Currency Updates:
The Australian Dollar (AUD): The AUD managed to slightly push itself back up after being pressured by 1.5% drop in Shanghai on Monday. The key data for this week on the AUD will be the Q1 CPI (3.2% f/c vs 2.7% prev). Even though a large upstick is expected, short term forward rates are counter-intuitively grinding lower and is worthy of a yellow cautionary flag with regard to this latest bullish run.
The AUD: Bulls are heartened by the crossing of longer term moving averages (40 and 200 DMA). The pair remain strong and technically solid on the major crosses, holding above the 200 DMA against USD, EUR, JPY and CAD. Current short term key support of 0.9290/0.9300 is worth to watch, as a break through it could lead more bears jump in.
EUR/USD: The thin rally throughout public holiday was capped by the 10 DMA and a high of 1.3830 was touched as USD/JPY failed to break Asia’s 102.71 high. The pair then broke below 1.3805/10 support and hit a low of 1.3787 as EUR crosses was pressured. Techs shows some bearish signs, day/week RSI lean bearish and the pair has pierced the 21 DMA & daily cloud top. Stops are below 1.3780 and may attract early Asia sell off if no recovery takes hold soon. A break below 1.3780 could see a quick move towards 1.3700/20.
USD/JPY: Tight range trading being played, roughly 102.50-102.70, supported by a positive tone in the equity market. The GPIF story added optimism for the Japan bulls in what is sure to be a big week for the country as it looks to put a stalled Abenomics trade back on track. However, on the USD side, it remains unclear, although data been relatively good but short term rates are not reacting too much on it. Need a break above 103 for further movement.
Looking Ahead – Economic Data (GMT)
• 22:45 NZ March Perm/L-T Migration no f/c prev 3470
• 22:45 NZ March Ext Migration & Visitors no f/c prev 7%
Looking Ahead – Events, Other Releases (GMT)
• JPY Council on Economic & Fiscal Policy holds meeting
