Currency Updates:
The Australian Dollar (AUD): Early Europe stop loss run through 0.9290 accelerated the drop on the pair after RBA minutes/Debelle comments also inspired the slide. A dip below 0.9250/60 was seen but bounce was only limited to 0.9270-75 area. Hawkish comments from Fed Plosser saw the 55-day MA pierced and a new low of 0.9241 was hit. Westpac consumer sentiment will be the main event for the AUD and May BOJ interest rate/MPS are the big event risks for Asia.
AUD/USD: The bull channel base and daily cloud top have been broken while day/week RSIs are firmly biased down. A clean break of the 55 DMA likely add more pressure and should lead to test of key support near 0.9200. Beyond that traders look for a test of the 200-DMA at 0.9171.
EUR/USD: Tight ranges were in play yesterday, EUR/USD was dragged down by the drop in EUR/JPY and EUR/GBP while USD/JPY traded heavily for most of the day. NY held the 1.3687/1.3706 range. The pair seems to be getting comfortable near recent low of 1.3645 and numerous rally was seen into the daily cloud and towards 100-DMA. If tomorrow’s statement from FOMC stands on the same line as Plosser then EUR/USD is likely to trade heavy and may see May low & 200 DMA (1.3632) tested.
USD/JPY Yen pairs were heavy again, led by antipodeans. A rebound in the Nikkei o/n was fleeting and followed by more weakness in stocks in NorAm trading. AUD/JPY has plunged through much of its daily Cloud and gotten well inside the weekly one. Yen-funded carry trades are being unwound, particularly those with linkage to China. The 100-DMA, 61.8% & late-week Cloud base supports in the 93.27-30 range are the near-term target. NZD/JPY completed a 38.2% of the 81.40-89.90 rise with today’s 86.64 lows and is threatening a slide to 85.65, where the 61.8% overlaps the weekly Kijun & the current daily Cloud base. USD/JPY remains sequestered to ever-tightening ranges above 101 barriers. A daily close below the 200-DMA at 101.25 is awaited by techs looking for fresh sell signals. Sell stops noted below 101, more bids into the 101.76 lows of the year and stops below there. No policy shift expected from the BOJ tonight, which is a problem for those who were hoping for QQE2 to revive the yen slide from last year. Trade data for April tonight is a key post-tax-hike input for yen. EUR/JPY’s downtrend is aided by EZ spread widening into June ECB easing: 138 target
Looking Ahead – Economic Data (GMT)
• 23:50 JP Exports YY Apr f/c 4.80%, 1.80%-prev
• 23:50 JP Imports YY Apr f/c 0.80%, 18.10%-prev
• 23:50 JP Trade Balance Total Yen Apr f/c -646.0b, -1446.3b-prev
• 00:30 JP Consumer Sentiment May 0.30%-prev
• 01:30 JP Wage Price Index QQ Q1 f/c 0.70%, 0.70%-prev
• 01:30 JP Wage Price Index YY Q1 f/c 2.60%, 2.60%-prev
Looking Ahead – Events, Other Releases (GMT)
• : JP BOJ MPC Meeting
• : JP BoJ Governor Kuroda Press Conference after Rate Decision
