U.S. dollar mixed after soft EU, upbeat US data. Aud, Kiwi firm. German IFO, US Consumer Confidence.

Aud, Kiwi enjoy a good session care of China data. Suspect some consolidation near current levels today.

Softer EU PMI’s kept the pressure on the Euro but the US$ was unable to make any real headway and most currencies, with the exceptions of the AUD & NZD, which had a positive session following the Chines data, remain pretty much within their recent ranges. It could be a similar day today, although the German IFO and the US Consumer Confidence & Housing data may provide some volatility. More likely, I suspect we remain close to current levels ahead of tomorrows US GDP, Durable Goods Orders.

EUR/USD: 1.3600

The Euro has remained pretty much rangebound after the softer than hoped for EU PMI’s, with France once again appearing to be a cause for concern (EU; 51.9 vs 52.2 exp, Germany; 52.4 vs 52.5 exp; France; 47.8 vs 49.5 exp). The EU composite index of service and manufacturing activity were also soft and fell to a six-month low of 52.8 in June from 53.5 in May.

The Euro fell to a low of 1.3573 but is now back at 1.3600 and looks likely to remain fairly much rangebound once again today, although there is a bit of data out to provide direction, starting with the German IFO and then later on, the US Consumer Confidence, New Home Sales and some regional manufacturing data.

Technically there is little change, and given that the momentum indicators are somewhat mixed we can probably expect another choppy, but rangebound day, close to current levels.

Today’s high was 1.3612 but given that the dailies do still point higher, a retest and at some stage, of last week’s high at 1.3642 would not really surprise. Beyond here, the Euro would then target  the 6 June high at 1.3676, which in turn lies just ahead of important Fibo resistance at 1.3687 (38.2% of 1.3994/1.2502). Above that, 1.3700 and then 1.3737 (50% pivot) would come into play ahead of 1.3803 (61.8%).

Back beneath today’s low (1.3573) would find bids at Friday’s low/200 HMA at 1.3564/67, below which would once again open up the base of the recent range, where the Fibo support at 1.3518 (38.2% of 1.2754/1.3995) will again find bids ahead of the post-ECB spike low at 1.3502, which would be strong support.  A break below 1.3500 would head towards the medium term target at the base of the rising wedge/weekly cloud top, at around 1.3430, where we would be squaring up shorts and looking for a bounce.  If wrong on this, a break of the wedge base would hint at a further move south towards 1.3400 (200 WMA), 1.3370 (50% pivot % of 1.2754/1.3995) and then to 1.3294 (7 Nov ’13 low) and 1.3260 (100 WMA).

Today, look for another fairly tight range, probably covered by 1.3565/1.3630. A test of 1.3675 may eventually be on the cards, but I think that if/when we get there, it is probably a sell, for another run to the downside.

German IFO, US Consumer Confidence, New Home Sales, Richmond Fed Mfg Activity, Case Schiller House Price Index

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EUR/USD: 4 Hour

USD/JPY: 101.95

The stronger Japan PMI and HSBC China PMI failed to create much interest in the Yen and we had yet another tight day of trade close to 102.00. It looks as though today could be similar. with the indicators remaining pretty flat, although the hourlies look mildly positive and we could yet be in for a retest of the session high at 102.13.

On the topside, the daily Tenkan, 100/200 HMA’s now all sit right at 102.00, above which the 100 DMA is now at 102.20, and I would be surprised to see the dollar head much above here today. Beyond there though could see an acceleration towards the daily cloud top at 102.65, which, if seen, should be toppish. If wrong, above here, the recent high at 102.79 will act as strong resistance ahead of heavy offers reportedly lined up at 103.00/10.

On the downside, the daily Kijun propped up the dollar today at 101.80, which comes ahead of the recent low / 200 DMA at 101.60. Below this, rising trend support is at 101.45, which equally, looks out of sight for the time being, although if wrong, would head back towards 101.00 and then to the weekly cloud top at 100.85.

Use 101.80/102.20 as a guide again today.

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USD/JPY: 4 Hour

GBP/USD: 1.7025

Cable initially headed higher, in early Europe, to 1.7049 but has since retreated, courtesy of profit-taking on long positions, to a low of 1.7001, where 1.7000 option expiries for today’s NY cut acted as a magnate.

As we said yesterday, the bearish divergence in the 4 hour charts have kept a lid on Cable and this could well again be the case today. A break of 1.7000 would hint at a run towards Fibo support at 1.6975 (23.6% of 1.6692/1.7062) and below here towards 1.6921 (38.2%).

The longer term charts though remain positive and any near term dips would appear to be buying opportunities for an eventual retest of 1.7060, above which, more offers are reputed to sit ahead of 1.7100 (option barrier level). Bull targets beyond here include 1.7200 (another barrier) and then 1.7331, – the 50% pivot of the long term move from 2.1160/1.3547. Beyond that, there is not a great deal to stop Cable heading to the August 2008 high, which is not to be seen until 1.7516, so it could be a wild ride if/when it does decide to carry on.

Looking to buy dips if we see a move towards 1.6950, appears to be the plan with Cable probably spending much of the day close to 1.7000, at least until the option expiries.

Economic data highlights will include:

UK Inflation Report hearings

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GBP/USD: 4 Hour

USD/CHF: 0.8940

The dollar is pretty much unchanged, having today traded a tight 0.8935/67 range, and technically there is little change.

Last week’s low of 0.8910 (38.2% of 0.8702/0.9036) remains the initial support, which in the short term, I think, should hold. However the dailies do point lower and we could yet see a fall below 0.8900 towards further support at around 0.8865/70, which if seen, would I think be a buy opportunity.

On the topside, above today’s 0.8967 high, minor resistance will be seen at Friday’s top at 0.8974, above which 0.8990/0.9010 will again prove difficult to overcome, although it looks unlikely to be too bothered today. Further out, I suspect the dollar will head towards the recent ECB inspired spike high of 0.9036 and then on towards 0.9050 and to 0.9070, where the major descending trend resistance now lies.

Use 0.8910/60 as a guide for the coming session, with a mild bias to trade from the short side, but with a more medium term view that the dollar will eventually turn higher for a more concerted test of 0.9000+. We may need to see 0.8870 first though.

Economic data highlights will include:

Swiss Trade Balance

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USD/CHF: 4 Hour

AUD/USD: 0.9418

The strong HSBC China manufacturing data was the big news yesterday, taking the Aud swiftly up to a high of 0.9444, where it ran into a brick wall, and has since given up a bit of ground as profit taking set in, with the addition of new short positions being instigated ahead of the important 0.9460 target.

It looks like being a choppy session today, with little to drive the Aud, although the short term indicators do look as though we could be in for a more concerted test of 0.9390/0.9400 support (100/200HMA; 0.9390), which previously acted as a bit of a hurdle late last week.

Should the Aud head to the downside, below 0.9400, the first Fibo support will be seen at 0.9388 (23.6% of 0.9210/0.9444), a break of which would head back to yesterday’s open/low at 0.9372 and then to the next Fibo level at 0.9352 (38.2 %.). Below this would hint at another look at last week’s low at 0.9320, where the (daily Kijun/Cloud top will provide strong support. I doubt that we are going below this but if wrong look for a run towards 0.9300 (0.9295; 61.8% of 0.9210/0.9438) below which would head towards 0.9260 (76.4%).

On the topside, back above the session high, would target the 11 April high at 0.9460 although I am not sure the Aud has the momentum for any of this today. If wrong, above 0.9460 would suggest an attempt on 0.9500 (0.9495: 76.4% of 0.9757/0.8660). Beyond here, there would be little to stop the Aud heading towards the 6 June high at 0.9543, and beyond that to the long term objective off head/shoulder reversal now at 0.9660.

For the coming session I suspect we may see a bit more profit taking in the Aud, but there appears to be some ACB interest to buy the Aud into the dips, and I would therefore use 0.9390/0.9440 as a guide. Medium term, remain bullish for an eventual look at 0.9460, although patience may be required.

Economic data highlights will include:

China CB Leading Economic Index

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AUD/USD: 4 Hour

NZDUSD: 0.8714

The Kiwi made a new trend high at 0.8748 today, taking out the 7 May 0.8744 high before profit taking set in, unable to carry on to the 6 May top at 0.8778.

Given that both the 1 and 4 hour indicators appear to be pointing lower, the Kiwi could test the rising trend support that it is currently sitting on, with a chance of heading back below 0.8700 for a look at the 200 HMA currently at 0.8680. I don’t really see it too much below here today, although the next support is not seen until the daily cloud top at 0.8655, which if seen should be strong. If wrong, a break lower would head to 0.8625 (23.6% of 0.84010/0.8699) and below 0.8600 would head to 0.8585 (38.2% of 0.8401/0.8699), but which now looks increasingly distant.

On the topside, above 0.8745/50 would suggest a test of the 2014 high at 0.8778 (6 May). Eventually we may even head towards the 2013 high at 0.8842, but this will be some way off yet.

Look for 0.8690/0.8730 to cover it today with a preference to buy dips, which should be supported as we begin to focus on the next RBNZ meeting and the chance of another rate hike on Juyl 24.

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NZD/USD: 4 Hour