The forex trading headlines for the European morning session
- German IFO business climate 104.4 vs 106.2 exp 106.7 prev
- IFO’s Wohlrabe sees no ECB interest rate cut
- UK CBI distributive trades survey april -1 vs +7 exp
- RBA to invest 5% of reserves in Chinese bonds
- Chinese agent banks diversifying yuan reserves
- Nikkei 225 closes +2.32% at 13,843.46. highest since june 2008
- Italian bond auction goes well. lowest yeilds since 1999
- Swiss consumption indicator march 1.25 vs 1.24 prev, revised down from 1.26
- Meiji Yasuda Life plan to buy JPY500 bln worth of foreign bonds
- Sumitomo Life will take on more currency risk
- Italian retail sales feb m/m sa -0.2% vs -0.5% prev.. y/y nsa -4.8% vs -3.00 prev
- UK net lending march GBP-326 mln vs -230 mln prev
- Italian president Napolitano asks Letta to form a government
A case of deja vu this morning as once again the euro got sold off on bad data and once again staged a decent rally on the back of sovereign-led buying, this time out of China. The weaker than expected German IFO numbers sent EURUSD down sharply to 1.2955 from 1.2995 only to run into strong buying interest and it wasn’t long before traders were booking profits on front-run short positions with the rally extending back to 1.3028.
EURJPY tested support at 128.80 only to bounce back above 129.50 while EURGBP flirted with 0.8500 before retracing to 0.8530 with the help of some weaker than expected UK data. GBPUSD has looked well supported overall but sellers seen on the rallies above 1.5285 still.
EURCHF paused at 1.2300 due to barrier option interest and fell back to 1.2263 on a bout of proft taking but with the euro demand elsewhere the pair was soon making another assault higher and this time triggering stops through 1.2300 to post highs of 1.2320 just shy of the next resistance at 1.2325 before falling back slowly toward 1.2300.
AUD benefitted intitally from an early surge in gold to USD1430 with AUDUSD moving up through 1.0260 , then surged again in rapid time as the Chinese-led purchases kicked in to 1.0295 just shy of strong sell interest still at 1.0300.
USDJPY remains the elephant in the room with 100 yet to be seriously attacked in this latest rally and with a good size option expiry interest at 99.50 today keeping a tight reign for now.
