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AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

Talking Points:

- USDOLLAR to Consolidate Further Going Into Holiday Weekend

- AUD/USD Risks Further Losses as RSI Threatens Bearish Trend

USDOLLAR Daily

AUD-USD-Holds-0.9330-Support-For-Now--Waiting-for-Bearish-RSI-Trigger_body_Picture_3.png, AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

Chart – Created Using FXCM Marketscope 2.0

  • Remains at Risk of Giving Back the October Advance (10,354)
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,406 (1.618 expansion)

Click Here for the DailyFX Calendar

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is paring the overnight decline to 10,426 amid the positive developments coming out of the world’s largest economy, but the greenback may face choppy price action over the next 24-hours of trade as market participation thins ahead of the holiday weekend.

Nevertheless, the USDOLLAR may remain capped by the 10,470 pivot as Fed Chair Janet Yellen remains reluctant to move away from the zero-interest rate policy (ZIRP), and we will continue to look for opportunities to ‘sell bounces’ in the reserve currency as the recent commentary coming out of the central bank drags on interest rate expectations.

With that said, the bearish sentiment surrounding the greenback may gather pace going into the Federal Open Market Committee (FOMC) interest rate decision on April 30, and the dollar remains at risk of giving back the advance from back in October (10,354) unless we see a material shift in the policy outlook.

Read More:

Price & Time: Coincidence or History Repeating?

EUR/AUD Bottom Developing as EUR/JPY Holds 139.90-143.75 Range

AUD-USD-Holds-0.9330-Support-For-Now--Waiting-for-Bearish-RSI-Trigger_body_ScreenShot114.png, AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

AUD/USD Daily

AUD/USD Daily Chart

  • Need a Break & Close Below 0.9330 to Favor Larger Decline
  • Interim Resistance: 0.9400 Pivot to 0.9420 (38.2 expansion)
  • Interim Support: 0.9200 (100.0 expansion) to 0.9220 (61.8 retracement)

Join DailyFX on Demandto Cover Current Australian Dollar Cross Trade Setups

The greenback gained ground against two of the four components, led by a 0.32 percent decline in the Australian dollar, but the AUD/USD may continue to consolidate over the remainder of the week as it remains supported by the 0.9330-40 region.

It seems as though it will only be a matter of time before we get a larger decline in the aussi-dollar as the Relative Strength Index (RSI) threatens the bullish trend from earlier this year, and a downside break in the oscillator may highlight a further decline in the exchange rate as it falls back from overbought territory.

In turn, we will favor the downside targets once the oscillator shows a bearish break, and the AUD/USD may fail to retain the upward trending channel from January as the recent appreciation in the higher-yielding currency undermines the Reserve Bank of Australia’s (RBA) upbeat tone for the $1T economy.

— Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David’s e-mail distribution list, please follow this link.

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EUR/AUD Bottom Developing as EUR/JPY Holds 139.90-143.75 Range

Talking Points:

- EURAUD may be bottoming; EURJPY rangebound.

- EURUSD turns more bullish per technical studies.

- Forex economic calendar thins out for Easter holiday weekend.

To keep up with developments central banks and their policy changes, be sure to sign up for my distribution list.

We’re headed into a long holiday weekend in Europe and North America, leaving market participants needing more liquidity for sustainable trend shifts. The three most interesting EUR-crosses right now, EURUSD (FOMC vs ECB easing speculation), EURAUD (ECB easing vs Chinese growth concerns), and EURJPY (ECB vs BoJ easing) are setting up for moves out of the holiday weekend. Watch the video for a discussion on the levels we’re watching over the coming days.

Read more: AUD/USD, GBP/USD Still Ripe with Potential after UK Jobs, Chinese GDP

— Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Talking Points

  • Gold and silver vulnerable near key levels as traders re-assess geopolitical risks
  • Crude retreats from $105.00 as inventories data reveals jump in crude stocks
  • US Durable Goods Orders and China Manufacturing figures on the radar for the week ahead

Gold and silver are wavering around key technical levels in Asian trading as investors re-assess the prospect of heightened geopolitical renewing safe-haven demand for the precious metals. Similarly, WTI continues to struggle around the $104.00 handle following a bearish inventories report from the Department of Energy overnight. With a trading holiday on Friday, the commodities space will likely be looking to US Durables Goods Orders and China Manufacturing figures in the week ahead for further cues.

Ukrainian Turmoil Continues

Gold is teetering on the brink of a further correction as the yellow metal wavers around the $1,300 handle in Asian trading. While the ongoing turmoil in Eastern Europe remains on the radar, the latest reports of clashes between Pro-Russian separatists and Ukrainian forces have failed to lift the precious metals. In the absence of a further escalation in the region over the coming week, safe-haven demand for gold may continue to ebb which could send the commodity on its next leg lower.

The energies space has also taken some cues from the Ukrainian crisis this week, with the most notable effects being seen in the price of Brent oil. The benchmark for crude prices is on track for its biggest weekly percentage gain since February, likely bolstered by concerns over supply disruptions from Russia, who supplies roughly one third of Europe’s oil. However, at this stage the West has refrained from imposing energy export sanctions on Russia, which suggests speculation over a crimp to supply may be unjustified at this stage. This puts crude oil in a precarious position over the next week, with the potential for a de-escalation to cause a quick correction for the commodity.

US Crude Production Hits 26 Year High

West Texas Intermediate crude erased earlier gains in US trading, following a report from the Department of Energy that revealed a jump in inventories of just over 10 million barrels for the week. The Weekly Petroleum Status report also noted that crude oil production in the US has risen to the highest level since 1988.

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Chart_6.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

As noted in yesterday’s commodities update, US oil inventories in the Gulf Coast region continue to build, as supplies are shifted to refineries from the WTI delivery point at Cushing, OK. A sustained gain in inventory levels alongside rising production suggests crude prices may be vulnerable at current levels.

Traders Await US and Chinese Economic Data

While the weekly US Initial Jobless Claims report could hold some sway in the session ahead, traders may be hesitant to adopt new positions heading into the Easter long weekend, given that trading will be closed for most commodities on Good Friday. We’re likely to see a more noteworthy reaction to the release of US Durable Goods Orders and China manufacturing figures next week.

Chinese Q1 GDP figures released on Wednesday revealed the slowest pace of growth since 2009, which has done little to alleviate concerns over a further deceleration in economic growth in the Asian giant. This sets the stage for a disappointing PMI print next week to weigh on copper and crude oil prices, based on concerns over future demand for the commodities. However, this could be counterbalanced by a better-than-anticipated US Durable Goods Orders reading, which would act as a bullish signal for crude demand in the world’s largest oil consumer.

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Chart_5.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Risk Trends To Offer Additional Guidance

Risk-trends continue to offer an undercurrent to the commodities space leaving the growth-sensitive commodities like crude oil and copper vulnerable to a shift in sentiment. Several economic data prints from the world’s largest economy offered upside surprises this week, which helped to buoy risk-appetite and likely supported WTI. However, sentiment has been shown to change on a dime, as evidenced by the reaction to the slightly weaker-than-anticipated NFP print earlier in the month. As we cautiously edge back towards the yearly highs for US equities, traders should be mindful of the potential for souring of sentiment, which could send crude oil and copper reeling.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil is struggling below the 105.00 handle following a break above the triangle formation on the daily. The hesitation amongst the bulls is made evident by the emergence of several Doji formations. While the breakout and continued uptrend favors a bullish technical bias, there is the potential for a pullback to support at 102.30, which would be seen as an opportunity to enter new long positions at this stage.

Crude Oil: Dojis Warn of a Pullback to Support

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Picture_4.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS

Gold has gone up by the stairs and down by the elevator this month. The plunge in prices during recent trading has acted to negate several bullish technical signals for the commodity. A Bearish Engulfing pattern near the 50% Fib Retracement level at $1,322.75 may be signaling further declines ahead. Buyers may look to emerge at support near $1,277, while $1,300 has offered resistance in intraday trade.

The DailyFX Speculative Sentiment Index suggests a mixed bias for gold based on trader positioning.

Gold: Reverses Course As Bearish Signals Emerge

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Picture_3.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Daily Chart – Created Using FXCM Marketscope 2.0

SILVER TECHNICAL ANALYSIS

Silver has finally broken below its prior range-bottom at $19.60, making a test of key support $19.00 look likely. This comes alongside several bearish signals, including prices holding below the 20 SMA (indicating a downtrend), as well as sustained negative momentum (evidenced by the ROC).

Silver: Finally Cracks $20.00 Handle

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Picture_2.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Daily Chart – Created Using FXCM Marketscope 2.0

COPPER TECHNICAL ANALYSIS

Copper prices have managed to recover above the $3.00 handle and cross back above the 20 SMA in recent trading, which obfuscates a technical bias for the base metal. With the rate of change indicator signaling fading upside momentum, we may be in store for a more range-bound environment for copper. Resistance continues to loom nearby at $3.085 while buyers appear to be prepared to support prices at $2.980.

Copper: Range Looks To Be Emerging

Crude-Oil-Retreats-Gold-and-Silver-Exposed-To-Ebbing-Ukrainian-Concerns_body_Picture_1.png, Crude Oil Retreats, Gold and Silver Exposed To Ebbing Ukrainian Concerns

Daily Chart – Created Using FXCM Marketscope 2.0

Written by David de Ferranti, Market Analyst, FXCM Australia

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Contact and follow David on Twitter: @DaviddeFe

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USD/CAD Risks Larger Pullback on Faster Canada Headline & Core CPI

USD/CAD Risks larger pullback core cpi data

- Canada Headline & Core Inflation to Rebound in March.

- Consumer Price Index (CPI) has Held Above 1.0% for Last Three-Months.

Trading the News: Canada Consumer Price Index

A rebound in Canada’s Consumer Price Index (CPI) may spur a near-term pullback in the USD/CAD as it dampens bets of seeing the Bank of Canada (BoC) further embark on its easing cycle.

What’s Expected:

USD-CAD-Risks-Larger-Pullback-Core-CPI-0219_body_ScreenShot234.png, USD/CAD Risks Larger Pullback on Faster Canada Headline & Core CPI USD/CAD CPI

Why Is This Event Important:

Heightening price pressures may keep the BoC on the sidelines as it limits the threat for deflation, and Governor Stephen Poloz may endorse a more neutral tone for monetary policy as the central bank head sees a ‘soft landing’ in the Canadian economy.

Join DailyFX on Demand to Cover Canada’s Consumer Price Report LIVE.

Expectations: Bullish Argument/Scenario

Rising input costs paired with the pickup in private sector consumption may encourage Canadian firms to boost consumer prices, and a marked uptick in the CPI may spur a near-term pullback in the USD/CAD as it limits the threat for deflation.

Risk: Bearish Argument/Scenario

However, the headline reading for inflation may continue to undershoot amid the slowing housing market along with the downturn in business sentiment, and a weaker-than-expected CPI print may heighten the bearish sentiment surrounding the Canadian dollar as it puts increased pressure on the BoC to further embark on its easing cycle.

How To Trade This Event Risk(Video)

Bullish CAD Trade: Price Growth Climbs 1.4% or Greater

  • Need red, five-minute candle after the CPI report to consider short USD/CAD entry
  • If the market reaction favors a bullish Canadian dollar trade, establish short with two position
  • Set stop at the near-by swing high/reasonable distance from cost; use at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish CAD Trade: Canada Consumer Prices Disappoint

  • Need green, five-minute candle following the release to look at a long USD/CAD trade
  • Carry out the same setup as the bullish loonie trade, just in reverse

Potential Price Targets For The Release

USD/CAD Daily

USD/CAD Daily Chart

Chart – Created Using FXCM Marketscope 2.0

  • Carves Higher Low (1.0857) in April; Long-Term Bias Remains Bullish
  • Need Topside Break in Relative Strength Index for Conviction on Higher High
  • Interim Resistance: 1.1310 Pivot to 1.1320 (61.8% expansion)
  • Interim Support: 1.0850 (61.8% retracement) to 1.0870 (100% expansion)

Read More:

Equities Rally on More of the Same From Yellen, Fed Beige Book  

Price & Time: Top Looming in the Aussie

Impact that the Canada Consumer Price report has had on CAD during the last month

February 2014 Canada Consumer Price Index

USD/CAD Chart

The Canadian Dollar began a strong month following a better than expected CPI print that came in a tenth of a percent above estimates. Although the pair hit multi-year highs just hours before this print, the USDCAD has since spent the past few weeks falling to lows not seen since the first week of January. After moving higher off key support and continuing to gain strength following the Bank of Canada Rate Decision on Wednesday, a weaker CPI print could help support the USDCAD pair resume some of the upward trends we saw start to play out as 2014 kicked off. Read more about Wednesday’s Bank of Canada Rate Decision.

— Written by David Song, Currency Analyst and Gregory Marks

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David’s e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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Euro: Should We Worry About Demands for More Currency Intervention?

Talking Points:

  • Dollar Advance Stalls as Yellen Comments and Beige Book Chewed
  • Euro: Should We Worry About Demands for More Currency Intervention?
  • British Pound Rallies on Strong Jobs Data, But Not Enough for Next Bull Leg

Dollar Advance Stalls as Yellen Comments and Beige Book Chewed

With Friday’s liquidity drain closing in, the dollar is focusing even more intently on the ebb and flow in interest rate expectations for its bearings. Against its major counterparts, the greenback moved higher against all but the pound and Australian dollar – both currencies charged by heavier fundamental catalysts. Though generally higher on the day, the lack of conviction would mean the equally-weighted Dow Jones FXCM Dollar Index (ticker = USDollar) would break its three-day rally with a 0.1 percent slide. Yet, if moderation is the course ahead and a rebound in Treasury yields is the course, the greenback may find itself relatively unimpeded in a slow rebound through week’s end.

Market conditions are of critical importance to trading through the final 48 hours of the week. With the a good portion of the speculative world offline Friday (North American, European and Australian markets amongst others), the appetite to take large positions will be low – and the ability to feed momentum behind new trends will be even lower. Under such circumstances, we are more likely to see positions unwound than new ones established; which in turn may pull pairs like EURUSD and GBPUSD back into ranges. In the meantime, monetary policy forecasts will continue to shape the dollar’s bearings. This past session, a Fed Chair Janet Yellen anchored a round of central bank speeches that resulted in a broadly ‘status quo’ outcome. The Fed’s Beige Book – the districts’ economic assessments used for policy decisions – was issued with a tangible optimistic lean for growth and employment evaluations. How did the market read it? Treasury yields were little changed on the day but swap rates extended their gains. Ahead, we have jobless claims and a 5-year TIPS (inflation-protected Treasury) sale to digest.

Euro: Should We Worry About Demands for More Currency Intervention?

Verbal threats against the euro seem to grow by the day. French Economy Minister Arnaud Montebourg remarked in an interview Wednesday that he wanted Eurozone members to meet in the near future to discuss the high level of the euro and evaluate monetary policy. While this is unlikely to result in actual change or a threat to the ECB’s independence, it is a reflection of the pressure that the central bank is under to curb the strength of its currency and fight a downtrend in inflation pressures. We were reminded of weak price growth today with the final readings of the region’s CPI figures. Expected to remain unchanged, the core figure actually ticked down to match a record low 0.7 percent reading. The likelihood of the central bank either cutting rates or introducing new unconventional policy in the near-term is growing. The question is whether this will curb the inflow of speculative capital and take the pressure off 1.4000 for EURUSD and policy officials.

Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.

British Pound Rallies on Strong Jobs Data, But Not Enough for Next Bull Leg

The UK inflation statistics Tuesday were met by a distracted and tepid pound response. That ultimately worked in bulls’ favor as the data further undermines expectations for an earlier rate hike by the Bank of England considering headline CPI slowed to its weakest pace since October 2009. Where unfavorable data was downplayed, the market would leverage the impact of the positive news this past session. Jobless claims for March dropped by 30,400 – generally in-line with expectations – but the ILO unemployment rate for February unexpectedly dropped 0.3 percentage points to a five-year low 6.9 percent. Yet, when it comes to jobs versus inflation – the latter typically necessitates rate hikes.

Canadian Dollar Modestly Weaker after BoC Rate Decision

Bank of Canada Governor Stephen Poloz left monetary policy untouched – as expected – at the most recent rate decision. However, the dovish lean remained in the central banker’s commentary. A reiteration that the door couldn’t be shut on possible future rate cuts positions the loonie well below the current bearings of the BoE, Fed and even the ECB. Ahead, Canada’s docket holds one of the few meaningful releases left amongst the G10 – March CPI figures. Poloz said any near-term inflation spikes would be transient . Let’s see if that warning was needed.

New Zealand Dollar: Swaps Still Show Certainty for RBNZ Hike, But Kiwi Isn’t Advancing

Is the Kiwi already pricing in an aggressive pace of rate hikes from the RBNZ going forward? Despite the weaker-than-expected 1Q CPI reading released earlier in the week (1.5 percent, where the target zone is 2 to 3 percent), swaps show a 97 percent probability of a follow up rate hike at the central bank’s next policy gathering next Wednesday. That said, government bond yields are floundering against a trend of lower foreign holdings and the New Zealand currency is trading lower. Can the market fully price an additional 200 bps worth of hikes this far forward?

Chinese Yuan Firms Slightly after Premier Li Says No Stimulus

For speculators, one of the silver linings of the notable cooling in the Chinese economy as of late is the potential for fresh stimulus that creates inefficiencies to invest around. Yet, following the soft 1Q GDP figures, Chinese Premier Li Keqiang stated this morning that there are no plans to consider large stimulus programs at the moment. The desire to balance the financial leverage in credit growth with the threat of stall-speed economic activity finds officials acting with restraint. This can significantly dampen the global expectations for high returns.

Emerging Market Rebound in Market Calm, Real Tumbles and Ruble Rallies

Emerging market capital markets recovered some of the ground they lost on Tuesday. However, there was a notable lack of conviction in the bounce in both price and volume. For the MSCI ETF, the 0.5 percent rebound was founded on less than half the volume of the previous day’s tumble. Looking at the rankings for the currencies, the Brazilian real suffered the biggest loss on the day (0.5 percent vs the dollar) on reports authorities may end their support of the currency. A 0.5 rally for the Ruble reflected tempered fears of an escalation over the Ukraine.

Gold Loses Momentum and Volume

A slow but steady bearing for the US dollar and balance in risk appetite across global financial markets equates to an unfavorable backdrop for the world’s ‘alternative asset’ – gold. The metal was virtually unchanged on the day despite a broad trading range through the period. Volume in the derivatives market reflects the lack of impetus. The SPDR Gold Shares ETF recorded turnover two-third of the month’s average. On a participation-basis, open interest in gold futures is slowing picking back up from its five-year low set earlier in the month. **Bring the economic calendar to your charts with the DailyFX News App.

ECONOMIC DATA

GMT

Currency

Release

Survey

Previous

Comments

1:30

AUD

New Motor Vehicle Sales (MoM) (MAR)

0.1%

As we approach the holiday weekend and ahead of Australians CPI next Wednesday, we may see volatility in AUD crosses slow as the week comes to a close.

1:30

AUD

New Motor Vehicle Sales (YoY) (MAR)

-3.5%

1:30

AUD

NAB Business Confidence (1Q)

8

1:30

AUD

RBA Foreign Exchange Transaction (A$) (MAR)

369M

1:30

AUD

RBA FX Transaction- Government (A$) (MAR)

-403M

1:30

AUD

RBA FX Transaction- Other (Australian dollar) (MAR)

55M

5:00

JPY

Consumer Confidence Index (MAR)

38.3

Although the head of the BoJ said that demand had not fallen off as sharply as expected in regards to the recent tax hike, March data will be key to assessing the true underlying impact of the hike.

5:30

JPY

Nationwide Department Store Sales (YoY) (MAR)

3.0%

5:30

JPY

Tokyo Department Store Sales (YoY) (MAR)

3.9%

6:00

EUR

German Producer Prices (MoM) (MAR)

0.0%

0.0%

After the EZ composite final reading came in a tenth of a percent below estimates, market participants are likely wary about CPI data not only out of Germany, but EZ as a whole in April. As the Euro fails to make higher highs, bulls may begin to feel the pressure build ahead of April CPI figures.

6:00

EUR

German Producer Prices (YoY) (MAR)

-0.7%

-0.9%

6:00

EUR

EU 25 New Car Registrations (MAR)

8.0%

8:00

EUR

Euro-Zone Current Account s.a. (euros) (FEB)

25.3B

8:00

EUR

Euro-Zone Current Account n.s.a. (euros) (FEB)

6.4B

12:00

EM

Russia Unemployment (MAR) (Emerging Markets)

Emerging market health is a key measure to a broad ‘risk’ assessment and frequent fodder for developed world monetary policy

12:00

EM

Brazil Jobless Rate (MAR) (Emerging Markets)

12:30

CAD

Consumer Price Index (MoM) (MAR)

0.4%

0.8%

Following the Bank of Canada yesterday, the central bank expects inflation to remain transitory as CAD weakness has helped boost CPI. With the Canadian Dollar hitting highs this week not since January, March figures may come in a tad light. Any data at or below expectations could prompt further USDCAD buying.

12:30

CAD

Consumer Price Index (YoY) (MAR)

1.4%

1.1%

12:30

CAD

Bank Canada CPI Core (MoM) (MAR)

0.3%

0.7%

12:30

CAD

Bank Canada CPI Core (YoY) (MAR)

1.3%

1.2%

12:30

CAD

Consumer Price Index s.a. (MoM) (MAR)

0.3%

12:30

CAD

Consumer Price Index Core s.a. (MoM) (MAR)

0.2%

12:30

CAD

Consumer Price Index (MAR)

124.1

12:30

USD

Initial Jobless Claims (APR 12)

315K

300K

Jobless claims came in at one of the lowest levels post-crisis last week, but price action in FX continues to remain limited in the face of uncertainty in US equity markets.

12:30

USD

Continuing Claims (APR 5)

2776K

14:00

USD

Philadelphia Fed. (APR)

10

9

23:50

JPY

Tertiary Industry Index (MoM) (FEB)

0.1%

0.9%

The last print was the best since May.

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table

CLASSIC SUPPORT AND RESISTANCE

INTRA-DAY PROBABILITY BANDS 18:00 GMT

v

— Written by: John Kicklighter, Chief Strategist for DailyFX.com

To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at http://www.twitter.com/JohnKicklighter

Sign up for John’s email distribution list, here.

The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

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Forex: Seasonal Forces May Overshadow German PPI, US Claims Data

Talking Points:

  • Japanese Yen Outperformed on Nikkei 225 Drop, Kuroda Comments in Asia
  • US Dollar, Euro Look for Cues in German PPI and US Jobless Claims Data
  • Protective Profit-Taking May Drive Volatility in Pre-Holiday Trading Hours

The Japanese Yen outperformed in overnight trade as the Nikkei 225 benchmark stock index declined, boosting demand for the safe-haven currency. Comments from Bank of Japan Governor Haruhiko Kuroda likewise helped. The central bank chief said policymakers’ easing effort is having the intended impact, with the economy moving toward the 2 percent inflation target. The remarks hinted the BOJ may not be quick to expand its easing effort, a move that has been the subject of heavy speculation as softening economic data and April’s 3 percent increase in the sales tax threatened the central bank’s deflation-fighting goals.

The March set of German PPI figures headlines an otherwise uneventful economic calendar in European hours. The pace of wholesale deflation is expected to moderate a bit, with the gauge posting a year-on-year drop of 0.7 percent compared with a 0.9 drawdown in the prior month. While the PPI print is typically not very market-moving, the absence of alternative catalysts may see the report generate some interest, particularly given the pickup in ECB stimulus expansion bets recently. With that in mind, a disappointing print is likely to weigh on the Euro amid a swell in easing expectations, and vice versa.

The US economic calendar is rather light as well, with the weekly set of Jobless Claims numbers on tap. Economists are penciling in mild increases in initial and continuing applications for unemployment benefits. US data flow has started to show notable signs of improvement relative to expectations over the past two weeks, opening the door for an upside surprise. A sizeable-enough positive deviation from consensus forecasts may further erode doubts about the continuity of the Fed’s QE “tapering” cycle, bolstering yield-based support for the US Dollar.

Seasonal considerations are likewise important to bear in mind. Most major financial markets will be closed for the Good Friday holiday, meaning today marks the end of the trading week for a considerable share of investors. In fact, key exchanges in Europe as well as Hong Kong and Australia will be closed through Monday of next week. That means a period of protective profit-taking ahead of the long gap normal trading conditions may be a meaningful driver of volatility in the hours ahead, opening the door for reversals in prevalent trends. Ebbing pre-holiday liquidity may amplify such moves, warning those traders still holding open exposure to tread cautiously in the near term.

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Asia Session

European Session

Critical Levels

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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