Brave New World

FX Daily Outlook 24/03/2009

EURUSD- (12.25GMT): 1.3557  Daily outlook: Bearish.  Has broken 1.3615, and below 100 SMA. Targeting 1.3500.

• Risk trades have paired back following yesterday’s euphoria.
• Mixed European data (French consumer spending -2% in Feb vs exp -1%, Euro PMI, 37.6- better than expected and prior)
• Technically strongly bearish
• Longer term EUR likely to be supported until possible radical change in policy 

USDJPY- (12.24GMT: 98.24) Daily outlook: Neutral to Bullish. Targeting 99.70 (200 SMA and YTD high)

• Rose over 200 pips overnight against the USD
• Reached 5 month high against EUR. 
• Minutes of BoJ meeting in Feb show agreement on need to bring down L-T interest rates- ie QE

GBPUSD (12.24GMT: 1.4735) Daily outlook: Bearish Targeting 1.4640(100 SMA) , then 1.4450 (yesterday’s low)

• Strong rally in Cable to reach near upper end of range (1.4980 is high of last 2.5 mths) benign CPI figures
• According to BoE, resumption of deflation in next few months
• BoE’s King sees no recovery to growth rate in lending