Forex Flash: Failure of USD/JPY to break 100.00 has provided a bout of long liquidation - BBH

FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that he has long argued that the dollar´s advance from the 76 region seen in mid-November was the market pricing in the stimulative monetary and fiscal policy associated the Abenomics.

He feels that the failure of the dollar to rise above JPY100 has prompted a bout of long liquidation. Further, he notes that the greenback appears to be carving out a potential double top. However, he writes, “The neckline is not seen until the JPY95.80 low seen on April 16. If confirmed, the measuring objective is near the late Feb lows around JPY91. The 38.2% of the dollar's rally since it became clear that Abe would be Japan's prime minister, comes near JPY92.”

He adds that Japanese markets are closed on Monday and Friday in the week ahead and Japanese exporter and institutional investors have been thought to be the featured yen buyers. While it may be tempting to try to take the dollar higher without Japanese resistance, he suspects that non-Japanese participants may be reluctant to do so given the large short yen positions already held by the short-term momentum and trend following market segment.

Apr 29, 2013

Forex Flash: EUR/USD clueless but bias is to the downside – Commerzbank

Steady trading last week, between the 55 and 200 day moving averages at 1.2954/1.3050, gave few clues to direction. “However given the markets recent failure at its 50% retracement at 1.3225 our negative bias remains”. Ahead of here lies the 2013 resistance line at 1.3123”, wrote analyst Karen Jones, focused on the 1.2954 200 day MA. “We should see failure shortly and a slide to 1.2839, the 78.6% retracement of the move up in April. This is the last defense for the 1.2740 recent low”, she added, pointing to key support at 1.2679/61 (61.8% Fibonacci retracement of the July-to-January rise and the November 2012 low).

Forex Flash: Australia budget deficit estimates creeping up to 1.7% of GDP – TD Securities

Concerns regarding the Australian budget are getting louder as the Budget is brought down on May 14. In October, the Treasury was pointing to a surplus of+ $A1b or +0.1% of GDP for this year 2012/13, but estimates are creeping up to -$A25b, or –1.7% of GDP, or higher, with a projection a substantial $A12b shortfall in revenues compared with October. “With debt rising to $A300b or only 20% of GDP it shouldn’t rattle Australia's AAA status, however, but a medium-term return to surplus (a la Canada) is required to keep Australia off the credit ratings radar”, wrote TD Securities analyst Annette Beacher.