Currency Tech

EURUSD R 2: 1.3216 R 1: 1.3107 CURRENT: 1.3078 S 1: 1.2981 S 2: 1.2842

USDJPY R 2: 87.24 R 1: 87.00 CURRENT: 86.62 S 1: 86.27 S 2: 85.95

GBPUSD R 2: 1.5922 R 1: 1.5826 CURRENT: 1.5743 S 1: 1.5625 S 2: 1.5541

AUDUSD R 2: 0.9273 R 1: 0.9149 CURRENT: 0.9092 S 1: 0.8959 S 2: 0.8861

Market Brief

Risk appetite crept back in the markets this morning as superior corporate earnings forecasts from Japan, positive housing & stronger manufacturing data from Australia combined with weaker Chinese manufacturing contributed to a weaker US Dollar and Japanese Yen. The Nikkei was +0.35% higher this morning as heavy weights reported positive earnings forecasts for the rest of 2010, putting doubts that the Asian recovery is slowing in the back of investors' minds for the time being. The Shanghai composite was similarly trading higher this morning, up +0.64% as negative data collected in a survey by HSBC showed that China's manufacturing was at the lowest level in a year, releasing at 49.4 from a previous reading of 50.4.

Although negative, the reading was viewed in a positive light as markets speculated it would stimulate the Chinese authorities to do more to support growth towards the last two quarters of 2010. The USDJPY was trading a touch higher on the positively perceived combo of releases this morning, this of course following Friday's trading session in which the USDJPY hit a 2010 low of 85.95.Data from Australia this morning showed that manufacturing in Australia expanded to 54.4 from a previous reading of 52.9 and new home sales improved to -5.1% from a previous reading of -6.4%.

The combo of data was good enough to take the AUDUSD pair past 0.9100 levels. The positive data keeps on piling up for the RBA who will be announcing their rate decision tomorrow. It is largely expected that rates will remain unchanged at 4.50%. And finally, the NZDUSD was also trading higher after the commodity price index improved to -0.8% from -1.6% from a month ago. The drop in the index helped the NZDUSD touch an intraday high of 0.7300.

Next up is retail sales data from Switzerland (previous at 3.8%), followed manufacturing data from the Euro-zone and the UK (expected at 56.5 and 57.0 respectively) and ISM manufacturing data from the US (expected 54.0).