THE TIPSTER
PERIPHERAL Europe, the US budget impasse and escalating tightening measures in China remain the key drivers for commodity currencies and dollar crosses. Swiss franc pairs express these themes very well given Switzerland’s immense external position and strong output. As well as being a safe-haven, Swissie pairs are also benefiting from strong Swiss economic growth. Alpari offers Australian dollar-Swiss franc SFr0.9079-SFr0.9082.
The euro was given a boost this week, with the authorities adamant there will be no restructuring of Greek debt and stating the aid plan should be in place by the end of June. But with non-farm payrolls looming on Friday, the current spurt of exuberance might have got ahead of itself. Chartists are eyeing up the $1.4450-$1.4500 area as the next big barrier. IG Index offers euro-dollar $1.4418-$1.4420.
The Kiwi had a great week against the dollar and it has not disappointed this week either. Confidence had been hit hard since the earthquake last February, but data released has shown around 40 per cent of companies expect their figures will pick up over the course of the year. Capital Spreads offers New Zealand dollar-dollar $0.8235-$0.8239.
The euro recovered against a basket of currencies yesterday, helped by an easing of fears over the Greek crisis. The single currency reached a three-week high against the yen at ¥117.80 after Moody’s placed Japan’s debt ratings under review for a possible downgrade. Traders are not yet eyeing a return to the highs of last month, above ¥123, but are instead looking at a strong support line dating back to March, which suggests that a possible pullback to around the ¥116 level could still be on the cards. Spreadex offers euro-yen ¥117.49-¥117.53.
Sterling-dollar has been on a one-way charge from $1.6100 since weak US data last week saw the dollar come under pressure. Chartists watching the four-hour candles yesterday noticed a bearish outside reversal as it failed to break $1.6550 resistance and the day candle was also setting up as a bearish hammer. A close below $1.6472 would be a good sell signal for a pull back to $1.6325. Spread Co offers sterling-dollar $1.6474-$1.6476.