Pulse of the Market
· Greenback positioned in a feeble bullish close as risk trends once again falter
· Euro financial difficulty growing extra prominent and in need of attention
· British Pound investors counting the days to the Bank of England’s rate decision
· Japanese Yen stability should be queried with FX volatility at 30 month low
The Greenback managed to appreciate against most of the major currencies in the yesterday’s trading session. Yesterday’s been a volatile trading day regardless of the lack of U.S economic data. The U.S Dollar started the session lower, however when there’s less than an hour left, currencies started to decline, giving up all of their earlier gains to end the day in negative territory. A number of Federal Reserve Presidents delivered speeches yesterday. Fed President Fisher, a voting member of the FOMC this year and said that he does not support extending asset purchases beyond June and in fact may vote to cut short a second round of QE. Fed President Evans, who is also a voting member, was more neutral as he acknowledged recent improvements in the U.S economy and the labor market. Euro rose to a 4 month high against the U.S Dollar on intraday basis before surrendering to selling pressure. Rate hike expectations continue to drive the move in the Euro and as long as oil stays above $100 a barrel, the pressure is on for the European Central Bank to raise interest rates. Euro strength could still be one of the prevailing premise in the foreign exchange market this week as long as the sovereign debt crisis does not come back to haunt the Euro. Euro Zone leaders are meeting this Friday to come up with a plan to tackle the debt crisis. If they fail to reach an agreement for the March 24-25 summit, Portugal could be “closed out the market” according to rating agency Fitch. British Pound was the worst performing currency yesterday which lost value against all of its major counterparts. Regardless of the lack of U.K or U.S economic data, the Cable weakened for the third consecutive trading session. Part of the weakness of the Cable could be attributed to the fact that its most hawkish member will be stepping down on May 31st. The Japanese Yen traded higher against all of the major currencies following better than expected economic data and risk aversion. Japan’s leading index and coincident index edged higher in the month of January and although the leading index fell short of expectations, the Japanese Cabinet raised its assessment of the coincident indicator for the first time since October 2009. Japanese economic data has been gradually improving but political troubles have made real progress difficult. Standard & Poor’s cut Japan’s credit rating in January for the first time since 2002 while Moody’s warned last month that they could also downgrade Japanese debt.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 00:01 | GBP RICS House Price Balance (FEB) | Medium | -26% | -26% | -31% |
| 06:45 | CHF Unemployment Rate (FEB) | Medium | | 3.7% | 3.8% |
| 07:45 | EUR French Trade Balance (Euros) (JAN) | Low | | -5.1B | -5.1B |
| 12:30 | USD NFIB Small Business Optimism (FEB) | Low | | 95.0 | 94.1 |
| 13:15 | CAD Housing Starts (FEB) | Medium | | 172.8K | 170.4K |
| 23:30 | AUD Westpac Consumer Confidence (MAR) | Medium | | | 1.9% |
Euro
The Single Currency broke through 1.4000 in European session before finding resistance and reversing as Greece was downgrade and stocks turned lower in the U.S session. March EU Sentix improved to 17.1 vs. 16.8 previously. The market is still cautious on buying the Euro aggressively with Portugal's bond yields remaining near highs. Overall the EUR/USD traded with a low of 1.3955 and a high of 1.4035 before closing the day around 1.3969 in the New York session.
Yen
The Japanese Yen tested 82.00 Yen level but held compact and rebounded softly into the close of the yesterday’s trading session. The outlook for the USD/JPY is range trading until the 81 to 84 Yen limits are broken. EUR/JPY traded around the 115 Yen level as the market consolidated the rally. Overall the USD/JPY traded with a low of 81.94 and a high of 82.37 before closing the day around 82.22 in the New York session.
British Pound
The British Pound enjoyed gains with the Single Currency in the starting hours of the session but reversed aggressively later in the day falling below 1.6200 at one point. GBP/JPY and EUR/GBP not helping as the Pound underperforms and buyers stay cautious ahead of this week's BoE meeting. Overall the GBP/USD traded with a low of 1.6181 and a high of 1.6341 before closing the day at 1.6200 in the New York session.
Canadian Dollar
The Canadian Dollar traded higher against the U.S Dollar regardless of a 5.1 percent drop in building permits. Canadian Dollar was supported by the rise in oil prices. The Canadian housing market is showing signs of slowing and this week’s housing market figures are expected to confirm that. Overall the USD/CAD traded with a low of 0.9698 and a high of 0.9741 before closing the day at 0.9727 in the New York session.
Euro-Yen
EURJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The RSI is above 63 and lies above the neutral zone. Overall the cross has lost 0.22%.
Sterling-Yen
Currently GBPJPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 51 reading and lies above the neutral zone. The pair has lost 0.52%.
Aussie-Yen
Currently, the cross is trading below 14 and above 50, 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 51 reading and lies above the neutral region. The cross has lost 0.28%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 63 reading and lies above the neutral region. The pair has gained 0.31%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The RSI is above 41 and lies below the neutral region. The pair has lost 0.35%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3858 | 1.3906 | 1.3938 | 1.3986 | 1.4018 | 1.4066 | 1.4098 |
| USD/JPY | 81.55 | 81.75 | 81.98 | 82.18 | 82.41 | 82.61 | 82.84 |
| GBP/USD | 1.5980 | 1.6081 | 1.6140 | 1.6241 | 1.6300 | 1.6401 | 1.6460 |
| USD/CHF | 0.9202 | 0.9219 | 0.9241 | 0.9258 | 0.9280 | 0.9297 | 0.9319 |
| USD/CAD | 0.9660 | 0.9679 | 0.9703 | 0.9722 | 0.9746 | 0.9765 | 0.9789 |
| EUR/JPY | 113.80 | 114.17 | 114.51 | 114.88 | 115.22 | 115.59 | 115.93 |
| GBP/JPY | 131.59 | 132.25 | 132.73 | 133.39 | 133.87 | 134.53 | 135.01 |
| CHF/JPY | 88.16 | 88.37 | 88.55 | 88.76 | 88.94 | 89.15 | 89.33 |
| AUD/JPY | 82.19 | 82.55 | 82.87 | 83.23 | 83.55 | 83.91 | 84.23 |
| EUR/GBP | 0.8519 | 0.8544 | 0.8583 | 0.8608 | 0.8647 | 0.8672 | 0.8711 |
| EUR/CHF | 1.2833 | 1.2873 | 1.2907 | 1.2947 | 1.2981 | 1.3021 | 1.3055 |
| GBP/CHF | 1.4816 | 1.4897 | 1.4954 | 1.5035 | 1.5092 | 1.5173 | 1.5230 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
No comments:
Post a Comment