• Dollar Faces Swell in Risk Appetite after Greek Bond Swap, NFPs
• Euro: The Greek Swap is a Done Deal, Is It Time to Buy Euros?
• British Pound May Find Itself at a Disadvantage After the ECB’s Hawkish Turn
• Canadian Dollar Advances on BoC Outlook, Can Employment Data Keep it Going?
• Japanese Yen: Finance Ministers Says Asset Purchases Work, Expects More
• Swiss Franc: Will the SNB Finally Find Relief in the Euro Zone’s Steps Towards Stability?
• Gold Puts In for its First Back-to-Back Advance in Two Weeks as the Dollar Falls, Stimulus Accepted

Dollar Faces Swell in Risk Appetite after Greek Bond Swap, NFPs

The anti-dollar move that begin Wednesday was extended through this past trading session. With the cumulative rally in risk appetite trends and rebound for European currencies, the greenback would suffer its biggest one-day loss in exactly a month. However, a one-day move does not make a trend. The dollar currently finds itself retracing gains forged over the past few weeks. To reestablish the general bear trend that swept the currency down since the beginning of the year, we need serious fundamental firepower. It just so happens that we have event risk to leverage the market’s two most influential themes – and subsequently, the dollar’s most pressing catalysts. On deck, we have another critical milestone in driving forward the Greek rescue and the ever, headline-worthynonfarm payrolls (NFPs).

Where the dollar is the world’s most liquid currency, EURUSD is the most liquid pair. As such, when the euro is under severe duress or strong demand, the greenback often takes the opposite move. That’s what makes the current market so exciting. We have come up to yet another ‘make or break’ deadline for the Euro Zone financial situation, and officials’ clumsy means of framing the situation in such a harsh light tends to leverage the currency market’s interest. In the current round of the ongoing rescue, the best possible outcome is essential the bare minimum required to keep this the ship afloat. And, preventing disaster isn’t the same thing as jump-starting true growth. Beyond countering the euro’s moves, the dollar will find another strong tie-in to risk trends withthe February NFPs. Here too, the long-term trend benefits little from even an exceptional deviation from consensus for just one month, but the short-term influence is there. It will curb activity before and struggle after.

Euro: The Greek Swap is a Done Deal, Is It Time to Buy Euros?

The numbers are in, and the outcome of the Greek PSI (private sector involvement) bond swap is clearly the positive outcome of the binary scenario tree. According to officials, there was an 85.8 percent participation rate on €172 billion. That easily clears the 75 percent minimum Greece was looking for. So, is that reason enough for the euro to rally? Leading up to the event itself, it was clear what the few conclusions to this event would be; and it was heavily expected that effort would pass in some form. That being said, market participants were more or less expecting such an outcome and would therefore price it in ahead of time. Follow through on developments like this generally comes from a clearing of the air – whereby future steps that had a wide array of possible outcomes suddenly consolidates to just a few possibilities. That isn’t provided here. The upcoming EU minister meeting will most likely release the remaining €71.5 billion euro rescue money and then we will have to look further out. One indisputable boon for diehard bulls though is the ECB’s downplaying financial tension and start warning on inflation.

British Pound May Find Itself at a Disadvantage After the ECB’s Hawkish Turn

As is the norm when there is no change to interest rates, the Bank of England remained mum on its policy assessment and expectations for economic activity after its most recent meeting. However, in the absence of guidance, speculators will draw comparisons – this is a relative market after all. Where the BoE continues on its slow path of bolstering its stimulus program, the ECB has just voiced its concern about inflation and Governor Draghi has said the financial environment has “improved enormously”. That is a quick hawkish turn – regardless of qualifiers of downside risks. So, if the ECB seems ready to turn an about face under these circumstances, the BoE doesn’t look good with the UK’s inflation.

Canadian Dollar Advances on BoC Outlook, Can Employment Data Keep it Going?

The other central bank surprise for the week was the Bank of Canada’s commentary. A consistently dovish outlook has become the norm for these events and the markets have acclimated without much active engagement on the warnings. So, in this past statement, Governor Carney’s suggestion that the economic outlook had improved and inflation will be somewhat higher in the medium-term, we see an uncharacteristic allowance for hawkishness. As long as underlying risk trends keep a steady or bullish heading, events like this will help an investment, Canadian currency. We have a great chance for leveraging an unusual deviation for the loonie away from general trends should jobs figures impress.

Japanese Yen: Finance Ministers Says Asset Purchases Work, Expects More

You had to expect that policy officials would take at least some credit for the yen’s titanic tumble over the past month. This both offers legitimacy to what they have done so far and creates uneasiness with speculators to fight the trend going forward. Finance Minister Azumi remarked that the Bank of Japan’s increased asset purchases clearly helped equities and the yen. More importantly, he also expected the central bank to continue on its path of easing. There is growing speculation that the policy group will move as early as its next meeting. That would be aggressive, but it could capitalize on existing momentum – a good plan considering risk pullbacks are a constant threat.

Swiss Franc: Will the SNB Finally Find Relief in the Euro Zone’s Steps Towards Stability?

With Greece’s bond swap going through and the country likely to receive the second half of its second bailout package, near-term risk has been lifted off the euro’s shoulders. Considering the Swiss franc’s primary role nowadays has been a safe haven for regional capital, a simple assessment would suggest that this relief would lead to a significant advance from the contentious 1.2000-floor against the euro. Yet, those expectations have yet to pan out. EURCHF is virtually unmoved. This has been the case under both scenarios where financial stability seems to have deteriorated sharply and improved significantly. We have an SNB rate decision next week. Will they be forced to act?

Gold Puts In for its First Back-to-Back Advance in Two Weeks as the Dollar Falls, Stimulus Accepted

A second advance for gold marks the first back-to-back climb for the precious metal in two weeks. In the lead up to the Greek bond swap, we would see risk rise and thereby the dollar slide. Given gold’s position as the primary non-currency alternative to the greenback, the boost was welcome. From here, we have the anti-dollar consideration still in place; but we could also see the precious metal go back to work as a preferred alternative to all fiat assets (those assets whose value comes from the guarantees of governments). Post bond swap, we come back to the stimulus regimes and austerity-growth imbalances that have long plagued the global economy.

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**For a full list of upcoming event risk and past releases, gotowww.dailyfx.com/calendar

ECONOMIC DATA

Next 24 Hours

GMT	Currency	Release	Survey	Previous	Comments
1:30	CNY	PPI (YoY) (FEB)	0.0%	0.7%	Price indices expected both to drop, may mean additional easing or fine tuning of economic plan
1:30	CNY	CPI (YoY) (FEB)	3.4%	4.5%
5:30	CNY	Industrial Production YTD YoY (FEB)	12.3%	13.9%	Industrial production data both expected to soften, may suggest additional reforms
5:30	CNY	Industrial Production (YoY) (FEB)	12.4%	12.8%
5:30	CNY	Fixed Assets Inv Excl. Rural YTD YoY (FEB)	19.5%	23.8%
5:30	CNY	Retail Sales YTD YoY (FEB)	16.5%	17.1%	Domestic consumer seen to save moderately more
5:30	CNY	Retail Sales (YoY) (FEB)	17.3%	18.1%
8:00	EUR	German Current Account (euros) (JAN)	10.4B	19.3B	German trade expected to show moderate pivot
8:00	EUR	German Trade Balance (euros) (JAN)	13.0B	12.9B
9:30	GBP	Industrial Production (MoM) (JAN)	0.3%	0.5%	Industrials and manufacturing seeing some dropoff, though additional easing in a very short time is unlikely
9:30	GBP	Industrial Production (YoY) (JAN)	-3.1%	-3.3%
9:30	GBP	PPI Input n.s.a. (YoY) (FEB)	7.1%	7.0%	Producer prices expected to show slightly higher data, may bring back concerns of inflation into the picture
9:30	GBP	PPI Output n.s.a. (YoY) (FEB)	3.9%	4.1%
9:30	GBP	PPI Output Core n.s.a. (YoY) (FEB)	2.5%	2.4%
9:30	GBP	Visible Trade Balance (Pounds) (JAN)		-£7111	British trade deficit seen to continue, may influence fiscal policies
9:30	GBP	Trade Balance Non EU (Pounds) (JAN)		-£3748
9:30	GBP	Total Trade Balance (Pounds) (JAN)		-£1109
12:00	CAD	Net Change in Employment (FEB)	14.5K	2.3K	Canadian labor markets expected to improve, may give more support for a rate hike in the near future
12:00	CAD	Full Time Employment Change (FEB)		-3.6
12:00	CAD	Part Time Employment Change (FEB)		5.9
12:00	CAD	Unemployment Rate (FEB)	7.6%	7.6%
13:30	CAD	International Merchandise Trade (CAD) (JAN)	1.95B	2.69B	Canadian trade expected fall
13:30	USD	Trade Balance (JAN)	-$49.0B	-$48.8B	US deficit still increasing
13:30	USD	Change in Non-farm Payrolls (FEB)	210K	243K	US labor market expected to grow slower than previous, will look to fiscal policies now as Fed indicates extent of monetary easing almost reached
13:30	USD	Change in Private Payrolls (FEB)	220K	257K
13:30	USD	Unemployment Rate (FEB)	8.3%	8.3%
13:30	USD	Average Hourly Earnings All Employees (YoY) (FEB)	2.0%	1.90%
13:30	USD	Average Weekly Hours All Employees (FEB)	34.5	34.5
13:30	USD	Change in Household Employment (FEB)		847
13:30	USD	Underemployment Rate (U6) (FEB)		15.1%
15:00	GBP	NIESR Gross Domestic Product Estimate (FEB)		-0.2%	UK GDP estimates weaker

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visitTechnical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit ourPivot Point Table

CLASSIC SUPPORT AND RESISTANCE–EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT

Currency	USD/MXN	USD/TRY	USD/ZAR	USD/HKD	USD/SGD		Currency	USD/SEK	USD/DKK	USD/NOK
Resist 2	16.5000	2.0000	9.2080	7.8165	1.3650		Resist 2	7.5800	5.6625	6.1150
Resist 1	14.3200	1.9000	8.5800	7.8075	1.3250		Resist 1	6.5175	5.3100	5.7075
Spot	12.6860	1.7762	7.4915	7.7575	1.2519		Spot	6.6992	5.6041	5.5937
Support 1	12.6000	1.6500	6.5575	7.7490	1.2000		Support 1	6.0800	5.1050	5.3040
Support 2	11.5200	1.5725	6.4295	7.7450	1.1800		Support 2	5.8085	4.9115	4.9410

INTRA-DAY PROBABILITY BANDS 18:00 GMT

\Currency	EUR/USD	GBP/USD	USD/JPY	USD/CHF	USD/CAD	AUD/USD	NZD/USD	EUR/JPY	GBP/JPY
Resist. 3	1.3415	1.5962	82.68	0.9191	0.9981	1.0773	0.8366	110.02	131.08
Resist. 2	1.3378	1.5928	82.46	0.9165	0.9960	1.0740	0.8339	109.64	130.67
Resist. 1	1.3341	1.5894	82.24	0.9139	0.9939	1.0707	0.8313	109.26	130.27
Spot	1.3266	1.5827	81.80	0.9087	0.9897	1.0640	0.8259	108.51	129.46
Support 1	1.3191	1.5760	81.36	0.9035	0.9855	1.0573	0.8205	107.76	128.65
Support 2	1.3154	1.5726	81.14	0.9009	0.9834	1.0540	0.8179	107.38	128.25
Support 3	1.3117	1.5692	80.92	0.8983	0.9813	1.0507	0.8152	107.00	127.85

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---Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com

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