Currency Updates:
The Australian Dollar (AUD): The pair was under pressure as US yields put the dollar on solid footings and it traded to a new trend low of 0.9208. Post minutes saw another spike up on USD but gains were quickly erased as US yield pulled back and AUD tested hourly resistance by 0.9240. Little pullback were seen. For today, the major risks event will be inflation expectation and China HSBC PMI due at 01:00GMT & 01:45GMT.
AUD/USD: The trend remains down but support into 0.9200 looks tough for now. A long lower wick on the daily candle is in place to suggest recent losses may need to consolidate before 0.9200 breaks.
EUR/USD: EUR made another attempt into 1.3730/40 resistance on the drop of USD/JPY to 100.80 area. Rebound on US yield then added pressure to EUR and the pair dived towards 1.3655. As Europe closed, the pair then went on a stop loss hunt, the EUR took a quick dive to the 200-DMA. Short covering started as we were close to the recent low and also a slid on US yield which pushed the pair towards 1.3680-90 area. EZ PMIs are due today, soft reading may see 200 DMA retested.
USD/JPY A little something for bulls and bears in USD/JPY today, as prices fell toward this year’s 100.76 lows only to ricochet up to and just through the last two day’s 101.60 highs in NorAm trading. Tsy yields and Nikkei futures never backed the o/n slide, and reinforced the rebound when the Feb lows couldn’t be broken and the 100.75 barrier just below it was left untouched. Prices sprinted first up to hourly Cloud & 100-HMA resistance by 101.40 and eventually to 101.63, but somewhat dovish Fed speakers and FOMC Minutes trimmed Tsy yields. A marginal outside-up day with a long Candle leg gives the pair some traction. BOJ’s Kuroda says policy on hold and not directed toward by FX or stock prices. Apr Trade gap was smaller, but bigger than f/c. Offers now into 101.75 and more at 102. Weidmann gave EUR/JPY a little extra lift. Shorts may have been looking for an excuse to book some profits given how close today’s low got to the 200-DMA & 76.4% support near 138. AUD/JPY is closing by its high after it, too, got fairly close to the 200-DMA. GBP/JPY’s uptrend resumed today after more impressive UK data. Weekly investment flows & Markit PMI for May out tonight.
Looking Ahead – Economic Data (GMT)
• 23:50 JP Foreign Bond Investment w/e 345.7b-prev
• 23:50 JP Foreign Invest JP Stock w/e -153.9b-prev
• 01:45 CN HSBC Mfg PMI Flash May f/c 48.1, 48.1-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
