Australian, EU GDP will be the days highlight. Otherwise more consolidation likely ahead of ECB, BOE, BOJ tomorrow.
It has been a reasonably steady session for the currencies, with the headlines being grabbed by the all time highs in the Dow Jones Index. Aud and Kiwi remain bid following yesterday’s recovery from recent low and today’s Australian GDP will provide the next directional move.
|Res||1.3070||1.3100||1.3120||The Euro has been steady against the dollar today in a session that saw it rise mildly , early on, due to the better than expected EU services PMI… …..scroll down|
|Res||93.70||94.00||94.50||The dollar has recovered from its mild sell-off to 92.91 and is now pretty much unchanged from this time yesterday.. …..scroll down|
|Res||1.5150||1.5200||1.5215||Cable is pretty much unchanged from this time yesterday, having tested and retreated from a session high of 1.5198 after it was assisted higher by the UK Services PMI… …..scroll down|
|Res||0.9430||0.9460||0.9510||The dollar has done very little again today, having traded a 40 point range above 0.9400… …..scroll down|
|Res||1.0270||1.0290||1.0330||The Aud has not really looked back from this time yesterday, despite the cautious outlook from the RBA … …..scroll down|
|Res||0.8325||0.8360||0.8380||The Kiwi has headed higher to the resistance at 0.8325 …..scroll down|
|Commodities / Indices|
|ASX SPI: 5080||Outlook|
|Res||5095||5100||5115||The SPI sits near its high but momentum is not really supportive of further gains. Stay with the trend but keep SL in place at 5000.|
|S+P Futs: 1538||Outlook|
|Res||1540||1550||1565||The short term momentum carried the S+P higher as we thought might happen and in the short term we may see further gains towards 1550. The dailies are warning us not to be too confident and I remain wary of a downside correction, but good support now lies in the 1490/1500 area.|
|DJI Futs: 14235||Outlook|
|Res||14265||14300||14350||Has made all time highs today and we are in blue sky territory. I remain very cautious, and while respecting the trend, stay with it, but keep SL firmly in place, now at around 14100.|
|Res||1585||1590||1600||No change. More trade either side of current levels looks likely, with a mild short term bias towards 1590/1600, but in the longer term still looking for a test of 1520.|
|Res||29.00||29.20||29.50||No change after a brief test of 29.00. More sideways trade looks likely within 28.00/29.00|
|Res||91.15||91.75||92.75||90.00/91.00 has covered it, with the price squeezing a bit higher and further gains towards 91.15 and possibly 91.80 looking possible. Good support now at 90.00. Don’t think we see it under 89.40 for a while now, although eventually see a return towards 87.00 and possibly 85.00.|
The Euro has been reasonably steady against the dollar today in a session that saw it rise mildly , early on, due to the better than expected EU services PMI, only to drift a little lower later, when the US ISM Non manufacturing PMI came in a bit stronger than had been expected, giving the dollar a boost. The Euro is now pretty much unchanged from this time yesterday and the bigger news of the day came from the Dow, which after weeks of chopping around, finally reached an all time high. In futures terms it has reached 14267. The S+P has so far been to 1541- still 35 points from its 2007 high.
Technically little has changed for the Euro apart from the fact that it has been to the minor 1.3070 (high 1.3074) resistance, from where it has backed off for the time being.
Should we see another test of this level, a break would take us towards, the 100 DMA, now at 1.3118 and possibly 1.3140 (23.6% of 1.3710/1.2966), while the top of the channel is now at 1.3215. In the short term the 4 hour charts are showing some mild positive momentum, which may drag the Euro a little higher, if only to give us better levels to sell into in looking for the greater move to the downside towards the medium term Head/Shoulder objective at 1.2840. A return towards 1.3100 would not surprise before we head lower.
On the downside, below today’s 1.3010 low would find bids at Friday’s base at 1.2965 and below here, 1. 2915 is the 76.4% Fibo support of 1.2660/1.3710. If we trade below this, 1.2875 (50% of 1.2042/1.3710) lies ahead of the H/S objective at 1.2840 , which in turn, is backed up by the 200 DMA at 1.2830, so the support in the 1.2830/75 area is going to be strong and would suggest a good area to buy back some shorts.
Today, I suspect that we are in for another tight session, probably rangebound, ahead of the ECB rate decision tomorrow, although today’s EU GDP could provide some interim volatility. With the NFP looming on Friday I dont think we are going anywhere too far and in the meantime, use 1.3000/1.31000 as a guide
Economic data highlights will include:
EU GDP, US ADP Employment, Beige Book.
The dollar has recovered from its mild sell-off to 92.91 earlier in the day, and is now pretty much unchanged from this time yesterday.
Nothing has changed from a technical perspective, and ahead of tomorrow’s BOJ meeting it looks likely that we will stay within the recent 92.50/94.00 range.
Today’s low looks reasonably well supported and may well hold, although a break lower would suggest a test of 92.65. This looks unlikely at present.
On the topside, a return to, and break of 93.70, would suggest further progress towards major Fibo resistance at 94.03 (38.2% of 124.13/75.56 – see daily chart from the weekend outlook) and then to 94.48 (25 Feb high) and eventually towards the important 94.97 May 2010 high.
Today seems likely to continue the 93.00/94.00 consolidation.
Cable is pretty much unchanged from this time yesterday, having tested and retreated from a session high of 1.5198 after it was assisted by the UK Services PMI, which unexpectedly rose to 51.8 in February, a five month high.
It has done pretty much as we hoped in rallying before turning lower again. I was hoping that it would now continue to the south side, but right now that looks a bit limited and I suspect that we have to spend some more time, not too far removed from 1.5100 before we see anything directional and prior to the BOE meeting on Thursday, a session of consolidation would not surprise.
On the topside, I think 1.5200 should continue to cap it ahead of further sellers at 1.5215. A break of this, although rather doubtful in the short term would head to strong resistance at 1.5310 and I don’t think we are going to break this in the near term.
A return to the downside, would see bids at 1.5070 and at 1.5000, which looks equally unlikely in the next couple of days.
Use 1.5070/1.5200 as a guide, with dips once again looking like buying opportunities for another test of today’s highs, but probably going nowhere very far in either direction.
The dollar has done very little again today, having traded a 40 point range above 0.9400.
Technically, there is nothing to add to yesterdays report and the 200 DMA at 0.9430 continues to provide the first hurdle ahead of Fridays 0.9462 high. Above that lies the major channel top at 0.9511 which coincides with the 13 Nov 12 high, and thus should prove strong resistance..
On the downside, 0.9400 and 0.9385 (both minor) should both continue see bids, below which lies the more important 0.9335 area but which looks doubtful today.
The 4 hour charts suggest a minor test of the downside again today but overall, I suspect that dips will continue to provide buying opportunities.
The Aud has not really looked back from this time yesterday, despite the cautious outlook from the RBA , and currently sits near its highs, helped along in the US session by the buoyant mood in the equities markets.
Today’s interest comes from the release of the Q4 GDP which is expected to grow by 0.6% (3.1% y.y.) and until then it should be pretty quiet. A better number will squeeze the shorts and if we see it above 1.03, it could begin to accelerate higher.
Technically, the 4 hour charts show the possibility of further gains towards the top of the channel, currently at 1.0270. With momentum looking positive, this could be taken out, although there are good sellers in the 1.0270/80 area, for a move on to the Fibo resistance at 1.0290 (38.2% 1.0577/1.0115). If we get beyond that, 1.0330 would come into sight and possibly even 1.0360/70 area.
On the downside, 1.0220 and then 1.0200 provide interim support, although this looks unlikely in the short term unless the GDP is a very poor reading. Below 1.0200 would see bids layered down to Mondays 1.0115 low, but that is for another day.
In the longer term, until we see a break of 1.0290, continue to use the channel as a guide with an eventual return to the downside being favoured, although this could take a few days to eventuate.
The Kiwi has headed higher to the resistance at 0.8330 and with the 4 hour momentum looking positive we could be in for further gains towards 0.8360 (50% of 0.8533/0.8192).
On the downside, there are now bids at 0.8300 and at 0.8280 with stronger buying interest seen at 0.8250.
Overall it looks as though the choppy conditions are going to continue, but for now, the market looks to be caught a little bit short and any dips look likely to meet good buying interest and advances towards 0.8400 would not surprise in the next couple of days.
Use 0.8280/0.8360 as a guide today.