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16 Mar 2015
What's next: FOMC week, Euro's relentless fall in focus
FXStreet (Bali) - Find below a wrap-up of the key headlines from Monday in Asia, the main themes dominating FX trading during the Far-East session, and what to expect for the next European session.
Main headlines in Asia
RBA's Debelle: Low levels of bond yields difficult to explain
Toyota set to raise base wage by a record 4K yen/ month - Kyodo news
Dominating themes from Monday Asia - centered on JPY, AUD, NZD
A quiet session in Asia, with the US Dollar initially finding some bids but there was never any follow through as a non-committal market awaits this week's FOMC.
AUD/USD traded in a mild bullish tone off key 0.76 support, with the rise reaching a high of 0.7657 before stabilizing circa 0.7650. Last Friday, we learnt that large specs increased their short bets towards the Aussie quite significantly, implying that the market should remain bearish overall, with upward corrections potentially aiming to collect topside liquidity for further slides in the days to come. The next key focus for AUD traders will be Tuesday's RBA minutes ahead of the FOMC.
USD/JPY was confined in a slim rage between 121.42 and 121.23, with a flat Nikkei 225 providing no inspirations for Yen traders ahead of the FOMC. Large offers are rumored above 121.75, which judging by recent price action, should be given decent veracity.
Heading into Monday Europe - centered on EUR, GBP
During the European session, a semi-vacant calendar suggests that technicals will play the most important role during the morning hours. The CHF could see some action though, as we get the Swiss producer and import prices and real retail sales. Out of Germany, the Buba monthly report is due, although no earth-shattering headlines are expected.
One of the major focuses in Europe will remain the relentless depreciation in the EUR/USD, as parity becomes the talk in the street. Nomura's FX Strategist Jens Nordvig notes that "the bottom line is that from a trading perspective, there is still potential for a further significant move to the downside, but the risk of a significant retracement higher (say back to 1.10-1.12 for EURUSD) is also increasing."
The British Pound has also been on the spotlight, losing over 8 cents in the last 2 weeks of trading since peaking at 1.55+ to currently trade around 1.4750. As Valeria Bednarik, Chief Analyst at FXStreet, notes: "The British Pound was weighed by comments from BOE's Governor Mark Carney, diminishing chances of a rate hike in the UK for this year" adding that "overall, the bearish outlook prevails with the 1.4500 level now as the probable bearish target."
Main headlines in Asia
RBA's Debelle: Low levels of bond yields difficult to explain
Toyota set to raise base wage by a record 4K yen/ month - Kyodo news
Dominating themes from Monday Asia - centered on JPY, AUD, NZD
A quiet session in Asia, with the US Dollar initially finding some bids but there was never any follow through as a non-committal market awaits this week's FOMC.
AUD/USD traded in a mild bullish tone off key 0.76 support, with the rise reaching a high of 0.7657 before stabilizing circa 0.7650. Last Friday, we learnt that large specs increased their short bets towards the Aussie quite significantly, implying that the market should remain bearish overall, with upward corrections potentially aiming to collect topside liquidity for further slides in the days to come. The next key focus for AUD traders will be Tuesday's RBA minutes ahead of the FOMC.
USD/JPY was confined in a slim rage between 121.42 and 121.23, with a flat Nikkei 225 providing no inspirations for Yen traders ahead of the FOMC. Large offers are rumored above 121.75, which judging by recent price action, should be given decent veracity.
Heading into Monday Europe - centered on EUR, GBP
During the European session, a semi-vacant calendar suggests that technicals will play the most important role during the morning hours. The CHF could see some action though, as we get the Swiss producer and import prices and real retail sales. Out of Germany, the Buba monthly report is due, although no earth-shattering headlines are expected.
One of the major focuses in Europe will remain the relentless depreciation in the EUR/USD, as parity becomes the talk in the street. Nomura's FX Strategist Jens Nordvig notes that "the bottom line is that from a trading perspective, there is still potential for a further significant move to the downside, but the risk of a significant retracement higher (say back to 1.10-1.12 for EURUSD) is also increasing."
The British Pound has also been on the spotlight, losing over 8 cents in the last 2 weeks of trading since peaking at 1.55+ to currently trade around 1.4750. As Valeria Bednarik, Chief Analyst at FXStreet, notes: "The British Pound was weighed by comments from BOE's Governor Mark Carney, diminishing chances of a rate hike in the UK for this year" adding that "overall, the bearish outlook prevails with the 1.4500 level now as the probable bearish target."