USD - Our Bias Bullish, Look to Sell on Rallies
• Dreadful Non-Farm Payrolls report on Friday
• Credit Suisse Overnight Index Swaps show Fed to raise rates by 21 basis points in the coming 12 months
• Investors’ now wondering about QE2s’ expiry at the end of June
• Recent momentum and the longer-term outlook favors further U.S.Dollar weakness
• Near term support at 72.80, resistance at 75.00
• We remain bearish the Dollar in the week ahead
EUR- Our Bias Bullish, Look to Buy on Dips
• Euro closed the week some 300 points higher against the U.S. Dollar
• Friday saw a positive assessment from the IMF/EU/ECB Troika mission to Athens
• Rumours circulate of 3 year adjustment to Greece debt repayment schedule
• ECB rate decision and press conference this Thursday with updated inflation forecasts
• Speculation of rate hike in July
• Near term support at 1.4500, resistance 1.4830
• We remain Euro bullish in the week ahead, albeit, pending a clearer picture on risk sentiment.
JPY- Our Bias Neutral
• Japanese Yen finished 0.64% higher against the U.S. Dollar last week
• USD-JPY broke key support at 80.70 following NFP
• Sustained move below 80.00 likely to see speculation of central bank intervention
• Near term support at 80.00, resistance 81.20
• We maintain a neutral Yen outlook over the week ahead pending confirmation of risk sentiment and rumours of central bank intervention
GBP- Our Bias Bearish, Look to Sell on Rallies
• Sterling fell 0.51% against the U.S. Dollar by last weeks close
• Growth outlook for the British economy lower following weak housing and PMI data
• BoE rate decision on Thursday
• Sterling-based crosses may depreciate in the week ahead - particularly against funding currencies
• Near term support at 1.6280, resistance 1.6500
• We maintain a bearish Sterling outlook in the week ahead
CAD - Our Bias Neutral
• Canadian Dollar closed last week unchanged against the U.S. Dollar
• Credit Suisse Overnight Index Swaps show BoC increasing by more than 50bp over the next 12 months, amid projections for a 100bp rise back in May
• Economic growth in Canada outpacing recovery in U.S.
• Near term support at 0.9700, resistance 0.9800
• We maintain a neutral Loonie bias in the week ahead pending the establishment of risk sentiment.
AUD - Our Bias Neutral
• Australian Dollar closed virtually unchanged against the U.S. Dollar on Friday
• RBA rate decision on Tuesday
• Employment report on Thursday
• Credit Suisse Overnight Index Swaps show a 25bp rise for the next 12-months, which compares with projections for 50bp worth of rate hikes back in May
• Near term support at 1.0550, resistance at 1.0800
• We maintain a neutral Aussie bias in the week ahead pending the establishment of risk sentiment
NZD - Our Bias Neutral
• New Zealand dollar fell 0.26 % against U.S. Dollar last week as disappointing economic data from U.S. saw risk appetite sentiment falter
• Credit Suisse Overnight Index Swaps factor in a 0% chance that the RBNZ will move on rates this Wednesday, with twelve month expectations pricing in a 57 bp hike
• Kiwi should remain well supported above the 0.8000 level
• Support at 0.8100, resistance 0.8230
• We maintain a neutral Kiwi bias in the week ahead pending the establishment of risk sentiment