U.S. Dollar. Our bias BULLISH, we’re looking to buy on dips.
• U.S. Dollar rallied on Friday closing at 75.58
• Declining equity markets helped boost the Greenback with the DJIA down 0.6%, S&P500 losing 0.25%, while the NASDAQ gained 1.4%.
• This week sees the formal end of the QE2 asset purchase program
• Personal Income and Spending, Conference Board Consumer Confidence, University of Michigan Consumer Confidence, and ISM manufacturing reports due this week
• Support at 74.50, resistance at 76.50
• We maintain a bullish Dollar outlook in the week ahead, looking to buy on dips.
Euro. Our bias BEARISH, we’ll be looking to sell on rallies.
• Euro closed at 1.4185 against the U.S Dollar on Friday
• Market focus this week again on Greece with the Greek parliament set to vote on the medium-term budget
• Scheduled Greece related events likely to produce short term price volatility
• German preliminary CPI, retail sales and unemployment change due on Tuesday and Thursday.
• Support at 1.4100, resistance 1.4350
• We maintain a bearish Euro outlook in the week ahead, looking to sell on rallies
Japanese Yen. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Yen closed last week virtually unchanged against the U.S Dollar at 80.39
• Bank of Japan cites further easing measures may be needed as the domestic economy continues to see sluggish growth prospects
• Retail trade, industrial production, manufacturing PMI, housing starts, household spending, CPI, unemployment and Tankan surveys due this week
• Support at 80.00, resistance 81.00
• We maintain a neutral outlook for the Yen in the week ahead until a clearer picture develops with risk sentiment.
British Pound. Our bias BEARISH, we’ll be looking to sell on rallies.
• Sterling slips to a fresh monthly low of 1.5939 against the Dollar on Friday
• MPC see scope to expand the asset purchase program beyond the GBP 200B target
• This week’s final 1Q GDP report is expected to confirm a 0.5% expansion in economic growth
• Support at 1.5950, resistance 1.6150
• We maintain a bearish Sterling outlook in the week ahead, looking to sell on rallies.
Canadian Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.
• Last week, the Canadian Dollar fell against every other major currency, while dropping 0.97% against the U.S. Dollar
• Loonie expected to see continued downside pressure as concerns linger about the health of the global economy
• Canada is the number one exporter of oil to the United States, so growth concerns for the U.S. weigh on the Loonie
• Canadian CPI & GDP due this week
• Support at 0.9780, resistance 0.9900
• We maintain a bearish Canadian Dollar outlook in the week ahead, looking to sell on rallies.
Australian Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.
• Australian Dollar closed last week at 1.0488 against the U.S. Dollar following the market wide shift toward risk aversion
• Risk-taking behaviour may dampen this week, reducing demand for the higher-yielding Aussie
• Credit Suisse Overnight Index Swaps show investors seeing borrowing costs holding steady over the next 12 months
• Support at 1.0450, resistance 1.0650
• We maintain a bearish Australian Dollar outlook in the week ahead, looking to sell on rallies or a daily close below 1.0450.
New Zealand Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.
• New Zealand Dollar closed on Friday at 0.8094 against the U.S. Dollar
• Kiwi remains at mercy of broader market risk trends, & may be vulnerable this week
• Trade balance, building consents & business confidence reports due this week
• Support at 0.8100, resistance 0.8190
• We maintain a bearish New Zealand Dollar outlook in the week ahead, looking to sell on rallies.