Market activity was very high last week as key US events gave way for new direction and reduced the probability of further quantitative easing from the Fed. The US job report on Good Friday, however kept the door open for further stimulus and backs up the view from the Fed that policy still has to be accommodative for the economy. The March nonfarm payrolls data missed expectations by 85k, coming out at 120k and the unemployment rate came out at 8.2% vs. 8.3% expected. came back slightly on Friday after four days of straight out selling, finishing the week down almost 2.0%.
Overnight, the JPY was on the bid as the current account beat market expectations at 1.18 trillion JPY vs. 1.12 trillion expected. is closing in on the 81-figure after touching as high as 84.19 in early March. The pair still has some distance to the Ichimoku-cloud, currently at 80.75. coming close to key support at 105.66, but first the pair has to breach the Ichimoku-cloud, currently at 106.09. is also continues on the offer and the Head and Shoulders formation that was confirmed last Monday at the close below the neckline paves the way for a potential technical target at 81.71.
The Swiss Franc also received some attention after the 1.20 floor in was breached briefly on Thursday and the pair hasn't been able to recover significantly despite the SNB's efforts. The market is testing the statement by the SNB to support the exchange rate with "unlimited quantities" and punishing the Euro zone for not being able to get back on track. It is crucial for the SNB to be successful in getting the CHF to depreciate against the EUR as the Euro zone is the biggest taker of Swiss exports. Last week, sentiment indicators in the Euro zone kept in contraction as the PMI Composite on Wednesday remained below 50.
Today should be pretty quiet as some markets still are closed and the calendar is lacking interesting data. Bernanke to speak tonight in Atlanta could trigger some moves though. If EUR/USD takes out 1.2975, this should give occasion for further unwinding in the markets, opening up for a test of the 1.29-figure. Upside is protected by the 100-day moving average, currently at 1.3147, where a break would give scope for a test of the 50-day moving average at 1.3216.
Have a nice day