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Late Safe Haven Demand As Equities Falter

  • The greenback spent much of Thursday consolidating the post-FOMC decline. However, a late bout of weakness across equity markets, led by the decline in regional bank indices, spurred some solid demand for safe havens which benefitted both the greenback and the Japanese Yen.
  • The likes of EURJPY and AUDJPY extended their losses to around 1% in the late session and despite a brief bout of turbulence over Yellen bank deposit headlines, USDJPY also printed fresh session lows below 130.40 approaching the APAC crossover.
  • Fresh short-term trend lows for the pair maintains the current bearish price sequence of lower lows and lower highs and now exposes a move to 129.75, the 76.4% retracement of the Jan 16 - Mar 8 rally.
  • EURUSD was unable to consolidate gains around the 1.09 handle and fell sharply towards the close. However, the pair maintains a firmer short-term tone overall. A clear breach of the Fibonacci hurdle at 1.0911 is required to strengthen bullish conditions and open 1.1000 and a key resistance at 1.1033, the Feb 2 high and a bull trigger. Initial firm support is seen at 1.0760, the Mar 15 high and a recent breakout point.
  • UK retail sales on Friday before Eurozone data comes thick and fast throughout the morning, with French flash manufacturing and services PMI’s kicking off a raft of Eurozone data points. Capping off the week, durable goods and PMIs highlight the US docket.

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