Morning View:
Just a quick one this morning with all eyes on the mid-week FOMC meeting.
Durable goods orders out of the US dominated Friday night’s trading with the 4% print beating expectations of 0.6%. This masked the subsequent downward revisions to core capital goods orders that saw a 7th consecutive fall. The USD was largely sold off as a result with the EUR and AUD major beneficiaries combined with Greek optimism and a rally in the price of iron ore.
Yes, optimism out of Greece… I’m not reading too much into current sentiment with the cash troubles for Greece likely to remain in the near term with €1.8bn in wages and pensions due at the end of April, followed by a €200mn IMF interest payment in May. Add the EBC being strongly committed to completing its QE program in the foreseeable future, how long can ‘optimism’ actually last?
All eyes on FOMC midweek with expectation that the Fed will still talk up economic growth and support the USD.
On the Calendar Today:
New Zealand and parts of Australia off for Anzac Day today. There’s not much else on the calendar during Asia or Europe/the US. All eyes on Stevens speaking tomorrow in Sydney as well as the fact it’s FOMC week.
Watch for some flows as traders position themselves into the release at the conclusion of the meeting on Thursday morning.
Monday:
NZD Bank Holiday
Chart of the Day:
USD/JPY Daily:
Click on chart to see a larger view.
USD strength to end the week coincided with an almost perfect clean bounce off the 120.00 psych level. As you can see on the chart above, price has broken through trend line support and re-tested it now as resistance. The fact that price couldn’t rally through the 120.00 and was again capped shows weakness in the pair.
I’m looking for some carry through to the short side off this major level but the fact we are still in a consolidation top is keeping me wary.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.