Daily Report: Commodity Currencies Tumble

Commodity currencies tumble across the board overnight follow sharp fall in oil and gold prices and remains generally weak today. Technically speaking, USD/CAD's rally already indicated a short term reversal. AUD/USD is pressing an important near term support zone and upon firm break will indicate a short term reversal too. So far, both the Aussie and Loonie are the biggest loser this week as seen in the weekly top movers chart, followed by Sterling.

Talking about Sterling, focus will turn to Feb retail sales report today which is expected to show -0.2% mom contraction. Yoy rate is expected to slow from 5.6 to 3.7%. PMI manufacturing and services from Eurozone will be released today and are both expected to be steady at 52 and 52.3 respectively. EUR/GBP has been consolidating after reaching new record high of 0.7911 earlier this week and could extend further higher in case of weak data from UK.

In US session, Philly fed survey is the main focus and is expected to improve from -24 to -18.5 in Mar. Jobless claims is expected to climb slightly from 353k to 357k. Leading indicators is expected to drop -0.3% in Feb.

Masaaki Shirakawa was selected to fill the vacancy left by Fukui as acting BoJ governor before the government can settle on the successor to Fukui. Markets are still speculating that BoJ would cut rates from the current 0.50% as soon as in Apr and believe Shirakawa won't be impediment to policy easing.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.9183; (P) 0.9327; (R1) 0.9506; More

AUD/USD weakens again sharply overnight and fell to as low as 0.9090 so far, back pressing mentioned 0.9100 cluster support (61.8% retracement of 0.8873 to 0.9496 at 0.9111 and 38.2% retracement of 0.8512 to 0.9496 at 0.9120). Outlook remains neutral for the moment. Sustained break of 0.9100 cluster support will argue that rise from 0.8512 has already completed and deeper decline should then be seen towards 0.8873 support. Meanwhile, above 0.9353 will suggest that fall from 0.9478 has completed. Though, more choppy sideway trading could still be seen until a break of 0.9478 resistance.

In the bigger picture, break of 0.9398 high indicates that medium term up trend has resumed. As discussed before, the whole up trend from 0.4773 (01 low) is expected to extend further to next medium term target of 100% projection of 0.4773 to 0.8008 from 0.6773 at 1.0008 which overlaps with parity. However, below 0.8873 support will argue that a medium term is in place and will turn medium term outlook neural first. In such case, focus will be back to 0.8512 support first.

Forex News Digest

Euro Trades Near One-Week Low Against Dollar; Report May Signal Slowdown

U.S. Leading Indicators Probably Fell for Fifth Month, Signaling Recession

Bernanke's Own Home on Capitol Hill Shows Housing Market's Boom and Bust

Shirakawa, BOJ's Accidental Leader, May Cut Interest Rates as Growth Fades

China's central bank sees rebound of dollar
Thu, 20 Mar 2008 04:36:00 GMT from China Post

TOKYO:Subprime woes 'could end dollar regime'
Thu, 20 Mar 2008 04:36:00 GMT from Asia News Network

Dollar Briefly Reverses Losses vs. Euro
Thu, 20 Mar 2008 04:32:00 GMT from CNBC

Dollar trades around 99 yen line in N.Y.
Thu, 20 Mar 2008 04:12:00 GMT from Kyodo

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