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6 May 2015
Kiwi heavy in Asia, Final Services PMI to dominate European trades
FXStreet (Mumbai) - The New Zealand dollar was relentlessly offered below 0.75 barrier in Asia after sluggish labor market report which sparked speculations of RBNZ rate cut at its next policy meeting. While the Aussie recovered from weak retail sales-backed dip and trades higher on the 0.79 handle. USD/JPY remains sidelined below 120 mark, awaiting fresh cues from US jobs data due later today.
Key headlines in Asia
HSBC China services activity expands in April
Australian retail sales slightly below expectations in March
Australian new home sales highest since 2010 in March
New Zealand Unemployment Rate registered at 5.8% above expectations (5.5%) in 1Q
New Zealand Employment Change came in at 0.7%, below expectations (0.8%) in 1Q
Dominating themes in Asia - centered on JPY, AUD, NZD
A busy Asian session, with disappointing NZ employment data, mixed Aus economic releases and upbeat China services PMI driving markets. While, the US dollar extends its bearish tone against its major competitors following mixed US services PMI and ISM non-manufacturing PMI reports.
Kiwi was the weakest performer among the G10 currencies after below estimates private sector wages and employment data drowned the NZD/USD pair to fresh three week lows below 0.75 handle. While the Aussie remained supported despite a miss on retail sales figures as traders continued to cheer upbeat RBA policy decision released yesterday.
USD/JPY tested 120 barrier, however failed to sustain above and retraced to 119.90 levels as the latest services PMI reports from the US keeps a check on the major.
Heading into Europe - centered on EUR, GBP
There is a lot to report in the European session, with Euro zone final services PMI and retail sales data to be closely watched. While UK services PMI is also eagerly awaited ahead of Thursday’s UK elections.
The Euro zone services sector reported 53.7 last time, with the same number expected as a final result again. The PMI for the euro area's number one economy's services sector showed 54.4 points in the fourth month of the year, with the same figure expected in the final result.
Results from the euro zone's retail business in March are awaited with an expected decline of 0.2%, while 2.5% growth is projected when measured annually.
While the UK services PMI in April is seen ticking slightly down to 58.6 from the 58.9 booked in the previous cycle.
Later, we have key US ADP non-farm employment data followed by Fed’s Chair Yellen’s speech in Washington which may provide fresh incentives on the US dollar moves.
EUR/USD Technicals
Jim Langlands, Founder at FXCharts notes, " "The daily and hourly charts both point higher, so another test of the topside does seem likely although the 4 hour charts look less certain and it may be that the market chops around without any real direction until the NFP on Friday. On the topside, we now have a short term double top at 1.1222, which will act as decent resistance.
Back above here would take the Euro back towards Friday’s trend high at 1.1290, which is also strong Fibo resistance (23.6% of 1.3993/1.0461)."
"The downside will see minor support at the 100 HMA at 1.1170, below which the Euro could head back to 1.1100 although this looks less likely. Below 1.1100 would head towards the session low at 1.1065, beneath which there would not be too much to hold it ahead of 1.1030 (200 HMA) and then 1.1000 (38.2% of 1.0520/1.1290)."
Key headlines in Asia
HSBC China services activity expands in April
Australian retail sales slightly below expectations in March
Australian new home sales highest since 2010 in March
New Zealand Unemployment Rate registered at 5.8% above expectations (5.5%) in 1Q
New Zealand Employment Change came in at 0.7%, below expectations (0.8%) in 1Q
Dominating themes in Asia - centered on JPY, AUD, NZD
A busy Asian session, with disappointing NZ employment data, mixed Aus economic releases and upbeat China services PMI driving markets. While, the US dollar extends its bearish tone against its major competitors following mixed US services PMI and ISM non-manufacturing PMI reports.
Kiwi was the weakest performer among the G10 currencies after below estimates private sector wages and employment data drowned the NZD/USD pair to fresh three week lows below 0.75 handle. While the Aussie remained supported despite a miss on retail sales figures as traders continued to cheer upbeat RBA policy decision released yesterday.
USD/JPY tested 120 barrier, however failed to sustain above and retraced to 119.90 levels as the latest services PMI reports from the US keeps a check on the major.
Heading into Europe - centered on EUR, GBP
There is a lot to report in the European session, with Euro zone final services PMI and retail sales data to be closely watched. While UK services PMI is also eagerly awaited ahead of Thursday’s UK elections.
The Euro zone services sector reported 53.7 last time, with the same number expected as a final result again. The PMI for the euro area's number one economy's services sector showed 54.4 points in the fourth month of the year, with the same figure expected in the final result.
Results from the euro zone's retail business in March are awaited with an expected decline of 0.2%, while 2.5% growth is projected when measured annually.
While the UK services PMI in April is seen ticking slightly down to 58.6 from the 58.9 booked in the previous cycle.
Later, we have key US ADP non-farm employment data followed by Fed’s Chair Yellen’s speech in Washington which may provide fresh incentives on the US dollar moves.
EUR/USD Technicals
Jim Langlands, Founder at FXCharts notes, " "The daily and hourly charts both point higher, so another test of the topside does seem likely although the 4 hour charts look less certain and it may be that the market chops around without any real direction until the NFP on Friday. On the topside, we now have a short term double top at 1.1222, which will act as decent resistance.
Back above here would take the Euro back towards Friday’s trend high at 1.1290, which is also strong Fibo resistance (23.6% of 1.3993/1.0461)."
"The downside will see minor support at the 100 HMA at 1.1170, below which the Euro could head back to 1.1100 although this looks less likely. Below 1.1100 would head towards the session low at 1.1065, beneath which there would not be too much to hold it ahead of 1.1030 (200 HMA) and then 1.1000 (38.2% of 1.0520/1.1290)."