US$ is mixed but remains under pressure after US Senate resolved Govt shutdown.
EUR underpinned, assisted by Spain upgrade from Fitch.
Cable at new highs after Macron hints on Brexit deal. EUR/GBP cracks below 200 DMA.
Central bank meetings ahead, with expectations for BOJ (today), ECB (Thur) to make a rhetorical shift in their outlook although no change to policy is expected form either
Stock markets head higher, S&P & DJI at new record.
| EURUSD: 1.2259 |
| EurUsd made some early minor gains but then gave up on the topside as news of the US senate deal became apparent and traders now seem to be on hold while waiting on Thursday’s ECB meeting. Note that the ECB’s Draghi & Coeure will participate in today’s Eurogroup meeting and the annual junket to Davos also starts today. | |||||
| 1 hour/4 hour indicators:Neutral | Daily Indicators: Up | Weekly Indicators: Turning higher | |||
| Preferred Strategy: A neutral stance seems prudent on Tuesday, and with just the ZEW in focus on the calendar another day of 1.2200/1.2300 would not surprise, although the daily charts do look positive and a return to the trend high should not be discounted either. Buying dips is preferred.Buy EurUsd @ 1.2185. SL @ 1.2280, TP @ 1.2135 | |||||
| Resistance | Support | ||||
| 1.2335 | Minor | 1.2213 | Session low | ||
| 1.2322 | 17 Jan high | 1.2165 | 17 Jan low | ||
| 1.2295 | 19 Jan low | 1.2140 | 23.6% of 1.1553/1.2295/200 HMA | ||
| 1.2275 | H/S Neckline | 1.2120 | Minor | ||
| 1.2270 | Session high | 1.2100 | Minor | ||
Economic data highlights will include:
EcoFin Meeting, German/EU ZEW Economic Sentiment Survey, EU Preliminary Consumer Confidence (Jan), Richmond Fed Mfg Index, World Economic Forum- Davos
…
| USDJPY: 110.95 |
| US$Jpy traded higher after finding support at 110.50, with some shots seen squaring up ahead of today’s BOJ meeting. The pair has traded up to 111.20, currently at 110.00. No change is expected to policy but Kuroda will attempt to sound positive that inflation will finally reach the BOJ target while at the same time keeping the QE program in place, attempting to weaken the Yen. | |||||
| 1 hour/4 hour indicators:Turning higher | Daily Indicators: Turning lower | Weekly Indicators: Neutral | |||
| Preferred Strategy: A neutral stance is required ahead of the BOJ. The short term momentum indicators look constructive, although the medium term charts do hint that the dollar is going remain under some pressure in the day’s ahead. If so, there will be a fair bit of support near 110.00 so any downside momentum, if seen, should be fairly slow. Just looking at the 4 hour chart, it does seem as though a basing formation may be building. Buying EurJpy may be a plan. | |||||
| Resistance | Support | ||||
| 112.20 | 100 DMA | 110.85 | 100 HMA | ||
| 111.70 | 200 DMA | 110.48 | 19 Jan low/Session low | ||
| 111.47 | 18 Jan high | 110.19 | 17 Jan low | ||
| 111.21 | Session high | 110.00 | Rising trend support | ||
| 111.00 | Pivot | 109.90 | 100 WMA | ||
Economic data highlights will include:
BOJ Interest Rate Decision/Statement/Press Conference/Outlook
…
| GBPUSD: 1.3983 |
| Sterling has had another solid session, making new post-Brexit highs, just 10 points short of 1.4000, underpinned by some positive comments from France’s Macron, and looking as though it could take out the nearby resistance, for further gains ahead. | |||||
| 1 hour/4 hour indicators: Turning higher | Daily Indicators: Up | Weekly Indicators: Up | |||
| Preferred Strategy: Cable looks increasingly positive, and with the daily/weekly momentum indicators aligning higher, a test of 140.00/1.41 would not surprise. If we do break 1.4000, there is not much resistance ahead of 1.4130/50 and even that is only minor, with the next major Fibo level not seen until 1.4250 (76.4% of 1.5017/1.1821). The 4 hour charts show some bearish divergence so waiting to buy dips would seem the best laid plan. | |||||
| Resistance | Support | ||||
| 1.4130 | Minor | 1.3945 | Minor | ||
| 1.4100 | Minor | 1.3880 | Minor | ||
| 1.4050 | Minor | 1.3835 | Minor | ||
| 1.4000 | Psychological | 1.3800 | Minor | ||
| 1.3988 | Session high | 1.3775 | Minor | ||
Economic data highlights will include:
PSNBR (Dec), CBI Distributive Trade Survey – Orders (June)
…
| USDCHF: 0.9621 |
| US$Chf is unchanged today after a tight 45 point range. | |||||
| 1 hour/4 hour indicators:Turning higher? | Daily Indicators: Turning lower | Weekly Indicators: Neutral | |||
| Preferred Strategy: As with yesterday, the daily charts look heavy but the 4 hour momentum indicators remain constructive on Tuesday, hinting that we could then see a retest of the 0.9650/65 area, above which could see a return towards 0.9700/20. On the downside, support will again be seen at 0.9590/0.9600 and again at 0.9570. I don’t think we see it here today but if wrong, look for a return to the strong support area at 0.9550 and then again at 0.9535, below which could open the way to 0.9500. | |||||
| Resistance | Support | ||||
| 0.9700 | 38.2% of 1.0004 /0.9535 | 0.9591 | Session low | ||
| 0.9665 | 18 Jan high | 0.9570 | 17 Jan low | ||
| 0.9650 | 17 Jan high | 0.9550 | 100 MMA /Rising trend support | ||
| 0.9637 | (23.6% of 1.0004 /0.9535)/Session high | 0.9535 | 19 Jan low | ||
| 0.9625 | Minor | 0.9515 | Minor | ||
…
| AUDUSD: 0.8014 |
| AudUsd is still trading at close to 0.8000, after climbing from the 0.7978 Asian low to a European/US high of 0.8026. | |||||
| 1 hour/4 hour indicators:Neutral | Daily Indicators: Up – Becoming Overbought | Weekly Indicators: Neutral – Turning higher? | |||
| Preferred Strategy: The longer term uptrend remains intact, although the daily charts warn of a correction, with the appearance of some bearish divergence in the 4 hour charts. It is a fairly light data calendar this week and a long w/e in Australia on Friday so external factors will drive price action. Right now a neutral stance seems best although I suspect that we may now be looking for areas to sell AudUsd, but with a tight stop loss in place. Note that the 200 MMA lies at 0.8055, which should be strong resistance.Sell AudUsd @ 0.8035. SL @ 0.8065, TP @ 0.7950 | |||||
| Resistance | Support | ||||
| 0.8102 | 20 Sept high | 0.8000 | Pivot | ||
| 0.8080 | Minor | 0.7978 | Session low | ||
| 0.8055 | 200 MMA | 0.7960 | Minor | ||
| 0.8036/38 | 21 Sept High/19 Jan high | 0.7940 | 17 Jan low | ||
| 0.8026 | Session high | 0.7900/10 | 23.6% of 0.7510/0.7998 / Rising trend support | ||
…
| NZDUSD: 0.7319 |
| The Kiwi is trading higher after a lift above 0.7300 in early European trade, reaching 0.8328 before settling near 0.7310/15. | |||||
| 1 hour/4 hour indicators:Turning higher | Daily Indicators: Up Possible topping formation. | Weekly Indicators: Turning higher | |||
| Preferred Strategy: While the medium term charts look constructive for further gains, buying dips would seem to be the plan although I am reluctant to get long given that the dailies are now becoming overbought. The short term momentum indicators also look positive though so I would not be looking to sell it here. Note the minor double top immediately ahead which may provide interim resistance, but with stop likely above 0.7340/45. Stand aside. | |||||
| Resistance | Support | ||||
| 0.7400 | Minor | 0.7300 | Pivot | ||
| 0.7375 | (76.4% of 0.7557/0.6780) | 0.7267 | Session low | ||
| 0.7360 | Minor | 0.7245 | 18 Jan low | ||
| 0.7343 | 22 Sept high | 0.7215 | Minor | ||
| 0.7330/29 | 17 Jan high/Session high | 0.7200 | (23.6% of 6780/0.7330) | ||
By January 23, 2018
Source: FXCharts