Intraday Market Thoughts

Yen Extends Rebound, Focus on China Continues

by Patrik Urban
Mar 23, 2012 1:07

US initial jobless claims fell to the lowest since 2008, helping to ease some concerns about global growth. The yen rally continued with commodity currencies on the defensive. The Asia-Pacific calendar is light with no major data or events. All of Wednesdays EURUSD. GBPUSD & AUDCAD shorts were done. Those remaining unfilled or in progress are below.

Soft European and Chinese PMIs placed markets firmly in a risk-off mood coming into US trading but after a brief spike to session extremes, trading was generally sideways. Initial jobless were at 348K compared to 355K expected.

USD/CAD climbed above parity for the first time in two weeks after Canadian retail sales climbed just 0.5% in February compared to 1.7% expected. AUD/USD fell below the 100-day moving average to a low of 1.0336.

Fed policymakers continue to maintain their distance from QE3. Fisher said he will not support more measures, Bullard warned on inflation and even Fed dove Evans said that guidance on when the Fed will tighten could control inflation. Bernanke delivered his second academic lecture on the history of the Fed but refrained from comments about the current state of the economy.

GBPUSD remains pressured. The pair failed to get over its 200 DMA in 6 occasions since October. Its H&S formation remains intact, as does that of EURUSD charted in Monday & Wednesday's Premium Intermarket Insights.

The Asia-Pacific session will be low-key barring any revelations about the true state of the Chinese economy. Its clear from yesterdays PMI reaction that this market is on edge about a potential slowdown there. Normally the Conference Boards leading index for China has zero effect on markets but this could be an exception. The data will be released at 0200 GMT. MNI also releases its flash Chinese business sentiment survey at 0135 GMT.

In Wednesdays PREMIUM INTERMARKET TRADES all EURUSD. GBPUSD & AUDCAD trades were done. 1 of 2 AUDCAD & and 1 of AUDUSD shorts were done the others unfilled. EURGBP & silver are in progress, while gold is unfilled. For more detail, see Non Subscribers can click here:


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