Morning Report: EUR 11% Q1 Decline Largest Since 2008

KEY DATA RELEASES TODAY (BST) :

09:30 GBP Manufacturing PMI 54.5 v 54.1
13:15 USD ADP Non-Farm Employment Change 227K v 212K
14:00 USD FOMC Member Williams Speaks
15:00 USD ISM Manufacturing PMI 52.5 v 52.9
15:30 USD FOMC Member Lockhart Speaks
15:30 USD Crude Oil Inventories 4.2M v 8.2M

OVERNIGHT:

According to Kathimerini, Eurozone finance ministry officials are to discuss progress and the prospects for a deal during a teleconference call later today. The Greek sources have claimed significant progress but European officials have indicated otherwise. As the Greek saga continues EURUSD dropped 0.9% yesterday, down 11% in the first quarter its largest decline since 2008. A slump in Eurozone consumer prices eased in March, offering a rest to the ECB after it ramped up stimulus to avoid the deflation threat.The annual rate of inflation in the 19-nation bloc printed below zero in the four consecutive readings, whereas climbed to -0.1% from -0.3 % in February.Overnight some reported profit taking in Euro from Asian prop accounts. Bids reported near and below 1.0700. Euro rose to 1.07815, but limited pullback – talk of renewed macro selling into 1.0800. Note there is a Eur2.4bn expiry today NY strike 1.0800.

GBPUSD was almost the only one major currency that have strengthened against the dollar overnight. U.K. 4Q GDP rose 0.6 percent QoQ, beating estimated 0.5 percent.The BoE has entered its pre‐election blackout period, which is likely to stabilize the cable in the near-term due to the election uncertainty.

USDJPY slipped from 120.00 amid weak Nikkei and started to take out stops at 119.80, then 119.65. Interbank drove the pair to 119.42. Common knowledge that bids gather 119.05 thereafter. We should see some sellers into 120-handle; do note a decent 120.00 strike maturing tomorrow NY. The general market impression is that the Japanese politicians may not want the JPY to be too weak into the April 12 & 26 local elections. USD might drift lower and renewed buying to emerge post elections.

AUDUSD ran into sellers near 0.7625 but all soaked up when USDJPY printed morning’s low. At the same time China manufacturing gauge came out stronger in March, which sent AUD towards 0.7664. Twice, AUDNZD traded up to the 1.0240’s and encountered offers – probably aided the AUDUSD pullback to 0.7640’s.

PRICE ACTION OVERVIEW:

EUR: While 1.06 supports target 1.1190/1.1210 equality corrective target
GBP: While 1.5030/50  contains upside target 1.4630
JPY:  While 118 contains downside target 124.00
CAD: While 124.50 contains downside target 130
AUD:  While .7940/6- contains upside target .72

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearish Sell/31 Mar 1.081.001.08 Intraday signal
GBPUSDBearishAwait new signal
USDJPYNeutral Await new signal
USDCADBullishAwait new signal
AUDUSDBearishAwait new signal

ANALYSIS:

EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 WeeksBearish

  • 1.0760/40 supports on retest, while this area supports there is still potential for a further leg of corrective action to test 1.1180/1.12 equality target. While 1.09 contains upside reactions there is the potential to breach 1.06 for trend resumption.
  • Order Flow indicators; OBV consolidates at lows, Linear Regression and Psychology bearish but lack momentum
  • Risk free shorts in play, if stopped will monitor price action and Order Flow to reset shorts

eu2015-04-01 07_19_47-

GBPUSD: Short Term (1-3 Days): Bearish – Medium Term (1-3 WeeksBearish

  • Range trade persists intraday suggesting a bearish consolidation pattern, while 1.5030/50 caps upside expect a break of 1.47 to confirm trend resumption en route to 1.45, above 1.51 suggests a test of 1.52 in broader corrective pattern
  • Order Flow indicators; OBV ticking up from lows, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow against 1.5030/50 targeting 1.46/45

gu2015-04-01 07_25_00-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Continued bullish consolidation below year to date highs while 118 supports expect retest and break of highs, below 118/117 negates pattern and suggests reversal
  • Order Flow indicators; OBV ticking up from recent lows, Linear Regression pierces midpoint from below, Psychology ticking up to test midpoints from below
  • Monitoring price action and Order Flow indicators for longs targeting 124

uj2015-04-01 07_40_44-

USDCAD: Short Term (1-3 Days):  Bullish – Medium Term (1-3 Weeks) Bullish

  • Third rejection a the 1.28 attempt,  a close above here will target key 1.30 only below 1.2450 concerns bullish bias, potential for further range trade in bullish consolidation pattern
  • Daily Order Flow indicators; OBV retesting highs, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow indicators to set longs targeting 1.30

uc2015-04-01 08_17_05-

AUDUSDShort Term (1-3 Days): Bearish  – Medium Term (1-3 WeeksBearish

  • Watching retest of year to date lows for potential double bottom attempt, a breach here targets .72
  • Order Flow indicators; OBV  at lows, Linear Regression and Psychology bearish but ticking up from low levels
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

au2015-04-01 08_38_05-

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