Pulse of the Market
· The Greenback regained some of its footing yesterday following the rebound in risk aversion
· European Central Bank board member Jozef Makuch said a rate hike in April is highly probable
· U.K final fourth quarter GDP report showed a 0.5% contraction in the growth rate
· Loonie has encountered stiff resistance as investors trim their bets that the BoC will raise rates
The Greenback ended yesterday’s trading session on a mixed note. Regardless of disappointing economic reports, investors' appear to have a modest appetite for riskier assets yesterday. The S&P Case/Shiller Home Price Index was released slightly better than expected, but the measure still dropped by the most since December 2009. A separate report showed that consumer confidence dropped in March to 63.4, down from last month's 72 and short of the expected reading of 65. This Friday's Non Farm Payrolls report will be closely watched by global markets as investors gauge the health of the U.S economy. The U.S Dollar has however avoided a potentially steep selloff yesterday after the disappointing economic data as commodity prices ease. The Single Currency was relatively flat yesterday in spite of a further downgrade in Greece's credit rating. S&P knocked the rating on Greek sovereign debt down two steps to BB and kept a negative outlook. However, after rapid downgrades from all three of the major credit ratings agencies, investors appear to be largely invulnerable to the news at this point. The Euro does however continue to struggle to sustain any significant gains after failing to break key support last week. For the time being, the Single Currency seems to remain within its recent ranges as investors await the ECB's April 7th monetary policy meeting. The British Pound slipped below key support levels yesterday, extending its losing streak against both the U.S Dollar and Euro. The Cable was the worst performing currency this month against its G10 counterparts as U.K GDP contracted 0.5%. Investors are far more confident in the outlook for monetary policy from both the ECB and Fed than they are from the BoE. With such uncertainty over both the direction of the U.K economy and monetary policy, Cable will struggle to maintain its recent levels. The Japanese Yen was lower yesterday against all of its major counterparts as most investors expect the gap between Japanese borrowing costs and those of other major economies to widen significantly in the coming months. The Yen fell to the lowest level in ten months against the Euro as most investors expect the ECB to hike interest rates as soon as at their next meeting in April. With the final economic impact of the worst natural disaster in Japanese history still unknown.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 00:30 | Australia Job Vacancies (FEB) | Low | -1.7% | | 6.6% |
| 09:00 | Euro Zone Business Climate Indicator (MAR) | Medium | | 1.42 | 1.45 |
| 09:00 | Euro Zone Consumer Confidence (MAR) | Medium | | -10.6 | -9.9 |
| 09:30 | Switzerland KOF Swiss Leading Indicator (MAR) | Medium | | 2.17 | 2.18 |
| 11:00 | U.S MBA Mortgage Applications (Mar 25) | Low | | | |
| 12:15 | U.S ADP Employment Change (MAR) | Medium | | 205K | 217K |
| 23:01 | U.K GfK Consumer Confidence Survey (MAR) | Medium | | -30 | -28 |
Euro
The Single Currency was able to extend its rally in yesterday’s trading session above 1.4100 before reversing on FED speaker Bullard hawkish comments the Quantitative Easing 2 program maybe be cut short by 100 billion. Standard & Poor’s knocked the rating on Greek sovereign debt down two steps to BB. Overall the EUR/USD traded with a low of 1.4046 and a high of 1.4147 before closing the day around 1.4110 in the New York session.
Yen
The Japanese Yen was strong pushing to pre earthquake levels above 82.00 Yen on the hawkish comments from a Fed member that they may close the Quantitative Easing 2 program early. AUD/JPY moved above 84.00 Yen and EUR/JPY above 116.00 Yen. The Yen is under pressure technically with many pairs breaking higher altogether. Overall the USD/JPY traded with a low of 81.53 and a high of 82.46 before closing the day around 82.46 in the New York session.
British Pound
The British Pound continued to underperform and was reproved against the Single Currency which hit year highs above 0.8830 on EUR/GBP before paring back some gains. Cable continued to pivot 1.6000 with range where investors enjoying some stability since Monday. Overall the GBP/USD traded with a low of 1.5942 and a high of 1.6041 before closing the day at 1.6009 in the New York session.
Australian Dollar
The Australian Dollar was very strong bouncing off its lows from the European trading session to resume its rally back to the 1.0300 resistance. 1.0300 is forming as a key resistance to the march higher and the AUD/USD will need to close above the figure to open up higher levels. Overall the AUD/USD traded with a low of 1.0203 and a high of 1.0295 before closing the day at 1.0290 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 gained 1.13%.
Sterling-Yen
Currently GBPJPY is trading above 14, 100 and below 50 days moving average. Fast stochastic is issuing bullish and MACD is also indicating a bullish stance. The RSI is above 54 reading and lies above the neutral zone. The pair has gained 1.08%.
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 65 reading and lies above the neutral region. The cross has gained 1.43%.
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 68 reading and lies above the neutral region. The pair has gained 0.06%.
Sterling-Swiss
This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The RSI is above 44 and lies below the neutral region. The pair has gained 0.46%.
Appendix
Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3954 | 1.4000 | 1.4055 | 1.4101 | 1.4156 | 1.4202 | 1.4257 |
| USD/JPY | 80.91 | 81.22 | 81.84 | 82.15 | 82.77 | 83.08 | 83.70 |
| GBP/USD | 1.5855 | 1.5898 | 1.5954 | 1.5997 | 1.6053 | 1.6096 | 1.6152 |
| USD/CHF | 0.9068 | 0.9103 | 0.9152 | 0.9187 | 0.9236 | 0.9271 | 0.9320 |
| USD/CAD | 0.9678 | 0.9708 | 0.9724 | 0.9754 | 0.9770 | 0.9800 | 0.9816 |
| EUR/JPY | 113.74 | 114.27 | 115.31 | 115.84 | 116.88 | 117.41 | 118.45 |
| GBP/JPY | 129.13 | 129.72 | 130.87 | 131.46 | 132.61 | 133.20 | 134.35 |
| CHF/JPY | 88.56 | 88.78 | 89.19 | 89.41 | 89.82 | 90.04 | 90.45 |
| AUD/JPY | 82.38 | 82.88 | 83.87 | 84.37 | 85.36 | 85.86 | 86.85 |
| EUR/GBP | 0.8758 | 0.8777 | 0.8795 | 0.8814 | 0.8832 | 0.8851 | 0.8869 |
| EUR/CHF | 1.2812 | 1.2849 | 1.2916 | 1.2953 | 1.3020 | 1.3057 | 1.3124 |
| GBP/CHF | 1.4546 | 1.4589 | 1.4660 | 1.4703 | 1.4774 | 1.4817 | 1.4888 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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