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By XE Market Analysis April 23, 2014 7:38 am
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    XE Market Analysis: North America - Apr 23, 2014

    The rebounded after wobbling in the wake of the below-forecast French PMI, with subsequent releases and the pan-Eurozone data superseding market expectations (in both services and manufacturing surveys in the case of the Eurozone). The EUR-USD high so far has been 1.3853, and the Apr-17 peak at 1.3866 looks likely to be tested. Sterling drifted lower in the wake of the BoE minutes after a volatile spell in the immediate wake of the release. The minutes didn't mark much of a departure from the already established dovish policy stance, which was a disappointment to us and some market participants who had been anticipating more of a hawkish tone. Cable saw a 1.6799 low before settling. The AUD dove following sub-expectations inflation data out of Australia, which came in at 0.6% q/q versus the median forecast for an unchanged 0.8% q/q reading. AUD-USD dove from 0.9375 to a low of 0.9273, the lowest level since Apr-7, since recovering to the 0.9290 area.

    [EUR, USD]
    The euro rebounded to fresh highs after wobbling in the wake of the below-forecast French PMI, with subsequent releases and the pan-Eurozone data superseding market expectations (in both services and manufacturing surveys in the case of the Eurozone). The EUR-USD high so far has been 1.3853, and the Apr-17 peak at 1.3866 looks likely to be tested. Above here, the Apr-13 peak at 1.3884 will swing into scope, along with resistance at 1.3900-05 (which encompasses the one-month high.

    [USD, JPY]
    USD-JPY has continued to oscillate in the 102s. The pair is lacking direction amid a broad sideways range, roughly contained within 100.00-105.00, which has been in place since early January. This stasis may persist for some time, though technical analysts will be marking this as a potential topping formation after the steep rally from levels around 75.0 that was seen during the second part of last year.

    [GBP, USD]
    Sterling drifted lower in the wake of the BoE minutes after a volatile spell in the immediate wake of the release. The minutes didn't mark much of a departure from the already established dovish policy stance, which was a disappointment to us and some market participants who had been anticipating more of a hawkish tone. The minutes noted that, "committee members had a range of opinions," with regard to economic slack and the outlook for inflation in the medium-term, which didn't cut it for those expecting something more decisively hawkish. Cable is presently settled around 1.6810 having made seen a 1.6799 low, down from a 1.6827 peak that was seen just ahead of the minutes. We continue to target 1.7000. Support is marked at 1..6800 and 1.6780.

    [USD, CHF]
    EUR-CHF has settled around 1.2200 again, having recovered from the one-month low of 1.2142 that was seen last on Monday. The cycle low of 1.2104 was left untested. While situation in the Ukraine remains a concern, and this is a potentially supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying. SNB's Jordan said earlier in the month that Swiss inflation remains "very low," and that the currency cap would still be defended.

    [USD, CAD]
    USD-CAD has settled just above 1.1000 after recovering from the three-month low of 1.0858 that was seen on Apr-9. The failure to make weekly close under 1.0900-10 was disappointing to CAD bulls, to whom we would advise caution as the Fed vs BoC stance should remain broadly supportive of USD-CAD. Resistance is pegged at 1.1059-60 (50-day moving average) and 1.1100 (former pivot level). Support is marked at 1.0985 (20-day moving average) and 1.0942 (Apr-14 low).

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