US$ marching north, with more gains looking possible this week.

There is no let up in the strength of the US$ with most counterpart currencies finishing on trend lows and looking as though there is going to be more of the same in the coming week. Commodities also took a hit, with Silver collapsing by 4% on Friday. The coming week  will have Mario Draghi’s testimony to the EU in focus today, ahead of the flash manufacturing PMI’s tomorrow. Later in the week, the US Durable Goods and GDP will be the highlights. Australia will be looking to Glen Stevens speech on Wednesday for guidance. Japan gets the CPI, Friday.

EUR/USD: 1.2830

The dollar finished the week on its highs against most currencies in posting its 10th consecutive week of gains as investors reflected on the outcome of the FOMC meeting, with traders speculating that U.S. interest rates will rise more quickly than had been previously expected which should continue to underpin the current rally..

The Euro is at 14 month lows and looks as though it is on its way to meet the long term objective at 1.2754  (9 July 2013 low) and with Mario Draghi due to speak today to the EU Governing Council on the outlook for the economy, he could well help it on its way. Elsewhere, there is a bit of secondary data out this week, starting with the flash manufacturing PMI’s tomorrow, but the focus will be on the US Durable Goods orders on Thursday and then on the US GDP on Friday.

Technically, the Euro has made a new trend low at 1.2827 and it would appear that 1.2800 is now not too far away. A break of 1.28 would then head towards the target area of 1.2780 (major rising trend support from July 2001 & 61.8% of 1.2041/1.3995), which comes just ahead of the 9 July 2013 low at 1.2754. The daily charts are reaching oversold levels and so the trend should slow here but I don’t think it is going to turn around much and once the charts have had the time to unwind, I suspect that we are in for a run towards the November 2012 low at 1.2660 and then 1.2500 (76.4%of 1.2041/1.3995). Below here we then look likely to ratchet our way lower towards the 22 July low at 1.2041.

On the topside, minor resistance is now seen at 1.2860 and it would appear that the Euro is going to struggle to make it back to 1.2900. If we do see a squeeze higher, then look for further sellers to emerge at the 100/200 HMA’s at 1.2915/20 and then again at the descending trend resistance at 1.2940. Right now 1.3000 is looking increasingly distant.

Stay short and sell rallies seems to be the plan.

Economic data highlights will include:

M: Mario Draghi Speech, US Existing Home sales

T: EU Flash Mfg PMI, US Flash Mfg PMI, Richmond Fed Mfg Index

W: German IFO, US New Home sales

T: US Durable Goods orders, Jobless Claims, Flash Composite PMI, Kansas fed Mfg Index

F: German Consumer Confidence, US GDP, Personal Consumption/ Expenditure, Rts/Michigan Consumer Sentiment index.

Meta Trader – AxiTrader

EUR/USD: Daily

…

EURUSD: Monthly

USD/JPY: 109.00

There is no stopping US$/Jpy, which on Friday reached 109.45 before running into some barrier selling ahead of 109.50 and then turning lower to finish the week at 109.00.

The trend remains resolutely higher though and thus, buying dips remains the plan. It may be a slow start to the week, given that it is a Japanese holiday on Tuesday and many will be making it a long weekend, although this would not be a bad thing as it would allow the short term charts to unwind their overbought condition.

The 4 hour charts do actually look as though they may be building a short term topping formation and if we do see a dip, the first supports should be at 108.50/60 and then again at around 108.35. A break of this could see the dollar fall back below 108.00, potentially to retest the breakout level at 107.35 although such a move currently looks over the horizon.

Dips though, will be buying opportunities, and eventually the dollar looks highly likely to take out 109.50 as it heads on towards the next targets at 110.65 (August 2008 high), above which would head on to 112.50 (76.4% Fibo level of 124.13/75.56). A break of this would suggest that the dollar is on its way to the July 2007 high at 123.65 although we have a lot of work to do before then.

For today use 108.50/109.40 as a guide, looking to buy dips.

Economic data highlights will include:

M:

T: Japan Holiday

W:

T:

F:CPI

Meta Trader – AxiTrader

USD/JPY:Daily

…

USDJPY:Monthly

GBP/USD: 1.6290

Cable was very kind to us  on Friday, reaching the sell area in the 1.6500/35 area, before topping out at 1.6523 as it became obvious that the “No” vote was going to win the Scottish referendum and then falling like a stone to close the week at 1.6290, unable to withstand the pressure of the strengthening US dollar.

Thoughts will now return to interest rate considerations, with both the UK and the US looking likely to start hiking rates in 2015. It does look as though Cable is going to stay under pressure from the increasingly strong dollar but it should also outperform the Euro, where the cross is already heading lower, having had a week of huge volatility with a 200 point range (see report.). There is no UK data this week and it will be offshore events that dictate the price action.

Technically Cable is sitting above minor rising trend support at 1.6250 (200 HMA). A break of this would point lower to the next target at last week’s low at 1.6163 and beyond there to the trend low at 1.6051.

While 1.6250 holds, we could see a squeeze back above 1.6300 (100 HMA) and on towards 1.6360 and perhaps 1.6400. I cannot really see it up here, but if we do then it would suggest a decent sell opportunity.

Meta Trader – AxiTrader

GBP/USD:Daily

USD/CHF: 0.9405

US$Chf made it back up to 0.9400 on Friday and managed to finish above, at 0.9407, but unlike the Euro it has yet to make a new trend high (seen on 18 Sept at 0.9432), and the close sees the dollar sitting right on Fibo resistance (61.8%  of 0.9838/0.8698) , which may slow progress early in the week.

In the short term, nothing has really changed technically as we continue to use 0.9400 as a pivot, and while we may see dips, they would provide a buying opportunity before the dollar takes out the recent high and finds the strength to head on towards the next targets, at the 6 Sept 2013 high at 0.9455, and then,above which, there is little to stop the dollar heading to 0.9570 (76.4% Fibo level of 0.9838/0.8698).

The downside will see minor support at 0.9390 and then again at 0.9360 (100 /200 HMA), below which would suggest a test of Friday’s low at 0.9333 and under this, 0.9300. With the momentum indicators currently pointing higher if we do see a dip today, it should be fairly shallow.

Meta Trader – AxiTrader

USD/CHF:Weekly

AUD/USD: 0.8925

Having made an early attempt to regain 0.9000 on Friday, the Aud gave up in the face of strong selling interest and headed lower for the rest of the session, seeing virtually no bounce and closing just above the new trend low at 0.8920.

There is not too much domestic data due this week so traders will look to the HSBC China Flash Mfg PMI on Tuesday for an early guide and then to a Glen Stevens’ speech on Wednesday before focusing on the US data, which could again push the US$ higher and the Aud lower, should the firmer trend in the data continue. Keep an eye on commodity prices. Iron Ore finished at another 5 year low ($81p.t.), and Gold looks as though it could be about to follows Silver’s lead on Friday (- 4%) and could be in for an early test of $1200oz.

The price action looks terrible, and with stops lining up under 0.8900 we could be in for an early test of 0.8890 (3 March low) and then 0.8860 (76.4% of 0.8660/0.9505). A break of that would see an acceleration to the downside towards 0.8800 and to the 1.618 Fibo extension of the head/shoulder target at 0.8790. This could take a while to come about but the medium/longer term indicators do not look healthy and it is beginning to look as though the Aud may eventually want to retest the January low at 0.8660.

With little data due that is likely to cause any nasty short squeeze, as per the recent domestic jobs data, the upside looks somewhat limited this week. If 0.8920 can hold though, then we may see a run back towards 0.8950 and possibly to the long term trend support-turned resistance at 0.8990. I would be surprised to see it back above here now, but if wrong, look for a squeeze back above 0.9000 towards 0.9100; we will worry about that if we see it, but if, as I suspect, we make a monthly close (next week) below the monthly trend line at 0.8990, then the way opens up to lower levels ahead for the Aud.

Economic data highlights will include:

M: WBC Consumer Survey.

T: HSBC China Flash Mfg PMI

W: CB Leading Indicator, Financial Stability review

T: RBA Annual report

F: China Leading Index.

Meta Trader – AxiTrader

AUD/USD:4 Daily

NZD/USD: 0.8150

The Kiwi held up reasonably well on Friday ahead of Saturday’s election

Technically the Kiwi looks a little indecisive, although it will find it hard to make any decent gains if the US dollar continues go from strength to strength.

The immediate resistance will be seen at the 200 WMA at 0.8135 and which may act as a bit of a magnate over the next session or two but if the Kiwi can find the legs, then we could see a run back to Fridays high at 0.8178 (0.8175:200 HMA). I would be doubtful of seeing it too much higher than this, but if wrong, we may see a run back to 0.8200, where I suspect it would be a sell.

On the downside, having made a second consecutive close below the base of the weekly cloud, we could be headed back towards 0.8100 and possibly down to  the trend low at 0.8076. Below this would head towards the 2014 low at 0.8051 on Feb 4, from where it previously bounced sharply but a break of which would probably head quickly to 0.8000 and lower, to Fibo support at 0.7985 (76.4% of 0.7670-0.8839) but not for a while.

Sell rallies with a SL placed above the top of the descending channel and 16 Sept 0.8230 high,  at around 0.8235.

Economic data highlights will include:

M:

T:

W: NZ Trade Balance

T:

F:.

Meta Trader – AxiTrader

NZD/USD:Daily

EURGBP: 0.7872

Having taken out the stops above 0.8040 the previous week in spiking up to 0.8065, the cross then spent last week chopping around just under 0.8000 before collapsing ahead of the Scottish vote, trading down to a low of 0.7810 and then bouncing, to close at 0.7875. With the vote now out of the way, interest rate differentials will again be the focus and thus it looks as though the cross will head lower as Cable outperforms, given the diverging outlooks from the BOE and ECB. While we may consolidate for a session or two after the recent big moves, a break of the session low would head below 0.780 and on to the long term target of 0.7753 (July 2012 low), which ties in nicely with the base of the channel seen in the chart below. If we head below there, there is little to stop the cross from heading to there Oct 2010 low at 0.7693.Rallies will see offers at 0.7900 then at 0.7945 (23.6% of 0.8399/0.7810), which if seen – doubtful – will be a sell opportunity...Meta Trader – AxiTrader

EURGBP: Daily

EURJPY: 139.90

The cross had a huge week in rallying sharply on the back of the general Yen weakness, to as high 141.21 on Friday, before collapsing to finish back below 140.00, but right on support at the 200 DMA. Further near term losses look possible and we could see a run towards 139.65 and possibly to 139.15. Although doubtful, back below 139.00 would suggest a run down to 138.50. Any decent dip though looks like a buying opportunity for an eventual return to last week’s highs and eventually beyond and on towards the April high at 142.46 and then to the March high at 143.78. Beyond there would take out the trend high at 145.68 (Dec 2013) and potentially to much higher . Patience required!.Meta Trader – AxiTrader

EURJPY: Daily

GBPJPY: 177.50

GbpJpy made EurJpy look positively static by comparison, and after spiking down to 169.33 (Sept 9) it has since taken off like a rocket, in running up to 180.70, as the Scottish poll result became clear, before collapsing to finish at 177.50 where the 200 Month MA is acting as a magnate. No complaints about volatility!!We need to tread very carefully here, and we could see further dips that could potentially see a return towards Fibo support at 176.80, below which could see a run back towards the previous high (1 July) at 175.36.As with the other Yen crosses, dips look like buying opportunities for an eventual run back to Fridays’ high and then on to 183.75 (50% of 251.09/116.83) and potentially a lot higher..Meta Trader – AxiTraderGBPJPY: Weekly

GBPAUD: 1.8250

No lack of volatility here either! After basing at 1.7213 on 8 Sept, the cross has since soared, reaching 1.8475 on Friday before retreating to finish the week at 1.8240. The dailies point to further gains and if last week’s high can be taken out, we could be in for a run towards 1.8720 (76.4% of 1.9185/1.7213), although realistically the cross should quieten down dramatically now that the Scottish vote is out of the way.The downside looks to have support at 1.81765 (200 DMA), which may act as a magnate, below which could see a return towards 1.8000, which if seen, would appear to be a buy opportunity. Overall, trading short term positions and avoiding a medium term outlook appears to be the plan, so take it session by session, but with an overall bias to the topside..Meta Trader – AxiTraderGBPAUD: Daily

SILVER: 17.85

Silver traded beautifully on Friday, by initially running up towards the 18.60 resistance, before collapsing by taking out the support at 18.00 and heading to a low of 17.79 for a 4.3% loss on the day. While the short term charts are oversold and need to have some time to unwind, the way now appears open for a run towards 17.00 and possibly a lot lower towards the Jan 2010 low at 14.62.  Resistance is now seen at 18.00 and I would be doubtful of heading back above 18.50 any time soon. Selling rallies is still the theme..Meta Trader – AxiTraderSILVER: Weekly

DXY: 84.79

Once again there was no holding back the DXY last week and it reached 84.79, closing on its high and taking out the major target at the July 2013 high at 84.75.  Further progress may slow somewhat from here and  it may prove tricky to break much higher early in the week given that the dailies are overbought and looking as though they could roll over. The weeklies remain firm though and if the index can continue its march north, I cannot see too much to stop it heading on towards 85.00 and then to the 76.4% Fibo resistance/descending monthly trend line at around 85.50 (see below) and then on to the 29 June 2010 high at 86.30 (weekly chart below). Beyond there would eventually head to the descending trend resistance line, starting from February 1985 at 164.72 and joining the Feb 2002 top at 120.51, now at 88.00. Beyond there could see a quick run to the 7 June 2010 high at 88.70, from where it collapsed, eventually to 80.08 by August 2010, but that is some way off yet.

If the index fails here, the downside now should find minor support at around 84.45 below which would head back to 84.00 and then to the close of a fortnight ago at 83.75. Stronger support would be seen at the break-up level of the long term downtrend resistance-now-turned- support and 23.6% of 78.86/84.51 at 83.17 . I don’t think we are going there, but – as before -, dips are buying opportunities given that the weekly charts look to have plenty of upside potential. In the short term some consolidation may be necessary.

Meta Trader – AxiTraderDXY: Daily

…

DXY:  Weekly.