Home > XE Currency Blog > XE Market Analysis: North America - Apr 08, 2014

AD

XE Currency Blog

Topics6796 Posts6841
By XE Market Analysis April 8, 2014 7:53 am
    XE Market Analysis's picture
    XE Market Analysis Posts: 4720
    XE Market Analysis: North America - Apr 08, 2014

    The dollar extended lower, across the board, as its post-jobs report losses. USD-JPY got the ball rolling during the Asia session in breaking below 103.00 and extending to an 11-day low of 102.51 during the London AM session. The move correlated with stock markets, which remained under pressure in Europe and Asia (which some commentaries blame on Ukraine-Russian tensions). Neither the BoJ's unchanged policy announcement or Governor Kuroda's boilerplate press conference impacted markets. EUR-USD punched above 1.3750, having cleared Monday's 1.3748 high, and made 1.3773. Buy stops were triggered through 1.3750. There wasn't any specific data or news development behind the gain, and the move continued the short squeeze that's been in place since yesterday, when ECB's Mersch and Nowotny dampened market expectations with regard to QE. Cable, meanwhile, gained over 60 pips in making a peak of 1.6718 following U.K. production figures that smashed expectations. AUD-USD broke to a fresh four-month high of 0.9341, and USD-CAD fell to a seven-week low of 1.0919..

    [EUR, USD]
    EUR-USD punched above 1.3750, having cleared Monday's 1.3748 high, and made 1.3773. Buy stops were triggered through 1.3750. There wasn't any specific data or news development behind the gain, and the move continued the short squeeze that's been in place since yesterday, when ECB's Mersch and Nowotny dampened market expectations with regard to QE. The move has been associated with a tightening in the 10-year U.S. T-note yield spread over the Bund. Friday's high at 1.3807 is back in scope.

    [USD, JPY]
    USD-JPY got the ball rolling during the Asia session in breaking below 103.00 and extending to an 11-day low of 102.51 during the London AM session. The move correlated with stock markets, which remained under pressure in Europe and Asia (which some commentaries blame on Ukraine-Russian tensions). Neither the BoJ's unchanged policy announcement or Governor Kuroda's boilerplate press conference impacted markets. Bigger picture, we remain yen bearish. The BoJ is likely to make a easing to offset the sales tax hike that was implemented last week, and the possibility of a further hike later in the year. We target USD-JPY to 105.00.

    [GBP, USD]
    Sterling rallied on production data out of the U.K., which smashed expectations and should lead to upward tweaks in GDP forecasts for Q1. Cable gained over 50 pips in making a peak of 1.6713, since settling around the 1.6700 mark. EUR-GBP dove below 0.8240 for the first time since Mar-6. Last week's March PMI surveys had disappointed relative to market expectations, but the data still points to healthy expansion in the economy while today's more laggard official data suggests GDP growth may be a little higher this quarter than previously anticipated. Cable's Mar-10 peak of 1.6741 and 1.6750 mark resistance levels. Support at 1.6685. GBP-JPY should be an attractive route for sterling bulls as BoE and BoJ policy paths are starting to diverge..

    [USD, CHF]
    EUR-CHF has settled lower after making a two-month high of 1.2249 on Friday. The up move reflects an unwinding of the Swiss franc's safe-haven premium. The cycle low of 1.2104 was left unchallenged during the recent risk-off phase. We see potential for a recovery to the 1.2300-1.2400 area, but this assumes there are no renewed flare-ups in geopolitical tensions.

    [USD, CAD]
    USD-CAD failed to hold a rebound back above 1.1000 on Monday, and subsequently dove to a seven-week low of 1.0919. This followed the weekly close below 1.1000, and all together paint a bearish technical picture. USD-CAD's mid-March surge to new cycle high of 1.1278 now looks to have been false breakout. While we are bearish over the nearer term.

    Paste link in email or IM