• AUD/JPY +0.7%
• AUD/USD +0.4%
• USD/CHF +0.3%

AUD/JPY

Base Metals Prop Up Aussie: Aussie bidding was heavy throughout the session as higher commodity prices bolstered Australian dollar moves.  Copper traded to a record in time with zinc contracts as silver hit a 22 �,½ year high in the morning.  With the economy known for base metal exports, traderâ�,��"�s sentiment is leaning towards the economy benefiting from the higher prices.  This in turn should lead to further speculation of potentially higher rates for the region in the H2 of 2006.  Adding to the crossâ�,��"�s higher appreciation was further deflationary talk stemming from statements by Japanese Finance Minister Sadakazu Tanigaki over the weekend.  Embracing the fact that the economy is turning around, the Finance Minister noted that Japan hasnâ�,��"�t â�,��"completelyâ�,� conquered inflationary pressures.  As a result, a word of caution was offered by Tanigaki on preemptively higher interest rates and their detrimental effects on the economy.  This effectively quelled near term speculation with most traders anticipating a hike decision coming in the summer months of 2006.  Separately, the pair looks to be further bolstered by positive anticipation of an uridashi issuance this week.

Rumorville: With the currency cross rising to the highest valuations since mid March today profit taking is expected slightly above the 86.35 spot price at 86.50.  Light paring is expected with heavier selling interest residing at the 87.00 handle, corresponding with the topside near term resistance.

AUD/USD

Traders Turn To NABâ�,��"�s March Survey: Major currency pair fluctuations were kept in a narrow range on the day as geopolitical risks heightened in the Middle East, weighing down the greenbackâ�,��"�s gains.  As a result, bidding resumed on the carry trade side with Aussie still sporting a higher rate against dollar counterparts.  Gold prices, hovering $600, also contributed to Australian dollar bidding.  However, with the lack of data and traders wayside positioning, momentum was thin enough to keep any upside breaks to a minimum.  Should tonightâ�,��"�s NAB March business survey post positive, traders will be wary of further bidding on interest rate speculation as expectations now mount on the likelihood.  Heading into the Asian session, options defense is residing at the 0.7350 figure with stops slightly below at 0.7240.

Rumorville: Offers are ahead at the 0.7300 handle, topside resistance on the dayâ�,��"�s launch.  Subsequently, heavier selling resides at the 0.7350 figure with corresponding stops as comparative bidding looks to key in at 0.7260 and 0.7270 figures.  Should the current momentum break through resistance at 0.7300, traders look to bid up to offers at 0.7400.

USD/CHF

Price Momentum Fuels Dayâ�,��"�s Move: Momentum from Fridayâ�,��"�s U.S. employment report trickled into the first trading day of the week for the Swissie.   Although, much of the advance was lost on rising base metal prices and conflict over nuclear programs in Iran, short covering boosted early morning trade, kicking the pair to the session high of 1.3058.  However, with momentum thin, and likely to linger for the rest of the shortened trading week, traders pushed to pair lower, eyeing the 1.3000 handle again.  Technically speaking support floors look to be established by the current 10 and 20 moving averages, reinforcing the 1.3000 handle.  Should the momentum remain, bulls will be headed off by heavy selling interests above at 1.3065 and 1.3075 leading to a formidable road block at the even 1.3100 handle.  Downside selling looks to be seeing resumed bidding at the 1.2975 and 1.2950 figures.

Richard Lee is a Currency Strategist at FXCM.