Releases from Japan:
Prior Current
March Tokyo Condominium Sales (YoY) -28.0% -17.8% Tokyo’s condominium market continues to suffer with its 14th decline out of the last 15 months and marked its 7th consecutive decline on a YoY basis. Much of this has been the reduction in available plots on which large developments can be constructed but last year’s stricter building controls has added to the decline. In general property and land prices have been on the decline since the middle of last year when it had reached a peak during the globalization boom. Separately the economic minister Ota commented on the increasing risk that the U.S. is now in recession, “The impact on the Japanese economy depends on how long the U.S. economic slowdown will continue. We are looking at the U.S. economic slowdown with great concern.” She also noted that exports to the U.S. from other regional developing nations are also declining and this adds to the drag on exports from Japan. She described Japanese exports as “not in good condition” with January and February providing flat numbers. This does also risk a recession in Japan although Q1 may well still provide positive growth.
The following economic releases are due today:
February
U.K. DCLG House Prices (YoY) +7.4% March
French CPI (MoM) +0.6%
French CPI (YoY) +3.0%
Italian CPI (MoM) +0.5%
Italian CPI (YoY) +3.3%
U.K. CPI (MoM) +0.6%
U.K. CPI (YoY) +2.6%
U.K. RPI (MoM) +0.5%
U.K. RPI (YoY) +3.9%
U.S. PPI (MoM) +0.7%
U.S. PPI (YoY) +6.1%
U.S. PPI ex food & energy (MoM) +0.2%
U.S. PPI ex food & energy (YoY) +2.7% April
German ZEW Survey: Econ Sentiment - 30.0
German ZEW Survey: Current Situation +32.8
Euro-zone ZEW Survey: Econ Sentiment - 33.0
U.S. Empire Manufacturing - 18.0
U.S. NAHB Housing Market Index +20.0
Yesterday’s surprise higher open yesterday was soon crushed as Europe gave little attention to the limp G7 statement and the day saw more consistent losses once again. However, I do find a directly Dollar bearish structure difficult to envisage and while we have seen this quite deep pullback in the Dollar I’m not totally convinced that it will cause direct follow-through.
To me the structure looks more solid within a bullish move for the Dollar but only within fairly tight ranges which I would put a base to the Euro around the 1.5510 low once again. There is a small chance it could move as far as 1.5340 but assuming we see this move I’ll watch how it goes to decide which target is more likely to hold. This does of course still fit within a MT Dollar bearish picture though once again I’m not totally convinced that we’ll see lows in any pair except the Euro. Certainly there is no particular indication that the U.S. economy has any chance of near-term improvement. The fiscal stimulus checks don’t get sent out until next month and basic sentiment still remains exceptionally bearish. Therefore the only way I could envisage any solid Dollar gains would be in one of two scenarios: first that Europe suffers a larger blow in terms of (say) an LBO failure, or; the central banks do intend to intervene once the Euro pushes above 1.5900 again. However, these are not factors that can be relied upon until the events occur. Therefore the overall bias remains Dollar bearish for now. However, I remain broadly feeling that we are not that far from the low for (probably) the year.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 102.54-93 1.5960-86 1.0127-51 1.9851-93
Res: 101.50-80 1.5860-95 1.0018-70 1.9755-84 Spt: 100.30-60 1.5720-55 0.9956-78 1.9648-80
Spt: 99.34-60 1.5668-99 0.9846-86 1.9554-90 | 
