Currency Updates:
AUD/USD The weak USD in Europe’s morning inspired bulls to test s-t resistance near 0.7880. Several attempts failed and the pair pulled back to the 0.7865 area into NY’s open. NY made their own try at cracking the resistance but failed just as well. A rebound for the USD that was ignited by significant rallies in US treasury yields saw AUD/USD’s gains start to erode. The slide saw 0.7820 tested before any bounce was seen. The lift was limited though and the pair went on to test 0.7800/10 support as US yields rallied further. A give back for some of the USD’s gains saw the support hold and the pair sat just below 0.7825 late in the day. No major data is due from the APAC region so traders will likely wait until US GDP tomorrow for the next cue for the pair.
EUR/USD Europe managed to break 1.1050 early in their morning but the gains couldn’t hold. EUR/USD slid from the 1.1052 high as the USD rebounded from its massive sell-off and talk of some sovereign selling helped have the pair near 1.1010 into NY’s open. The pair spiked above 1.1020 after US jobless claims but the rally was sold fairly hard. Bears pressed their case and the pair quickly traded below 1.0920 before any bounce was seen. US treasury yields were firm for most of NY but their rally intensified in NY’s afternoon and had DE-US yield spreads driving further in the USD’s favor. EUR/USD nose dived and ran stops below 1.880/85. A low of 1.0857 was made and very little bounce was seen as the pair sat near 1.0875 late in the day. Bears might be growing bolder after multiple attempts rallies above 1.1000 failed to hold. Daily RSI rolls over and a bearish outside candle is in place while monthly RSI maintains its bear bias. The March 23 low (1.0768)& 10 DMA (1.0773) are eyed. A break may mean a return to the 2015 low.
USD/JPY The yen was the best performer among the majors today, gaining ground amid concerns about a potential ME proxy war over Yemen, resultant rebounding energy prices and risk of a sizeable technical retracement of the N225’s outsized 2015 gains. London selling took USD/JPY to its 118.34 session low by the daily Cloud base & 61.8% of the Jan-Mar rise at 118.19/21. Prices snapped back up sharply from there with help from better-than-f/c US data & comments by Fed’s Lockhart. The rally, partly driven by disappointed shorts covering, got to 119.42 and just beyond the broken up TL from this year’s lows as well as post-FOMC daily lows. The military action in and around Yemen, as well as the military warnings from numerous countries bears close monitoring. Japan has a plethora of econ releases tonight, but Yellen’s speech on Friday will probably be at least, if not more, market-moving. EUR/JPY fell through the session on the back of a nasty failed upside breakout in EUR/USD that ushered in a break below the last two days’ lows. The cross is near its Mar up TL & daily Tenkan at 129.48/43. The 76.4% of the Mar rally at 128.73 is key on a close.
Looking Ahead – Economic Data (GMT)
• 23:30 JP All H’hold Spding YY* Feb f/c -3.2%, -5.1%-prev
• 23:30 JP All H’hold Spending MM Feb f/c 0.5%, -0.3%-prev
• 23:30 JP CPI, Core Nationwide YY Feb f/c 2.1%, 2.2%-prev
• 23:30 JP CPI, Overall Nationwide* Feb 2.4%-prev
• 23:30 JP CPI Core Tokyo YY* Mar f/c 2.2%, 2.2%-prev
• 23:30 JP CPI, Overall Tokyo* Mar 2.3%-prev
• 23:30 JP Jobs/Applicants Ratio Feb f/c 1.15, 1.14-prev
• 23:30 JP Unemployment Rate Feb f/c 3.5%, 3.6%-prev
• 23:50 JP Retail Sales YY Feb f/c -1.5%, -2%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
