Morning Report: Month & Quarter End Flows Ahead…

KEY DATA RELEASES TODAY (BST) :

10:00 EUR Unemployment Rate 11.2% v 11.2%
10:00 EUR CPI Flash Estimate y/y -0.3% v -0.3%
10:00 EUR Core CPI Flash Estimate y/y 0.6% v 0.6%
13:00 USD FOMC Member Lacker Speaks
13:50 USD FOMC Member Lockhart Speaks
14:45 USD Chicago PMI 52.5 v 45.8
15:00 USD CB Consumer Confidence 96.6 v 96.4

OVERNIGHT:

Flows into EURJPY carried EURUSD up to 1.0846 high but reported speculative sellers emerged and forced the single currency into 1.0815 in the late morning. Interbank reports suggest some sellers positioning into selling of Euros for month-end balancing. Orderbooks suggest that sell orders are planted above 1.0860 up into 1.09-handle. Euro low has been 1.08155, we suspect some buying into 1.0800-10. Addressing the parliament on late Monday, Greek PM Alexis Tsipras appealed for an “honest compromise” with lenders but warned Greece would not agree to an “unconditional” one, after its biggest creditor demanded it do more to show commitment to reform.

USDJPY coming back to 120-teens as it registered its first gain in four sessions, Nikkei gave up 1% gain and into red. Into late morning, Nikkei recovered into black and UsdJpy hauled up to 120.20’s. The BOJ aims to achieve price stability; weaker yen raises profits of exporters and stocks whereas pushing down non-manufacturers profits and real household incomes; desirable inflation rate is anchored around 2%, said Governor Haruhiko Kuroda. Interbank reports suggest some small demand linked to month-end rebalancing

GBP weighed down by political concern on the first official day of a national election campaign; GBPUSD drifted through 1.4800 level and hit 1.4751 low. UK mortgage approves rose to 61.8k in February vs 61.5k expected, the data bounced back from the cycle low last November, all eyes on GDP data today

Commodity currencies continue to be pressured in Asia with very little bounce so far today. Aussie has remained under 0.7660 all day and hit lows around 0.7625. Copper prices remained heavy also today as did iron ore future which had a 3% drop on the open. The expectation for the RBA to cut next week is growing also so there is plenty of negativity in Aussie right now

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 123.50/124 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 test underway, while this area supports there is still potential for a further leg of corrective action to test 1.1180/1.12 equality target. Only below 1.06 suggests trend resumption.
  • Order Flow indicators; OBV consolidates at lows, Linear Regression and Psychology bearish
  • Risk free shorts in play, if stopped will monitor price action and Order Flow to reset shorts.

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

  • 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 bearish
  • Monitoring price action and Order Flow against 1.5030/50 targeting 1.46/45

gu2015-03-31 07_25_13-

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 and Psychology bearish but ticking up to test midpoints from below
  • Monitoring price action and Order Flow indicators for longs targeting 124

uj2015-03-31 07_28_16-

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

  • 1.28  test underway a close above here will target key 1.30 only below 1.2450 concerns bullish bias
  • 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

uc2015-03-31 08_44_05-

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

  • Below .7760 suggests false break from bearish channel and early return to trend. 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
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

au2015-03-31 08_47_51-

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