Pulse of the Market
· Greenback once again in hazard of a serious bearish breakdown in spite of favorable risk flows
· Euro risk level rose once more as Portugal downgrade and EU wrangling threatens fresh crisis
· British Pound could undergo the most from tempered rate forecasts as speculation spurned
· Australian Dollar slide could turn into a tumble as rate expectations start to call for cut
The U.S Dollar, Japanese Yen and Swiss Franc rose aggressively in the yesterday’s trading session with the Franc rising to its strongest level ever. Currencies, equities and commodities plunged across the sphere as ongoing concerns in Japan weighed on the financial markets and investor sentiment. Meanwhile the Federal Reserve’s optimism was overshadowed by risk aversion. The Federal Reserve was careful with their choice of words for the latest monetary policy statement. They made no state of Japan and sounded more optimistic by describing the economic recovery as being “on a firmer footing.” Euro proved to be the most durable currency among all of the higher yielding currencies. Euro ended the yesterday’s session slightly higher against the Greenback. Regardless of a decline in the ZEW survey that showed investor confidence deteriorating, some people are still hopeful that the central bank will raise interest rates. The ECB could choose to delay their rate hike particularly if Japan is unable to control their nuclear problems or radiation levels. The ZEW survey of current conditions rose slightly from 85.2 to 85.4 but the expectations index fell from 15.7 to 14.1, a level below the long term average of 26.7. Euro Zone consumer prices are due for release in today’s trading session and based upon the rise in German producer prices and the overall hawkishness of the ECB, CPI is expected to trend higher. British Pound weakened significantly against the U.S Dollar, Euro and Swiss Franc, but rallied against the Commodity currencies. Concerns about radiation leaks and the risk of further aftershocks in disaster struck Japan caused investors to gather to the safety of the U.S Dollar and the Franc. The Department for Communities and Local Government released data that showed U.K house prices fell by 1.4% from the previous month, but are up 0.5% from a year ago. Weekly Earnings, the ILO Employment Rate and Jobless Claims are due for release in today’s session. The Japanese Yen rose strongly against all of the major currencies, defying the traditional logic that external shocks are negative for an economy and its currency.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 09:30 | GBP Jobless Claims Change (FEB) | High | | 1.3K | 2.4K |
| 09:30 | GBP Claimant Count Rate (FEB) | Medium | | 4.5% | 4.5% |
| 10:00 | CHF ZEW Survey (Expectations) (MAR) | Medium | | | -17.2 |
| 10:00 | Euro Zone Consumer Price Index (YoY) (FEB) | Medium | | 2.4% | |
| 11:00 | USD MBA Mortgage Applications (MAR 11) | Low | | | |
| 12:30 | USD Housing Starts (FEB) | Medium | | 575K | 596K |
| 12:30 | USD Producer Price Index (YoY) (FEB) | Medium | | 4.7% | 3.6% |
| 23:50 | JPY Tertiary Industry Index (MoM) (JAN) | Medium | | 1.4% | -0.8% |
Euro
The Single Currency held up better than most of the other major currencies and able to close near opening levels on the back of the widening FED or ECB divide on inflation. EUR/GBP surged above 0.8700 but EUR/JPY did end up falling with the USD/JPY slump. Overall the EUR/USD traded with a low of 1.3854 and a high of 1.4012 before closing the day around 1.3998 in the New York session.
Yen
The Japanese Yen was in the eye of the storm yesterday as news of radiation leaking and reports of radiation near Tokyo the world's largest city sent the Nikkei down over 13% at one stage. The market did stabilize in the mid of the session but the USD/JPY was under pressure for most of the day. Overall the USD/JPY traded with a low of 80.59 and a high of 82.02 before closing the day around 80.70 in the New York session.
British Pound
The British Pound fell sharply below 1.6000 before rebounding gentle to 1.6100 in the U.S session. Crosses are not helping with EUR/GBP and GBP/JPY both adding weight to the British Pound and both developing technically bearish for the Cable. Overall the GBP/USD traded with a low of 1.5977 and a high of 1.6184 before closing the day at 1.6076 in the New York session.
Australian Dollar
The Australian Dollar was battered over 200 pips as the market sold out of long position in a rush. 1.0000 broke in Asian session and then 0.9900 broke down in European session along with the Key 80.00 Yen level on the AUD/JPY cross. The market recovered slightly in the U.S session closing but still very vulnerable. Overall the AUD/USD traded with a low of 0.9814 and a high of 1.0105 before closing the day at 0.9909 in the New York session.
Euro-Yen
EURJPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The RSI is above 45 and lies below the neutral zone. Overall the cross has lost 1.07%.
Sterling-Yen
Currently GBPJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is indicating a bullish stance. The RSI is above 35 reading and lies below the neutral zone. The pair has lost 1.70%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic gives bearish and MACD is also indicating a bearish stance. The RSI is above 27 reading and lies below the neutral region. The cross has lost 2.97%.
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 66 reading and lies above the neutral region. The pair has gained 0.64%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The RSI is above 32 and lies below the neutral region. The pair has lost 1.44%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3739 | 1.3797 | 1.3897 | 1.3955 | 1.4055 | 1.4113 | 1.4213 |
| USD/JPY | 78.76 | 79.67 | 80.19 | 81.10 | 81.62 | 82.53 | 83.05 |
| GBP/USD | 1.5767 | 1.5872 | 1.5974 | 1.6079 | 1.6181 | 1.6286 | 1.6388 |
| USD/CHF | 0.9009 | 0.9074 | 0.9119 | 0.9184 | 0.9229 | 0.9294 | 0.9339 |
| USD/CAD | 0.9492 | 0.9612 | 0.9732 | 0.9852 | 0.9972 | 1.0092 | 1.0212 |
| EUR/JPY | 109.05 | 110.50 | 111.74 | 113.19 | 114.43 | 115.88 | 117.12 |
| GBP/JPY | 125.08 | 127.12 | 128.44 | 130.48 | 131.80 | 133.84 | 135.16 |
| CHF/JPY | 86.44 | 87.06 | 87.55 | 88.17 | 88.66 | 89.28 | 89.77 |
| AUD/JPY | 75.21 | 77.22 | 78.59 | 80.60 | 81.97 | 83.98 | 85.35 |
| EUR/GBP | 0.8568 | 0.8596 | 0.8651 | 0.8679 | 0.8734 | 0.8762 | 0.8817 |
| EUR/CHF | 1.2517 | 1.2625 | 1.2726 | 1.2834 | 1.2935 | 1.3043 | 1.3144 |
| GBP/CHF | 1.4348 | 1.4518 | 1.4624 | 1.4794 | 1.4900 | 1.5070 | 1.5176 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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