Currency Updates:
AUD/USD Short covering in Europe saw the 200-HMA cleared and the pair sit near 0.7810 as NY got going. Early NY saw a tight range but the short squeeze took control again. With USD bulls taking a rest after the US jobs report there was no real reason to push AUD/USD lower. Real money names were noted short covering culprits. The pair tested 0.7835/40 resistance and made a 0.7836 high. The afternoon saw the pair slip a bit as it held close to 0.7820 for the remainder of the session. Traders will look to Oz Q4 house prices and NAB’s business conditions & confidence indictors. Should the housing data come in above f/c AUD might get a further boost as the RBA still has noted their concerns on home prices. Should the short covering intensify and Friday’s high break it’s likely a bigger squeeze is due. We might then see a test of key resistance in the 0.8025/55 zone heading into OZ jobs later this week.
EUR/USD The pair got hit late in Europe’s morning and headlines that the UK’s PM chaired a meeting with treasury & BoE to plan for a possible Greek Euro exit. The slide saw EUR/USD fall from near 1.1350 towards 1.1310 into NY’s open. Bear pressure persisted in early NY as the market was also expecting some USD bullish follow through after Friday’s US jobs data. The pair hit 1.1270 but couldn’t make more progress. RM bids in the 1.1260/70 zone halted the slide. With now new impetus for USD strength, short covering took hold. A steady ascent towards 1.1350 ensued with relatively few dips. LAte in the day the pair sat nearer to NY’s high and had offers into the 200-HMA (1.1361) under threat. There is little major data due out of the EZ or US tomorrow so the pair may stick to a tight range. headline risk out of Greece and Russia (re; Ukraine) could be the main drivers for tomorrow’s session.
USD/JPY Friday’s stellar US NFPs report produced a run at the daily Cloud top and down TL from the Dec highs on Friday and again in Asia today, but those hurdles in the 119.20s held. That triggered a slide to 118.44 early NY low, retracing 38.2% of the post NFP rally. A late NY break below 118.44 now target props by 118. Greece’s new leader made his first parliament speech; one that remained fully confrontational toward the troika. EUR/CHF fell to its daily Tenkan at the 133.675 low before rebounded toward unchanged. Key EU meetings on Wed and Thur should better define the Grexit risk. IMM net spec EUR shorts increased again last week & German Trade & C/A data were robust, providing some support for the cross. Watch the 21-DMA resistance Tues as its slips below 135 to press the issue between a simple mean reversion correction and a broader retracement to the upper band. Seems like we’d need some good news on Greece for the latter scenario. Consolidation was the main them for the crosses, with commodity-related ccys doing a shade better on higher oil and precious metals prices. Housing & Services data from Japan Tues.
Looking Ahead – Economic Data (GMT)
• 00:30 AUD Jan NAB Business Conditions no f/c prev 4.1
• 00:30 AUD Jan NAB Business Confidence no f/c prev 2.0
• 00:30 AUD Q4 2014 Home Price Index Reuters Poll 1.8% prev 1.6%
• 01:00 CNY Jan New Yuan Loans f/c CNY1,350.00b prev CNY697.30b
• 01:30 CNY Jan CPI m/m f/c 0.40% prev 0.30%
• 01:30 CNY Jan CPI y/y f/c 1.0% prev 1.5%
• 01:30 CNY Jan PPI y/y f/c -3.8% prev -3.3%
