Currency Updates:
AUD/USD While the pair set a new low post-Oz jobs data bears were a bit disappointed in the follow through. A weak USD saw Europe begin covering shorts and the pair sat near 0.7680 into NY’s open. Early action saw hourly support near 0.7665 tested but the dip was bought. The weaker than f/c US data sent the USD tumbling again. Pre-Oz jobs levels were tested. The rise accelerated as US bond yields took a nice dive into Europe’s close. AUD/USD spiked to resistance in the 0.7775/85 zone. A rebound for the greenback saw a late day slide and the pair pulled back near 0.7740. Traders now look to RBA Gov. Stevens’ speech to the House of Representatives’ Standing Committee on Economics. Stevens is likely to strike a dovish tone and if AUD is mentioned it’s likely to be touted as overvalued again. Bear pressure should then return and we may see post-jobs levels retested. If Stevens can’t ignite a bear push a decent short squeeze may take hold.
EUR/USD A somewhat subdued European morning for EUR/USD suddenly came to life in early NY. The USD had been generally soft leading into the US data but the below f/c results sent the USD tumbling even faster. EUR/USD’s reaction was delayed a bit though as it couldn’t break 1.1355/60 res. A slight pullback was bought though and stops above that resistance were run. The 200-HMA was pierced and 1.1380 neared before another pullback below 1.1340 took hold. Again the dip was bought but this time more vigorously as US bond yield crumbled. Fierce buying took hold and the pair cleared the 10-DMA and pierced the 21-DMA. Real money sellers building short positions were noted sellers but they were no match for the momentum buying. The pair hit a 1.1423 high before any meaningful pullback was seen. The USD took back some losses late in NY’s afternoon and EUR/USD dipped towards 1.1395 late in the day. Traders now looks to EZ Q4 GDP reports and further news on Greece for their cues. A weak GDP likely puts bear pressure on the pair.
USD/JPY Damage to USD/JPY o/n on a story about “some” at the BOJ being wary of the utility of a weaker yen (largely a recycling of similar Reuters story from Jan & not a shift in BOJ sentiment) took it to 118.60 in a stop-fest that neared the daily Tenkan & 50% of the Feb 2-11 rise at 118.56. Wed & Thur’s highs were rejected by the dn TL off the Dec 23 and Jan 2 highs at 120.48, creating pullback vulnerability. After a rebound to 119.88 by the NY open, prices slid again, this time on poor US Claims and Retail Sales data that sent Tsy yields lower. A new session low at 118.51 cracked the Tenkan & 50% Fibo, but not bids at 118.50. Heading toward the NY close, prices are below the Cloud top at 119.05, dimming the mood & leaving a bearish engulfing Candle. Weather and fallout from the collapse in energy prices depressed today’s US data, so some are taking the news with a grain of salt. EUR/JPY fell back toward the 21-DMA it cleared cleanly Wed for the first time since the Dec 8 multi-year peak. Decent bounce from there, but the upper 21-day Bolli is falling toward 137 on Friday. The Dec-Jan slide’s 38.2% is at 137.66. Flows data out tonight. Huge expiries up & dn Fri.
Looking Ahead – Economic Data (GMT)
• 21:45 NZ Food Price Index* Jan 0.3%-prev
• 02:00 NZ RBNZ Offshore Holdings* Jan 62.6%-prev
• 23:50 JP Foreign Bond Investment w/e 675.2b-prev
• 23:50 JP Foreign Invest JP Stock w/e -104.8b-prev
Looking Ahead – Events, Other Releases (GMT)
• 22:30 AU RBA Gov Stevens testifies before the House of Representatives Standing Committee on Economics – Sydney
