AUD Pushed By Commodity Recovery

Market Brief

Commodity currencies paired gains during the Asian session as investor sentiment toward commodities continues to gradually improve. Gold continues to push higher, up 0.58% to $1,245 an ounce, as the greenback lost ground against the G10 complex. Palladium was also on fire in Tokyo as the metal surged 1.60%. In the commodity market, futures on iron ore rose sharply overnight amid a cut in the reserve ratio by the PBoC, while crude oil prices kept pushing higher. The West Texas Intermediate crude was up 1.45% to $34.24 a barrel, while its counterpart from the North Sea, the Brent crude, was up 1.15% to $37 a barrel.

G10 Advancers - Global Indexes

This environment proved a major tailwind for the Australian as AUD/USD surged more than 1% from tonight’s low and reached 0.7192 after the RBA decided to keep the cash rate target unchanged at a record low of 2%. The statement was broadly in line with expectations and was even perceived as relatively hawkish, especially when you consider the stable inflation outlook. AUD/USD is on its way to test the strong 0.7250 resistance level (already failed twice to break it to the upside). However, the price action suggests that the pair is lacking momentum as traders started to price back in a potential rate hike by the Federal Reserve. The pair is currently taking a breather at around 0.7180 as the rally loses steam.

The New Zealand dollar was the other big winner in Asia as the kiwi appreciated 0.60% against the greenback in spite of raising expectations for a rate cut from the RBNZ and falling terms of trade. NZD/USD started pushing higher in the late Asian session, rising as much as $0.6640. As stated many times, we maintain our bearish bias on the pair as the policy divergence theme is comes back under the spotlight. On the downside, a support can be found at 0.6566 (low from February 29th), then 0.6547 (low from Feb. 16th).

On the equity market, most Asian regional markets posted strong gains, with mainland Chinese stocks leading the charge, boosted by the PBoC’s RRR cut. The Shanghai Composite was up 1.68%, while the tech-heavy Shenzhen Composite surged 2.32%. In Japan, the Nikkei edged up 0.37%, in Singapore the STI was up 0.21%, while in India the Sensex jumped 2.66%. In Europe, equity futures were trading in negative territory ahead of today’s eurozone PMI figures.

Today traders will be watching manufacturing PMI from Norway; Markit PMI from Turkey, Spain, Italy, France, Germany, the UK, Brazil and the US; PMI manufacturing and retail sales from Switzerland; unemployment rate from Germany; manufacturing PMI from South Africa; unemployment rate from the eurozone; Danish PMI survey; Canadian GDP; ISM manufacturing PMI and ISM price paid from the US.

Today's Calendar

Currency Tech
EUR/USD
R 2: 1.1068
R 1: 1.0963
CURRENT: 1.0862
S 1: 1.0810
S 2: 1.0711

GBP/USD
R 2: 1.4409
R 1: 1.4168
CURRENT: 1.3944
S 1: 1.3836
S 2: 1.3657

USD/JPY
R 2: 117.53
R 1: 114.91
CURRENT: 113.18
S 1: 110.99
S 2: 105.23

USD/CHF
R 2: 1.0257
R 1: 1.0074
CURRENT: 1.0005
S 1: 0.9847
S 2: 0.9660