Aussie sold-off on Capex, UK GDP – Next Up

FXStreet (Mumbai) – The Australian dollar was relentlessly sold-off in Asia; with the fall aggravated by worse-than expected private capex data. The Kiwi also followed suit tracking losses from its OZ counterpart. While the yen reached fresh twelve year highs on BOJ official comments ahead of Friday’s Japan’s CPI print.

Key headlines in Asia

Australia’s capex second estimate 2015/16 lower-than-expected

AUS Capex communicates RBA dovish, recession ahead?

USD/JPY reaches highest since 2002

Dominating themes in Asia – centered on JPY, AUD, NZD

A busy Asia, with Japanese bourses at records higher mainly driven by broad yen weakness as stops triggered at 124 marker, driving the major to 124.30 levels – highest since December 2002. Also, increased greenback buying across the Asian currencies after Australia’s capex numbers discouraged markets also accelerated the gains in USD/JPY.

The Australian dollar was the biggest loser across the FX space, dropping below the key 0.7680 support, after poor capex data highlighted concerns over Australian economy’s transitions from mining to non-mining investment. The Kiwi piggy-backed its Australian counterpart slumped to lows just ahead of 0.72 barrier.

Heading into Europe – centered on EUR, GBP

The second estimate of Q1 2015 GDP figures from the UK is likely to be the main highlight in a rather data-dry European session.

Markets expect the second estimate to show an upward revision to 0.4%. The Bank of England (BoE) expects first-quarter growth of 0.5% in the final estimate. The first official estimate showed the UK economy slowed to 0.3% in the first quarter, down from 0.6% in the previous three months.

While markets remain hopeful of any deal reached between Greece and its creditors while G7 finance ministers’ meetings continue for the second day.

Later the NA session brings a host of Canadian macro releases along with weekly jobless claims and pending home sales from the US.

EUR/USD Technical

Chris Capre, Founder at 2ndSkies notes, “Although we saw a price action exhaustion spike lower followed by a false break and bounce back up towards 1.09, I’m suspecting the Euro will be sold on pullbacks, so am looking to sell on a rally. My pullback zone I’m looking to get short around is 1.1070 as this is a key role reversal level. Downside I’ll be targeting 1.09 and 1.0827. Only a daily close above 1.1070 negates my bearish bias.”

The Australian dollar was relentlessly sold-off in Asia; with the fall aggravated by worse-than expected private capex data. The Kiwi also followed suit tracking losses from its OZ counterpart. While the yen reached fresh twelve year highs on BOJ official comments ahead of Friday’s Japan’s CPI print.

(Market News Provided by FXstreet)