FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
- Dollar held firm in spite of a record high Trade Deficit outcome which was largely due to the high import costs of oil. Since oil prices have eased in the last few days the market expects deficit to decrease in months to come. In spite of the expiration of global textile quotas since start of this year, last month’s deficit with
China
Euro
- The Euro slipped below 1.29 before stabilizing above it, as the market continues to play the range between key levels. Lack of any decisive breakout puts prime focus on the U.S. TIC’s data on Friday while the continuous stream of weak data from the Euro-Zone has also prevented it from taking advantage of the record high
U.S.
Yen
- The Yen remained within its recent range with Dollar bids around 107.50 still holding firm while the easing in oil prices helped it rally on its crosses as it broke below 139 against the Euro. EU Finance ministers meet saw renewed calls for Asian nations to have flexibility in their currency regimes. 107.25 holds strong Dollar bid interest while 138.55 for the Euro.
Pound
- The Pound swayed with the Dollar’s general direction meeting strong offers around 1.8975 before finding solid bid interest on its pullback towards 1.8835. It remains supported by the surprise increase in Retail Sales which keeps hopes alive for a rate hike this year especially since MPC members have their eye on the extent of consumer spending. Today’s employment data is eyed for further direction with resistance in the 1.8955-70 zone.
Australian Dollar
- The Australian dollar remained within the 0.77 region as other majors failed to provide any cue with offers seen around 0.7775 while good bid interest is seen around the 0.7675-0.77 zone. This mornings Consumer Sentiment index has rebounded less than expected largely due to the spike in oil prices and with an even chance of the RBA raising rates in a few months, consumers are stiffening their spending habits.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
February Trade Balance |
|
-931Mn |
-1517Mn |
Like other nations, higher oil prices are increasing import costs. |
|
|
|
February Trade Balance |
|
-$58.3Bn |
-$61.0Bn |
Higher oil prices the main reason for the increase but exports are not keeping up |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
March CPI m/m |
|
0.5% |
0.5% |
Expected to stay steady as high oil prices are offset by drop in common items |
|
|
March Unemployment Rate |
|
2.6% |
2.6% |
Expected to stay steady while unemployment should inch higher and wage growth to remain unchanged. |
|
|
March Retail Sales |
|
0.5% |
0.7% |
Consumer spending remains robust. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.2862 and high was 1.3013.
The pair closed at 1.2902.
The pair is still lacking a decisive direction with TIC’s data on Friday the next focus. For now, good support is expected to come up around 1.2855. A break below could accelerate losses down to the strong support zone around 1.2775-1.28. On the upside mild resistance exists around 1.2950 with very strong resistance in the 1.3000-15 zone.
Key resistance is seen at 1.2955 followed by 1.3025 while support starts at 1.2855 followed by 1.2775.
USD/JPY – Yesterday’s low was 107.51 and high was 108.46.
The pair closed at 107.79.
It broke below Dollar bids around 107.75 with strong bids around 107.50 holding well for now. A break below would bring into focus the strong support zone of 106.90-107.10. On the upside resistance is strong around 108.50 with any foray towards the 108.85-109.10 zone likely to lead to profit taking.
Key Resistance is seen at 108.25 followed by 108.85 while support starts at 107.45 followed by 106.90.
GBP/USD – Yesterday’s low was 1.8829 and high was 1.8974.
The pair closed at 1.8901.
The pair see sawed with Dollar’s general direction and awaits today’s key data from both sides of the
Key Resistance is seen at 1.8975 followed by 1.9045 while support starts at 1.8855 followed by 1.8775.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7718 and high was 0.7767.
The pair closed at 0.7743.
The Aussie is locked within a narrow range with 0.77 bringing up good bid interest while offers are strong around 0.7775. Cue is taken from other majors for a decisive breakout with U.S. TIC’s data eyed on Friday. A break below 0.77 should bring up good bid interest around 0.7675 while any foray above 0.78 should lead to profit taking.
Key Resistance is seen at 0.7775 followed by 0.7825 while support starts at 0.7695 followed by 0.7655.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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