Currency Updates:
The Australian Dollar (AUD): The AUD rallied steadily yesterday towards 0.9375 into NY open and hit a high of 0.9386. However, no further gains were seen as 0.9400 barrier and the upcoming Aus Govt budget announcement to sap the positive energy. The early gains were then erased quickly as US yields were firm along with US equities while USD/JPY pressed towards 102.20. Few Oz data and China industrial output due later in Asia session and U.S retail sales due tonight.
The AUD/USD: Market await for U.S retail sales for a better indication on the pair. For now, range is still holding between 0.9345-0.9395. A clean break above the cloud base and 0.9400 barrier puts April’s high (0.9460) in play.
The EUR/USD: Ranges were relatively tight (1.3749-75) and with the bearish bias posted by Draghi remains, the pair managed to test the hourly resistance near 1.3775-80. However, no further pushes were seen and the pair dropped back down to where we started. Tech bolster the bear view as last week’s bearish engulfing candle looms large, a long upper wick forms on the 12th of May candle and day/week RSI trend lower. Market await for U.S Retail sales and also PPI on Wed.
Yen Crosses: USD/JPY Technical disaster was averted Friday when EUR/JPY’s breach of key supports by 140 could not be sustained into that day’s close. Monday trading was above the 140.02 daily Cloud base and most of Friday’s losses were retraced. Just how forceful any ECB easing in June will be remains a point of contention, attracting some opportunistic profit-taking on last week’s fresh EUR sales and even a little bargain hunting and delayed commercial bidding. USD/JPY took the sour Japanese C/A data from o/n as a signal the BOJ may be unable to rest on its QQE laurels. USD/JPY sellers have also been deterred as prices ran into immovable bids in the lower 101.00s for a third month running. N225 futures & S&Ps headed higher, along with Tsy yields on the eve of US Retail Sales for April out Tuesday. Japan’s GDP is out Thur, but Q1 was skewed by the April 1 tax hike. In any event, USD/JPY looks to have found a base with last week’s lows and now faces another run at the daily Cloud top and upper 21-day Bolli, last by 102.80. Initial resistance is from the Tenkan & 50% of the 103.02-101.43 slide at 102.23, the Kijun, 61.8% and Cloud base at 102.37/41/44.
Looking Ahead – Economic Data (GMT)
• 22:45 NZ Food Price Index Apr -0.30-prev
• 01:30 AU Home Price Index Q1 f/c 2.90%,3.40%-prev
• 01:30 AU Housing Finance Mar f/c -1.50%, 2.30%-prev
• 01:30 AU Invest Housing Finance Mar 4.40%-prev
• 05:30 CN Urban inv (ytd) yy Apr f/c 17.70%, 17.60%-prev
• 05:30 CN Industrial Output YY Apr f/c 8.90%, 8.80%-prev
• 05:30 CN Retail Sales YY Apr f/c 12.20%, 12.20%-prev
Looking Ahead – Events, Other Releases (GMT)
• 23:30 AU RBA Head of Fin’l Stability Dept Luci Ellis speaks at TR regulatory Summit
