Forex Market News
As usual we had a relatively quiet start to the week after some late action last week following an improved US core CPI, which put the USD back on the front foot. EUR led the way breaking through strong recent support at 1.1260 opening the door for another test of January’s low of 1.1100.
Despite some stronger China Manufacturing PMI data over the weekend and on Monday as well as an interest rate cut by the PBOC (China Central Bank), Mondays price action was very subdued and the AUD failed to make any significant gains with an impending 25 bps cut due today at 2.30pm.
A big week ahead for data which hopefully give us the kick start we need to get the USD back on track and break out of the current consolidation phase and range trading markets !!! I’m sure everyone has sacrificed enough last month to the ‘Stop-Loss Gods !!’ I certainly have !!
A quick rundown of data due this week:
Tues: RBA, Swiss GDP, CA GDP
Wed: AUD GDP, US ADP employ, BOC Rates, FED Beige Book
Thur: AUD Ret Sales, AUD Int’l Trade, ECB Rates, BOE Rates, US Productivity, Factory Orders
Fri: EUR GDP, Germ IP, CA Buildg Permits, CA Merch Trade, Labour Prod, US NON-FARM PAYROLLS
AUD/USD – Obviously trading heavy into the RBA. No rally on the back of stronger than expected Building Approvals this morning, +7.9% M/M V -2.0%e. A 25bps rate cut is widely priced in which should add more pressure to the downside but of course will depend on any following comments. Suspect only matter of time before we test initial support at 0.7720 which should open up test of recent lows at 0.7625 !!
EUR/USD – Copped an overdue shellacking last week on Thursday night. Broke through support at 1.1260. Sell on rallies and on the crosses, especially EURGBP.
ECB – should announce QE purchases on Thursday for next week starting March 9th. The only was is ………..DOWN!
Support : 1.1100
USD/JPY – Finally some action! After a topside failure mid-December we’ve held a 38.2% retrace level building a base and again after last week’s US CPI, we are building for another test of topside resistance at 120.70 and then 121.80!Let’s go! Notably, 2 Global Investment banks have recently put out strong recommendations for USDJPY to break higher targeting 130 !!
Resistance: 120.50, 120.70
Support: 119.45, 119.20