Currency Updates:
The Australian Dollar (AUD): After the inspired rally to the 21-DMA, the AUD/USD lost steam and settled into 0.9252/0.9285 range for both Europe and NY sessions. Narrowing yield spreads and trend resistance off April high managed to cap bullish momentum and aldo due to upcoming RBA meeting aided to keep action subdued. No major changes are expected from the RBA today but traders may see risks lean to the dovish side. Aus inflation and other econ releases have fallen short of forecasts and may get mention by Steven.
AUD/USD: Mention of persistent AUD strength may get attention again as AUD/USD is basically unchanged from the April 1 meeting. Should rhetoric over AUD and recent data ramp up AUD/USD may trade heavy. Traders may then see 0.9200 break and the H&S top on daily charts complete. A break of 0.9200 immediately targets the 200-DMA. A break and close below that would open door for 0.8990/00 and then the March low near 0.8890.
EUR/USD:
The pair held in a tight range of 1.3865-87 as market await a slew of EZ services PMIs tomorrow, Yellen’s testimony and ECB on Thursday. A strong PMI may see market make a run for stops above 1.3890-1.3910. However, upside should be limited below 1.3965-70 before ECB. Tech favours bulls also as long lower wicks on recent daily candles show dips are bought while the 10, 21 & 55 DMA are bullishly aligned.
USD/JPY New York took a brighter view of the yen pairs to begin the holiday-thinned week, seeing the o/n yen gains as likely remnants of Friday’s post-payrolls position flushout and pricing in of deadly events in Ukraine and spurious HLs about Russian war plane movements. USD/JPY range traders used the dip below 102 to both book some short profits from Friday and to bargain hunt to start the week. Tsy yields and stocks rebounded modestly in NY, but the above-f/c ISM Services result couldn’t add to the bounce. Decent intraday resistance is by 102.30 and 102.45. Offers are noted by where the daily Cloud top at 102.80. EUR/JPY found support at the 141.29 daily Cloud top, shrugging off softer EC CPI and GDP forecasts for the euro zone and perhaps taking to heart the German govt spokesman’s retort to the French PM’s push against the EUR’s strength. AUD/JPY snapped 94.50/47 supports, but rebounded near the bottom of the up channel from Feb’s lows. BOJ Minutes from the Apr 7-8 meeting are out Wed. US Trade data Tuesday have a better chance of impacting USD/JPY ahead of Yellen’s JEC appearance on Wed.
Looking Ahead – Economic Data (GMT)
• 22:45 NZ HLFS Unemployment Rate Q1 f/c 5.90%, 6.00%-prev
• 22:45 NZ HLFS Job Growth QQ Q1 f/c 0.60%, 1.10%-prev
• 22:45 NZ HLFS Participation Rate Q1 f/c 68.80%, 68.90%-prev
• 22:45 NZ Labour Cost Index – QQ Q1 f/c 0.50%, 0.60%-prev
• 22:45 NZ Labour Cost Index – YY Q1 f/c1.80%, 1.70%-prev
• 01:30 AU Trade Balance G&S (A$) Mar f/c 1200m, 1200m-prev
• 01:30 AU Goods/Services Imports Mar 1.00%-prev
• 01:30 AU Goods/Services Exports Mar 0.00%-prev
• 04:30 AU RBA Cash Rate May f/c 2.50%, 2.50%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
