FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
· Dollar gained slightly as profit taking and poor data from other regions helped it stabilize. Consumer credit surprised to the upside rising to its fastest pace in three months as spending remains robust. The Fed is well aware of this and thus has maintained a hawkish tone for interest rates which in turn is providing a fair degree of support for the Greenback. In spite of bearish factors like spike in oil prices and Warren Buffet’s warning of an impending Dollar crash.
Euro
· The Euro eased back as the data disappointed with the Retail PMI coming below expectations recording its biggest fall in nine months. The decline was seen across the zone as Consumer spending remains suppressed and the overall optimism about the economy remains low. For now, the market seems happy to buy on dips towards 1.3150-75 but further easing towards 1.31 is possible..
Pound
· The Pound slipped back towards 1.9150 as the market was happy to take profits and not yet ready to push the Pound past the stiff resistance zone of 1.9270-90. Weak Retail sales data makes another strong case for BoE to leave rates on hold this week. Like the Euro, for now the market would be happy to buy on dips with 1.9085-1.9110 the important support zone.
Yen
· The Yen went back into the 105 region as it was Japanese economy’s turn to be scrutinized by the market as the corporate capital spending grew at its slowest pace in over a year. Corporates continue to be hurt by high oil prices and suppressed consumer spending. Today’s Household spending data is eyed by the market with the Yen likely to remain within its range against the Greenback.
Australian Dollar
· The Australian dollar remained firmly supported on any dips below 0.79 as the market expects another rate hike in the near term horizon. Employment data will be watched closely with only a surprise upside result likely to help it break towards 0.80. Stiff resistance continues in the 0.7950-0.80 region which is laced with option barriers.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
Q4 Capital Spending |
|
13.9% |
3% |
Corporate spending remains weak on global problems of high oil prices. |
|
|
|
February Bloomberg Retail |
Euro-Zone |
49.9 |
47.3 |
Consumer spending remains low as employment and high oil prices concern persists. |
|
|
|
January Consumer Credit |
|
$3.1Bn |
$11.5Bn |
A surge in credit as post holiday sales remain strong |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
January Household |
|
-3.5% |
2.1% |
Expected to improve from last period but could decline. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3177 and high was 1.3246.
The pair closed at 1.3217.
Mixed
Key resistance is seen at 1.3285 followed by 1.3315 while support starts at 1.3155 followed by 1.3075.
USD/JPY – Yesterday’s low was 104.51 and high was 105.35.
The pair closed at 105.08
Weak Japanese data has sent it back into the 105 region but the range play continues as any Dollar foray above 105.50-75 should bring in decent selling interest while decent Dollar bids exists above 104.50 and strong ones on any move below 104.
Key Resistance is seen at 105.55 followed by 105.95 while support starts at 104.20 followed by 103.75.
GBP/USD – Yesterday’s low was 1.9114 and high was 1.9248.
The pair closed at 1.9146.
It has slipped back towards 1.9150 but with good support on dips below 1.91. For now, the market seems happy to buy on dips but 1.9270-90 is the very strong resistance zone. Further liquidation towards 1.90 is possible but the general Dollar direction is eyed.
Key Resistance is seen at 1.9285 followed by 1.9345 while support starts at 1.9145 followed by 1.9055.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7883 and high was 0.7930.
The pair closed at 0.7929.
It has managed to break back above 0.79 but 0.7950 mark continues to hold resistance with option barriers laced between 0.7950-0.80. On the downside good buying interest should crop on dips below 0.7850 with strong support above 0.78.
Key Resistance is seen at 0.7975 followed by 0.8015 while support starts at 0.7855 followed by 0.7805.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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