FX Trading Australia – Weekly FOREX Market Summary
- Dollar gave back some of its gains as the market preferred taking profits on a thin trading day and lack of any key data release provided no incentive to push the Greenback higher. Greenspan’s comments of high oil prices not likely to be long lasting helped prices to ease back but the market is eyeing the Crude oil stocks data released today. Challenger layoffs report was encouraging showing a 20% drop but higher inflation is curbing hiring plans.
- The Euro came off its lows and has stabilized around 1.2850 helped by lack of clear direction in the market and uncertainty of oil price direction affecting the Dollar. The zone’s PMI Services data was came slightly higher than expected due to a rise in expectations index. Real money demand also supported it and has strong support in the 1.2750-75 region.
- The Yen came off its lows against the Greenback as well as the crosses as Greenspan’s comments helped it rally in line with oil prices. Household spending declined slightly less than expected but it remains under pressure ahead of data releases with today’s Leading Economic index expected to be on the weak side. Profit taking on any move above 109 should help minimize its losses.
- The Pound rallied back above 1.88 helped by better than expected data and gains on its Euro and Yen cross. House prices came in higher than expected giving further evidence of stabilization in House prices instead of a sharp fall. PMI Services surprised to the upside which was highest since May last year. Focus shifts to BoE’s meeting which starts today with rates expected to stay on hold in tomorrow’s decision.
- The Aussie crashed by around 50 points aa the RBA kept rates on hold against market consensus. Rates might still increase by 25 bps in the next few months but given the uncertain state in the economy’s direction, rates might remain on hold. Given the hawkish tone of U.S. Fed Reserve, the Aussie is likely to see sentiment turn against it with a fall towards the 0.7590-0.7610 support zone likely.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
February Household Spending |
|
4.3% |
-1.8% |
In line with recent data results but spending expected to pick up. |
|
|
|
March PMI Services |
Euro-Zone |
53.0 |
53.0 |
Slightly higher than estimated on gains in expectations sub index. |
|
|
|
March PMI Services |
|
55.1 |
57.0 |
Higher than expected as optimism increase for economy’s outlook |
|
|
|
RBA Rate Decision |
|
5.5% |
5.5% |
Expectations were for a rise but rates on hold as RBA concerned about slow growth. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
February Leading Economic Indicator |
|
54.5% |
25.0% |
Should drop as many sectors remain on the weak side. |
|
|
February Retail Trade m/m |
Euro-Zone |
0.3% |
-0.1% |
Should decline as post holiday sales have dropped. |
|
|
February Factory Orders m/m |
|
-3.5% |
0.0% |
Could come in lower as demand remains low. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.2799 and high was 1.2876.
The pair closed at 1.2867.
Its recent base around 1.2850 has broken below and the pair looks set to test its yearly lows in the 1.2750-75 zone. On the upside any rally above 1.29 is expected to be sold with very strong resistance around 1.30. Lack of any key data should lead to thin trading with data outcomes eyed for intra day moves.
Key resistance is seen at 1.2905 followed by 1.2995 while support starts at 1.2805 followed by 1.2745.
USD/JPY – Yesterday’s low was 108.07 and high was 108.88.
The pair closed at 108.30.
It was helped by easing of oil prices but prospect of poor data keeps it under pressure. 108.90-109.10 is the strong resistance zone which should lead to profit taking on any rally above it. Decent Dollar bids exists around 107.75 with very strong ones in the 107.20-40 zone. The pair is likely to remain in the 108 region.
Key Resistance is seen at 108.85 followed by 109.45 while support starts at 107.75 followed by 107.20.
GBP/USD – Yesterday’s low was 1.8717 and high was 1.8816.
The pair closed at 1.8795.
Good data from the
Key Resistance is seen at 1.8845 followed by 1.8915 while support starts at 1.8715 followed by 1.8640.
AUD/USD – Yesterday’s low was 0.7627 and high was 0.7697.
The pair closed at 0.7642.
Rates on hold which makes puts lot of pressure on the Aussie with the strong support zone of 0.7590-0.7610 likely to be tested. Decent support is expected around that region but a break would lead us to 0.7555. On the upside 0.77 holds mild resistance with strong resistance around 0.7755. any move above 0.7725 would bring in sellers.
Key Resistance is seen at 0.7705 followed by 0.7755 while support starts at 0.7615 followed by 0.7545.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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