Foreign Exchange Market Summary
Dollar
· Dollar recouped some of its losses by gaining on all majors led by a sharp rise against the Yen. Profit taking ahead of some crucial data released this week helped the Dollar as today’s retails sales is expected to remain robust while the TIC’s will be keenly eyed with expectations of an outcome greater than the deficit..
Euro
· The Euro went towards 1.3475 against the Dollar helped by its break above 140.50 against the Yen. However, it slipped back on approach of the strong resistance zone of 1.3485-1.3910 with the market looking to adopt a semi neutral position ahead of the key data releases. The Euro might slip further on good
Yen
· The Yen fell broadly across the board as the upward revision to the GDP failed to give it a boost and the Yen’s inability to break below the 103.50-75 zone which is laced with strong Dollar bids led to some position squaring. The market also turned its attention to the sharp decline in the Current Account surplus. For now any Dollar move above 105.25 should attract selling interest but data outcome is eyed.
Pound
· The Pound eased back after going above 1.9250 and fell towards 1.91. More sections of the market are losing hope for a rate hike in the
Australian Dollar
· The Australian dollar slipped below 0.79 as the inability to break above 0.80 in spite of Dollar’s weakness on the increase in trade deficit, led to some liquidation. 0.7845-60 is the key region with a break below could lead to losses towards 0.78. But for now good buying interest should come up on dips towards 0.7850.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
January Retail Sales
|
|
-0.4% |
1.3% |
Higher than expected as consumer confidence remains at a decade high. |
|
|
|
January Industrial Production |
|
-0.8% |
2.5% |
Production has risen as stronger domestic demand made up for decline in exports. |
|
|
|
January ODPM |
|
10.7% |
10% |
As expected it has declined as country side house prices ease as well. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
February CPI m/m
|
|
-0.5% |
0.5% |
Should increase as oil and energy prices have spiked. |
|
|
March ZEW Economic Sentiment survey |
|
35.9 |
35.0 |
Sentiment should slightly decline as high oil prices are causing a concern |
|
|
|
|
19.19 |
19.45 |
Expected to inch slightly higher as orders remain solid |
|
|
February Retail Sales less autos |
|
0.6% |
0.8% |
Sales continue to remain strong as consumer confidence increases |
|
|
January TIC’s data |
|
$61.3 Bn |
$59 Bn |
Net foreign security purchases expected to stay around recent levels |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3334 and high was 1.3476.
The pair closed at 1.3362.
It has slipped back on profit taking but so far good buying demand should come up on dips towards 1.33. On the upside resistance is strong around 1.3450 with any foray above 1.3485 laced with option barriers and strong offers. A break below 1.33 brings 1.325-50 support zone into focus.
Key resistance is seen at 1.3455 followed by 1.3525 while support starts at 1.3320 followed by 1.3225.
USD/JPY – Yesterday’s low was 103.79 and high was 105.17.
The pair closed at 104.95.
The Yen continues to be held off from the 103.50-75 zone with strong Dollar bids in that region. Since sentiment is against the Greenback any foray above 105 should continue to attract selling interest. A break below targets 102.90-103 where good support exists. 105.50 holds very stiff resistance.
Key Resistance is seen at 105.45 followed by 105.75 while support starts at 104.25 followed by 103.50.
GBP/USD – Yesterday’s low was 1.9099 and high was 1.9275.
The pair closed at 1.9131.
The Pound has eased back and for now decent buying interest exists on dips below 1.91. 1.9050 acts as good support mark with a break below targets the strong support zone of 1.8975-1.90. On the upside resistance is strong around 1.9220 with very strong selling interest on any foray above 1.93.
Key Resistance is seen at 1.9245 followed by 1.9315 while support starts at 1.9105 followed by 1.9045.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7859 and high was 0.7938.
The pair closed at 0.7879.
The Aussie has solid support above 0.7850 with good buying interest on any move towards 0.7875. A break below 0.7850 brings even stronger support above 0.78. On the upside 0.7950 continues to hold mild resistance while option barriers are laced till 0.80 which continues to be the very stiff resistance mark.
Key Resistance is seen at 0.7955 followed by 0.7995 while support starts at 0.7845 followed by 0.7805.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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