Releases from Australia:
     
March Preliminary BoP Imports   (MoM) +1.0%

Australians keeping importing and that will not help the economy much. Having said that February’s figure was revised lower from +0.3% to -1.4% which more than offsets the gain seen in March.  

Releases from Japan:

February                                  Prior      Final
Industrial Production (F) (MoM) +0.9%   +1.6%

February proved to be a good month for production in Japan. It does show that industry had remained surprisingly resilient but the rising sound of concern is beginning to deafen which can only mean that since then a significant downturn has been seen.

The following economic releases are due today:

February
Swiss Adjusted Retail Sales        (YoY)    +1.6%
Euro-zone Trade Balance             EUR   - 3.5bn
Euro-zone Construction Output  (MoM) 
Euro-zone Construction Output   (YoY) 

March
U.S. Leading Indicators                         +0.1%

April
Swiss ZEW Survey: Expectations             - 60.0
U.S. Initial Jobless Claims        (12th)      365K
U.S. Continuing Claims              (5th)
U.S. Philadelphia Fed                            - 15.0

The ECB are due to publish their April monthly report

Dollar bullishness proved the wrong call yesterday as it quickly gave up its gains yet again and this time fell to a new low against the Euro into the 1.5967-86 resistance area. The only exception to this was against the Yen where the Dollar actually made gains. This in itself was quite interesting given the previous excessive losses and suggests that the market has returned to the fact that a bad U.S. economy = a bad Japanese economy.

The other factor to note is that the Swissie is resting comfortably above its lows and in fact it only looks like the Euro where there is any danger of further extension lower for the Dollar. Indeed, I remain with the feeling that there is a good chance that we are seeing the last leg lower for the Dollar at this stage. (Next year is a different matter.)

Short term momentum for the Euro remains pretty strong but we must keep in mind that both daily and weekly charts are displaying (Euro) bearish divergences. What we need now is for the hourly and 4-hour to confirm this also. I suspect that today could well mark a correction – probably with the market in shock that it actually penetrated those three 1.5900 area highs. This correction should move back to the 1.5802-44 area. From here we should see the rally continue to the 1.6065 area where I suspect a peak is quite probable.

That’s either a brave or foolhardy call with the sentiment as it is… Let’s just watch this and see how all currency pairs perform during this period. However, having poured over the charts a lot over the past week or so I am feeling more confident that the 0.9644 low in the Swissie was a significant low, as was the 95.71 low which was implied through two large daily projections. With a barrage of targets between 1.5970 and 1.6065 in the Euro I suspect this will join them as there does seem to be some significant Dollar cycle lows in development right now.

These should be for a correction higher only moving into the end of the year – next year does look just as bearish for the Dollar…

Note important support and resistance areas:

         USDJPY        EURUSD       USDCHF       GBPUSD
Res:  102.93-40    1.6042-65    1.0109-27    1.9842-93
Res:  102.26-54    1.5960-87    1.0037-61    1.9735-70

Spt:   101.21-40    1.5874-00    0.9933-72    1.9640-78
Spt:   100.59-69    1.5802-44    0.9846-70    1.9520-50

See Also

• Itching to trade currencies?
  Read more about the Forexc market

0   15   30   45   60   75   90   105   120   135   150   165   180   195   210   225   240   255   270   285   300   315   330   345   360   375   390   405