Currency Updates:
AUD/USD Both Europe & NY made attempts to break below the 200-HMA but failed the resulting bounces were limited though. AUD/USD’s bounce off the MA could only reach s-t hourly resistance near 0.7815. The bounces were likely limited due to generally heavy commodity prices and AUD/NZD’s slip towards 1.0355. NY’s afternoon saw the pair a bit heavy and sit near 0.7800 into the close. Traders aren’t getting overly aggressive as they await Fe Chief Yellen’s testimony to congress tomorrow. Should she lean hawkish and have a June hike feasible, AUD/USD should slide. key supports near 0.7740 & 0.7720 might then get tested. A break below 0.7720 likely means the recent squeeze is through and a retest of the 2015 low might ensue.
EUR/USD The pair couldn’t break free of Friday’s range. Europe pushed EUR/USD down to 1.1295 just ahead of NY’s open. The driver was EUR/JPY’s dive from near 135.50 towards 134.50. NY retested Europe’s low early on but once it became clear no further losses were possible some intra-day short covering took hold. The pair lifted above 1.1320. Weak US housing data then gave an added boost and the pair tested hourly resistance near 1.1365/70. Some gains were given back on Greece postponing its list of reforms for the Euro group until Tuesday morning. The 1.1320 area was tested but JPY weakness helped stall that dive. EUR/JPY bounced towards 135 in NY’s afternoon and this allowed EUR/USD to settle near 1.1335 late in the day. Traders now look to Tuesday morning’s Greek news and Fed Chief Yellen’s testimony to congress tomorrow in NY’s morning. Should Yellen keep a June hike on the table EUR/USD should get hit. We might then see key support in the 1.1270 area get taken out and the pair make a run for the 2015 low again.
USD/JPY was one of least interesting yen pairings today as traders braced for tomorrow’s testimony by Yellen and got only soft, but second-tier, US econ data to chew on ahead of that. BOJ Minutes and Abe advisor comments bolstered the notion QQE2 will be left alone for the next few months at least. Meanwhile, the steady erosion of the net spec short JPY positioning the past few months is being largely offset by Japanese pension demand for foreign assets, led by GPIF. EUR/JPY gave back a big chunk of Fri’s whiplash recovery gains on Greek hopes. The reality of the Greek extension is less glamorous than some had perceived it to be on Friday. The next chapter in this drama was delayed until Tues, when the Greek govt is to deliver its new “letter” to the troika a day behind the new schedule. The two sides have until the end of April to sort it out. GBP/JPY shrugged off poor CBI data to reach a 184 high, just shy of the 61.8% of the Dec-Feb slide at 184.24 that has capped Feb rally attempts thus far. CAD/JPY and other commodity crosses got a fleeting lift on an FT story about a potential emergency OPEC meeting. Fri is the next big Japan data day.
Looking Ahead – Economic Data (GMT)
• No Significant Data
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
