FOREX Newsletter
Pulse of the Market
· Greenback rallied on risk aversion short lived and no trend to acquire before CPI data
· Euro recovered from an early lows provided by record PIG Yields and fear of contagion
· British Pound advanced on consumer confidence and rising real market rates
· Japanese Yen rally curbed by a bounce in equities and reminder of a G7 lying in wait
The Greenback ended yesterday’s trading session lower against all of the major currencies pressured by weaker than expected U.S data and mostly dovish comments from Federal Reserve officials. The U.S Dollar has performed appallingly in recent weeks because there is a great deal of unwillingness within the Federal Reserve to begin the process of normalizing monetary policy. The U.S economy is improving but there is very little keenness about the pace of the recovery or concern about inflation pressures. Yesterday’s economic data was softer than expected. For the past four weeks, jobless claims have remained below 400k, but last week claims rose 27k to 412k which raises concern that the trend could be reversing. PPI increased but not nearly as much as the market had anticipated. Producer prices rose 0.7 percent in March, down from 1.6 percent the prior month and against a forecast of 1.0 percent. The Single Currency hovered near its one year high against the Greenback. Comments from ECB officials continue to be in line with the anti-inflation stance expressed by ECB President Trichet earlier this month. The ECB monthly bulletin restated many of the points that the central bank head had touched on after carrying their first rate hike in 2 years. Euro Zone consumer prices and trade balance are scheduled for release in today’s trading session and if the central bank’s concerns can be a steer, then there is a very good chance that the CPI report will confirm that inflationary pressures increased in the month of March. The British Pound ended yesterday’s session higher against the Euro and U.S Dollar, as better than expected data brought risk appetite back to the markets. A number of key economic releases showed mixed reviews on the state of U.K labor market conditions, while consumer confidence showed modest improvement for the month of March. The Nationwide Consumer Confidence report, showed an increase from a record low of 39 in February to 44 in March; the expectation was 40. Unemployment has dropped only 0.1% over the past five months and still remains at record high levels. Currently the unemployment rate remains at 7.8%, down 0.2% after last month’s unexpected uptick. The Japanese Yen strengthened against all of the major currencies yesterday. With no new economic news out yesterday, the majority of the Yen’s movements have been fueled by risk sentiment in the market particularly from Euro Zone and the U.K.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 04:30 | Japan Industrial Production (MoM) (FEB) | Low | | | 0.4% |
| 09:00 | Euro-Zone Consumer Price Index (YoY) (MAR) | Medium | | 2.6% | 2.6% |
| 12:30 | U.S Consumer Price Index (YoY) (MAR) | High | | 2.6% | 2.1% |
| 13:00 | U.S Net Long-term TIC Flows (FEB) | Medium | | $42.3B | $51.5B |
| 13:15 | U.S Industrial Production (MAR) | Medium | | 0.6% | 0.0% |
| 13:55 | U.S U. of Michigan Confidence (APR) | High | | 69.0 | 67.5 |
Euro
The Single Currency dipped sharply in the European trading session following Greek Debt restructuring fears with the talk of a 50% trim spooking investors. The market found support on contradictions of such a plan and reclaimed the 1.4500 level in the U.S trading session. Overall the EUR/USD traded with a low of 1.4364 and a high of 1.4513 before closing the day around 1.4488 in the New York session.
Yen
The Japanese Yen hit day lows yesterday pressured by the weak weekly jobless claims and Japanese Yen tested 83.00 Yen. The level saw good support and the major bounced with crosses back to more familiar levels at 83.50 Yen and 121.00 Yen. Overall the USD/JPY traded with a low of 82.94 and a high of 83.92 before closing the day around 83.47 in the New York session.
British Pound
The British Pound was supported by EUR/GBP selling and allowed the pair to finish at 1.6350 up from 1.6250 opening levels. GBP/JPY was more volatile but somehow found support on dips after consolidating recent gains. Overall the GBP/USD traded with a low of 1.6253 and a high of 1.6384 before closing the day at 1.6349 in the New York session.
Australian Dollar
The Australian Dollar pushed was higher in to the mid of yesterday’s session in striking distance of all time highs at 1.0580. AUD/JPY was still the most important cross tracking global stocks up and down. U.S economic data will be in focus today as investors try to judge the strength of the U.S recovery. Overall the AUD/USD traded with a low of 1.0456 and a high of 1.0548 before closing the day at 1.0543 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The RSI is above 62 and lies above the neutral zone. Overall, the cross has lost 0.09%.
Sterling-Yen
Currently GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is indicating a bullish stance. The RSI is above 55 reading and lies above the neutral zone. The pair has gained 0.10%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bearish and MACD is indicating a bullish stance. The RSI is above 60 reading and lies above the neutral region. The cross has lost 0.07%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish and MACD is also issuing a bearish signal. The RSI is above 60 reading and lies above the neutral region. The pair has lost 0.18%.
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 39 and lies below the neutral region. The pair has gained 0.08%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.4248 | 1.4306 | 1.4397 | 1.4455 | 1.4546 | 1.4604 | 1.4695 |
| USD/JPY | 81.99 | 82.46 | 82.97 | 83.44 | 83.95 | 84.42 | 84.93 |
| GBP/USD | 1.6142 | 1.6198 | 1.6273 | 1.6329 | 1.6404 | 1.6460 | 1.6535 |
| USD/CHF | 0.8816 | 0.8855 | 0.8889 | 0.8928 | 0.8962 | 0.9001 | 0.9035 |
| USD/CAD | 0.9503 | 0.9548 | 0.9577 | 0.9622 | 0.9651 | 0.9696 | 0.9725 |
| EUR/JPY | 117.58 | 118.41 | 119.68 | 120.51 | 121.78 | 122.61 | 123.88 |
| GBP/JPY | 134.12 | 134.70 | 135.59 | 136.17 | 137.06 | 137.64 | 138.53 |
| CHF/JPY | 91.57 | 92.16 | 92.84 | 93.43 | 94.11 | 94.70 | 95.38 |
| AUD/JPY | 85.93 | 86.43 | 87.21 | 87.71 | 88.49 | 88.99 | 89.77 |
| EUR/GBP | 0.8743 | 0.8775 | 0.8817 | 0.8849 | 0.8891 | 0.8923 | 0.8965 |
| EUR/CHF | 1.2750 | 1.2796 | 1.2863 | 1.2909 | 1.2976 | 1.3022 | 1.3089 |
| GBP/CHF | 1.4467 | 1.4501 | 1.4546 | 1.4580 | 1.4625 | 1.4659 | 1.4704 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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