Euro's recovery against dollar extends today on hope that the rescue package for Greece will be finalized soon. European Union Economic and Monetary Affairs Commissioner Olli Rehn said the European Union should complete talks within days while Germany opposition party also expressed that it will move quickly to approval funds for German participation. Euro is also supported by better than expected job market and confidence data. Nevertheless, the momentum of Euro is so far weak as there is no detail about the negotiation yet.
The Japanese yen is under much pressure as risk appetite returns to equities market with broad based strength in European stocks. US equities are also set to open high on solid earnings data from Motorola and Exxon. Nevertheless, one thing to not is that we'd continue to expect strong resistance in S&P 500 at around 1220/30 level to bring sizeable correction in stocks. The development, whether S&P 500 will reverse at mentioned 1220/30 level or break through, will have critical impact on the range bound yen crosses.
On the data front, US jobless claims improved to 448k. Eurozone confidence indicators generally improved in March with Economic confidence up to 100.6, industrial confidence up to -7, services confidence up to 5 while consumer confidence was unchanged at -15. M3 money supply dropped -0.1% yoy in March. German unemployment rate dropped to 7.8% in April while unemployment dropped -68k.
Daily Pivots: (S1) 1.3133; (P) 1.3200 (R1) 1.3285;
EUR/USD's recovery from 1.3114 is still in progress and intraday bias remains neutral for the moment. Further rise cannot be ruled out but we'd expect upside to be limited below 1.3417 resistance and bring fall resumption. Decisive break of 61.8% projection of 1.4578 to 1.3443 from 1.3817 at 1.3113 will target 100% projection at 1.2682 next.
In the bigger picture, the three wave consolidation from 2008 low of 1.2329 has completed at 1.5143 already and fall from there is resuming whole down trend from 2008 high of 1.6039. We'd expect fall from 1.5143 to break through 1.2329 low eventually. On the upside, break of 1.3691 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.
Economic Indicators Update
RBNZ Interest Rate Decision
Trade Balance (NZD) Mar
Conference Board Leading Index Feb
German Unemployment Change Apr
German Unemployment Rate Apr
Eurozone M3 Y/Y Mar
Eurozone Economic Confidence Apr
Eurozone Consumer Confidence Apr F
Eurozone Industrial Confidence Apr
Eurozone Services Confidence Apr
Initial Jobless Claims
Natural Gas Storage