By Jay Hawk at Orbex
Fundamental Currency Analysis
USD: The U.S. Dollar Index is currently up +0.0650 or +0.08% to 85.5600 after opening at 85.5650 in Asia earlier today. The Greenback is mixed against most major currencies after yesterday’s release of Pending Home Sales, which increased +0.3% m/m compared to an expected +1.1% rise. Today’s U.S. economic numbers will have Durable Goods Orders (+0.4%), Core Durable Goods Orders (+0.5%) and CB Consumer Confidence.
EUR: The Euro is trading fractionally higher against the U.S. Dollar today, after yesterday’s release of the German Ifo Business Climate index, which came out with a reading of 103.2 compared to an anticipated print of 104.6. Also, the EZ M3 Money Supply increased by +2.5% versus the +2.2% rise expected, and Eurozone Private Loans showed a -1.2% decline versus -1.3% anticipated. Today’s only Eurozone economic release scheduled was German Import Prices, which increased +0.3% m/m versus an expected decline of -0.1%.
GBP: Sterling is trading slightly higher against the U.S. Dollar today after yesterday’s release of UK CBI Realized Sales, which printed at 31 compared to an expected reading of 29. Also, in an interview with the UK Financial Times, deputy governor of the BOE, Minouche Shafik stated that, “We would need to see more of the data pointing in the same direction in terms of price pressures – particularly in terms of wages and unit labour costs (before raising interest rates),” she continued saying, “In terms of sustained domestic inflationary pressures, that’s going to be the ultimate test”. Later today, MPC member Jon Cunliffe will speak at the Cambridge Economics Curriculum Reform event.
JPY: The Japanese Yen is steady against the U.S. Dollar today in the wake of Japanese Retail Sales, which increased by +2.3% y/y compared to an anticipated increase of only +0.9%.
CHF: The Swiss Franc is trading slightly lower against the U.S. Dollar today in the absence of any significant economic data coming out of Switzerland until Thursday
AUD: The Australian Dollar strengthened against the Greenback today with no significant economic data expected out of Australia until Thursday.
CAD: The Canadian Dollar is gaining against the U.S. Dollar today with no Canadian economic numbers due out until tomorrow, when RMPI (1.5%) and a speech by BOC Governor Poloz are anticipated
NZD: The Kiwi is trading higher against the U.S. Dollar today with no significant data out of New Zealand until Wednesday’s RBNZ Official Cash Rate Decision (3.50%) and Rate Statement are due out.
USD/CAD currency pair shows the rate consolidating above the lower support trendline of its medium term up channel within a longer term up channel. In addition, the rate is trading above its gently rising 200 day Moving Average, and its 14 day RSI in the indicator box is falling mildly in central neutral territory. (See additional technical analysis in the section below.)
Technical Analysis for the Majors
EUR/USD: The Euro rose mildly this morning after rising yesterday to 1.2723. The rate is correcting higher after a downside break from its near term up trend that began at its recent 1.2500 low, suggesting a likely retest of that channel’s rising lower trendline now drawn at 1.2783. Medium term declining trendline resistance is now drawn at the 1.2811 level. Resistance is seen at 1.2705/14 and 1.2723/30, with support seen at 1.2695 and 1.2605/24. Its falling 200 day MA now lies at 1.3418, and its 14 day RSI is rising gently within central neutral territory to read at the 47.88 level. Its outlook is mildly bullish near term and bearish medium term.
USD/JPY: USD/JPY was unchanged this morning after falling to 107.60 yesterday, as the rate consolidates below its recent 108.34 high. This peak followed an upside break above a resistance trendline of a corrective down channel that came after its medium term 110.08 high. Support appears at 107.78 and 107.38/60, with resistance noted at 108.34 and 108.00. The rate’s 14 day RSI is falling gently within central neutral territory and now reads at the 52.65 level, and the rate is trading above its rising 200 day MA currently at 103.56. Its outlook is neutral near term and medium term.
GBP/USD: Cable rose slightly this morning after rallying to 1.6146 yesterday, as it corrects higher off its recent low of 1.5994. The rate is still trading below its 1.6183 high made near the upper resistance line of its medium term descending wedge pattern now drawn at 1.6134 that was retested yesterday. The rate remains above its 50.0% Fibonacci retracement level of its long term rally from 1.4812 to 1.7190 at 1.6001, with its 38.2% Fibo level providing theoretical resistance at 1.6282. Furthermore, the rate’s 200 day MA lies at 1.6663 with a falling slope, and its 14 day RSI is rising mildly within central neutral territory to read at the 49.35 level. Its outlook is bearish near term and medium term.
USD/CHF: The Swissy fell this morning after declining to 0.9476 yesterday, as the rate corrects lower off its recent 0.9559 high and remains between its previous 0.9360 low and 0.9683 high. The rate is reacting lower after retesting its recently broken near term up channel, the lower line of which is now drawn at 0.9588. In addition, the rate remains above its rising medium term trendline support line now drawn at 0.9266. Support is seen at 0.9467/76 and 0.9395/97, with resistance noted at 0.9559/61 and 0.9592/96. The rate’s 14 day RSI is falling slightly in central neutral territory and reads at the 49.74 level, and the rate is trading above its rising 200 day MA now situated at the 0.9058 level. Its outlook is bearish near term and bullish medium term.
AUD/USD: The Aussie rose to 0.8834 this morning after falling slightly yesterday, as it seems to be breaking up from a near term triangular pattern with a 256 pip initial width that would yield a pattern objective of 0.9061 once a sustained breakout is confirmed. The rate has just penetrated above the upper resistance line of this consolidation pattern now drawn at the 0.8805 level on an intraday basis. Resistance is seen at 0.8831/59 and 0.8897, with support noted at 0.8811/23 and 0.8743/46. The rate remains below its mildly falling 200 day MA now at 0.9207, and its 14 day RSI is rising in central neutral territory to read at the 52.34 level. Its outlook is bullish near term and neutral medium term.
USD/CAD: USD/CAD declined somewhat this morning after rising mildly yesterday, as it consolidates below its recent five year high at 1.1384 and above its rising near term support trendline now drawn at 1.1220 that was tested yesterday and held. A gently rising medium term support line is drawn below that at the 1.1043 level. Its 14 day RSI remains has fallen within central neutral territory to read at the 54.68 level, and the rate is trading above its mildly rising 200 day MA now at 1.0955. Its outlook is neutral near term and bullish medium term. (See highlighted chart above.)
NZD/USD: The Kiwi rose today to 0.7908, after also rising significantly yesterday, as it corrects upwards from its recent low at the 0.7791 level that reacted from a high at the 0.8032 level. The rate has been rising correctively from its recent similar lows of 0.7706 and 0.7712 within a medium term channel pattern, and it recently bounced from its lower support line now drawn at 0.7816. In addition, the rate’s medium term down channel resistance line is now situated at 0.7977 and may soon be retested. Support is noted at 0.7875/82 and 0.7830, with resistance seen at 0.7908 and 0.7927. Also, its 14 day RSI is rising within central neutral territory to read at the 49.51 level, and the rate remains below its falling 200 day MA now at 0.8442. Its outlook is bullish near term and bearish medium term.