Forex - Yen and Swiss Franc rise against Dollar as investors reduced exposure to risky assets
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Forex News and Events:
The JPY and CHF firmed broadly on Monday as US stocks fell on credit-related worries, prompting investors to reduce exposure to risky assets and unwind trades funded by the Japanese and Swiss currencies' low rates. The Yen approached eight-year highs against the Dollar while the Swiss franc rose to roughly two-year peaks against the Euro and was within striking distance of its record high against the Dollar. Meanwhile, the Dollar was steady against the Euro after Europe's top monetary officials expressed concern about excessive movements in currency exchange rates.
UsdJpy hit a session low of 101.43 at close, -1.22%, one pip over Friday's eight-year low 101.42. EurJpy fell to one-week lows 155.63 down 1.29%. The high-yielding crosses AudJpy and NzdJpy fell respectively 2.43% to 92.84 and 1.86% to 80.02. EurChf fell more than 0.72% to 1.5621, the lowest since July 2006. UsdChf dropped 0.64% to 1.0187 . Friday, UsdChf hit a record low at 1.0134. EurUsd was unchanged at 1.5343 coming back from Friday record peak 1.5462.
The Euro's surge was also halted on Monday, after European Central Bank President Jean-Claude Trichet said the central bank was concerned about "excessive exchange rate moves." His comments were echoed by Klaus Regling, director-general of the European Commission's monetary affairs department, and Joaquin Almunia, the European Economic and Monetary Affairs Commissioner.
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Today's Key Issues (time in GMT):
07:00 EUR Wholesale price Index (YoY) FEB 6.70% vs 6.60%
07:00 EUR Wholesale Price Index (MoM) FEB 0.50%vs 1.40%
09:30 GBP DCLG UK House Prices (YoY) JAN 7.50% 9.10%
10:00 EUR ZEW Survey (Econ. Sentiment) MAR -42 vs -41.4
10:00 EUR ZEW Survey (Econ. Sentiment) MAR -40 vs -39.5
10:00 EUR ZEW Survey (Current Situation) MAR 30 vs 33.7
12:30 USD Trade Balance JAN -$59.6B vs -$58.8B
12:30 CAD Int'l Merchandise Trade JAN C$2.6 vs C$2.4
12:30 CAD New Housing Price Index MoM JAN 0.20% vs 0.10%
14:00 USD IBD/TIPP Economic Optimism MAR 42
15:30 GBP Leading Indicator Index (MoM) JAN
15:30 GBP Coincident Indicator Index(MoM) JAN
21:00 USD ABC Consumer Confidence Mar-09
23:50 JPY Bank of Japan Minutes of February meeting
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The Risk Today:
EurUsd Euro posted a new all-time high 1.5462 on Friday. Should we break down through 1.5227 (23.6% retracement), expect the door wide open to 1.5077 (38.2% retracement). On the upside, the next target is 1.5470, a 100% extension of the last intermediate high-low.
GbpUsd Cable advanced as high as 2.0217 on Friday. Yesterday, the pair bounced right off its daily Winnipeg line. The latest move up keeps the pair bullish in the short-term, looking to cross 2.0253, the 50% retracement of the 2.1166 – 1.9339 high-low, and aim for 2.0468, the 61.8% retracement. For now, downside risk remains high with 2.0037 providing support and targeting 1.9770
UsdJpy consolidating around the January 17th, 2005 low and the bottom of the weekly lower trend line of the downtrend. Upside risk remains very high, with 104.22 in close sight. Very strong support clearly shown at 101.40; a break of this level would be very bearish.
UsdChf is very interesting lately, as the pair blasts down through the double bottom of 1.1287, triple bounced at the lower trend line, and broke down into unchartered territory. All signs now point to a 161.8% extension of the last major high-low at 1.0045. Expect a spike to the psychological parity level.
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Resistance and Support:
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EURUSD |
GBPUSD |
USDJPY |
USDCHF |
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1.5600 T |
2.0577 T |
108.67 T |
1.1500 P |
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1.5500 M |
2.0447 S |
106.51 S |
1.1107 S |
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1.5396 S |
2.0140 M |
104.22 S |
1.0761 M |
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1.5354 |
2.0075 |
102.18 |
1.0216 |
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1.5280 M |
2.0000 P |
101.42 M |
1.0200 S |
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1.5000 K |
1.9727 M |
101.24 S |
1.0134 M |
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1.4500 P |
1.9630 K |
100.00 K |
1.0000 K |
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S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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