Posted on: 26 February 2016, by: Pepperstone Support, category: Market Review
Durable goods data adds some food for thought on US GDP, jumping by 4.9% in January.
GBP found some support from 1.3900; now 1.3980/75. Lows coincided with release of soft Q4 GDP data.
USDJPY is back testing 113. The close above 1950 in ES adds weight to the short term out. The risks in CrossJPY look higher.
EURUSD is still contained by the moving averages, with support provided by the 55d and 100d MA (1.0972 and 1.0950) followed by the daily trendline (1.0940), and resistance at the 200d MA (1.1048) followed by the key inflection point of 1.1060.
With the recent market backdrop, AUD has been pretty side-lined of late but clearly it has depreciated a lot since commodity currencies moved lower, China became the focus and the USD cycle gained momentum. AUD, NZD and in particular CAD look to be potential victims of a further position squeeze in front of the G-20.
While we wait for the G20, the SF Fed’s Williams added some interesting weight to hawkish rate view:
*WILLIAMS SAYS FED SHOULDN'T GET CAUGHT UP IN MARCH, JUNE DEBATE
*WILLIAMS: INFLATION EXPECTATIONS EXCESSIVELY SENSITIVE TO OIL
*WILLIAMS: DON'T UNDERSTAND SENSITIVITY OF PRICE EXPECTATIONS
*WILLIAMS SAYS NEW DOT PLOT WILL HELP CLARIFY FED POLICY PATH