Currency Tech

EURUSD R 2: 1.2885 R 1: 1.2650 CURRENT: 1.2557 S 1: 1.2450 S 2: 1.2330

USDJPY R 2: 95.00 R 1: 93.70 CURRENT: 92.91 S 1: 92.25 S 2: 91.57

GBPUSD R 2: 1.5055 R 1: 1.4800 CURRENT: 1.4637 S 1: 1.4550 S 2: 1.4400

AUDUSD R 2: 0.9200 R 1: 0.9050 CURRENT: 0.8967 S 1: 0.8800 S 2: 0.8710

Market Brief

USDJPY climbed to 92.89 snapping two weeks of declines before US reports that may show retail sales rose for a seventh month and confidence among consumers improved in April, adding to signs the US is recovering. Sales probably increased 0.2% in April, extending the most successive gains since 1999, while University of Michigan consumer confidence advanced to 73.5 (prev. 72.2) according to reports due out today. The outlook for the US economy appears upbeat which could be a positive factor for the greenback. Fed's Kocherlakota said yesterday the pledge to keep interest rates low for an extended period doesn't stop the Fed from raising rates if economic conditions change appropriately. FDI in China climbed 24.7% (exp. 21%) to $7.35 billion for a ninth month in April as the government relaxed rules to lure investors amid a sustained economic expansion. China's GDP quickened to 11.9% in Q1, the fastest pace in almost three years, driven by stimulus spending and a credit boom unleashed last year. The MSCI Asia Pacific Index declined 0.8% to 120.16, trimming the biggest weekly gain in six weeks, Nikkei fell 1.1%, the most in a week and S&P/ASX 200 dropped 0.9%.New Zealand retail sales rose 0.2% (prev. 0.9%) at the slowest pace in a year and house prices fell 0.4%, weakening the case for RBNZ Governor Alan Bollard to raise interest rates next month. NZDUSD dropped on concern weak consumer spending will restrain economic growth this year. Bollard, who has kept the official cash rate at a record-low 2.5% since April 2009, said in April he may start raising rates in coming months provided the economy keeps growing as he forecast. NZDUSD dropped to 0.7132 while NZDJPY slid 0.2% to 66.20. AUDUSD traded at 0.8972 and AUDJPY at 83.34.

The EURUSD headed for a fourth weekly decline trading at 1.2545 as the currency rebounded after touching 1.2516, the lowest level since March 5, 2009, breaking through the 14-month low reached last week, on concern European nations' debt-cutting measures will undermine economic growth. The EURJPY was at 116.45 after earlier reaching 115.88, the lowest since May 7 before Greece submits a progress report tomorrow to the EU on the implementation of a deficit-reduction plan. Investors are still concerned widespread fiscal tightening could derail the already weak European economic recovery which could lead the EURUSD to decline to 2008 low of 1.2330. The BOE will raise its target rate next year after previous forecast for increases in Q3 according to market estimates. BOE Governor Mervyn King endorsed yesterday Cameron's plan to reduce spending after Greece's debt crisis threatened to spread. The BOE also said in a report there were greater downside risks to its forecast that growth will reach a 3.5% annual pace by 2012 and that inflation will stay below its 2% target while not ruling out any further asset purchases.

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