EUR/USD
The pair managed to offset renewed concerns over the Eurozone sovereign debt crisis and settle the week with a net gain of around 60pips, following speculation that China may cut RRR which in turn depressed the greenback. Of note, this week saw the release of weaker than expected PMIs which raised concerns that the LTRO provided by the ECB in December and February will fail to resolve the fundamental problem faced by a number of EU nations. In addition to that, market participants had to digest cautious comments from Moody’s rating agency on Spain, which noted that Spain’s fiscal outlook remains challenging despite easier targets. Still, the ratings agency further commented that easier targets do not affect Spain’s A3 government bond rating with a negative outlook. Still, the price action of the 1-month 25-delta risk-reversal (RR) indicates that it is too early to call a reversal. In terms of technical levels, supports are seen at 1.3188, followed by the 10DMA line at 1.3167 and then at 1.3134. On the other hand, resistance levels are seen at 1.3333, followed by 1.3357 and then at 1.3456 which is the 21Day Upper Bollinger Level.
GBP/USD
In spite of the fact that market participants were again forced to contend with speculation that Portugal may require monetary assistance, the pair settled the week little changed in the mid-1.5800 region. This week saw the release of the latest Budget, which was largely in line with the press reports. On that note, Fitch said UK budget is neutral for its ‘AAA’ status. The ratings agency added that the UK government remains committed to deficit reduction strategy. Fitch also noted that the scale of the ‘fiscal challenge’ for the UK remained large relative to its ‘AAA’ peers. Separately to this, the release of the most recent BoE policy meeting minutes which revealed that two of the nine members (David Miles and Adam Posen) voted for a GBP 25bln increase in QE. In terms of this week’s economic data release, the ONS reported that inflation in the UK fell to 3.4% in February, down from 3.6% in January. However, higher alcohol prices stopped the rate declining further. Finally, technical studies indicate that supports are seen at 1.5807, followed by the 10DMA line at 1.5785 and then at 1.5770. On the other hand, resistance levels are seen at 1.5924, followed by 1.5967 and then at the 21Day Upper Bollinger Level at 1.5990.
USD/JPY
Combination of better than expected Japanese related economic data, together with an influx of safe haven related flows on the back of renewed concerns over the Eurozone amid speculation that Portugal may require further assistance meant that the pair settled the week lower. In terms of technical levels, supports are seen at 82.11 which is the 21DMA, followed by 81.97 and then at 81.46. On the other hand, resistance levels are seen at 82.70, followed by 82.95 and then at 83.29.
The pair managed to offset renewed concerns over the Eurozone sovereign debt crisis and settle the week with a net gain of around 60pips, following speculation that China may cut RRR which in turn depressed the greenback. Of note, this week saw the release of weaker than expected PMIs which raised concerns that the LTRO provided by the ECB in December and February will fail to resolve the fundamental problem faced by a number of EU nations. In addition to that, market participants had to digest cautious comments from Moody’s rating agency on Spain, which noted that Spain’s fiscal outlook remains challenging despite easier targets. Still, the ratings agency further commented that easier targets do not affect Spain’s A3 government bond rating with a negative outlook. Still, the price action of the 1-month 25-delta risk-reversal (RR) indicates that it is too early to call a reversal. In terms of technical levels, supports are seen at 1.3188, followed by the 10DMA line at 1.3167 and then at 1.3134. On the other hand, resistance levels are seen at 1.3333, followed by 1.3357 and then at 1.3456 which is the 21Day Upper Bollinger Level.
GBP/USD
In spite of the fact that market participants were again forced to contend with speculation that Portugal may require monetary assistance, the pair settled the week little changed in the mid-1.5800 region. This week saw the release of the latest Budget, which was largely in line with the press reports. On that note, Fitch said UK budget is neutral for its ‘AAA’ status. The ratings agency added that the UK government remains committed to deficit reduction strategy. Fitch also noted that the scale of the ‘fiscal challenge’ for the UK remained large relative to its ‘AAA’ peers. Separately to this, the release of the most recent BoE policy meeting minutes which revealed that two of the nine members (David Miles and Adam Posen) voted for a GBP 25bln increase in QE. In terms of this week’s economic data release, the ONS reported that inflation in the UK fell to 3.4% in February, down from 3.6% in January. However, higher alcohol prices stopped the rate declining further. Finally, technical studies indicate that supports are seen at 1.5807, followed by the 10DMA line at 1.5785 and then at 1.5770. On the other hand, resistance levels are seen at 1.5924, followed by 1.5967 and then at the 21Day Upper Bollinger Level at 1.5990.
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USD/JPY
Combination of better than expected Japanese related economic data, together with an influx of safe haven related flows on the back of renewed concerns over the Eurozone amid speculation that Portugal may require further assistance meant that the pair settled the week lower. In terms of technical levels, supports are seen at 82.11 which is the 21DMA, followed by 81.97 and then at 81.46. On the other hand, resistance levels are seen at 82.70, followed by 82.95 and then at 83.29.
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