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Forex Market UpdateUSDJPY breaks 113.40 support in Asia!
The strong JPY continues to be the major played theme in Asia, in a thin traded market as most Asian centers are closed for vacation
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€¢ Canada GDP (MoM) Feb, out at 0.2% in line with expectations.
â€¢ US GDP annualized (Q1 A), out at 4.8% vs. 4.9% expected.
â€¢ US GDP price Index (Q1 A), out at 3.3% vs. 2.7% expected.
â€¢ US personal consumption (Q1 A), out at 5.5% vs. 5.0% expected.
â€¢ US employment cost index (Q1), out at 0.6% vs. 0.9% expected.
â€¢ U. of Michigan confidence April, out at 87.4 vs. 89.0 expected.
â€¢ US Chicago PMI April, out at 57.2 vs. 58.0 expected.
â€¢ Australia's AiG performance of mfg index April, out at 50.3 vs. a prior reading of 51.9.
â€¢ Australia's TD securities inflation MoM% April, out at 0.4% vs. a prior reading of 0.3%.
â€¢ Japan's labor cash earnings YoY March P, -0.2% vs. a prior reading of 0.4%.
â€¢ Japan's overtime earnings YOY March P, out at 1.9% vs. a prior reading of 2.0%.
THEMES TO WATCH â€“ UPCOMING SESSION
We saw a follow through after Fridayâ€™s soft US data in the weak dollar which was set off by Fed chairman Bernankeâ€™s dovish comments made last Thursday. So we think it is fair to say that the sentiment has changed from the dollar yield scenario to the FX market focusing on global imbalances, which will likely lead to more dollar weakness in the weeks to come. Also technically most majors are showing very sustainable trends both medium and long term, with EURUSD closing above 1.2590 Friday and USDJPY breaking 113.40 in Asian session, a close below this level today gives scope for a 109.00 target looking ahead.
Note: the support/resistance levels used in the matrixâ€™s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.
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