Pulse of the Market
· The Greenback fell yesterday in spite of encouraging economic data
· Euro traded higher as inflation cools, encouraging ECB to delay the exit strategy further
· British Pound rally could be short lived as household confidence deteriorates further
· Aussie rallied against Japanese Yen for 9th consecutive trading day
The Greenback ended yesterday’s trading session lower against the basket of major currencies. The persistent rise in equities combined with the decline in Treasury yields and the gains in high yielding currencies indicate that investors are more optimistic and less worried about the risks in the global economy. Safe haven flows have continued to ease out of the U.S Dollar, Japanese Yen and Swiss franc, driving the Aussie to a fresh record high against the U.S Dollar and a 10 month high against the Japanese Yen. Chicago Purchasing Manager Index, weekly jobless claims and factory orders are scheduled for in today’s trading session. Yesterday, ADP reported private sector payroll growth of 201k, which was approximately the same pace of growth as the previous month. The Single Currency held steady against the Greenback ahead of Ireland’s stress test results. Today, the Irish Central Bank will publish the third round of its stress test results. The current estimate is for the results to show that Irish banks need approximately 25 billion Euros out of the 35 billion Euros set aside under the EU-IMF deal. If the amount is larger than this estimate, it will be bearish for the Euro, particularly if the banks require more than 35 billion Euros and if the amount needed is less, it could actually help the Euro. Confidence in the Euro Zone has deteriorated slightly according to the latest reports. German retail sales and the country’s unemployment report are due for release today. The British Pound extended its gains against the Greenback following better than expected economic data. In the service sector, more bearable weather conditions in January helped to promote the strongest recovery in economic activity for the sector in nearly 9 years. The index of services rose 1.3 percent in January after declining by 1.1 percent at the end of the year. The Japanese Yen weakened against all of the major currencies ahead of the fiscal year end in Japan. The latest Japanese economic reports showed industrial production rose 0.4 percent in February which was much better than expected but on an annualized basis, industrial production growth slowed from 3.5 to 2.8 percent.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
00:30 | Australia Private Sector Credit (MoM) (FEB) | Medium | 0.5% | 0.3% | 0.3% |
02:00 | New Zealand NBNZ Business Confidence (MAR) | Medium | -8.7 | 34.5 | |
05:00 | Japan Housing Starts (YoY) (FEB) | Medium | 7.4% | 2.7% | |
06:00 | U.K Nationwide House Prices s.a. (MoM) (MAR) | Medium | 0.0% | 0.3% | |
07:55 | German Unemployment Change (MAR) | High | -25K | -52K | |
09:00 | Euro Zone Consumer Price Index Estimate (YoY) (MAR) | Medium | 2.4% | 2.4% | |
12:30 | Canada Gross Domestic Product (YoY) (JAN) | High | 3.2% | ||
12:30 | U.S Chicago Purchasing Manager (MAR) | Low | 69 | 71.2 | |
12:30 | U.S Initial Jobless Claims (Mar-26) | Low | 380K | 382K |
Euro
The Single Currency fell in European trading session but reversed once again on strong EUR/JPY buying which tracked stock markets higher in the U.S trading Session. Resistance was found at 1.4150 for the second consecutive day and the market may wait until Friday’s U.S jobs report for fresh direction. Overall the EUR/USD traded with a low of 1.4051 and a high of 1.4146 before closing the day around 1.4126 in the New York session.
Yen
The Japanese Yen remained strong in yesterday’s trading session supported by the strong ADP Employment report at 201k vs. 208k previously. Crosses also enjoyed solid gains with AUD/JPY year highs above 85.00 Yen and EUR/JPY now above 117.00 Yen in exceptionally one sided moves. Overall the USD/JPY traded with a low of 82.36 and a high of 83.17 before closing the day around 82.88 in the New York session.
British Pound
The British Pound was able to finally rally in yesterday’s trading session on the back of strong data and positive markets. On the economic docket, CBI Distributive trades jumped to 15 vs. 6 previously in March. EUR/GBP slipped to 0.8750 but losses were limited and most of the moves were seen on GBP/JPY. Overall the GBP/USD traded with a low of 1.5978 and a high of 1.6082 before closing the day at 1.6072 in the New York session.
Australian Dollar
The Australian Dollar remained strong on the back of investor demand for AUD/JPY with the major closing above the key 1.0300 level ahead of Economic data today. The Market is starting to look higher now as investors become more comfortable with levels above parity. Overall the AUD/USD traded with a low of 1.0269 and a high of 1.0336 before closing the day at 1.0328 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 0.62%.
Sterling-Yen
Currently GBPJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is also indicating a bullish stance. The RSI is above 55 reading and lies above the neutral zone. The pair has gained 0.90%.
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 63 reading and lies above the neutral region. The cross has gained 0.86%.
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 64 reading and lies above the neutral region. The pair has lost 0.28%.
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 0.20%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.3974 | 1.4013 | 1.4069 | 1.4108 | 1.4164 | 1.4203 | 1.4259 |
USD/JPY | 81.63 | 81.99 | 82.44 | 82.80 | 83.25 | 83.61 | 84.06 |
GBP/USD | 1.5902 | 1.5940 | 1.6006 | 1.6044 | 1.6110 | 1.6148 | 1.6214 |
USD/CHF | 0.9048 | 0.9111 | 0.9147 | 0.9210 | 0.9246 | 0.9309 | 0.9345 |
USD/CAD | 0.9616 | 0.9650 | 0.9682 | 0.9716 | 0.9748 | 0.9782 | 0.9814 |
EUR/JPY | 115.37 | 115.79 | 116.43 | 116.85 | 117.49 | 117.91 | 118.55 |
GBP/JPY | 130.33 | 131.07 | 132.14 | 132.88 | 133.95 | 134.69 | 135.76 |
CHF/JPY | 88.87 | 89.16 | 89.69 | 89.98 | 90.51 | 90.80 | 91.33 |
AUD/JPY | 83.86 | 84.28 | 84.93 | 85.35 | 86.00 | 86.42 | 87.07 |
EUR/GBP | 0.8687 | 0.8719 | 0.8753 | 0.8785 | 0.8819 | 0.8851 | 0.8885 |
EUR/CHF | 1.2862 | 1.2910 | 1.2941 | 1.2989 | 1.3020 | 1.3068 | 1.3099 |
GBP/CHF | 1.4553 | 1.4640 | 1.4700 | 1.4787 | 1.4847 | 1.4934 | 1.4994 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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