- Dollar continued to strengthen as the focus shifts to tomorrow’s Fed meeting with the market expecting a hawkish tone in the accompanying statement with good chances of the word ‘measured’ being removed. Inflationary pressures remain high in spite of growth pace of the economy slowing but the easing of oil prices below $50 pb augurs well for a pick up in consumer confidence. Meanwhile a case of déjà vu for the Yuan revaluation story as speculation was rife for a move in that direction this week but this was denied by the Bank of China.
- The Euro has broken below its support at 1.2875 and is likely to go towards its yearly lows as the strong resilience of the Greenback and continuous stream of poor data from the Euro-Zone is increasing the recent negative sentiment around the Euro. French unemployment rate went to a 5 year high while the Zone’s Biz climate indicator as well as Confidence indicators for Consumers, Industrial & Services sector and the Economy declined.
- The Yen rallied across the board as the market was rife with speculation of a Yuan revaluation move this week with the official newspaper reporting that
China
- The Pound has slipped back towards its pivot region of 1.9040-55 due to general support for the Greenback while data was mixed with mortgage approvals and consumer credit increased providing more signs of stabilization in the housing market while the consumer confidence index declined. The focus is on
U.K.
- The Aussie Dollar is taking cue form other majors and the Yuan revaluation story helped it break back above 0.78 however it has strong offers in the 0.7825-40 zone which held firm once again. The focus shifts to the U.S. Fed and the Reserve Bank of
Australia
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
Retail Sales |
|
0.0% |
0.0% |
Has remained steady but overall picture looks bleak. |
|
|
Business Climate Indicator |
Euro-Zone |
-0.08 |
-0.28 |
Has come much lower thane expected due to high oil and energy prices coupled with poor domestic demand. |
|
|
April GFK Consumer Confidence |
|
1 |
0 |
Confidence has declined slightly as economic conditions remain mixed. |
|
|
March PCE Deflator |
|
2.3% |
2.4% |
Inflationary pressures continue to increase. |
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
April PMI Manufacturing |
Euro-Zone |
50.4 |
49.8 |
Should decline as poor demand and high costs has slowed activity. |
|
|
April ISM Manufacturing |
|
55.2 |
55.0 |
Should stay around recent levels with prices paid likely to increase. |
*Only key potential market moving data is mentioned, for a detailed Economic Calendar please click on the ‘Financial Calendar’ link on the web-site.
Forex Technical Analysis
EUR/USD – Friday’s low was 1.2852 and high was 1.2970.
The pair closed at 1.2870.
The Euro is slipping on poor data while the Dollar garners some support ahead of the Fed’s meeting. The support at 1.2875 has broken below with the next strong support zone at 1.2775-90 with a break below to target its yearly lows. On the upside the resistance comes at 1.2925 followed by strong selling interest in the 1.2980-1.30 zone. The 1.28 region holds a mixed technical picture for this pair.
Key resistance is seen at 1.2925 followed by 1.3015 while support starts at 1.2795 followed by 1.2745.
USD/JPY –Friday’s low was 104.60 and high was 106.07.
The pair closed at 104.74.
The Yen has rallied on the Yuan story but the preceding denial coupled with an overbought view has seen it go back above 105.25. The uncertainty on the Yuan issue would continue to see volatile moves with support strong in the 104.60-75 zone. On the upside mild resistance exits around 105.75 followed by a stronger one at 106.55.
Key Resistance is seen at 105.75 followed by 106.55 while support starts at 104.75 followed by 104.15.
GBP/USD – Friday’s low was 1.9052 and high was 1.9159.
The pair closed at 1.9084.
The pair has remained in the 1.90 region on conflicting data with key support at 1.8975 with a break below targeting the pivot region of 1.8940-55 where decent buying interest exits. On the upside 1.9095 holds mild resistance with strong resistance in the 1.9155-70 zone. Lack of any local data put focus on
Key Resistance is seen at 1.9095 followed by 1.9175 while support starts at 1.8975 followed by 1.8925.
AUD/USD – Friday’s low was 0.7771 and high was 0.7839.
The pair closed at 0.7810.
The pair remains within its narrow ranges as the market awaits interest rate outcomes from sides of the Pacific. Good support and buying interest exists at 0.7755 followed by stronger support above 0.7710. On the upside strong offers exits in the 0.7825-40 zone with a break bringing the 0.7875 resistance mark into focus.
Key Resistance is seen at 0.7825 followed by 0.7860 while support starts at 0.7755. followed by 0.7705.
Kunal ‘Kris’ Sharma
Forex Analyst
E-mail: kris@easy-forex.com
Australian Financial Services License 246566
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