Pulse of the Market
· Greenback is still at the compassion of risk trends and Euro but medium term outlook is changing
· Standard & Poor's joined Portugal in downgrading Portuguese debt
· British Pound reversal brings currency back to its critical turning point
· Loonie sold off as Congress voted to support no-confidence movement that would force an election
The Greenback ended the Friday’s trading session higher against all of the major currencies except for the Australian Dollar. One of the biggest stories on Friday was the rise in the Australian Dollar to a record high against the U.S Dollar. Regrettably there was no tangible reason for the move in the Aussie. All four central bank officials that spoke on Friday sounded like they would support ending Quantitative Easing in June. Fed President Fisher expressed his concern about inflation and restated his belief that additional asset purchases aren’t necessary. Meanwhile the movement in the U.S Dollar could be back to fundamentals this week with the economic calendar full of market moving data. The Single Currency traded lower against the U.S Dollar on Friday pressured by fresh concerns about Portugal and the lack of comprehensive progress in the EU Summit. Standard & Poor's joined Portugal in downgrading Portuguese debt prompting one of the first major rejections of Portuguese assets. Last week the market has treated Portugal as a remote problem that will not spread to other parts of Euro Zone but this sentiment is losing popularity very quickly. In terms of the EU Summit, the members of the European Union pledged to move forward on creating a permanent bailout facility for the Euro Zone. If Portugal or another country requires a bailout, European leaders could be forced to make a decision on expanding the EFSF and other measures more quickly. The Cable weakened against all of its major counterparts in Friday’s trading session, with the exception of the Euro and Swiss Franc. Ratings agency Moody’s issued a warning to Chancellor George Osborne that the U.K could lose its AAA credit rating if his latest GDP forecasts from 2013 onwards prove to be excessively optimistic. The Japanese Yen ended the Friday’s trading session on a mixed note as it strengthened against the Euro, Pound and the Swiss Franc, but weakened against the U.S Dollar and commodity currencies. The Ministry of Internal Affairs and Communications released data showing that Japan’s national Consumer Price Index remained flat in February from the previous year for the third consecutive month. National Core Consumer Prices, on the other hand, fell marginally in February due to a temporary stabilization in energy prices.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 12:30 | USD Personal Consumption Expenditure Core (MoM) (FEB) | Medium | | 0.2% | 0.1% |
| 12:30 | USD Personal Spending (FEB) | Medium | | 0.6% | 0.2% |
| 12:30 | USD Personal Income (FEB) | Medium | | 0.4% | 1.0% |
| 14:00 | USD Pending Home Sales (MoM) (FEB) | Medium | | 0.9% | -2.8% |
| 23:30 | JPY Household Spending (YoY) (FEB) | Medium | | 0.0% | -1.0% |
| 23:30 | JPY Jobless Rate (FEB) | Medium | | 4.9% | 4.9% |
| 23:50 | JPY Retail Trade (YoY) (FEB) | Medium | | -0.5% | 0.1% |
Euro
The Single Currency ended the week on Friday lower against the U.S Dollar as the Portugal issue rankled and rejected to go away with many pricing in a bailout over the next couple of weeks. On the economic docket, March German IFO fell slightly to 111.1 vs. 111.3 previously. Overall the EUR/USD traded with a low of 1.4054 and a high of 1.4193 before closing the day around 1.4069 in the New York session.
Yen
The Japanese Yen started to rally on Friday as the U.S Dollar moved higher on the FED address from Plosser. EUR/JPY and GBP/JPY held up well even as the majors fell and could be set for moves higher over the medium term as they edge closer to raising rates themselves. Overall the USD/JPY traded with a low of 80.86 and a high of 81.48 before closing the day around 81.43 in the New York session.
British Pound
The British Pound fell back to the 1.6000 major level in the Friday’s trading session as Sterling fell in sympathy with the Single Currency. EUR/GBP fell back slightly from the 0.8800 level and developed into a closely watched gauge of British Pound relative strength. Overall the GBP/USD traded with a low of 1.6006 and a high of 1.6141 before closing the day at 1.6011 in the New York session.
Australian Dollar
The Australian Dollar hit all time position highs up near 1.0300 before coming under profit taking pressure and gave way to U.S Dollar strength. AUD/JPY moved stealthily higher as the uptrend continued posts Japanese Earthquake sell off. Overall the AUD/USD traded with a low of 1.0186 and a high of 1.0293 before closing the day at 1.0252 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 56 and lies above the neutral zone. Overall the cross has lost 0.17%.
Sterling-Yen
Currently GBPJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 46 reading and lies below the neutral zone. The pair has lost 0.07%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is also indicating a bullish stance. The RSI is above 58 reading and lies above the neutral region. The cross has gained 1.02%.
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 lost 0.09%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The RSI is above 42 and lies below the neutral region. The pair has gained 0.69%.
Appendix
Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3879 | 1.3966 | 1.4018 | 1.4105 | 1.4157 | 1.4244 | 1.4296 |
| USD/JPY | 80.41 | 80.64 | 81.03 | 81.26 | 81.65 | 81.88 | 82.27 |
| GBP/USD | 1.5829 | 1.5918 | 1.5964 | 1.6053 | 1.6099 | 1.6188 | 1.6234 |
| USD/CHF | 0.8976 | 0.9025 | 0.9115 | 0.9164 | 0.9254 | 0.9303 | 0.9393 |
| USD/CAD | 0.9679 | 0.9709 | 0.9764 | 0.9794 | 0.9849 | 0.9879 | 0.9934 |
| EUR/JPY | 113.55 | 114.01 | 114.29 | 114.75 | 115.03 | 115.49 | 115.77 |
| GBP/JPY | 129.16 | 129.67 | 130.03 | 130.54 | 130.90 | 131.41 | 131.77 |
| CHF/JPY | 87.19 | 87.77 | 88.10 | 88.68 | 89.01 | 89.59 | 89.92 |
| AUD/JPY | 81.66 | 82.07 | 82.78 | 83.19 | 83.90 | 84.31 | 85.02 |
| EUR/GBP | 0.8732 | 0.8753 | 0.8769 | 0.8790 | 0.8806 | 0.8827 | 0.8843 |
| EUR/CHF | 1.2785 | 1.2819 | 1.2886 | 1.2920 | 1.2987 | 1.3021 | 1.3088 |
| GBP/CHF | 1.4516 | 1.4566 | 1.4653 | 1.4703 | 1.4790 | 1.4840 | 1.4927 |
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