Euro is generally soft today as markets remain concerned with Greece situation. Greek 10-year spread to German bund widened to 436bps, widest level since Euro's inception. ECB left rates unchanged at 1.00% as widely expected and it's believed that the uncertainty around Greece ties ECB up for existing stimulus measures . Sterling is steady against dollar after BOE left rates unchanged at record low of 0.5% and held the asset purchase problem unchanged at GBP 200b. Japanese yen continue to be the better performer today as global stock markets are mostly in red.
On the data front, US jobless claims unexpectedly rose to 460k. Eurozone retail sales missed expectation by dropping -0.6% mom, -1.1% yoy in February. UK industrial and manufacturing production are stronger than expected at 1.0% mom, 1.3% mom respectively in February. Swiss unemployment rate was unchanged at 4.1%. Japanese current account surplus narrowed to JPY 1.12T in February. Machine orders dropped -5.4% mom, -7.1% yoy in February. Australia job market expanded by 19.6k in March with unemployment rate unchanged at 5.3%.
Dollar is lifted by sharp retreat in Crude oil as well as risk aversion. Dollar index edged higher to 81.90 earlier today and is still extending recovery from 80.68. Nevertheless, we'd like to point out that such recovery is still having a corrective look and another is still likely as the third wave of the consolidation from 82.24. A break below 81.30 minor support will flip intraday bias back to the downside for 80.68 and below. Nevertheless, decisive break of 82.24 resistance will confirm rally resumption for 61.8% retracement of 89.62 to 74.19 at 83.72.
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USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0697; (P) 1.0720; (R1) 1.0762; More.
Intraday bias in USD/CHF remains on the upside for the moment and further rally is still expected to have a retest on 1.0897 resistance. As noted before, the three wave corrective structure of the fall from 1.0897 to 1.0434 suggests that rise from 0.9916 is not over yet. Break of 1.0897 will confirm rally resumption and should target 1.1158 resistance next. On the downside, below 1.0667 will indicate that a temporary top is in place and turn intraday bias neutral. But pull back should be contained well above 1.0434 support and bring another rise.
In the bigger picture, while the pull back fro 1.0897 was deeper than expected, the three wave corrective structure reaffirmed the view that rise from 0.9916 is still in progress. Break of 1.0897 will confirm this case and also have USD/CHF sustain above medium term falling trend line. This will in turn affirm the case that correction from 1.2296 has completed with three waves down to 0.9916 and will pave the wave for another high above 1.2296. On the downside, though, break of 1.0434 will invalidate this view and turn outlook mixed.