Releases from Europe: February Forecast Actual
German CPI (F) (MoM) +0.5% +0.5%
German CPI (F) (YoY) +2.8% +2.8% German CPI for February was confirmed as unchanged from the provisional reading and leaves a vacuum until this afternoon’s U.S. CPI. Europe’s attempt at selling the Dollar have not really come to very much but the risk is still for a mild pullback before the market can get up steam for a fuller test of the major long term targets.
The following economic releases are due today:
February
Bank of France Business Sentiment 106.0
Euro-zone CPI (MoM) +0.3%
Euro-zone CPI (YoY) +3.2%
U.S. CPI (MoM) +0.3%
U.S. CPI (MoM) +4.2%
U.S. CPI Excl food & energy (MoM) +0.2%
U.S. CPI Excl food & energy (MoM) +2.4% March
University of Michigan Confidence 70.4
With no economic releases from Asia the session has been relatively quiet but retaining a Dollar bearish tone following the late recovery yesterday.
Finance officials have kept up their rhetoric and voicing their concerns about the excessive fall in the Dollar. Juncker considers the move to be irrational as it focuses solely on the short term and that the market is forgetting that although the U.S. is on the verge of a recession the medium term prospects are “excellent”. Indeed, the market has a fixation on the U.S. economy moving into a recession almost as if it has never happened before. It has and has always come out again. Is this time any different? The market appears to believe that the recession will be a long one though even private forecasters are mixed on this. NABE has said it will be brief with the second half seeing a recovery. The IMF has always maintained exactly the same. However, the market makes more profit from short positions and sees any attempt to buy Dollars as too risky. From that perspective there can be no turning back for the Dollar – except if they are forced to and this will rely on central bank intervention. From Japan both Nukaga and Ota have commented on the rapid decline in the Dollar following the first decline below 100 since November 1995. Both reiterate that they are following FX moves closely but refuse to comment on specific levels. Still no comments concerning intervention but that action will come without pre-warning.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 101.28-54 1.5768-97 1.0234-60 2.0458-60
Res: 100.50-00 1.5660-90 1.0134-60 2.0365-90 Spt: 99.58-75 1.5550-90 1.0015-43 2.0249-82
Spt: 98.55-90 1.5430-73 0.9959-93 2.0156-83 | 
