Daily Report: Yen & Aussie Higher in Calm Markets
The yen and aussie are the relatively stronger currencies in an otherwise quiet market today. Q1 GDP growth from Japan was surprisingly resilient, registering 0.8% qoq growth, with 3.3% yoy rate, beating expectation of 0.6% qoq and 2.5% yoy. Q4's growth was revised down from 0.9% qoq, 3.5% yoy to 0.6% mom, 2.6% yoy. Nevertheless, the growth is still maintaining solid momentum after turning negative last Q2. Other data from Japan saw industrial production contracting at -0.7% yoy in Mar, worse than expectation of -0.4%. Consumer confidence dropped from 37 to 35.4. Technically speaking, intraday outlook in yen crosses are generally neutral and more retreat could be seen in USD/JPY, EUR/JPY and GBP/JPY. Nevertheless, there is no confirmation of the completion of the rebounds that started earlier this month. Price action could remain choppily consolidative.
Aussie is lifted by news about Chinese companies' interest in Australian commodity companies. AUDUSD surges further to 0.9457 today and is maintaining intraday momentum so far. Though, focus remains on 0.9505 resistance on indication of completion of recent choppy consolidations.
Looking ahead, main focus today is on new residential construction data and consumer sentiments from US. After staying at 20 for 3 months, the NAHB housing market index fell again in May to 19, just one point above the historical low of 18 set in Dec 07. Housing starts and building permits to be released today are expected to show further deterioration in the housing markets. U of Michigan consumer sentiment is expected to fall beyond 26-year low to 62 in May.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 161.32; (P) 162.13; (R1) 162.60; More.
EUR/JPY's rebound from 158.60 was limited below mentioned 163.09 resistance. Subsequent retreat sent EUR/JPY below 161.70 minor support and dragged 4 hours MACD below signal line, indicating an intraday top is already in place. Intraday bias is flipped back to the downside for 160.14 support first and then mentioned 158.24 cluster support (50% retracement of 151.71 to 164.97 at 158.34). As discussed before, break will confirm that rally from 151.71 has completed bring deeper decline towards the lower end of the medium term range near to 151.71.
On the upside, above 162.13 will turn intraday outlook neutral again. Also, break of 163.09 resistance will confirm that fall from 1.6497 has completed with three waves corrective manner to 158.60. In such care, stronger rally should be seen to test this resistance first and then upper end of the medium term range near to 168.93.
In the bigger picture, EUR/JPY turned into sideway consolidation after medium term up trend was limited at 168.93. It's unclear whether such consolidation has completed at 151.71 already. Though, below 158.24 support will argue that such consolidation is still in progress with at least another fall to the lower end of the medium term range before completion. However, strong rebound form 158.24, followed by break of 163.09 resistance, will leave the fall from 164.97 in corrective nature. Hence in such case, it will argue that rise from 151.1 is going to extend further to retest 168.93 high. And firm break of which will confirm the medium term up trend has resumed.
Forex News Digest
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Economic Indicators Update
| GMT |
Ccy |
Events |
Actual |
Consensus |
Previous |
Revised |
| 23:50 |
JPY |
Japan GDP annualised Q1 |
3.30% |
2.50% |
3.50% |
2.60% |
| 23:50 |
JPY |
Japan GDP Q1 |
0.80% |
0.60% |
0.90% |
0.60% |
| 23:50 |
JPY |
Japan GDP deflator Y/Y Q1 |
-1.40% |
-1.50% |
-1.30% |
|
| 4:30 |
JPY |
Japan Capacity utilisation Mar |
3.50% |
N/A |
1.80% |
|
| 4:30 |
JPY |
Japan Industrial prod'n M/M Mar |
-3.40% |
-3.10% |
-3.10% |
|
| 4:30 |
JPY |
Japan Industrial prod'n Y/Y Mar |
-0.70% |
-0.40% |
-0.40% |
|
| 5:00 |
JPY |
Japan Consumer confidence Apr |
35.4 |
N/A |
37 |
|
| 6:00 |
JPY |
Japan Machine tools orders Y/Y Apr |
0.40% |
N/A |
0.30% |
|
| 7:15 |
CHF |
Swiss Retail sales Y/Y Mar |
|
3.80% |
3.30% |
|
| 9:00 |
EUR |
Eurozone Trade balance (euro) Mar |
|
2.5B |
0.8 B |
|
| 12:30 |
USD |
U.S. Building permits Apr |
|
0.92M |
0.928 M |
|
| 12:30 |
USD |
U.S. Building permits M/M Apr |
|
N/A |
-5.70% |
|
| 12:30 |
USD |
U.S. Housing starts Apr |
|
0.94 M |
0.947 M |
|
| 12:30 |
USD |
U.S. Housing starts M/M Apr |
|
N/A |
-11.90% |
|
| 14:00 |
USD |
U.S. U. Michigan survey Prel. May |
|
63 |
62.6 |
|
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