Forex Market
Technical Analysis
EURUSD respected support yesterday but little indicates it won’t be tested again. Key ref on south at 1.2974… USDJPY may have lost some momentum and has to at least re-visit the 80-handle…
USD/JPY Analysis
Opened in Asia at Y81.56 and edged higher to Y81.59, before coming under pressure from cross weight. AUD/JPY was sold off on comments from PM Gillard and additionally weighed by AUD/USD sales from a US fund which impacted on the USD/JPY pushing the pair to Y81.35.
AUD/USD Analysis
Opened in Asia at $1.0670 having been dragged lower yesterday on the back of weaker equity and metal prices, and a EUR/USD that fell on weaker european PMI data. Aussie hit lows of $1.0656 in NY yesterday and lagged the euro recovery later on stronger ISM data, as EUR/AUD rallied back up through A$1.2400.
Currency Weekly : QE pendulum to swing in JPY’s favour
The recent BoJ inflation goal announcement and QE expansion caught the market by surprise. Since the announcement, USD-JPY has reached nine-month highs. We think the price action looks overdone.
Behavioral Finance: Daily Forex Outlook: Collateral debate dents euro sentiment
EUR USD (1.3195) Bundesbank head Jens Weidmann’s letter to the ECB voicing his concerns about the latest loosening of collateral requirements for the LTRO2 has unleashed a debate that can hardly be confidence-inducing for the euro investors.
Speculative Positions
Speculators scaled back on short EUR contracts and the JPY net speculative position turned short The IMM data for the period 22-28 Feb revealed: * The net short speculative EUR position decreased significantly as speculators once again scaled back on their short contracts.
Daily FX Technical Strategy – USD upside potential
Last week was a good one for the dollar as the USD Index posted a reversal week against important retracement levels. The implication is that the 2012 downtrend is over and further USD strength should be expected this week.
Technical Analysis – FX Daily Majors
Today’s highlights: · DXY: Through trend resistance from the 2011 peak with risk to the 55-DMA, 79.69. A close above would aim through the mid-Q1 spike high 80.12, closer to topping barriers, 80.50/70 (threat to 2012 peak, 81.78)
EUR/USD Analysis
Closed in NY at $1.3200 after being pressed to lows of $1.3187. Rate came under pressure into early Asian dealing, a European bank pressing the rate down to an early low of $1.3188 before meeting decent demand from a Swiss name.
AUD/USD Analysis
AUD/USD opened a $1.0738 in Sydney, and after an initial high of $1.0743 was sold off by european names and AUD/JPY cross sales to $1.0703 following comments from China’s PM Wen at the National People’s Congress that China’s growth target was being lowered to 7.5% from 8%.
USD/JPY Analysis
Opened at Y81.81 after NY highs of Y81.87 on Friday but fell back from Y81.86 in Tokyo on EUR/JPY and AUD/JPY sales profit taking from Japanese names on the recent highs ahead of barriers sitting up at Y82.00 in dollar yen and stiff resistance towards Y88.00 in AUD/JPY.
Daily FX Technical Strategy: NOK shadows oil
The spike in crude oil prices to new 2012 highs overnight is lending support to the NOK. EUR/NOK is being driven relentlessly lower and following a weeekly close below 7.4190, we would be encouraged to target the 2003 low at 7.2175.