Currency Updates:
The Australian Dollar (AUD): The pair was trading in tight ranges (0.9230-65) throughout Europe and NY session with slightly bearish signals as USD strength is still the overall sentiment for the market and the AUD was bought on crosses. The AUD now could go either way at the moment, risk events coming up today and tomorrow which will give a better indication on the pair. For today, we have the retail sales, trade balance, RBA Steven speaking, China March HSBC PMI and ECB due later in the day.
AUD/USD: Tight range in play, waiting for better indication. However, a break below exports bid of 0.9220 could see a follow through to the 200 DMA level, meaning bears would start jumping in again.
EUR/USD: Asian sellers near 1.3820 and other offers ahead of the 21-DMA & March 26 high capped the o/n rally. The pair tested the 200 hour MA but weakness was aided by most of the other major crosses. EUR/USD dropped after ADP slightly missed forecast, pierced through 200 HMA and ran to a low of 1.3753. Very little bounces were seen, the market now will focus on ECB first, a dovish surprise from it would see sub 1.3600 levels quickly.
USD/JPY: Despite a relatively good ADP data, USD/JPY shoot off to the recent high 103.80-90 area but negative pull backs was mostly from EUR/JPY enduring heavy bunds selling to unwind last week’s ECB easing hints. The outlook for BOJ QQE2 before mid-years looks strengthening; rising treasury yields and real yield spreads favour a weaker yen. However, this has already been priced in on recent USD/JPY on expecting a good US. NFP data. A retest of 105.45 highs would require all of the above to come in places.
Looking Ahead – Economic Data (GMT)
• 23:50 JP Foreign Bond Investment w/e -395.5b-prev
• 23:50 JP Foreign Invest JP Stock w/e -191.0b-prev
• 22:30 AU AIG Services Index Mar
• 00:30 AU Retail Sales MM Feb f/c 0.30%, 1.20%-prev
• 00:30 AU Trade Balance G&S (A$) Feb f/c 850m, 1433m-prev
• 00:30 AU Goods/Services Imports Feb 1.00%-prev
• 00:30 AU Goods/Services Exports Feb 4.00%-prev
• 01:00 CN NBS Non-Mfg PMI Mar 55-prev
• 01:45 CN HSBC Services PMI Mar 51-prev
Looking Ahead – Events, Other Releases (GMT)
• 02:00 AU RBA Gov Stevens speaks at the American Chamber of Commerce in Australia (AMCHAM) in Brisbane
