Aud, Kiwi take a breather following mixed China data, stable RBA outlook.
Mixed EU manufacturing PMI data had little lasting effect , although the weaker US ISM has sent stocks higher, WTI lower and kept the pressure on the Dollar. Yen weakness was the main theme and this looks as though it could continue as the BOJ eyes further BOJ easing. The EU GDP and the ADP Jobs data will be the main event today as the market looks forward to tomorrows ECB meeting and Friday’s NFP. Australia will get Building Permits.
CURRENCIES
EUR/USD: 1.3794
Outlook
Res
1.3810
1.3825
1.3850
The final March manufacturing PMI’s from the EZ and US were mixed, leaving the Euro over the session.….scroll down
Sup
1.3750
1.3720
1.3700
USD/JPY: 103.70
Outlook
Res
103.75
104.00
104.30
The dollar has squeezed higher against the Yen today despite the weaker US ISM, as the market eyes the possibility of further easing from the BOJ .….scroll down
Sup
103.45
103.10
103.00
GBP/USD: 1.6635
Outlook
Res
1.6650
1.6680
1.6700
Cable is a little weaker today after the miss in the UK Manufacturing PMI ….scroll down
Sup
1.6625
1.6600
1.6570
USD/CHF: 0.8835
Outlook
Res
0.8850
0.8875
0.8895
There is little add on US$/Chf today and the chart points remain the same..….scroll down
Sup
0.8815
0.8800
0.8775
AUD/USD: 0.9240
Outlook
Res
0.9260
0.9280
0.9300
The RBA said very little in leaving rates unchanged, although the statement did manage to see a quick blip to 0.9303, since when, the Aud has seen a steady slide .….scroll down
Sup
0.9230
0.9200
0.9185
NZD/USD: 0.8648
Outlook
Res
0.8660
0.8675
0.8700
The Kiwi made it to 0.8700 (high 0.8701) today but was unable to maintain its momentum and has returned to sit at around 0.8650 with not too much damage done.….scroll down
Sup
0.8630
0.8610
0.8600
Commodities / Indices
ASX SPI: 5410
Outlook
Res
5415
5425
5435
The ASX is back at the 5415 resistance following a generally positive session on global equity markets, and it looks as though it could squeeze a bit higher towards 5425 resistance, above which could see a run towards 5450. The downside now looks well supported below 5400, and with the dailies now turning higher, it looks as though dips may be a buy opportunity, although I remain wary of being long of equities at these lofty levels.
Sup
5395
5385
5370
S+P Futs: 1875
Outlook
Res
1880
1887
1900
The softer than expected manufacturing data from the US, and Yellen’s dovish comments, has the market thinking that the pace of tapering could slow down and may also delay thoughts of any rate rise, allowing the S+P put in a decent rally today. We are not so far away from the all time high (1887) and given that the NFP will be then next key driver on Friday, I am doubtful of heading above there until then. The downside looks well supported though, above 1855/60, and in the short term any dips look like buying opportunities.
Sup
1865
1855
1845
DJI Futs: 16442
Outlook
Res
16500
16537
16575
Likewise, the Dow is back and close to its all time high of 16537 and the indicators are suggesting that we could be in for a retest of this, although I am doubtful of seeing it ahead of the NFP rollout. 16300/350 now looks like decent support.
Sup
16400
16350
16300
GOLD: 1280
Outlook
Res
1290
1300
1310
Gold once again remains heavy, close to the trend lows of 1277 and it looks as though we could be headed for a test of the 200 DMA at 1272. Beyond there would head to the next major Fibo level at 1260 (61.8% of 1180/1392), and eventually 1230 (76.4%) would come into view – but not for a while I suspect. The topside looks capped at the 100 DMA at 1296, above which further resistance is at 1300/10, but currently looks out of reach.
Sup
1275
1260
1250
SILVER: 19.70
Outlook
Res
20.00
20.20
20.40
Silver is flat again today as it continues to hold the 19.60 support of recent days, while at the same time, unable to overcome resistance at 20.00. The 4 hourlies still point a bit higher and we may see another run towards 20.00 (200 HMA) and maybe to the 100 DMA at 20.40. I cannot really see this though and suspect that anything above 20.20 would be a sell for an eventual break of the support in order to take a look at 19.45 (76.4% of 18.63/22.16), below which would suggest 19.00 is on the cards.
Sup
19.60
19.45
19.00
OIL(WTI): 99.50
Outlook
Res
100.20
101.00
101.50
WTI fell hard today after weak US data, taking out various layers of support and has broken down though 100.00 to finish at session lows. Negative intraday momentum suggests the chance of a decline to 99.00 and possibly lower to 98.70 and possibly to 98.00, below which the 17 March low is at 97.35 (100 DMA: 97.60). The dailies are flat and while less likely, a rebound to above 100.00 would see a retest of the 200 DMA at around 100.20. It looks as though it is going to be a choppy few days and for today I would use 99/100 as a guide with a bias towards the downside.
Sup
99.00
98.70
98.00
EUR/USD: 1.3794
The final March manufacturing PMIs from the EZ were mixed, with France improved, at 52.1 (vs 51.9 flash and 49.7 in February). Germany was slightly lower at 53.7 (from 53.8 flash and 54.8 February), while the overall EU final reading was unchanged from the flash 53.0, but down from 53.2 in February. German Unemployment was at 6.7 % (6.8% exp) with the unemployment change being -12K (exp -10K). The Euro squeezed to just under 1.3800 where it stayed until the US ISM manufacturing PMI, which rose to 53.7 in March from 53.2 in February but missed market expectations of a 54.0 reading, sending the Euro to a high of 1.3815 before returning to 1.3800.
As we thought yesterday, the range has largely held and I suspect this will again be the case until the ECB meeting on Thursday, although today’s EU GDP (0.5%yy) and US ADP (195K) Jobs data could cause some volatility if they are wide of expectations.
Technically, on the topside, the resistance above 1.3800 remains strong, with 1.3808 (1.3803: Daily Kijun, 38.2% of 1.3966/1.3704) and 1.3820 (Daily Tenkan) providing the initial hurdles ahead of 1.3833 (50% pivot of 1.3966/1.3704). A break of this would see a move on towards 1.3865 (61.8%) and the recent spike high at 1.3875. I cannot really see this being tested again yet, but beyond there would head towards the minor trend resistance at 1.3900, above which would suggest a retest of 1.3966 and eventually 1.4000. If we ever get there, this area won’t be easy to overcome as there well be plenty of option related sellers protecting it, but if/when the Euro finds the legs to head above it, there is not a lot to stop it heading on to the next major Fibo resistance at 1.4240 (76.4% of 1.4940/1.2041) which was also the Oct 2011 high.
On the downside the 200 HMA is at 1.3780 ahead of the 100 HMA at 1.3767, the session low. Under there would head towards minor support at 1.3720 ahead of the more solid 1.3700/05. A break of 1.3700 could see the Euro head towards the top of the daily cloud at 1.3680, the 100 DMA (1.3678) and then the 61.8% Fibo support at 1.3660, which is also where the rising trend support now lies. A break of this looks unlikely in the near term, but if wrong, then the 27 Feb low at 1.3643 will come into view ahead of the 76.4% Fibo support at 1.3595.
The short term charts are mixed but the dailies still point lower and for the time being selling strength still looks to be the play, although on the day I suspect another day of trade, close to 1.3800 may cover it, using 1.3760/1.3830 as a guide.
Economic data highlights will include:
EU GDP, US Factory Orders, ADP Jobs Data
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EUR/USD: 4 hour
USD/JPY: 103.70
The dollar has squeezed higher against the Yen today despite the weaker than expected US ISM, as the market eyes the possibility of further easing from the BOJ in order to keep economic growth heading in the right direction and to to combat the sales tax hike.
As can be seen on the daily chart, the descending trend resistance has now been broken and with the dailies apparently looking as though they might be building up some steam of an attempt on 104.00. Before then, we have to overcome the 7 March top at 103.76, and eventually, beyond 104.00, the major Fibo resistance will come into view at 104.31(76.4% of 105.42/100.75). Beyond there lies the descending trend resistance at around 104.50, which lies ahead of further minor resistance at around 104.80/90 ahead of 105.00.
On the downside, back below minor 103.45 support will find some bids at 103.10 (23.6% of 100.20/103.70). Under 103.00 would see further buyers at around 102.75 (38.2%) but looks unlikely.
I suspect the Yen will remain under pressure but the momentum may slow somewhat ahead of the NFP on Friday but buying dips in the dollar still looks to be the plan.
For today, use 103.103.40/104.00 as a guide.
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USD/JPY: Daily
GBP/USD: 1.6635
Cable is a little weaker, after the miss in the UK Manufacturing PMI (55.3 v 56.7 exp), but remains well within the 1.66/6.67 range, which could well continue to cover it today.
Having seen a low of 1.6618, the 100 HMA is now at 1.6625 and this area provides strong support, with both the daily Kijun ( 1.6625) and the daily cloud top at 1.6619 likely to see strong bids. If we head back below here, 1.6600 is 38.2% of 1.6462/1.6683, which lies ahead of minor rising trend support at around 1.6570, with the 200 HMA/daily Kijun also sitting close by.
On the topside, back above 1.6650 would see another run towards 1.6675/85. Above here would see sellers at 1.6700, above which there is minor resistance at 1.6715 ahead of the descending trend resistance at 1.6745 and the Mar 7 high at 1.6780.
We only have the UK construction PMI to go on today and I suspect we are probably stuck within the 1.66/1.67 range with a chance of heading a bit lower. Use 1.6580/1.6660 as a guide.
Economic data highlights will include:
UK Construction PMI
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GBP/USD: 4 hour
USD/CHF: 0.8835
There is little add on US$/Chf today and the chart points to watch remain the same. Although the dollar has broken below the 0.8820 support, there has so far been little follow through, seeing a low of 0.8813 before a mild bounce to current levels.
Below 0.8800 would see a run back to 0.8775 (61.8% of 0.8698/0.8898) and possibly to 0.8750. I don’t think it goes this low today, but if wrong, while the dailies still point higher, dips are probably buying opportunities.
On the topside, today’s high has been at 0.8849 which provides the initial resistance. Above 0.8850 would see a run back towards the recent 0.8895 high, but currently looks some way off. If/when we head above 0.8900, we could see a run towards 0.8925 (50% of 0.9143/0.8698). Above here, strong descending trend resistance lies at 0.8930 and I would be doubtful over overcoming this at the first attempt although if the dollar does find the legs to do so, it could head on to the 100 DMA at 0.8955 and the Fibo resistance (23.6% of 0.9838/0.8698) at 0.8962.
Use 0.8800/0.8860 as a guide.
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USD/CHF: 4 hour
AUD/USD: 0.9240
While the official Chinese Mfg PMI came in as expected, the HSBC figure was a little weaker but had little lasting impact on the Aud yesterday as the market awaited the RBA. When it came to its turn, the RBA said very little in leaving rates unchanged, although the statement did manage to provoke a quick blip to 0.9303, since when the Aud has seen a steady slide to slightly lower levels but currently holding on above 0.9230 support.
If 0.9230 gives way, then I suspect we could be in for a deeper decline towards 0.9200 and possibly to the major support at 0.9150. Given the lack of data today, and the market’s focus on Thursdays ECB decision and then on Fridays NFP roll out, I am not sure that today is going to do too much. Below 0.9200 would see interim support at 0.9185 (38.2% of 0.8660/0.9303/200 HMA) and I would be surprised to see this give way today.
A return to the topside, which looks a bit less likely while the intraday indicators point lower, will see decent sellers in the 0.9265/75 area. I would be surprised to see it much above there today, but if wrong, 0.9300 would again come into view, above which the next port of call would be the Fibo levels at 0.9339 (61.8% of 0.9757/0.8660) and possibly to 0.9387 (38.2% of 1.0582/0.8660). Beyond this, there is not a lot ahead of 0.9450 (daily cloud base) and 0.9494 (76.4% of 0.9757/0.8660). At this stage these are a long way off and with the short term indicators looking to be pointing a bit lower, upside progress today may be a bit limited, but the dailies are positive and buying dips for an eventual run towards the SHS target at 0.9590 remains the strategy.
For the coming session, use 0.9200/75 as a guide. Building Permits today.
Economic data highlights will include:
Building Permits
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AUD/USD: 4 hour
NZD/USD: 0.8648
The Kiwi made it to 0.8700 (high 0.8701) today but was unable to maintain its momentum and has returned to sit at around 0.8650, with not too much damage done.
The rising trend support/200 HMA, now at around 0.8610, provides good support and with little data out today, this should continue to hold. If wrong, a break would take the Kiwi back below 0.8600 and could see a deeper decline, potentially towards 0.8547 (23.6% of 0.8051/0.8701).
On the topside, the 100 HMA is at 0.8660 and given the negative look of the intraday indicators I am not sure we are heading too much above here in the coming session. If wrong, look for a run towards 0.8680 and perhaps to 0.8700.
Above 0.8700, there really is nothing from a technical perspective to stop it heading to the 0.8842 July 2011 high but I don’t think we are ready for this yet.
Look for 0.8600/70 to largely cover it.
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NZD/USD: 4 Hour