1 Mar: Euro soft on Italian political outlook, US$ bid on better data ahead of global PMI’s today.


PMI data will be today’s highlight with China release likely to drive the Aud and Kiwi.

 

Ongoing concerns over the Italian political outlook and better than expected US data hurt the Euro and helped the dollar, in what has been a slightly quieter session. Global PMI data will be today’s highlight, with the Chinese release likely to drive direction in the Aud and Kiwi. EU employment data also to be released.

CURRENCIES
EUR/USD: 1.3075 Outlook
Res 1.3125 1.3160 1.3200 The Euro remains heavy as the market retain its focus on the potential political gridlock in Italy..……scroll down
Sup 1.3050 1.3015 1.3000
USD/JPY: 92.64 Outlook
Res 92.85 93.05 93.50 The dollar has had a pretty quiet session currently at the higher end of its 92.00/65 range..……scroll down
Sup 92.25 92.00 91.65
GBP/USD: 1.5175 Outlook
Res 1.5200 1.5220 1.5250 Cable has had a choppy session but has ended up going nowhere too far from this time yesterday..……scroll down
Sup 1.5150 1.5100 1.5075
USD/CHF: 0.9345 Outlook
Res 0.9365 0.9400 0.9430 Once again the dollar declined to the 0.9280 support, which again held, before a bounce to the resistance at 0.9335.……scroll down
Sup 0.9300 0.9280 0.9260
AUD/USD: 1.0231 Outlook
Res 1.0275 1.0290 1.0305 Yesterdays Capex numbers, although a little mixed, suggested that the likelihood of a March rate cut have been reduced from slim to negligible .……scroll down
Sup 1.0225 1.0200 1.0185
NZD/USD: 0.8285 Outlook
Res 0.8300 0.8325 0.8350 Having rallied early in the session following yesterday’s large jump in the Business Confidence data, the Kiwi has retreated ……scroll down
Sup 0.8265 0.8225 0.8200

Commodities / Indices
ASX SPI: 5070 Outlook
Res 5095 5100 5110 The SPI keeps driving higher. stay with it and raise stops to trend support, now at 5000
Sup 5050 5035 5020
S+P Futs: 1523 Outlook
Res 1525 1530 1540 Back near the top of the recent range. We need to break 1530 to accelerate, probably to the 2007 high at 1576. Before that happens, I remain wary that we are close to a top here as daily momentum does not look strong. Above 1530 would probably change that as fresh buying would likely evenutate..
Sup 1515 1500 1490
DJI Futs: 14125 Outlook
Res 14130 14200 14300 The Dow has passed the 14100 objective and looks headed towards 14200. Momentum is not strong though and I remain wary of a setback so raise stops now to 14000.
Sup 14050 14000 13900
GOLD: 1575 Outlook
Res 1585 1595 1605 Gold is looking sick again and 1520 once more looks to be the target. 1590/1600 is good resistance.
Sup 1565 1555 1525
SILVER: 28.40 Outlook
Res 28.70 29.00 29.50 Silver is heading towards 28.00. Fibo support is at current levels but a break would see an acceleration lower. resistance at 28.80 should cap it.
Sup 28.40 28.00 27.60
OIL(WTI): 91.60 Outlook
Res 92.25 92.75 93.15 Oil reached 93.15 but is currently undergoing a bit of a collapse – not sure why – having just fallen from 92.30 to 91.55. As we said yesterday a test of 90.00 looks likely in coming days. resistance now at 92.50 and then 93.00.
Sup 91.50 91.00 90.00

 


EUR/USD: 1.3075

 

The Euro remains heavy as the market retains its focus on the political gridlock in Italy, with the dollar being assisted today by US jobless claims that continue to show mild signs of improvement, better factory orders, and the Q4 US GDP, which rose 0.1 %, reversing the previous reading that showed a contraction, but less than the expected 0.5 % gain. In the EU, inflation data was released,  2.0% yoy, -1.0% mom, both as expected, while German unemployment was also pretty much as expected at 6.9 %.

Looking ahead, the automatic budget spending cuts come into place today unless US officials can come up with a last minute deal. This does not look to be affecting the market too much at this point given that the Dow has traded today at a new 5 year high, but the markets will be keeping one eye closely on the outcome amid concerns of how the lack of any breakthrough may affect global economic growth.

Technically, the Euro has, for the time being at least, run out of steam above 1.3150 and has retreated a little in what has been a reasonably quiet session.

The indicators are mixed and it looks to me as though the current range of between 1.30/1.32 could be with us for a while. On the topside there will be sellers now at 1.3125 and at the session high of 1.3160.  Beyond this Fibo resistance lies at 1.3180 (23.6% of 1.3710/1.3017) and I don’t think that we are heading too much above 1.3200, but if wrong, 1.3240 (minor) and 1.3280 (38.2%), where the top of the descending channel now lies, will see offers. The neckline of the Head/Shoulders is at 1.3300 and we have to allow a return to this, although it looks a little unlikely, but if we go above 1.3300, then the current medium term bearish view would need to be reassessed.

Today’s low has been 1.3053 where the short term support now lies with further buyers likely to be seen at 1.3040  (yesterday’s low), 1.3017 ( Mondays low) and then 1.3000, which  will provide solid support, with 1.2995 being the 100% correction of the move up to 1.3710. Below here, there could be a bit of an acceleration lower, with the next support not really to be found until 1.2905 (76.4% of 1.2671/1.3710) and then more bids should be seen at 1.2875 (7 Dec low), but eventually, as previously mentioned, I would be looking for a test of the Head & Shoulder objective of 1.2840.

For today look for 1.3000/1.3150 to contain it although there is plenty of data out today that may provide some volatility, with German Retail sales, the PMI’s and the US CPI being the highlights.  It could get a bit choppy but I don’t think going anywhere too far and my preferred strategy remains to sell rallies towards 1.3200, looking for an eventual break of 1.3000 and lower. If the PMIs are weak out of Europe, the chances of any meaningful Euro rally will diminish.

Economic data highlights will include:

NBS Official, HSBC China Mfg PMI, EU/US Mfg PMI (Feb), EU Unemployment Change, US CPI, Personal Spending, ISM Mfg PMI (Feb), Reuters/Michigan Consumer Sentiment Index (Feb)

Meta Trader – AxiTrader
EUR/USD: 4 hour


USD/JPY: 92.65

 

The dollar has had a pretty quiet session until a late spike to 92.85 and currently sits at 92.65. The official naming of the new BOJ Governor, Kuroda, earlier in the day had little effect, although this is yet to be passed by parliament.

Technically not too much has changed and 92.65 remains the short term pivot (50% of 94.48/90.85). A sustained break higher might see a bit of an acceleration towards 93.05 (61.8% of 94.48/90.85) and eventually to 93.60 (76.4%) although probably not today.

A return to the downside would find bids at near term bids at 92.20 and then at 92.00 and at 91.70.

The indicators still continue to fight each other for direction and therefore, while it may be a bit choppy, I don’t think we are heading too far in either direction. It is a Friday though, and once NY have it to themselves they may decide to rearrange the furniture a little, so keep stops tight. For the time being, although I think the dollar will eventually head higher, the dailies are still pointing lower as they continue to unwind, and therefore it may not be until next week when we get any real directional movement.

Today look for 92.20/93.00 to cover it.

Economic data highlights will include:

CPI, Unemployment

Meta Trader – AxiTrader
USD/JPY: 1 hour


GBP/USD: 1.5175

 

Cable has had a choppy session but has ended up going nowhere too far from this time yesterday. Having taken out some stops above 1.5180 in early Europe, a quick run higher to 1.5220 was reversed and it has traded pretty much within a 1.5150/1.5200 ever since.

The charts continue to recover from their oversold condition and for the time being 1.5150 looks like holding the downside. Below this, 1.5100 and the double bottom at 1.5070 provide good support above 1.5000. The 4 hour charts continue to have positive momentum and again today, I suspect that short term dips may be buying opportunities for intraday traders looking for a move back towards/above 1.5200.

On the topside today’s 1.5220 high is the immediate target above which 1.5250 and 1.5300 would attract, albeit probably not today.

In the longer term, the dailies still point lower and thus if we do see 1.5250/1.5300 or thereabouts, this may be a selling opportunity for the next leg to the downside. The dailies are oversold though and thus it maybe that we need to do some work next week in the 1.50/1.53 area to allow them to unwind.

Economic data highlights will include:

UK Mfg PMI (Feb), Consumer Credit

Meta Trader – AxiTrader
GBP/USD: 4 hour


USD/CHF: 0.9345

 

Once again the dollar declined to the 0.9280 support, which again held, before a bounce to the resistance at 0.9335. We are currently in the process of finally overcoming this level and currently sit at 0.9343.

The indicators still look a bit unconvinced about further gains, but for those who did buy the dip, they should now raise stops to 0.9300 . A break would see a retest of 0.9280 and below there would suggest 0.9260 and possibly 0.9230.

TThe downside is not the favoured direction though, and more likely we see a slow grind towards 0.9400.

Meta Trader – AxiTrader
USD/CHF: 4 hour


AUD/USD: 1.0215

 

Yesterdays Capex numbers, although a little mixed, suggested that the likelihood of a March rate cut have been reduced from slim to negligible and caused the Aud to remain bid throughout much of the first half of the session.

Once Europe arrived, the Aud turned itself around and we saw a slow drift lower to current levels, where we currently sit at session lows.

Today’s focus will be on the China Manufacturing PMI. The official reading is expected to show a reading of 50.3 and after that we also get the HSBC number, so it may get a bit choppy at around lunchtime.

All things being equal though, I don’t think we are going anywhere too far today and another session within 1.0190/1.0250 may be in store. The 4 hour charts are reasonably well supported on dips to below 1.0200 and I don’t really think we are going below this today unless the official PMI goes below 50.00. If that does occur,  the pressure would build to the downside, where further bids would be seen at 1.0185 and 1.0150.

The topside will find sellers again at 1.0250, 1.0275 and then at the session high at 1.0290, where the descending trendline resistance now lies, although I don’t think we are likely to see this today. If wrong, a break would see some stops triggered which would cause an acceleration towards Fibo resistance at 1.0330 (38.2% of 1.0577/1.0182).

For the time being, still prefer to sell rallies towards 1.0275 for an eventual test of 1.0150.

Economic data highlights will include:

China Mfg PMI.

Meta Trader – AxiTrader
AUD/USD: 4 hour


NZD/USD: 0.8265

 

Having rallied early in the session following yesterday’s large jump in the Business Confidence data, the Kiwi has retreated from its 0.8323 high to be back below 0.8300 and currently looks a bit heavy although the 4 hour charts suggest that the downside should be limited in the short term.

Today it looks as though 0.8250/0.8300 may cover it, with any direction likely to be driven by the China PMI data, although before then we get the NZ Terms of Trade which may give the Kiwi a nudge.

In the medium term, the dailies still point lower and therefore the preferred strategy remains to sell rallies in looking for the next leg towards 0.8200

Economic data highlights will include:

NZ Terms of Trade, China Mfg PMI.

 

Meta Trader – AxiTrader
NZD/USD: 4 Hour

 

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