US$ lower after soft US data provokes growth concerns. US long w/e today.

The dollar is generally a little weaker today after some soft US data hinted that US economic growth may  be losing momentum, and also on the back of some position squaring ahead of the Thanksgiving weekend. Today’s focus will be on the EU data with the German CPI, Unemployment and EZ Consumer Confidence being the main interest. The outcome of the OPEC meeting will also be closely watched. Australia gets New Home Sales, Private Capital Expenditure data; and NZ, the Trade Balance.

EUR/USD: 1.2508

The Euro is higher today, in thin conditions ahead of the US Thanksgiving holiday, after some mixed/soft US data put US yields and the dollar under pressure. An increasing view that the ECB are unlikely to head towards any form of QE any time soon, with no announcement of any action expected at next weeks ECB Meeting assisted the Euro through the session adding to the downside pressure on the dollar.

Today’s focus will turn to EU data, where the German provisional CPI, Unemployment and EZ Consumer Confidence figures will dictate the direction of the Euro, in what will again be a day of limited liquidity due to the absence of the US.

Technically the Euro, having broken above 1.2500 , has headed higher to meet the shorter term downtrend resistance at 1.2530, a break of which could see a further squeeze towards where it was trading ahead of Mario Draghi’s comments last Thursday, at around 1.2550, and then on to the 19 Nov high at 1.2600. Beyond that could see a larger squeeze towards the next downtrend resistance at 1.2685 (purple line) although this is unlikely today – if at all.

While the 4 hourly and daily chart momentum points higher, the downside looks a bit limited, but if we do head back below 1.2500, look for a decline towards the 200/100 HMA support levels at 1.2485/1.2450. Below here would see a return to 1.2400 and to the 7 Nov trend low at 1.2353, albeit, not today.

In the bigger picture, while the current short squeeze looks as though it may have further to run, the major downtrend is firmly intact. Once 1.2353 is taken out, 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.

For today, look for a day of 1.2485/1.2585, although it may end up doing very little in the absence of the US markets.

Economic data highlights will include:

OPEC Meeting, German Unemployment, Spain GDP, EU Business Climate, Economic Sentiment Indicator, German/EU CPI, Consumer Confidence.

Meta Trader – AxiTrader  EUR/USD: 4 Hour

USD/JPY: 117.73

The dollar has had a sideways session, with the main theme being one of position squaring ahead of the US long weekend, and with more of the same looking likely in the coming session as the market turns its focus towards tomorrow’s Japan CPI.

Points to watch today on the topside are at 118.00 (100 HMA: 117.92) and 118.50. I don’t really see too much upside above here, although if wrong look for a run back to the recent high at 118.98, where option related sellers would again protect 119.00. Beyond there 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.

With the daily indicators looking heavy, any near term direction would seem to point a bit lower. The 200 HMA at 117.50 and today’s session low at 117.43 will provide the initial support, ahead of last Friday’s low of 117.35 and then 117.15 ( Daily Tenkan).

Below there would head quickly back to 117.00 a break of which could see deeper declines to 116.50 and we could even head back to 115.75 (23.6% of 105.19/118.98) without doing too much damage to the longer term uptrend.

For today, look for a similar day as yesterday, with a mild bias to the downside, but in the longer term, any decent correction will be seen as a decent buying opportunity.

Meta Trader – AxiTrader   USD/JPY: 4 Hour

GBP/USD: 1.5798

Cable fell to 1.5678 after some weak UK investment data but has since recovered strongly, on the combination of some pre-long-weekend short covering and the generally soft US data, to reach a high of 1.5805, and sits close by at the end of the US session.

From the look of the indicators on the 4 hour/daily charts, further upside progress looks possible, and above 1.5800 the next target would lie close by at  the Fibo resistance at 1.5813 (38.2% 1.6182/1.5589). Above there would see the chance of a run towards 1.5870 (minor) and 1.5885 (daily Kijun) and possibly even to 1.5900 although somewhat unlikely today I suspect.

On the downside, buyers will arrive at 1.5765 (minor), with stronger support to be seen at the breakout level at 1.5730, and then at 1.5700.

For the time being, buying dips seems the way to go, although I don’t think the greater downtrend is yet done, so medium term players may be looking for levels to sell Sterling.

Look for 1.5780/1.5880 to cover it today.

Economic data highlights will include:

PSNBR.

Meta Trader – AxiTrader   GBP/USD: 4 Hour

USD/CHF: 0.9611

The dollar is lower today, having broken down below the 100 HMA (0.9653) and the 200 HMA (0.9625), which will now act as the interim topside levels to watch.  The topside looks a bit limited right now, but if wrong, further gains would take us back to 0.9700 and then to 0.,9725. I don’t see it getting close today, but further levels to watch would be at the 7 Nov 0.9741 peak, above which would head towards 0.9789 (29 May 2013 high) and 0.9838 (22 May 2013 high).

On the downside, a break of the 0.9595 low would head back to rising trend support at 0.9575, a break of which would see an acceleration in the decline towards 0.9498 (23.6% of 0.8702/0.9741).

Look for a firmer test of the 0.9595 level, with the chance of heading towards the rising trend support today.

Economic data highlights will include:

GDP.

Meta Trader – AxiTrader   USD/CHF: 4 Hour

AUD/USD: 0.8552

The Aud fell sharply from 0.8565 to a new trend low of 0.8480 today, helped by a large order to buy Eur/Aud in Europe. The softer US data then put the US$ under some pressure of its own, underpinning the Aud and allowing a steady recovery ever since, to currently sit back close to the session highs.

For the time being, we may have seen a short term base on the downside, and a bit of a squeeze back towards 0.8565 and possibly to 0.8600 (100 HMA) would not really surprise. Above there would head back into the choppy consolidation area, where resistance at 0.8640 (200 HMA) and at 0.8670 would be targets, ahead of a possible run back to 0.8700.

The downside will see bids today at 0.8530 and at 0.8515 ahead of 0.8500. I would be quite surprised to see a return to 0.8480 today, but if wrong then look for decent bids to hold the Aud at the base of the major channel at the 0.8450 area. A break of this would see a bigger decline towards the  May 2010 lows at 0.8066.

The medium term view remains one of selling rallies, and with the Iron Ore price now under $70 per tonne, any move back above 0.8600 would begin to look attractive – unless the US$ runs out of steam – in which case the Aud could put in a stronger run to the upside.

Economic data highlights will include:

New Home sales, Private Capital Expenditure.

Meta Trader – AxiTrader   AUD/USD: 4 Hour

NZD/USD: 0.7882

The Kiwi traded with a soft tone for the first half of the day before climbing off the 0.7803 session low,  gaining ground steadily, with the US$ generally under some pressure after the soft US data,  to reach a high of 0.7893 and closing the day right on the 200 HMA at 0.7880.

Momentum points higher in the short term, where the initial points to watch will be at 0.7900/10, a break of which would head towards last 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.

The downside will find initial support at 0.7850 (100 HMA) and then at 0.7820 and at 0.7800

The NZ October trade data will be the main focus today and a soft outcome would see the Kiwi back under some pressure, but overall the shorter term charts currently look reasonably well underpinned and I think any damage would be limited.

Use 0.7850/0.7950 as a guide today.

Economic data highlights will include:

NZ Trade Balance.

Meta Trader – AxiTrader   NZD/USD: 4 Hour