Forex headlines for March 24, 2014:
- March US Markit manufacturing PMI flash 55.5 vs 56.5 exp
- February US Chicago Fed national activity index +0.14 vs +0.10 exp
- Malaysian Prime Minister says flight MH370 crashed in the Southern Indian Ocean
- Fed’s Williams says first rate hike is not coming any sooner
- Fed’s Kocherlakota criticizes vague forward guidance
- IMF sees Italian GDP growing 0.6% this year
- Five Madoff employees found guilty of criminal conspiracy
- Russia sanctions 13 Canadian officials
- G7 to hold meeting in June in Brussels without Russia
- WTI crude down 7-cents to $99.39
- Gold down $25 to $1310
- S&P 500 down 9 points to 1857
- AUD leads, USD lags
A quick wave of US dollar weakness was the main event of US trading. The action came shortly after the European close as the euro began to move up from 1.3780. Earlier in the session, the pair bottomed at 1.3760 but a slow, steady move higher turned into a surge as buy stops above 1.3800 started a cascade all the way up to 1.3876. The move fizzled back down to 1.3839 in short order and then moved sideways. There wasn’t a fundamental reason behind the move and it spread broadly except for USD/JPY.
Cable was also volatile. The pair touched a 6-week low shortly after the weekly open but it was a slow chop higher until the spike came, driving the pair to 1.6536 from 1.6500 in minutes. But it was a complete round trip in the pair and it ends just slightly higher on the day.
Technically, the major development may have been in AUD/USD is it briefly climbed above the 200-day moving average to 0.9150 before fading back to 0.9131. It was a steady climb higher after the spike down to 0.9045 post-China PMI.
The kiwi spiked up to 0.8567 but it flashed a double-top on the short-term chart and that’s something to watch out for in the day day.
Gold was beaten up. It was a steady drip lower in Europe but stops below $1320 helped to accelerate the move. A golden cross is brewing on the daily chart but short-term support is minimal.
USD/JPY slumped in the early going, leading stocks lower after a strong open. The pair traced out an intraday head and shoulders with the top of the head at 102.65 but it slumped as low as 102.13.
