Releases from Australia:
Prior Actual
Australia AiG Performance of Construction Index 58.3 53.9 Much in line with yesterday’s building approvals the AiG Performance of Construction Index reflected the same slowing with a drop of 4.4 points to 53.9. Commercial building and engineering works has still seen good activity but the residential building is sliding under the weight of successive interest rate hikes and the pass-on of funding costs. However, while the AiG noted the decline in residential construction the HIA reported a robust 11.3% rise in new home sales in January to reverse two months of weakness. If the AiG report is to be believed then the new homes sales may well be the swan song for construction companies with softness expected to reign over the rest of the year.
Releases from Japan:
Fukui ended his last policy meeting as the BOJ governor having failed to restore rates to a “state of normality” which had been his intention since last year. The CB was not expected to make any changes today and voted unanimously to retain an unchanged policy. Fukui’s speech is expect later this afternoon and one wonders whether he will bow to a more negative outlook given that global uncertainty still remains strong and Japan’s leading indicators and consumer confidence remain low.
The following economic releases are due today:
January
German Industrial Production (MoM) +0.3%
German Industrial Production (YoY) +4.6%
Euro-zone Leading Index
U.S. Consumer Credit USD 7.0bn February
U.S. Change in Non-Farm Payrolls 30K
U.S. Unemployment Rate 5.0%
U.S. Change in Manufacturing Payrolls - 25K
The train kept tanking along and broke the 1.5322 resistance. My automatic thought was that we may be moving directly to the 1.5660 target but without the Swissie and Dollar-Yen breaking beyond their supports I think it would be better to be slightly cautious.
There are several things to look for now to indicate that the Dollar will continue letting itself getting flushed down the drain: Dollar-Yen – watch the 101.82-102.00 area which does seem quite firm. Also look for a bullish divergence to form in both hourly and 4-hour charts. There does seem a basis for this. Dollar-Swiss – we have just about reached target at 1.0209 though there are a variety of smaller time frame targets that may let it slip to just below 1.0200 though I doubt by more than 10-20 points. Again look for bullish divergences which are developing but need to hold. Euro - there is resistance around the 1.5428-46 area which could cap the current move. Already there are early signs of a bearish divergence but again I’d want these to be confirmed. Pound - the 2.0138 peak does have a reasoning for a peak but also watch 2.0185. Bearish divergences are developing here too… It will all probably go down to the line before tonight’s figures and given the tension in the market it could go either way. Breaks of all the supports mentioned above could well see further strong losses. It is about time we should see a pullback but then maybe we’re seeing a classic spike bottom in the Dollar. For me the sentiment is a little too much one-way…
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 103.26-55 1.5472-02 1.0380-00 2.0222-48
Res: 102.83-13 1.5428-46 1.0280-07 2.0138-85 Spt: 101.82-00 1.5345-49 1.0190-08 2.0060-81
Spt: 101.20-25 1.5255-75 1.0110-23 2.0000-15 | 
