Pulse of the Market
· Greenback may continue to lose ground as the economic docket reinforced a weakened outlook
· The Single Currency held steady ahead Of European Central Bank President Trichet’s testimony
· Cable may continue to retrace the decline as policy makers hold an enhanced outlook for the region
· Japanese Finance Minister Yoshihiko Noda said the G-7 nations will lend a hand as appropriate
The U.S Dollar ended the yesterday’s trading session lower against the basket of major currencies as safe haven flows continued to ease out. Demand for risk helped to lift the Single Currency, Cable, and commodity currencies while keeping the Japanese Yen and the Swiss Franc weak. Yesterday’s price action shows that for the time being, the intervention efforts by G7 nations on Friday has successfully stopped the Yen from rising. Simultaneously, the market is shifting its focus to Libya from Japan. Meanwhile the latest U.S economic report showed more receptacle of weakness in the U.S economy. U.S housing market continues to underperform with existing home sales falling 9.6 percent in the month of February. Only 4.88 million units were sold compared to 5.4 million the previous month. The Single Currency ended the yesterday’s trading session higher against the Greenback. The Single Currency was steady for most of the Asian and European trading session but started to trade higher in the U.S session after Russia's Finance Minister said they are adding Spain back to the list of countries in which their National Welfare Fund can be invested. Bond auctions in the Euro Zone have been well received and Russia's announcement is a strong vote of confidence. Portugal, who has presented its austerity plan to parliament, could see a vote on the plan. If the plan is not approved, it could push Portugal into the hands of the EU and IMF. The only thing that has been supporting the Single Currency is the hawkishness of the European Central Bank. The Swiss Franc weakened against the U.S Dollar and Euro; Switzerland officials are worried that a worsening EU crisis could push the Franc higher. The British Pound traded at one year high against the U.S Dollar. This is a big week for the Sterling with U.K consumer prices and retail sales due for release along with the BoE Quarterly Monetary Policy Statement. Economic data has taken a turn for the worse and the only things sustaining the rally in the Cable is risk appetite and the prospect of tighter monetary policy from the Bank of England. The Japanese Yen traded lower against all of the major currencies, a sign that the G7’s intervention efforts are working. The Canadian and Australian Dollars extended their gains against the U.S Dollar thanks to the improvement in risk appetite and higher commodity prices.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
04:30 | Japan All Industry Activity Index (MoM) (JAN) | Medium | 2.8% | -0.2% | |
07:00 | Switzerland Trade Balance (Swiss Franc) (FEB) | Medium | 2.04B | ||
09:30 | U.K Consumer Price Index (YoY) (FEB) | High | 4.2% | 4.0% | |
09:30 | U.K Retail Price Index (FEB) | Medium | 230.6 | 229.0 | |
12:30 | Canada Leading Indicators (MoM) (FEB) | High | 0.7% | 0.3% | |
14:00 | U.S House Price Index (MoM) (JAN) | Medium | 5.2% | -0.3% | |
14:00 | U.S Richmond Fed Manufacturing Index (MAR) | Low | 24 | 25 |
Euro
The Single Currency pushed above 1.4200 in the yesterday’s trading session as the market turned risk on and reproved the U.S Dollar. EUR/JPY is providing a lot of support and could continue to break higher if more intervention emerges. Market expectations of a rate rise at the next ECB meeting are rising as more members make hawkish inflation fighting comments. Overall the EUR/USD traded with a low of 1.4138 and a high of 1.4239 before closing the day around 1.4224 in the New York session.
Yen
The Japanese Yen consolidated above 80.80 Yen and grinded higher as the Japanese Yen remained weak across the board yesterday. EUR/JPY and AUD/JPY led the crosses higher as they tracked stock markets and their individual majors. Fears of further intervention are keeping the Japanese Yen buyers very cautious. Overall the USD/JPY traded with a low of 80.74 and a high of 81.30 before closing the day around 81.01 in the New York session.
British Pound
The British Pound moved higher above 1.6300 where consolidated in quiet trading session yesterday. EUR/GBP fell from profit taking at 0.8740 to 0.8710. The market outlook is turning bullish on the British Pound as risk appetite picks up and a short term bottom is put into a place. Overall the GBP/USD traded with a low of 1.6203 and a high of 1.6326 before closing the day at 1.6310 in the New York session.
Canadian Dollar
The Canadian Dollar extended its gains against the Greenback thanks to the improvement in risk appetite and higher commodity prices. The price of crude settled above $102 a barrel as the conflicts in Libya continue to wage on. Canadian retail sales are scheduled for release today and consumer spending is expected to improve immensely. Overall the USD/CAD traded with a low of 0.9747 and a high of 0.9845 before closing the day at 0.9779 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 58 and lies above the neutral zone. Overall the cross has gained 0.78%.
Sterling-Yen
Currently GBPJPY is trading above 14, 100 and below 50 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 50 reading and lies above the neutral zone. The pair has gained 0.93%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 46 reading and lies below the neutral region. The cross has gained 1.33%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish and MACD is issuing a bullish signal. The RSI is above 66 reading and lies above the neutral region. The pair has lost 0.16%.
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 40 and lies below the neutral region. The pair has gained 0.72%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.4061 | 1.4099 | 1.4162 | 1.4200 | 1.4263 | 1.4301 | 1.4364 |
USD/JPY | 80.17 | 80.46 | 80.73 | 81.02 | 81.29 | 81.58 | 81.85 |
GBP/USD | 1.6110 | 1.6157 | 1.6233 | 1.6280 | 1.6356 | 1.6403 | 1.6479 |
USD/CHF | 0.8957 | 0.8987 | 0.9014 | 0.9044 | 0.9071 | 0.9101 | 0.9128 |
USD/CAD | 0.9638 | 0.9692 | 0.9736 | 0.9790 | 0.9834 | 0.9888 | 0.9932 |
EUR/JPY | 113.70 | 114.07 | 114.65 | 115.02 | 115.60 | 115.97 | 116.55 |
GBP/JPY | 129.93 | 130.44 | 131.29 | 131.80 | 132.65 | 133.16 | 134.01 |
CHF/JPY | 88.88 | 89.12 | 89.34 | 89.58 | 89.80 | 90.04 | 90.26 |
AUD/JPY | 79.20 | 79.79 | 80.64 | 81.23 | 82.08 | 82.67 | 83.52 |
EUR/GBP | 0.8650 | 0.8674 | 0.8696 | 0.8720 | 0.8742 | 0.8766 | 0.8788 |
EUR/CHF | 1.2705 | 1.2743 | 1.2803 | 1.2841 | 1.2901 | 1.2939 | 1.2999 |
GBP/CHF | 1.4519 | 1.4572 | 1.4662 | 1.4715 | 1.4805 | 1.4858 | 1.4948 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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