Carry Trade Returns on Global Recovery
Last week’s currency trading review
The Dollar was well supported against the Yen on Strong economic data although risk appetite and new highs in Stocks sent risk sensitive currencies such as the AUD and CAD to multi month highs. The global recovery story is also helping Oil and Gold rally. Oil surged past the key $85 level whilst Gold closed in on the Key $1130 resistance. March Unemployment Rate remained at 9.7% whilst the Non Farm Payroll change was at 162k. The Euro rallied at the start of the week on relief that the Greece situation was coming to a close before running out of steam at the 1.3600 resistance level. German Retail Sales fell -0.4% vs. 0.0% forecast. EUR/GBP fell back form the key 0.9000 level to close under 0.8900 as the GBP bathed in good economic data. The EUR/USD gained 0.7% closing at 1.3503, after opening the week at 1.3409.
The Japanese Yen weakness continued this week in anticipation of a strong US Jobs which was well founded with the major and crosses all rallying to fresh multimonth highs on Friday. AUD/JPY tested Y87 whilst EUR/JPY toyed with Y128. The Q1 Tankan Survey improved to -14 vs. -24 previously. The USD/JPY gained +2.24% closing at 94.61, after opening at 92.49 previously. The GBP was the best performing currency last week on a potent mix of risk appetite and good UK economic data. Q4 2009 GDP was upgraded to 0.4% from 0.3% and March Nationwide House Prices where at 0.7% vs. -0.8% previously. The rally/rebound is coming from multimonth lows at 1.47 with the GBP/USD trading at above 1.7000 last year. GBP/USD gained +2.05% closing at 1.5207 after opening at 1.4896. The AUD tracked the commodities higher although strong resistance at 0.9220 proved too strong to break ahead of the RBA rate announcement due out on April 6th. Economic data was weaker than expected with February Retail Sales falling -1.4% vs. 0.3% forecast. Also weak, February Trade Balance forecast at -1.92bn vs. -1.12bn previously. The AUD/USD gained +1.64% closing at 0.9190 after opening at 0.9039.
The forex trading week preview
In the States On Tuesday, March FOMC minutes released. On Wednesday, US Fed Chief Bernanke speaks. On Thursday, Weekly Jobless Claims are forecast at 430k vs. 439k previously. On Friday, Canadian Unemployment is forecast at 8.1% vs. 8.2%. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Wednesday, March PMI services Final is forecast unchanged at 53.7. Also released, German February Factory Orders are forecast at -1% vs. 4.3% previously. On Thursday, ECB Rate Announcement forecast unchanged at 1.0%. On Friday ECB President Speaks. In the UK On Wednesday, March PMI services are forecast at 57.9 vs. 56.4 previously. On Thursday, BOE Rate Annoucement is forecast unchanged at 0.5% along with BOE Asset Purchase forecast to also remained unchanged at 200Bn. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Wednesday, BOJ target Rate Released forecast to remain at 0.1%. On Thursday, BOJ Monthly Report released. In Australia On Thursday, March Unemployment is forecast at 20k vs. 0.4k previously. March Unemployment Rate is forecast unchanged at 5.3%. We will provide our previews and reviews of these data releases in the daily summary.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.3268 |
1.3385 |
1.3460 |
1.3591 |
1.3627 |
|
USD/JPY |
93.28 |
93.68 |
94.25 |
95.06 |
95.29 |
|
GBP/USD |
1.5044 |
1.5173 |
1.5265 |
1.5299 |
1.5382 |
|
AUD/USD |
0.9150 |
0.9183 |
0.9190 |
0.9225 |
0.9250 |
|
XAU/USD |
1101.00 |
1111 |
1130.00 |
1133 |
1145.00 |
|
OIL/USD |
85.00 |
86 |
86.40 |
88 |
90.00 |
Euro – 1.3460
Initial support at 1.3385 (March 31 low) followed by 1.3268 (Mar 26 low). Initial resistance is now located at 1.3591 (April 1 high) followed by 1.3627 (Mar 19 high)
Yen – 94.25
Initial support is located at 93.68 (Apr 2 low) followed by 93.28 (Apr 1 low). Initial resistance is now at 95.06 (Aug 24 high) followed by 95.29 (Aug 18 High).
Pound – 1.5265
Initial support at 1.5173 (Apr 1 low) followed by 1.5044 (Mar 31 low). Initial resistance is now at 1.5299 (Apr 1 high) followed by 1.5382 (Mar 17 high).
Australian Dollar – 0.9190
Initial support at 0.9183 (Apr 2 low) followed by the 0.9150 (Apr 1 low). Initial resistance is now at 0.9225 (Apr 5 high) followed by 0.9250 (March 17 high).
Gold – 1130
Initial support at 1111 (Apr 1 low) followed by 1101 (Mar 30 low). Initial resistance is now at 1133 (Mar 17 high) followed by 1145 (Mar 3 high).
Oil – 86.40
Initial support at 86.00 (Intraday Support) followed by 85.00 (Intraday Support). Initial resistance is now at 88.00 (March high) followed by 90.00 (Intraday Resistance).
