Euro lifted by a firm German IFO ahead of today's US GDP/Confidence data.

A firmer German IFO business reading underpinned the Euro today and it would appear there may be some room for further short term gains as positions are squared ahead of the US Thanksgiving holiday. Direction today will be decided by the outcome of the GDP data due from Germany and the US, and then by the US Consumer Confidence and Expenditure figures. Asia gets the BOJ Minutes and there will be speeches today from the BOJ’s Kuroda, from the RBA’s Lowe and from the BOE Governor Carney, speaking to the Treasury Committee on the inflation outlook.

EUR/USD: 1.2438

The Euro is mildly firmer against the dollar today after the improved German IFO business data and backed up by some remarks from the ECB’s Weidmann who cast some doubts as to whether the ECB will take any further stimulus measures in the near future.

Today will see a fair bit of data including both the German (exp 0.1% qq, 1.2% yy) and the provisional US GDP figures (exp 1.3%qq, 3.3%yy) as well as the September US Consumer Confidence data (exp 96.0) so it could get quite active later on.

In the meantime, the Euro has been able to make it up to the minor resistance at 1.2440 and it looks as though it may have the legs to head on towards  where  the 200 and 100 HMAs are about  to cross at around 1.2485. Above here would run on to 1.2500 and possibly back to where it was trading ahead of Mario Draghi’s comments last Thursday, at around 1.2550, although at this stage I am not sure what is likely to drive it back above 1.2500. Soft US data could be the catalyst.

On the downside, 1.2400 will now act as minor support ahead of the stronger level at around 1.2360. A break of the 7 Nov low at 1.2357, would trigger stops and would cause an acceleration lower, and there really is not too much to hold the Euro up until around 1.2225 (200 Month MA), which should be strong support at the first attempt. Below that is the rising trend support at the 1.2130, which is also the 50% pivot of the rally from the Euro Oct 2000 low to the July 2008 high and should also provide decent support. Under that we have the July 2012 low at 1.2041 and the June 2010 low 1.1876, which both come ahead of 1.1743, where the Euro was initially pegged to the dollar in January 1999.

Selling rallies remains the main theme, although it may be worth hanging off doing so for a while as I suspect we could get a bit more of a topside squeeze first, and ahead of the US Thanksgiving weekend (Thur/Fri) we could see some position squaring. As we said yesterday, be aware of the bullish divergence in the daily charts which could yet provoke a bigger short squeeze, but in the meantime use 1.2385/1.2485 today as a guide, with the direction to be driven by the GDP/Confidence figures from Germany and the US.

Economic data highlights will include:

German GDP, US Consumer Confidence, Provisional GDP, Personal/Core Personal Consumption/Expenditure, Case Schiller House Price Index, Richmond fed Mfg Index.

Meta Trader – AxiTrader  EUR/USD: 4 Hour

USD/JPY: 118.27

The dollar saw a quick run higher at the European open, from 117.80 to a high of 118.48, since when it has tracked sideways above 118.00 as the market now awaits today’s BOJ Minutes, and then later a speech from BOJ Governor Kuroda.

Technically there is little to add today as the dollar continues to consolidate its recent gains, below last week’s high of 118.98.

On the topside, sellers will again be seen at 118.50 ahead of 118.98. Beyond 119.00 would trigger stops and would head on towards 120.00, which again will see heavy option related sellers, although in the longer term the target of 124.13 (June 2007 high) remains valid, but will take time.

As we said yesterday, the dailies are overbought and are looking rather tired on the topside after the recent “one-way” rally, and with the daily momentum indicators looking to be rolling over, some sort of correction to the recent Yen weakness would not really surprise. Today’s low was 117.57, which will provide the initial support, but if we break Friday’s 117.35 low, then we could well head back towards 116.70 (200 HMA/ Daily Tenkan). 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.

Economic data highlights will include:

BOJ Minutes, Kuroda Speech.

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GBP/USD: 1.5704

Cable was underpinned by the better German IFO today and is a little higher, in line with the Euro. Further consolidation may be likely today in the absence of any UK data today, with the market looking ahead towards tomorrows UK Q3 GDP reading. Mark Carney will be speaking today to the Treasury Select Committee today, and this may create some waves so will be worth watching.

Technically, the short term charts look mildly positive, but Sterling need to break above 1.5730(23.6% of 1.6182/1.5593) /1.5735 (minor double top) to give confidence that we have made a near term base. If that can be managed, then we could be in for a run towards minor resistance at around 1.5780 above which would head  to 1.5800 and  the next Fibo resistance at 1.5813 (38.2% 1.6182/1.5589).

The downside will now find some buyers here at 1.5700, below which would head back to the 200 HMA (1.5680) and the 100 HMA (1.5665). Further losses, which look a little unlikely at the time of writing, would see a decline back to the day’s lows at 1.5628. The 1.5625 area should now prove quite strong support and stops will be placed below here. If triggered at any time, we would see another run towards 1.5590/00, which again, 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 is not too much support to be seen below there until we approach 1.5400

For now, look for 1.5675/1.5750 to cover it.

Economic data highlights will include:

BOE Carney Speech.

Meta Trader – AxiTrader  GBP/USD: 4 Hour

USD/CHF: 0.9666

The dollar initially gapped up to open on its highs at around 0.9725, since when, it has been pretty much a slow drift lower, filling that gap, to a session low of 0.9662.

Technically, while a little lower, the medium term picture remains the same for US$Chf although the short term technical outlook hints at further possible losses for in the session ahead.

Below today’s low, further bids will arrive at 0.9650 (23.6% of 0.9360/0.9741)and then at 0.9625, where the 100/200 HMA’s are about to cross. Under here 0.9600 will see buyers ahead of 0.9550 where minor rising trend support lies and if seen would present a decent buying opportunity.

On the topside, we need to regain 0.9700, and then the session high at 0.9725, in order to make further gains, but which may be a bit tricky today given the look of the short term momentum indicators. If wrong then look for a run towards 7 Nov 0.9741 peak, above which would head towards 0.9789 (29 May 2013 high) and 0.9838 (22 May 2013 high)..

Meta Trader – AxiTrader   USD/CHF: 4 Hour

AUD/USD: 0.8611

The Aud has been unable to maintain the enthusiasm seen after Friday’s China rate cut and is now back sitting above the important support in the 0.8590/0.8600 area. There has been little bounce from the lows in late NY trade and although there is no data out today, the outlook does appear to be rather bearish for the Aud.

Watch out for RBA Deputy Governor Lowe who will be speaking today at the Australian economic forum, and may well once again take aim at the Aud. I noticed yesterday that ANZ lowered their targets for the Aud to 0.8200 for end-2015 and to 0.8000 for 2016, based on an outlook for little improvement in commodity prices, a cyclical slowing of growth in China, and shrinking purchasing power parity models over the next couple of years.

A break of 0.8590 would see an acceleration towards last week’s low at 0.8565, a break of which would head to the major support seen at the 7 Nov low at 0.8540, this 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, 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.

On the topside, we need to regain the 100 HMA at 0.8645 and more importantly the 200 HMA, now at 0.8685 in order to make further gains towards 0.8700. The short term indicators look negative and I think selling rallies for another look at 0.8540 is probably the way to go.

Economic data highlights will include:

RBA Lowe Speech, China CB Leading Economic Index.

Meta Trader – AxiTrader   AUD/USD: 4 Hour

NZD/USD: 0.7860

The Kiwi is a bit lower today, after an early run up to 0.7910, on the back of the weaker Aud but it has recovered from a session low of 0.7845 to sit at 0.7860 and now waits on the upcoming RBNZ inflation expectations

Not too much change is seen from a technical perspective although the Kiwi is sitting just above minor rising trend support, a break of which could trigger an acceleration lower. If so, we now have a minor double bottom at around 0.7845 (Friday’s low), a break of which would head to Thursday’s base at 0.7806.

Once we get back 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).

On the topside, 0.7870 (100 HMA) becomes the first hurdle, ahead of 0.7890 (200 HMA). Above there would see sellers at 0.7900/10, a break of which would head towards Friday’s China rat-cut inspired spike up to 0.7945. Above there would see another run towards last week’s double top at 0.7975, although I don’t see it going close.

Economic data highlights will include:

RBNZ Inflation Expectations.

Meta Trader – AxiTrader   NZD/USD: 4 Hour