|EurUsd has had a choppy session without breaking any new ground and is finishing the day near to where it starts, currently at 1.2410.|
|1 hour/4 hour indicators: Neutral||Daily Indicators: Up||Weekly Indicators: Turning higher|
|Preferred Strategy: With the short term momentum indicators now in neutral a cautious stance seems wise. The longer term charts still hint that the dollar downtrend does remain intact although we may be approaching a top for the Euro and I would not be entering new longs as we approach 1.2500, particularly if US yields start to accelerate higher and outpace Bund yields. On the downside, below today’s low of 1.2388 would then allow a run back towards the 29 Jan low of 1.2335, below which there is Fibo support at 1.2305. A break of 1.2300 would then allow a move towards 1.2225.
With the daily/weekly charts still looking positive though, any weakness may be short lived and buying any dips may still be the medium term trade. The session high of 1.2275, along with the 100 MMA/200 MMA will continue to provide stiff resistance, but above 1.2500 would then target 1.2538, beyond which would open 1.2650. In the meantime, we can probably expect a choppy session while waiting on tomorrow’s NFP, although the EU PMIs are likely to underpin the Euro today.
|1.2538||25 Jan high||1.2388||Session low|
|1.2500||(38.2% of 1.6037/1.0340)||1.2360||200 HMA|
|1.2475||Session high||1.2336/34||28 Jan/29 Jan low|
|1.2460||100 MMA||1.2305||(23.6% of 1.1553/1.2537)|
Economic data highlights will include:
EU Manufacturing PMIs, US Jobless Claims, ISM Mfg PMI/Prices Paid, Construction Spending, Total Vehicle
|US$Jpy is back above 109.00, assisted in part by the comments from the BOJ that the current easing policy is still required, with the FOMC having little influence in the overall direction as the dollar struggles to take out the 109.20 resistance, although it did briefly touch 109.44, before giving up those gains and heading back to safer ground by the end of the session.|
|1 hour/4 hour indicators: Turning higher||Daily Indicators: Neutral -Turning lower – Possible basing formation.||Weekly Indicators: Neutral|
|Preferred Strategy: The short term momentum indicators are still looking a little more positive and if 109.20 can be overcome then we should be able to take another look at the session high. Beyond there, look for a run back towards 109.70/80 and possibly onto 110.20, where Fibo resistance may well cap any further gains ahead of tomorrow’s US jobs data.
The longer term charts still look heavy, although the dailies seem to be basing and if we head back below the session low of 108.59, it may be that we see a return towards the 29 Jan low of 108.40, below which would head to the 26 Jan low of 108.27. A break of this would then find little to hold the dollar up until rising trend support at 107.50 and the 2017 low at 107.32.
Allowing for a dip, the short term momentum indicators still suggest that we should be looking to buy into weakness, but with a tight SL in place.
Buy US$Jpy @ 108.60. SL @ 108.15, TP @ 106.65
|110.22||(38.2% of 111.38/108.27)||108.59||Session low|
|110.00||Minor||108.40||29 Jan low|
|109.76||26 Jan high||108.27||26 Jan low|
|109.47||(23.6% of 111.38/108.27)/200 HMA||108.00||Minor|
|109.44||Session high||107.70||Rising trend support|
|Sterling had a choppy session, falling to 1.4121 after EU officials rejected the City of London’s Brexit blueprint for banks before rallying strongly into the London month-end fix, reaching 1.4213 and then ending the day at 1.4190.|
|1 hour/4 hour indicators: Turning higher||Daily Indicators: Up – Possible topping formation.||Weekly Indicators: Up|
|Preferred Strategy: Cable remains very choppy and is probably best left alone right now. It would seem to be roughly in a range of 1.4000/1.4300 so look to trade that, or possibly 1.4100/1.4250, with a tight 50 point stop placed either side.|
|1.4287||26 Jan high||1.4090||200 HMA|
|1.4232||Session high||1.4035||(23.6% of 1.3039/1.4344)|
|1 hour/4 hour indicators: Turning higher||Daily Indicators: Down||Weekly Indicators: Turning lower|
|Preferred Strategy: As before, the longer term charts look heavy, and if the support at 0.9288, where we now have a double bottom, does get taken out we could head quickly to the August 2015 low at 0.9257, below which there is a black hole until around 0.9150.
The shorter term charts though look a little more positive though, and on the topside, resistance will again be seen at the session high and then at 0.9380/90, a break of which could see the dollar carry on to the 26 Jan high 0.9430. Given the positive momentum of the 4 hour charts, buying dips for the next 24 hours is mildly preferred although another choppy session, waiting on tomorrow’s US jobs figure, would not surprise.
|0.9452||(23.6% of 0.9977/0.9288)||0.9288||25 Jan low /Session low|
|0.9430||26 Jan high||0.9257||Aug 2015 low|
|0.9392||29 Jan high||0.9210||Minor|
|AudUsd had a choppy session, and having fallen to a low of 0.8044 in the aftermath of yesterday’s CPI miss, it then managed to rally to 0.8116 before falling sharply back to the lows, reaching 0.8035 ahead of a mild bounce into the close to sit right on the 200 MMA at 0.8055. It could be a busy session ahead, with the December building approvals, the AIG Performance of Mfg Index and China Jan Caixin Mfg PMI being the data risks in Asia.|
|1 hour/4 hour indicators: Turning lower||Daily Indicators: Up – Becoming Overbought||Weekly Indicators: Neutral – Turning higher|
|Preferred Strategy: After a choppy session on Wednesday, the short term momentum indicators are now pointing lower and if 0.8035/40 is broken it would open the chance of a run towards 0.7985 and possibly to 0.7950. While the dailies are looking rather toppish, the longer term uptrend remains intact, and back above 0.8100/15, and the recent high of 0.8135, could then see a move towards the May 2015 high. If that (0.8162) is taken out then we might expect to see a run towards 0.8200 and higher, with little resistance seen until 0.8245/90.
For today I prefer to sell into rallies but wait for the data, where strong figures could see a return towards 0.8100.
Sell AudUsd @ 0.8100. SL @ 0.8120, TP @ 0.7985
|0.8162||May 2015 high||0.8040/35||Rising trend support/Session low|
|0.8135||26 Jan high||0.8004||26 Jan low|
|0.8117/13||Session high /29 Jan high||0.7985||(38.2% of 0.7502/0.8135)|
|0.8180||Minor||0.7956||23 Jan low|
|0.8055||200 MMA||0.7936||16 Jan low|
Economic data highlights will include:
AIG Performance of Mfg Index, Import/Export Index, Building Permits (Dec), Caixin China Manufacturing PMI, RBA Commodity Price Index
|The Kiwi is at 0.7365 after a 0.7325/0.7419 range, having been pushed around by AudNzd flows and then by the gyrations in the US bond market..|
|1 hour/4 hour indicators: Neutral||Daily Indicators: Possible topping formation.||Weekly Indicators: Turning higher|
|Preferred Strategy: As before, the daily charts remain positive but look increasingly toppish, and selling rallies may now be the plan, although if the US$ remains under pressure it may be better to trade it through the crosses. Against the US$, the Kiwi needs to hold above 0.7280/90, below which would break below the rising trend support, possibly signalling that a longer term top is in place and opening the downside towards 0.7185/0.7215. On the topside, resistance will be seen at 0.7400/15, but above which could see a run back towards 0.7435. The direction of US yields will provide the overall direction, and they look to be heading higher so I would tend towards being short the Kiwi above 0.7400, but with a SL placed above 0.7450 as we could then see a run back to the July 2017 high of 0.7557.|
|0.7434/30||20 Sept high/25 Jan high||0.7325||Session high|
|0.7419||Session high||0.7290||26 Jan low /Rising trend support|
|0.7400||Minor||0.7279||29 Jan low/(23.6% of 0.6780/0.7433)|