DAILY FX WRAP: Cautious start with focus on the plethora of data points scheduled later in the weak, while GBP softens on weaker than expected Mfg. PMI

A steady start to the new week/quarter with focus on the plethora of data points scheduled throughout the week, most notably the NFP report on Friday. The Asian session saw AUD underperform post the release of the latest retail sales data, alongside the softer Chinese Caixin PMI figure, which saw the currency make a brief break below 0.76. While focus for the antipodean will be tomorrow’s RBA report in which it is expected that the central bank will maintain a neutral tone. Of note, AUD/USD o/n is roughly 10.5/33pips.

Elsewhere, GBP had been pressured for much of the session in the wake of the latest UK manufacturing PMI which slipped to a 4-month low. This had been led by the slowdown in output and orders of consumer goods, according to Markit.

In the emerging market space, ZAR continues to grab the headlines with the latest reports from the weekend out of South Africa noting that the parliament speaker may call for a vote of no confidence in President Zuma after sacking 9 cabinet members last week. In turn, USD/ZAR continued its upward trajectory to break above Friday’s high moving to within the highs seen late Jan at 13.68, additionally South Africa’s credit rating has been downgraded to junk status by the S&P today.

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Dollar Index Daily

Market is sideways. Price is bullish though approaching overbought levels. No pull back in the US Dollar yet. Price have moved from last month's profit taking zone straight into this month's central which is also the 50% fib of last month's bearish move. Further resistance is eyed at the 61.8% fib and then higher up at MM3 with support eyed at MM2 which is the fib zone for the current bullish move.

Dollar Index H4

Market is slightly bullish though very slow. Price is sideways. I was expecting some profit taking at the MPP/ WM3 resistance though price broke slightly above though has not made a higher high so we could still see some Dollar weakness during Asia or London. Support eyed at WPP. Note that MM2 and WM2 are at the same price. We also have price action support at the 61.% fib. Some price action resistance higher up highlighted in pink and MM3 and WM4 confluence.

US10Y Daily

Market is sideways. Price is bullish though stochastic is bearish. Price is approaching the top of the range marked by MR1. Bottom of the inside range at MMS and the outside range marked by previous price action and no confluence with monthly pivot points.

US10Y H4

Market is sideways. Price is bullish and at overbought levels. Top of the range marked by WR2. Supported eyed at WM3. Paying careful attention to the top of the range and resistance at WM4 and WR2 as any weakness seen in price on the US 10Y will result in weakness in the Yen, Gold and/ or strength in the Dollar.

2 thoughts on “Daily FX Wrap Monday 3 April”

  1. Brian Burmeister says:

    Hey Ryan,
    You meant April 3, or is that an “April Fool’s” joke?

    1. Ryan Gandalf van Jaarsveld says:

      Thanks for picking up the typo

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