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US FX Market Open – Tuesday, March 21, 2017: EUR/USD eyes Feb 1.0829 high

Posted by Marge Maresca on Mar 21, 2017 7:35:48 AM

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Overnight Events

• EUR/USD +0.5%, USD/JPY flat, GBP/USD +0.9%, DXY -0.5%
• DAX +0.1%, CAC +0.3%, Brent +0.7%, Gold -0.1%, Copper -0.8%
• Dollar index dips below 100, first time since early Feb
• Euro briefly tops $1.08 after French presidential debate - Rtrs
• Macron still odds-on to win French presidency
• UK Feb CPI +2.3% y/y vs +2.1% f/c. Highest y/y rate since Sept 2013
• UK Feb PPI core output 0.0% m/m, +2.4% y/y vs prev 0.5%/2.5% rvsd. 0.2%/2.5% f/c
• UK Feb PSNB 1.083bln vs prev -11.72bln rvsd. 2.500bln f/c
• UK Feb PSNCR 12.875bln vs prev -22.74bln rvsd
• Swiss Feb Trade surplus narrows to 3.3bln vs rvsd 4.83bln
• Swiss economy f/c to grow 1.6% in 2017 vs 1.8% prev f/c - SECO
• Swiss govt sees 2017 inflation at 0.5% vs 0.0% prev f/c
• Greece won't last in euro zone in long-run - Bavarian finmin - Rtrs
• JP Aso: G20 accept importance of free trade - Rtrs

Currency Summaries

EUR/USD
• Macron seen performing better than Le Pen in debate, lifts EUR
• 1.0719 to 1.0770 in Asia, extends to 1.0804 early London
• Weekly kin-sen 1.0820 (not above since early Nov), 1.0829 feb 2 hi
• 38.2% Fibo May 2016-Feb 2017 1.1616-1.0340 decline is at 1.0827
• Above targets 8 Dec 1.0875 hi and 200-DMA 1.0891

USD/JPY
• USD/JPY collapsed to 112.26 in Asia, some say on Fin Min Aso's remark
• Expect strong supply between Mon's 112.89 high & 113.00 psychological level
• Today's session high has been 112.86
• Option market still wary of the downside in USD/JPY
• EUR/JPY rose from 120.66 to 121.84 on French polls
• Presidential debate polls shows Le Pen didn't make up ground on Macron
• Japanese names through Asia have been buyers of EUR/JPY on dips in past 2 days

EUR/CHF
• EUR/CHF up to 1.0755, its highest since last Monday's 1.0825 peak
• 1.0755 is the 50% retracement of last week's 1.0825-1.0684 drop
• Gets boost fm EUR/USD's rise above 1.08 after French presidential debate
• Likely that the SNB are working a EUR/CHF 1.07 soft floor again
• USD/CHF dropped from 0.9990-0.9849 in Europe. 1.0003 Asia high

GBP/USD
• GBP/USD extended north to test 1.2471 after above f/c UK CPI at 5.30am ET
• 1.2471 = Feb 28 high. 1.2426 = pre-data high vs 1.2341 late Asia/early Europe low
• UK CPI beat fresh boost for UK rate hawks after last week’s hawkish BoE hold
• EUR/GBP extended south to 0.8655 (13-day low) after higher than f/c UK CPI
• 0.8695 was pre-data release low vs 0.8725 early Europe high

USD/CAD
• USD/CAD tested 1.3324 (Asia low) after retreating from 1.3365 (late Asia high)
• Bids expected near 1.3300 (1.3304 = Friday/Monday low; 1.3299 = 100DMA)
• Canada Jan retail sales data due 8.30am ET, +1.1% f/c vs -0.5% in Dec

AUD/USD
• AUD/USD has risen from 0.7699 to threaten mooted offers at 0.7740-50
• 0.7699 = Asia low. 0.7741 was Feb high. 0.7748 was  Monday’s 4mth high
• Large 0.7750 option expiry Wednesday, AUD 1bln strike


NZD/USD
• NZD/USD is consolidating recent gains ahead of the Fonterra milk auction
• GDT auction result expected circa 10am ET: WMP futures signalling price fall
• 0.7033-0.7061 = intra-day range-to-date. 0.7028-0.7080 = Monday’s range

Today’s events

Option Expirations (Source:ThompsonReuters)

An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

• EUR/USD vol recovery peaks – 1mth 6.3 to 7.3
• USD/JPY vols also attract sellers at post FED recovery highs
• 2.5bln 112.75-113.05 USD/JPY expiries Thursday proving a draw
• Cable 1mth bounce from 14mth low at 7.9 to 8.5 falters
• AUD/USD vols underpinned by intraday spot moves for now

Economic Data (GMT) - (Source:ThompsonReuters)

• 12:30  Current Account (Q4) prev -$113.0 bn
• 12:55  Redbook Same-Store Sales Index (weekly) prev +1.3% y/y

Events, Other Releases (GMT) - (Source:ThompsonReuters)

• 13:45  FedTrade 15-year Fannie Mae / Freddie Mac (max $600 mn)
• 16:00  FRB Kansas City's George on the economy and monetary policy; Washington, DC
• 21:00  FRB Dallas' Kaplan in taped interview with Reuters
• 22:00  FRB Cleveland's Mester on outlook and communications; Richmond, VA
• 01:45  FRB Boston's Rosengren addresses Asia banking supervision; Bali, Indonesia

 

Topics: US FX Market Open

 

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