Another day, another multi year low for the Yen. Some consolidation likely today.

Despite new 7 year lows for the Yen against the dollar, it has been a largely sideways session for the major currencies, commodities and indices today , – and in the absence of any major data it could be much the same in the coming session.  The focus will be on Mario Draghi, who will  be speaking in early European trade and may create some waves, but that aside, there is little due apart from the UK PSNBR. Don’t expect too much action. Have a good w/e.

EUR/USD: 1.2549

The reaction to the soft EU PMI’s and to the unchanged (although above expectations) US CPI (1.7% yy) has been somewhat muted, and the EurUsd has traded in a fairly tight range today, currently unchanged from this time yesterday.

With little data due out, it could well remain that way into the weekend, although Mario Draghi will again be speaking today (on “reshaping Europe” – could be a long speech!), and may take another chance to push the Euro lower by reiterating his dovish outlook on the growth prospects in the EZ, after saying earlier today that Europe needs an economic model that boosts growth and employment.

Technically, a move above the session high of 1.2575 would again run into sellers on an approach to 1.2600, above which, would see a run towards 1.2620 (50% of 1.2886/1.2357). A break of this would trigger stops and could see an acceleration towards 1.2682 (38.2% of 1.2886/1.2357) and then to 1.2700 and possibly even to 1.2740 (23.6% of 1.3995/1.2357).

A turn to the downside will find minor support 1.2420 (100 HMA) ahead of 1.2500 and then 1.2480 (200 HMA). Below there would take us back to 1.2440 (minor), 1.2400 and then to the trend low of 1.2357 although I don’t really see this being tested today.

Further out, we would then test 1.2342 (21 Aug 2012 low) and 1.2295 (20 Aug 2012 low), which both lie ahead of the 200 Month Moving average at 1.2205 and the long term support off the Nov 2005/June 2010 lows at 1.2100. Then comes the major target at 1.2041 (July 2012 low), but which looks unlikely to come about for a while.EU.

Look for a fairly quiet run into the weekend, probably again contained within 1.25/1.26.

Economic data highlights will include:

Kansas Fed Mfg Survey.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

USD/JPY: 117.97

For the first time in a while we have seen a bit of a correction in US$Jpy, but not before reaching a 7 year high at 118.98.

The retracement may have further to run to the downside given the bearish divergence and the generally negative look of the shorter term charts, to where support should be seen at 117.10 (100 HMA) and then at 116.30 (200 HMA). Such a move would be healthy for the longer term uptrend, and we could even head back to 115.75 (23.6% of 105.19/118.98) without doing too much damage.

The topside will again see sellers here at 118.00 and at various points beyond, towards the session high which, I suspect, is unlikely to be taken out today after barrier related sellers successfully protected 119.00. If wrong above 119.00 would head on towards 120.00, which again will see heavy option related sellers – in the longer term, the target of 124.13 (June 2007 high) remains valid but will take time.

Meta Trader – AxiTrader   USD/JPY: 4 Hour

GBP/USD: 1.5699

Cable initially performed well today, rising to form a double top with the Nov 17 high at 1.5736 following the better than expected UK retail sales, but capped by the 200 HMA before retreating to 1.5670 in NY and then finally closing just below 1.5700.

Resistance remains at 1.5730 (23.6% of 1.6182/1.5593) and the day’s high at 1.5737. A break of this would then drive towards minor resistance at around 1.5780 above which would head  to 1.5800 and  the Fibo resistance at 1.5813 (1.6182/1.5589).

The downside will see buyers again at 100 HMA (1.5660) and then at today’s session low of 1.5630. Back below here would see another run towards 1.5590/00, which if seen, should be pretty solid support, but if Cable does come under further pressure, look for a run, below 1.5590 towards 1.5550 and then to 1.5500 beneath which, there really is not too much support to be seen below there until we approach 1.5400.

The 4 hour charts remain supportive, but overall, a fairly quiet session heading into the weekend may be the final outcome.

Economic data highlights will include:

PSNBR.

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USD/CHF: 0.9575

US$/Chf has again traded a choppy, but sideways 0.9552/0.9605 range today, and currently trades pretty much unchanged from this time yesterday.

The short term indicators remain mildly negative at this point and we could therefore see the dollar head back towards 0.9535 (23.6% of 0.8855/0.9741 & daily cloud top), which once again should provide decent support. Under here would then take a look at the larger degree of Fibo support at 0.9495(23.6% of 0.9360/0.9471) and eventually would hint at 0.9441 (29 Oct low).

The topside will again find sellers at 0.9600 and then at 0.9625 (200 HMA), above which, the previous session high at 0.9653, where the daily Tenkan lies, will provide a cap. I don’t really see it getting up here today, but above 0.9650 would then see a run towards 0.9700, a break of which could see a run towards Friday’s 0.9741 peak. Beyond there would target 0.9789 (29 May high) and 0.9838 (22 may high).

A similar day ahead would not surprise.

Meta Trader – AxiTrader  USD/CHF: 4 Hour

AUD/USD: 0.8634

Soft commodity prices and lower than expected Chinese manufacturing data kept the pressure on the Aud for the first half of the session as it fell to a low of 0.8665 before a bounce in NY on the back of the correction lower in US$Jpy.

The shorter term indicators now look positive again and we may be in for a bit more of a squeeze, above the session high of 0.8640, and on towards the 100/200 HMA’s at 0.8685. Above here could see a move back towards 0.8700/20, although I don’t really see it up here today.

A turn lower will find bids once more in the 0.8590/00 area, below which would revisit 0.8565 although this looks a little unlikely in the short term.

Look for 0.8600/70 to cover it today.

Further out as we said previously, the next support is seen at the 7 Nov low at 0.8540 and this will provide very strong support, being both the 50% pivot of the move from 0.6006/1.1082 and also the base of the monthly cloud. A break of this level though, and a November close below it, would have very bearish implications, for a test of the major channel base at around 0.8474 and then the May 2010 lows at 0.8066.

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NZD/USD: 0.7877

After trading with a heavy bias in the first half of the day, culminating in a dip to 0.7806, the Kiwi has since found firmer ground and is finishing the NY session close to the day’s highs of 0.7881, currently sitting just above the 200 HMA (0.7865).

The hourlies look mildly positive now, and further gains could see a run towards the 100 HMA at 0.7900. I doubt that we are headed much above here today, but if wrong look for a run back to 0.7925 and then possibly to 0.7940, which is the base of the daily cloud and has repelled the topside on two occasions. Back above here, would see another test of 0.7975 and the 29 October at 0.7977 and then 0.7990 (22 Oct) ahead of 0.8000 and 0.8010 (21 Oct) which will see strong sellers, although I don’t think we are going close today.

If/when the Kiwi does break below 0.7800, look for a run towards bids at 0.7780 (61.8% of 0.7660/0.7974) and eventually a run to 0.7700.  A break below 0.7700 (50% of 0.6560/0.8838) would see a retest of the trend low at 0.7660. Under this, there are minor support at 0.7625 and at 0.7600, but not an awful lot to prop it up ahead of 0.7530 (100 Month MA) and then 0.7435 (61.8% of 0.6560/0.8838).

Overall a day of 0.7840/0.7900 would not surprise, with a mildly positive bias.

Meta Trader – AxiTrader   NZD/USD: 4 Hour