Asian Forex Overview (March 31 - April 4)

Markets experienced another volatile trading day as they inch closer to April 2—the day the U.S. implements reciprocal tariffs and a 25% tariff on automobile imports announced last week. The news helped push gold toward new highs, inching closer to $3,100 per ounce, but it also spurred a JPY rally, as the safe-haven currency stalled or reversed the weakening trend.

Despite a better-than-anticipated CPI reading, the Australian Dollar did little to do the same, continuing to weaken against other pairs except for the New Zealand Dollar. Its short-term future will be clearer after Tuesday's central bank decision, which should remain at 4.1%.

Besides the interest rate news, the week ahead will bring the latest ISM Manufacturing PMI numbers and employment data, with Friday's NFP news expected to add 139,000 jobs. The focus will be on following the Euro's potential strength and the Australian dollar's weakness.

Key News:

• Monday: CNY Manufacturing PMI, EUR – German Prelim. CPI
• Tuesday: AUD - Interest Rate, USD – Manufacturing PMI
• Wednesday: USD – ADP Employment
• Thursday: CHF – CPI, USD – Unemployment Claims, ISM Services PMI
• Friday: CAD – Unemployment rate , USD – Unemployment rate, NFP

Pairs In Focus

1. EUR NZD

After two weeks of ranging, this pair, which is in an uptrend since late February, is signaling it is ready to revisit the short-term highs. Ideally, the price would first dip toward previous resistance around 1.89, before rejecting and moving higher.

Retail sentiment is overwhelmingly short at 86%, which offers a high probability of a short squeeze.

 EUR/NZD Daily Chart, Source: TradingView 

2. AUD CAD

Despite multiple attempts to break lower, this pair stubbornly remained hovering above the support. Still, going into the next week, the premise remains the same, observing for a daily close below the key level around 0.89700. It could open a follow-up move lower toward 0.89300 and below to 0.88700 if it occurs.

Retail sentiment remains highly bullish, at 78%, indicating good potential for a short squeeze.

 

AUD/CAD Daily Chart, Source: TradingView

 

Notes:

• AUD/NZD: Pulled back as anticipated, but now that its made a clear higher low it might make a lower high.
• AUD/SGD: Tried to rally again, and again failed to break the resistance. Further downside is possible.
• AUD/JPY:  Failed to break a key resistance at 95.230 once again. Good candidate for shorts to try to take out stops resting around 93.100.
• AUD/CHF: Similarly failed to reverse once again and might create fresh lows.
• CAD JPY: It made a possible lower high, but needs more observation before becoming a candidate for fresh short positions.
• CHF/JPY:  It made a new higher high on the daily, before engulfing the last bullish candle. It might pull back lower in the next week.
• EUR/AUD:  It made a swing lower before rejecting. It might try to take out the previous high from early March.
• EUR JPY: Ranging between two key levels at 163.800 and 161.125. Either of these needs to be broken before confirming the new trend.
• GBP/NZD: It swept the low and failed to reach it, but now it is ready to challenge 2.27450 again.
• GBP/JPY: Rallied and made a new high before a turnaround at the end of the week. Price is in an uptrend but not without a short-term risk to the downside.
• GBP/SGD:  Failed to reach the 1.71500 support, but turned around and made a fresh yearly high.
• GBP/AUD: Remains in an uptrend after overcoming a short-term pullback.
• NZD/JPY: It is ranging between support at 85.200 and resistance around 87. Overall bias is to the downside.
• SGD/JPY: Rallied but failed to close above the key level of 112.300 once again. A big pullback by week’s end took it toward a key level of 111.400. It needs a clean close below to get a bearish bias.