Currency Updates:
AUD/USD Europe added to the gains brought on by Oz CAPEX. Bulls managed to hit a new s-t trend high of 0.9374 but couldn’t breach the TL off the April 2013 high or the high from August 6th. The headlines from the Ukraine/Russia situations hit risk hard and the USD got a safe haven bid. Most of the Oz data gains were erased as the pair hit 0.9341. Risk made a bit of a comeback though and the pair sat near 0.9355 late in the day. Recent longs may have some concerns as the pair did breach the daily cloud base and 55-DMA but couldn’t hold the gains. The long-term TL is also tempering the rally. It appears as though the market needs to clear the daily cloud top and daily highs near 0.9410/15 to initiate a serious rally for this pair.
EUR/USD Europe tried squeezing shorts late in their morning. The squeeze managed to just barely pierce recent daily highs as it hit 1.3220. The lift was quickly reversed on reports of increased tensions with Ukraine & Russia. The pair quickly dived towards 1.3170. When the initial Ukraine/Russia headline was tempered a bit the pair bounced slightly. German HICP came in as expected and little market reaction was seen. The US GDP and claims data were solid and further increased the view that the US econ is fairing better than the EZ. EUR/USD went on to make a 1.3159 low but 1.3150 barrier protective bids and profit taking by shorts halted the slide. A steady lift from the lows saw the pair near 1.3185 late in the day. traders now look to the EZ CPI for their next cue. Bears need a below f/c result to have a chance at breaking the barrier. If the barrier is cleared stops below will be hit and a quick move down to 1.3100 is due.
USD/JPY The correction of the overbought USD/JPY this week finally took prices to the 200-HMA ahead of the NY open amid worrying headlines from Ukraine that tripped stops below Tues’s 103.75 low. Better-than-expected US GDP revisions buttressed the recovery from the 200-HMA, as N225 futures and Tsy yields rebounded. Exporter and spec profit taking offers are scattered between 103.85 and the Tues-Wed highs by 104.17. Overbought daily techs just today began to roll over, so still risk that the 38.2% of the 101.51-104.49 rise and the daily Tenkan at 103.35 will eventually be tested. Huge 102-103.25 expiries Fri. Weekly MOF flows showed the slow-but-steady outbound flow into foreign equities persisting, though bond flows revered the previous week’s investment. Abe’s new cabinet is gnashing some teeth over this yr’s decision whether to raise the sales tax again next yr. Still working out the residual damage from April’s hike. Kitchen sink of Japanese data releases tonight, including some early Aug CPI readings from Tokyo. BOJ’s on hold at least until Oct regardless. EUR/JPY fell again on soft EZ data & Ukraine woes, despite doubts about more ECB easing next Thur.
Looking Ahead – Economic Data (GMT)
• 19:30 JP July All Households Spending y/y; f/c -3.0% prev -3.0%
• 19:30 JP July All Households Spending m/m; f/c 1.6% prev 1.5%
• 19:30 JP July CPI Nationwide Core y/y; f/c 3.3% prev 3.3%
• 19:30 JP July CPI Nationwide Overall; no f/c prev 3.6%
• 19:30 JP July Unemployment Rate; f/c 3.7% prev 3.7%
• 19:30 JP July Retail Sales y/y; f/c 0.10% prev -0.6%
• 21:00 NZ Aug NBNZ Business Outlook; no f/c prev 39.7%
• 21:00 NZ Aug NBNZ Own Activity; no f/c prev 45.10
• 21:30 AU July Private Sector Credit y/y; f/c 0.50% prev 0.76%
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
