earnings reports. In addition to better than expected U.S. data, we saw negative data in the eurozone and Greece. German bond yields fell to 30 basis points, nearly 140 basis points lower than the U.S. bond yield. This adds pressure to the euro to continue to fall over the long term.
The EUR/USD bounced slightly as German bonds were driven higher with the fear in Greece driving money into German bonds for safety. Because of the uncertainty, we expect furthering weakening of the euro.
(see EUR/USD below)
The GBP/JPY bumped up slightly and attempted a move through the 50% Fib level but failed to move higher by the end of the day. We are still in the trade and we are watching for our bullish move above 181.50.
(see GBP/JPY below)
The NZD/CAD felt to within 3 pips of triggering our stop before bouncing and rallying back to our entry point. We are looking for a chance to add to this position on a move higher and we will look for a chance to adjust our stops.
(see NZD/CAD below)