Currency Updates:
AUD/USD Bear pressure remained on AUD/USD during NY’s session. The pair sat near 0.7670 into the open and was weighed upon immediately. The combination of upped concerns for an RBA rate cut, new trend low for iron-ore and a broad based USD bid had the pair slide below the March 20 low and T-L off the March low. Adding weight to the pair was AUD/NZD hitting a new trend low and steady buying of EUR/AUD which saw that pair lift near 1.4180. AUD/USD hit a low of 0.7633 before rebounding. The USD’s rise abated a bit as did EUR buying. AUD/USD lifted and sat near 0.7660 late in the day. Asia traders have the Fed’s Fischer speech and Oz Feb private sector and housing credit data to contend with. Reaction might be limited though as the markets won’t push too far ahead of the upcoming holidays and US jobs report on Friday.
EUR/USD A tight range in Europe’s morning carried over to NY initially. EUR/USD sat near 1.0840 (near mid-point of Europe’s range) as NY got going. The US data releases saw algos whip the pair about. The combination of as expected Feb consumption and above f/c personal income initially sent the USD lower. EUR/USD spiked up near 1.0865. The gains were given back though as Feb US housing data was upbeat and US yields took back some early losses. EUR/USD went on to hit a new session low of 1.0810. Very little bounce was seen though and the pair sat near 1.0820 late in the day. German Feb retail sales and march employment data are the big EUR risks due tomorrow. Weak readings should weigh on EUR/USD and push the pair through 1.0765/70 support. As it stands now bears are gaining a bit of an edge. The 10 & 21-DMAs have been pierced form the topside while daily & monthly RSIs maintain a bear bias. A test of the 1.0610/40 support zone cannot be ruled out ahead of the key US jobs data on April 3.
USD/JPY The week kicked off with a bang for USD/JPY after last week’s breakdown to 118.33 was seen as having completed an ABC correction and Cloud test that has segued into a resumption of the broader uptrend. In addition to the broader USD revival, the yen was sold following a much-weaker-than-f/c IP result and amid fresh flows into equities, including N225 futures. Heading toward the NY session end, USD/JPY has retaken the daily Kijun line at 120.19. Assuming the Mar 26 low and Mar 27 are the base of a new advance, the 161.8% Fibo-projected top of that is at 121.41, and close to the spate of six consecutive daily closes by there in early Mar. The dn TL off the Mar highs will be at 120.51 on Tues. US PC/PI/PCE data suggested spending was delayed in part by weather and pent up in the form of surging savings. Feb Pending Home Sales beat, despite weakness in the weather-beaten NE. Dallas MFG was weak amid energy industry travails. Bernanke made a case for being cautious on raising real rates, but yield spreads played little role in USD/JPY today. Yen weakness lifted the crosses save for soggy AUD/JPY. Wed’s Tankan is the next major local focus.
Looking Ahead – Economic Data (GMT)
• 21:45 NZ Building Consents Feb -3.8%-prev
• 05:00 JP Construction Orders YY Feb 27.5%-prev
• 05:00 JP Housing Starts YY Feb f/c -7.1%, -13%-prev
• 00:00 AU HIA New Home Sales m/m Feb 1.8%-prev
• 00:30 AU Private Sector Credit Feb f/c 0.5%, 0.5%-prev
• 00:30 AU Housing Credit Feb 0.6%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
