It was a rollercoaster day of trading on Wednesday. The dollar gained ground in Europe only to quickly change course in North America trading. The star of the show was the USDJPY due to the BOJ pledge of an additional 10 trillion Yen of QE. Now that the dust has settled where does this leave us? Pretty much in the same place we were yesterday. The EURUSD and GBPUSD are still consolidating in narrow ranges. The USDCAD has barely budged over the last two days and the USDJPY is testing the lows of its weekly range. Yet the AUDUSD and NZDUSD are in interesting positions at the moment. The AUDUSD is testing the top of its ascending channel. A hold at this level could lead to a test of the bottom of the channel and the development of a head and shoulders pattern. The NZDUSD is of interest because its GDP report is due in early Asian trading. A number above or below expectations could knock this pair out of its current drift. As always keep your trades KEANE and play it safe.
EURUSD CONSOLIDATION IS THE GAME BUT FOR HOW LONG
The EURUSD continued to trade within a narrow range on Wednesday. The pair moved down to test support at 1.30 but could not find the conviction to break below. The cross has been trading in this style for over the last month or so. Slow range bound trading followed by a burst of action. It looks as though the trend will continue. A break of support at 1.30 favors a move lower towards 1.2820. Resistance doesn’t begin until 1.3170. German PPI is due in European trading Thursday. Economist are predicting a reading of 1.5%.
Keane Plan…Looking for a break of the range. Watching price action at the edges.
GBPUSD NOTHING TO SEE HERE
The GBPUSD tempted traders in early North American trading breaking below the weekly support at 1.62. The cross could not gather any strength from that point and quickly rebounded back into the range. The current range is between 1.6272 and 1.6180. A solid break of these levels is needed to test either support at 1.6130 or resistance at 1.64.
Sup 1.6180 1.6130
Res 1.6272 1.64
Keane Plan… Could play the range…but would rather look for a break.
AUDUSD TESTING CHANNEL TOP
The AUDUSD continued to slowly grind higher in a narrow channel on Wednesday. To say the pair was trading with any true conviction would be an overstatement. At the moment the cross seems content to register slightly higher highs and lower lows. A break of the channel could expose the pair to a move towards 1.0630/50 region. This level is composed by daily price resistance at 1.0630 and the monthly declining trend line that has capped price action near 1.0650. A push to the bottom of the trend line could find support as soon as 1.04.
Sup 1.0435 1.04
Res 1.0485 1.0630/50
Keane Plan…Watching price action at the channel top at 1.0485. A larger head and shoulder could be in the works.
NZDUSD IN A WEDGE AHEAD OF GDP
The NZDUSD GDP report will be the highlight of early Asian trading. Expectations are for a reading of 2.4%. Once again this number will be reviewed for any hints of economic activity with its Asian trading partners. A strong or weak number could dictate price action in the majors in Asian trading.
The NZDUSD is in a wedge that is rapidly closing in. The top of the wedge is created by resistance at .8300 and the bottom is created by an ascending trend line that currently rest around .8265. A break lower opens the pair up for a test of the support zone between .8220/.8185. A push to the topside could test recent highs around .8350.
Sup .8265 .8220/.8185
Res .83 .8350
KEANE Plan….watching the wedge….Waiting for a break in either direction.
USDCAD TOOK THE LAST TWO DAYS OFF
The USDCAD has been traveling in a narrow 30 pip range over the last two days. The cross has not lost ground as oil has tumbled. In the short-term as long as the pair does not close above the descending daily trend line that has contained price action since last February at .9675, the path of least resistance is higher. An inverse head and shoulders could be forming in the one hour chart. Resistance now rest at .9775.
Keane Plan…Looking for a break of resistance at .9775
USDJPY 10 Trillion Yen Wasn't Enough
The USDJPY went on a rollercoaster ride in early Asian trading Wednesday. After news surfaced that the BOJ expanded its monetary easing by 10 trillion yen the USDJPY moved higher to test trend line resistance at 79.20. The cross was quickly rebuffed at this level. From this point it will take a break of trend line resistance around 79.10 to send the pair higher. Until that point support can be found at the weekly low around 78.15.
Keane Plan…Watching price action near 78.15