EUR/USD
[ul]
[li] Our EUR/USD long reached the stop-loss level as the EUR/USD broke below strong technical support at 1.0917 and is on the way to parity. The next support level is 1.0809 (daily low on September 4, 2003). Weaker U.S. data in the coming week (retail sales, University of Michigan consumer sentiment index) may be a trigger for profit taking on EUR-selling positions.
[/li][li] Given strong downside pressure on this pair we will be looking to get short near 1.1100 or even slightly lower. The next target for the EUR/USD bears will be near 1.0762 (monthly low, September 2003)
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GBP
[ul]
[li] Britain’s industrial output data are scheduled for Wednesday. In our opinion economic data will remain supportive of the GBP, but approaching general elections create a risk that economic fundamentals will play lower role in the nearest time.
[/li][li] After a possible correction in the GBP/USD we expect the GBP/USD may fall further. We see scope to 1.4952 (low from January 23). We will be looking to place sell offer near 1.5200.
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AUD
[ul]
[li] The RBA left the cash rate unchanged last week, but it introduced an easing bias in its communication by concluding that “further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target.” We do not expect a cut in April in our baseline scenario. However, the risk of such a move is still quite high.
[/li][li] The AUD may be relatively strong this week. We have Australian employment report and some important economic data from China scheduled for this week, such as retail sales, CPI and industrial production.
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NZD
[ul]
[li] The Reserve Bank of New Zealand meets on Wednesday. It will likely keep interest rates unchanged and retain its neutral bias. The market expects that rates will remain on hold also in April with the probability of 80%.
[/li][li] The NZD remains under pressure against the USD, but also depreciated against the AUD last week due to decisions taken by Australian monetary authorities. This short-term rising trend on the AUD/NZD may be continued in the coming days.
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