US$ losing upside momentum after soft ADP/ISM data. Now on hold ahead of Easter & NFP, Friday.

The dollar eased back a little today at the start of the second quarter as disappointing data on U.S. manufacturing and jobs growth raised bets that the Fed might refrain from raising interest rates until late 2015 at the earliest. Commodities were the big winners after the data, with metals and WTI all rallying strongly. Today sees a bit of secondary data (US Jobless Claims, US Factory Orders), but mostly, the market will be position squaring ahead of Easter, while looking forward to Friday’s NFP. Australia will kick things off with the local Trade figures.

EUR/USD: 1.0762

The dollar has spent a rangebound session between 1.0718/1.0800 against the Euro, unable to make further upside progress after a very disappointing ADP Jobs Figure (189K v exp 225K) and Manufacturing ISM (51.5 v exp 52.5).

We could be in for a similar session today with some only some secondary data due, as the market looks towards Easter, but with the US Jobs/NFP figure due on Friday (exp 244K/5.5%).

Technically little has changed and the points to watch remain the same.

On the topside, 1.0800 will again provide strong resistance ahead of the 100 HMA at 1.0815, the daily Tenkan at 1.0847 and the 200 HMA at 1.0865.

The downside will see bids again at 1.0710/20 but a break of which could then head towards the Fibo support at 1.0687 (61.8% of 1.0461/1.1057) below which there is minor support at 1.0650 and then the next Fibo support at 1.0601 (76.4%).

Look for another choppy day with a generally soft tone. Position squaring is likely to be the order of the day as liquidity begins to dry up. The NFP will drive the direction in to next week, and while the overall US$ uptrend is expected to continue, a weak reading on Friday could easily see the Euro back at 1.0900/1.10.

Economic data highlights will include:

US Jobless Claims, EU MP Meeting Accounts, US Factory Orders.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

USD/JPY: 119.70

The dollar is back below 120.00 after the poor US jobs/manufacturing data and looks rather soft heading into the NY close, although it is holding above the 119.41 low where a minor double bottom has been formed.

More of the same choppy trade looks likely today as the markets squares up for Easter.

Currently sitting right on the 100/200 HMA’s and just below the daily Tenkan at 119.75, this area could act as a pivot today, with the downside likely to again see decent support at 119.40. Below this would open up the daily cloud top at 119.00 which will provide decent support ahead of the 100 DMA at 118.85, Thursday’s 118.32 lows and the thin daily cloud base at 118.15.

The topside will find sellers again at 120.00 above which the daily Kijun is at 120.15 and we need a daily close above here to give added momentum to head higher but seems unlikely ahead of Friday’s NFP. The session high has been 120.32, above which would see a run towards the descending trend resistance at 120.50 and then to the 20 March high at 121.20. Although unlikely to be seen yet, a topside break of this would open up 121.50 and the 20 March high at 122.02. If/when this level can be overcome, the way would open up for a run towards the 15 July 2007 high at 122.42, and in the longer term, the target of 124.13 (17 June 2007 high) would appear on the horizon but will take time.

Economic data highlights will include:

Foreign Bond Investment.

Meta Trader – AxiTrader   USD/JPY: 4 Hour

GBP/USD: 1.4818

The Pound has had another choppy day within a range of 1.4870/1.4738, with political stories dominating the direction as the UK heads towards the May 6 Election.

UK PMI manufacturing rose to 54.4 in March, hitting an eight month high, but narrowly missed expectation of 54.5.

There is no change in view, which requires a neutral stance but looking to sell rallies towards 1.5000, if/when seen. Until then the points to watch remain unchanged.

The near term resistance is seen at the 200 HMA at 1.4863 above which could see a squeeze back to 1.4900 and then to some minor tops at around 1.4920/25.Further out 1.5000 will again be strong resistance, having capped it at the last three attempts and which if seen would be a decent sell, bearing in mind that there would be stops placed above 1.50 which could temporarily drive Cable higher, towards 1.5050/1051. Doubtful, unless the NFP disappoints badly on Friday.

Back to the downside, 1.4800 and 1.4740 will again provide the intra-day supports. Below this would then open the way to move to the recent lows at 1.4713, 1.4685 and at 1.4633, although the latter of these may be a stretch too far today.

Economic data highlights will include:

UK Construction PMI.

Meta Trader – AxiTrader   GBP/USD: 4 Hour

AUD/USD: 0.7596

The Aud is sitting near 0.7600 after a European sell-off, to a low of 0.7582 before a recovery, to 0.7640 after the poor US data. It has been unable to hang on to its gains though and has since slipped lower as the market looks towards today’s Feb Trade Balance, which is forecast to deteriorate to Aud$-1.3bio from the prior Aud$-980 mio.

Iron Ore has today fallen to new lows at US$49.50 per tonne which wont help the Aud today.

Below today’s 0.7581 low will find decent bids at the 11 Mar low at 0.7559, which will probably hold until Friday’s NFP. If wrong, a break of this would then hint at a run to the RBA’s stated target of 0.7500, and as before, I think we are eventually heading there and a fair bit lower over time. Below 0.7500 there is not too much to hold the Aud ahead of 0.7414 (Oct 2010 low) beneath which there is a bit of a hole until the very strong support at around 0.7200 where two important Fibo levels are lining up (0.7210: 61.8% of 0.4773/1.1082 and 0.7180:76.4% of 0.6006/1.1082). I suspect that eventually 0.7000 will appear on the horizon (and eventually 0.6000!), but this is going to be some way off yet.

Rallies today should once again be limited to around 0.7640 although we could see a run towards 0.7665 if the Trade data surprises to the upside. I don’t think we head above here today, but if wrong, then 0.7700 and possibly the Fibo resistance at 0.7725 (38.2% of 0.7937/0.7590) would come into view.

Economic data highlights will include:

TD Inflation, Trade Balance.

Meta Trader – AxiTrader    AUD/USD: 4 Hour

NZD/USD: 0.7451

The Kiwi has had a very choppy session today, and after a sharp selloff to a low of 0.7390 in Europe, it has recovered, to reach 0.7465 following the poor US jobs data. It then fell sharply once again, to 0.7410, after the release of the latest Fonterra milk results which  saw GDT drop 10.8% and WMP drop 13.3%. The weak ISM then saw another sharp rally, allowing the Kiwi to reach 0.7479 before settling back to currently reside near 0.7450.

Today will probably be one for licking wounds on both sides of the market and a quiet day of position squaring ahead of Easter would not surprise.

The points to watch are at 0.7420 (minor) and then at the day’s low at 0.7390. Below that would head towards 0.7380 (61.8% of 0.7175/0.7694) and to the March 19 low at 0.7372, below which there is little to support it until the 18 March low at 0.7325.

The topside will see interested sellers at 0.7480 and then again at 0.7500. I would be doubtful of heading above here today, but if wrong, the 100 HMA is at 0.7510 and the 200 HMA is at 0.7560.

Meta Trader – AxiTrader    NZD/USD: 4 Hour