How low can the Euro go and has the AUD got its grip?

March 5, 2015

No matter how pleasant the recent improving data in the Euro area is looking, it cannot seem to stop the falling Euro. The Eurozone retail sales rose for the fourth month in a row with the expansion speed at a 9-year high. Data shows how the tumbled oil prices have supported consumption and economic recovery. However, the CPI still fell by 0.3% in February, increasing speculations that ECB may be forced to purchase more assets. The EURUSD yesterday refreshed recent lows to 1.1060, breaking two support levels and former lows nearing 1.11. The alligator is in bearish order, implying the short term trend may continue.

EURUSD 050315 | Vantage FX

Australian Q4 GDP rose by 0.5% and expanded by 2.5% in 2014, mostly in line with forecasts. Aussie Dollar maintains its consolidation within the range between 0.78-0.7850. The currency is supported by real money but the offers at 0.7850 are still very strong. The larger sideway range will be 0.7750-0.79.

AUDUSD 050315 | Vantage FX

The Canadian Dollar jumped after Bank of Canada held its interest rate at 0.75%, the result disappointed some traders who were betting on an upward breakout of a recent USDCAD triangular pattern. The rebound of oil prices also supports the strength of CAD. Although, it seems unlikely the BOC will cut the rate in the near future, the lessened oil exports still put heavy pressure on CAD. The bottom of the triangle pattern is at 1.2350.

USDCAD 050315 | Vantage FX

Looking to the stock markets, the Shanghai Composite rebounded by 0.51% to 3280. The Nikkei Stock Average slid by 0.6%. The Australian ASX 200 lost 0.54% to 5902. In European markets, the UK FTSE was up 0.44%, the German DAX gained 0.73% and the French CAC Index rose by 1%. The US stock indices’ retracements continued. The S&P 500 closed 0.44% lower at 2098. The Dow slid by 0.58% to 18097, and the Nasdaq Composite Index fell 0.26% to 4967.

On the data front, Australia retail sales and trade balance will be released at 11:30 AEDST. Bank of England and ECB will disclose their March decision tonight. US weekly Unemployment Claims will be out at 0:30 AEDST after midnight.

Have a great trading day!
Anthony

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