Fundamental Currency Analysis
06 October 2014 Guest post by Jay Hawk at Orbex.
USD: The U.S. Dollar Index is currently off -0.1690 or -0.19% to 86.5250 after opening the day at 86.6590 in Asia. The Greenback is broadly lower against all major currencies, selling off correctively after Friday’s sharp rise. The U.S. Dollar sharp rise on Friday followed better than expected U.S. Non-Farm Payrolls and Trade Balance releases. No economic data is expected out of the United States until Tuesday.
EUR: The Euro is trading fractionally higher against the U.S. Dollar today despite German Factory Orders declining by -5.7% m/m compared to an expected decline of only -2.4%, with the previous number revised modestly higher from +4.6% to +4.9%.
GBP: Sterling is trading steady against the U.S. Dollar today in the absence of any significant economic releases out of the UK. No economic data releases are expected out of the UK until Tuesday.
JPY: The Japanese Yen is currently trading higher against the Greenback after making a six year low last week, and ahead of tomorrow’s Bank of Japan monetary policy decision.
CHF: The Swiss Franc is trading fractionally higher against the U.S. Dollar today in the absence of any economic data out of Switzerland until Tuesday.
AUD: The Aussie is higher against the Greenback today after making an eight month low last week. The Aussie is gaining despite ANZ Job Advertisements increasing only +0.9% m/m compared to a previous reading of +1.6%. Also out was the MI Inflation Gauge, which gained +0.1% m/m versus a previous flat reading. The AIG Construction Index (55.0 last) is set to be released later today.
CAD: The Loonie is gaining against the Greenback today ahead of Ivey PMI (53.4), which is scheduled for release later today.
NZD: The Kiwi is trading higher against the U.S. Dollar today ahead of the release of NZIER Business Confidence (32 last) later today.
Technical Analysis for the Majors
EUR/USD: The Euro rose to 1.2535 this morning after having a rather flat day yesterday and a very weak day on Friday. Support is noted at 1.2497 and 1.2508, with resistance seen at 1.2613 and 1.2570. Its falling 200 day MA now lies at 1.3516, and its 14 day RSI remains in oversold territory at the 24.95 level. Its outlook is neutral near term but bearish medium term.
USD/JPY: USD/JPY fell this morning to 109.35 after rising mildly yesterday and strongly on Friday. Resistance appears at the recent six year high of 110.08 and at 109.90, with support noted at 109.35 and 109.45/53. The rate’s 14 day RSI remains in upper neutral territory at the 64.19 level, and the rate is trading above its rising 200 day MA currently at 103.08. Its outlook is neutral near term and bullish medium term.
GBP/USD: Cable came off to the 1.5953 level this morning after a flat day yesterday and a strong down day on Friday. The rate has fallen below theoretical resistance at the 50.0% Fibonacci retracement level of its long term rally from 1.4812 to 1.7190 at 1.6001, with the 61.8% Fibo level providing theoretical support at 1.5720. Also, the rate’s 200 day MA lies at 1.6720 with a falling slope, and its 14 day RSI has fallen back into oversold territory to read at the 26.58 level. Its outlook is bearish near term and medium term. (See highlighted chart above.)
USD/CHF: The Swissy corrected lower to 0.9662 this morning after falling slightly yesterday in the wake of Friday’s big rise to a new recent high at the 0.9683 level seen on Friday. Support is now seen at 0.9595/96 and 0.9516/40. The rate’s 14 day RSI is reading in overbought territory at the 75.98 level, and the rate is trading comfortably above its rising 200 day MA now situated at the 0.8997 level. Its outlook is neutral near term and bullish medium term.
AUD/USD: The Aussie rose correctively to 0.8721 today after a neutral day yesterday in the wake of its decline to a new recent low at the 0.8641 level on Friday. The rate is still trading above its recently broken medium term down trend line now drawn at 0.8644. Resistance is seen at 0.8747 and 0.8763/73, with support noted at 0.8662/83 and 0.8641. The rate remains below its falling 200 day MA now at 0.9228, and its 14 day RSI has returned to lower neutral territory at the 34.38 level. Its outlook is neutral near term and bearish medium term.
USD/CAD: USD/CAD fell to 1.1217 today after doing little yesterday despite rising to a new recently high at the 1.1296 level on Friday. The rate remains below its recently broken near term up trend support line now drawn at 1.1273. Its 14 day RSI now reads in upper neutral territory at the 65.36 level, and the rate is situated above its gently rising 200 day MA now at 1.0939. Its outlook is neutral near term and bullish medium term.
NZD/USD: The Kiwi fell to 0.7712 before bouncing to 0.7792 this morning after having a neutral day yesterday in the wake of Friday’s strong decline to 0.7735. The rate is currently trading below the lower support line of its medium term down channel currently situated at 0.7863. Its 14 day RSI remains just inside lower neutral territory at the 32.70 level, and the rate is trading well below its falling 200 day MA now at 0.8487. Resistance is noted at 0.7816/59 and 0.7927, with support seen at 0.7737/46 and 0.7706/12. Its outlook is bearish near term and medium term.