USD/JPY Daily Commentary for 3.6.09

The USD/JPY continues its retraction from weekly highs as the U.S. economy stumbles.  Even though the Japanese economy is in bad shape, the U.S. doesn’t seem too far off.  Therefore, the investors are questioning the U.S. as a safe haven currency all around the FX markets in the last 24 hours.  Therefore, the medium-term downtrend remains largely intact.  With our 3rd tier downtrend and the psychological 100 mark hanging over head, the USD/JPY has its work cut out for it to the topside.  Investors will of course be keeping a close eye on the Unemployment Rate coming from the U.S. this morning.  If the number is disappointing and U.S. equities tumble, the USD/JPY should follow suit.  Fundamentally, we maintain find resistances of 97.66, 98.25, 99.05 and 99.64.  To the downside, we see supports of 97.22, 96.59, 95.98, and 95.08.  The USD/JPY is currently exchanging at 97.59.

GBP/USD Daily Commentary for 3.6.09

The Cable is logging some healthy gains after the BOE cut its benchmark rate to record low of 0.50%.  The Cable is rising above our 2nd tier downtrend line ahead of the U.S. Unemployment Rate.  Despite the progress made in the GBP/USD over the last 24 hours, the debilitating medium-term downtrend line remains intact.  What we are likely seeing here is a situation of oversold conditions and buying on the news.  Furthermore, Britain released a better than expected PPI Input number this morning, showing an encouraging rise in inflation.  However, we must not forget the BOE is considering using quantitative easing to rescue the economy since its benchmark interest rate is close to zero.  Quantitative easing has not proven successful in the past, and could result in a depreciation of the Pound.  As with the rest of the major Dollar paired currencies, all eyes are on the release of the official U.S. Unemployment Rate.  If the number comes in weaker than expected and U.S. equities tumble as a result, we should see the Cable follow suit due to the positive correlation.  Furthermore, while we could see the continuation of near-term gains in the GBP/USD our 3rd tier downtrend line looms in the distance.  Fundamentally, we find resistances of 1.4292, 1.4355, 1.4409, and 1.4455.  To the downside, we see supports of 1.4207, 1.4139, 1.4103, and 1.4058.  The 1.45 level still serves as a psychological barrier to the upside with 1.40 serving as a cushion to the downside.  The GBP/USD is currently exchanging at 1.4248.

EUR/USD Daily Commentary for 3.6.09

The Euro posted some solid gains against the Dollar in the last 24 hours.  Investors bought on the news after the ECB cut its benchmark rate by 50 basis points, in line with expectations.  However, the rally doesn’t seem to have any legs yet as investors await the release of America’s official Unemployment Rate.  While we may see some more near-term gains in the EUR/USD, the rally may be deflected by our 1st tier downtrend line.  The medium-term downtrend of the EUR/USD is still in command with the EU economy suffering and the Eastern European economies faltering.  The EUR/USD faces multi-tiered downtrend lines and the highly psychological 1.30 area.  If the U.S. Unemployment Rate is worse than expected, then we could see the EUR/USD follow U.S. equities lower due to their strong positive correlation.  Fundamentally, our 1.2677 and 1.2634 resistances turn support with additional supports sitting at 1.2592 and 1.2549.  To the topside, we maintain our resistance of 1.2725 with 2nd tier and top-end resistances hanging at 1.2794 and 1.2860, respectively.  The EUR/USD is currently exchanging at 1.2706.