Asian Session Morning: Super Mario World

June 4, 2015

Morning View:
The Euro continued to drive markets overnight with Mario Draghi’s ECB press conference the trigger.

Draghi expressed his disappointment with economic growth and even laughed at the question that they are nearing their inflation target! This was the big one as he went on to say that the ECB would actually look to add to policy and that QE is still moving full steam ahead. For the ECB, volatility isn’t an issue.

If you remember during last month, the ECB suggested the idea of front-loading their QE program to avoid any seasonal issues that could arise. This contradicts that notion and bond yields reacted with sharp increases across the board, interpreting a more even spread of stimulus to be more beneficial on growth.

EUR/USD Daily:
Click on chart to see a larger view.

Just remember that pumping cheap money into the economy is still longer term bearish for EUR/USD and as we approach the following trend line resistance, things will get interesting.

Across the Atlantic:
With ADP Non-Farm Employment Change and Unemployment Claims coming in at expectations, it was up to the Fed’s Evans to spur the US side of the market:

It is unlikely Fed should raise rates before 2016 as economic data has come in weaker than had expected for March.

If Fed raises rates this year, it’s important it’s a shallow increase.

From a known dove, this rhetoric is important as it re-enforces the notion that the Fed is inevitably going to be raising rates this year.


On the Calendar Today:
Retail sales out of Australia during Asia. Price failed to follow through on yesterday’s good GDP number so if we get a miss here, things could get ugly fast.

AUD/USD Daily:
Click on chart to see a larger view.

Price is sitting right in the middle of this range that has formed at the lows and from a technical point of view is finding it tough to crack in the current USD driven climate. The greater risk is to the long side.

Tonight’s central bank action comes from the BoE and leads nicely into US Unemployment claims.

AUD Retail Sales
AUD Trade Balance

GBP Official Bank Rate
GBP MPC Rate Statement

USD Unemployment Claims


Chart of the Day:
I threw this one up on the @VantageFX Twitter feed yesterday afternoon.

NZD/USD Daily:
Click on chart to see a larger view.

Something we have been following in the Technical Analysis section of the Vantage FX News Centre is this NZD/USD setup. Price has now broken through support and is possibly re-testing the level we have been watching as resistance.

NZD/USD Hourly:
Click on chart to see a larger view.

Zooming into the hourly chart, I like the lack of momentum that price has shown pushing up into short term resistance which is inside the higher time frame level.

Are you trading these setups on the WebTrader Platform? Leave a comment below or mention @VantageFX on Twitter.

Dane Williams – @VantageFX

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