Europe Closed for Easter; Can Strong Earnings from Financials and an Open U.S Market Bolster the Dollar?

Daily Forex Fundamentals | Written by AC-Markets | Apr 13 09 10:46 GMT |

Thin markets could see some erratic currency moves today as (with Asia now closed) the U.S will be the only financial center open for business on this Easter Monday. Q1 earnings are set to continue with Blackrock, Charles Schwab set to announce their results before market open today. Citi, Goldman and JPM & Chase will follow this week. The focus now is on whether good numbers will bolster the dollar as a preferred asset or boost risk taking which would see demand for the dollar wane slowly. The dollar dropped across the board (except against the Yen - as expected) during the asian session as stocks rose on encouraging news that the Chinese economy was at or had seen a bottom. Continued worries over the Nippon economy remains a dark spot in the region as risk of deflation now becomes apparent - wholesale prices dropped at their fastest rate since 2002. USDJPY breaks firmly above 100.00 and aims higher. Another interesting development that we mentioned last week is the carry trade opportunities against the AUD and NZD - we test new 6-month highs on these currencies. Higher yield currencies are now attractive havens as risk appetite returns. Not much in terms of news announcements today except for the aforementioned earnings releases. Lookout for a strong dollar as higher stocks and no Europe will play in favor of the greenback. Today Key Issues (time in GMT): 00:00 - The Risk today: EurUsd Despite weaker dollar the pair remains in broad downward trend. Crucial support at 1.3100 tested twice in the last month. Currently trading a 2-figure range between 1.3100 and 1.3300. 1.3300 being the upper extremity of current mini-trend which is a more pronounced dollar bull than the broader declining triangle we have outlined in the past. Initial support at 1.3168 while on the upside we are eying at 1.3224. GbpUsd Dollar decline brings the pair higher as the BoE keeping rates unchanged late last week bolster the Sterling. Today's move culminated at 1.4746. This said the U.S is open today while Europe and the U.K are closed for Easter - expect a retracement move pre-open. We are testing the 23.60% (1.4713) Fibonacci level at time of writing. Initial support stands at 1.4692. A break above 1.4730 will allow us to test 1.4746 (2 day high). UsdJpy Strong resistance at 100.74 as the Yen falls on carry trade demand. Further gains will eye 103.16 levels via 101.46 (recent high). Initial support stands at 100.21 (level tested twice in last 2 days). UsdChf Broad trend points to a renewed dollar bull as we have found a firm bottom at 1.1171. However as markets deal with earning's season and a hypothetical “bottom” to the crisis moves will be erratic. Initial resistance stands at 1.1607 with 1.1508 as strong support (base of triple top). Encouraging Q1 report for financials will benefit the dollar as Europe is closed. EURUSD GBPUSD USDJPY USDCHF 1.3506 1.4776 103.16 1.1967 1.3301 K 1.4746 101.46 1.1607 1.3224 1.473 101.1 1.1552 1.3191 1.4702 100.6 1.1526 1.3168 1.4692 100.21 1.1508 1.3128 1.4676 99.86 1.1429 1.3100 K 1.4656 99.33 1.1243 S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot AC Markets http://www.ac-markets.com Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.