Currency Updates:
AUD/USD The pair held below 0.7900 in Europe’s morning and was unable to benefit from general USD weakness as upped concerns of an RBA cut and AUD/NZD’s slide towards 1.0275 weighed. NY walked in with the pair near 0.7890. The weak durable goods data weighed further on the USD. AUD/USD finally caught a bid and traded to 0.7905. The gains were fleeting though as the USD recovered on a rally for US bond yields. AUD/USD slipped lower, cleared Asia’s low & hit 0.7829. There was little bounce for the pair as the USD stayed firm in the afternoon. Late in NY the pair sat just above 0.7840. No major data is due from the APAC region. Action might be limited as the market awaits weekly US jobs data for their cues. Recent longs might have some concerns as the March 24 doji sees downside follow through today and daily RSI rolls over from near o/b territory. A dip might be due but the 10-DMA will cross above the 21-DMA soon and is likely to generate buy signals from the model community. The recent rally may still have legs.
EUR/USD Above f/c March German IFO had the pair bid in Europe’s morning. The pair lifted towards 1.0980 into NY’s open. The lift was aided by general USD weakness. NY added to the gains after ECB’s Praet noted QE has helped inflation expectations re-anchor and US durable goods saw a big miss while prior releases were revised down. EUR/USD rallied to 1.1014 but the gains didn’t last. A recovery for the USD and US bond yields combined with market chatter of a large Asian seller above 1.1000 saw EUR/USD begin a slide. The move lower tested hourly support in the 1.0945/50 zone but the level held. The pair then lingered in the 1.0950/1.0993 range for the remainder of the session with it settling near 1.0965. German GfK consumer confidence for April and French Q4 GDP are the risks in Europe while the US weekly jobs data and Fed speakers Bullard & Lockhart might stir the market in NY’s session. For now bulls have the edge. Daily RSI is biased up with room to run and the 21-DMA is containing dips. A break of the post-Fed high is needed to ignite the next bull leg. If it occurs resistance near 1.1115 and 1.1185 are then eyed.
USD/JPY Very poor USD Feb Durable Goods Orders data briefly yanked USD/JPY to its 119.23 low, unable to quite retest Tues’s 119.22 post-FOMC correction low. That alone got some nimble spec shorts and latent relative value buyers bidding; a trend that was nurtured by Fed’s Evans and a rise in Tsy yields. The pair initially ran into hourly Ichi resistance by 119.60, but after a pre-fix dip to 119.325 prices made new regional highs and are by them as the NY session winds down. Weakness in US and N225 equities gave the haven yen a little boost intraday, but rising yield spreads outmatched this in the end. We are, however, keeping a keen eye on a potential 38.2% retracement of the N225’s ’15 overbought advance given the implications for USD/JPY prices. The daily Kijun is now at Monday’s 120.17 high and daily on-close pivot pt, while the Tenkan & 21-DMA converge on Thur by 120.40. Need a breakout and close above the latter to put the broader uptrend back on track. EUR/JPY’s rebound remains stymied by the daily Kijun, last at 131.49. Crucial resistance is by 131.81 from 50% of the Feb-Mar drop & the weekly Tenkan. Weekly JPY flows tonight.
Looking Ahead – Economic Data (GMT)
• 23:50 JP Foreign Bond Investment w/e 551.1b-prev
• 23:50 JP Foreign Invest JP Stock w/e 244.3b-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
