Currency Updates:
The Australian Dollar (AUD): Short covering remained from last week, the pair opened up at 0.9082 and rally started immediately pushing the AUD above 0.91. Today’s main focus will be the Chinese March HSBC manufacturing PMI. The prior reading was 48.3 which indicates contraction. If the data comes in poor, pressure will hit on AUD again however, if it comes in good then 0.9150 resistance level could be tested today.
AUD/USD: Chances of a rally back to the 200 DMA & TL off April’s high increase as the March 20 doji sees upside follow through today. Day/Week RSIs resume bullish pressure and spreads remain at recent wides.
EUR/USD: Sell off started since last week, hourly supports were bought but topside rallies were limited by the 21-DMA and old bull channel base. Asian names with resting offers 1.3810/20 aided to cap the pair. Bearish sentiment seems to be still growing as the break below the 21-DMA bull channel off February’s bearish outlook. EZ PMIs will be out today, soft reading on the data would confirm the bearish technical outlook and could test the pair to 1.3685/1.3710 support levels.
USD/JPY: Once again, the pair moved in a relatively tight range with the Japanese on holiday last Friday. With the N225 (Nikkei) futures badly underperformed S&Ps, traders will be eyeing on Nikkei movements and this week’s Japanese CPI data.
Looking Ahead – Economic Data (GMT)
• 01:45 CN HSBC Mfg PMI Flash Mar 48.50-prev
Looking Ahead – Events, Other Releases (GMT)
• 05:00 JP BOJ Deputy Governor Kikuo Iwata speaks at a seminar in Kita-Kyushu
