A day consolidation but with Aud, Kiwi both making good gains. A busy day of data, ahead.

It has been generally a rangebound session, although the commodity bloc made some decent gains, with the Aud and Kiwi both finding favour on the basis of their yield, while at the same time triggering stop losses in a market trading from the short side. Today will be a busier day (hopefully!), with the Australian Capex and the NZ Trade Balance kicking things off. Later on we will see the German/EU Consumer Confidence, Unemployment and EU LTRO figures, while from the US we get the CPI, Durable Goods Orders, House Price Index & Jobless Claims. From the UK comes the provisional Q4 GDP.

EUR/USD: 1.1357

It has been another sideways day today, with the Euro currently sitting at 1.1350, right in the middle of its 50 point range. There is therefore little to report, although it could begin to warm up later with a fair bit of data due, highlighted by the German Unemployment, the LTRO figures, and then from the US, the CPI and Durable Goods Orders. Given the weather in the US recently, one would not expect the US data to be all that good, in which case the dollar could come under a bit of pressure, although the short term indicators are flat and giving little hint in either direction.

Technically there is no change.

On the topside, the 100/200 HMA’s are at 1.1355/70 and will again provide the initial, but minor resistance, ahead of this week’s high at 1.1395. A break of 1.1400 would see a return towards last Friday’s 1.1428 peak, above which the Euro could then potentially squeeze on towards Thursday’s session high of 1.1449, where we have a minor double top. The Fibo resistance at 1.1437 (23.6% of 1.2570/1.1097) will again be a hurdle but if the Euro can make a sustained run above it, then beyond 1.1450, we could head towards, the Feb 7 high of 1.1485 and possibly on to 1.1500.  If we were to see a move beyond 1.1500, then we would get a run towards the 3 Feb peak at 1.1533 above which would see further sellers at the nearby Fibo resistance at 1.1542 (76.4% of 1.1679/1.1097) and then maybe towards 1.1600 (daily Kijun) and on to 1.1655 (38.2% of 1.2569/1.1097). If seen, such a rally could be seen as a potential sell opportunity, with a SL left on all short positions to be left above the 21 Jan high of 1.1680.

On the downside, back below today’s 1.1335 low would head towards 1.1300, below which strong support is now seen in the 1.1280/90 area and is backed up by the Fibo support at 1.1260 (61.8% of 1.1097/1.1533), but a break of which would head towards further bids at 1.1220 and 1.1200. Below there would see a run towards the trend lows (1.1097) and eventually beyond towards 1.1000 and lower.

A neutral stance is currently required and while I still favour the Euro lower in the longer term, it could well be that we see a squeeze first, to 1.1400, and above.

Economic data highlights will include:

German/EU Consumer Confidence, Unemployment, EU targeted LTRO, US CPI, Durable Goods Orders, House Price Index, Jobless Claims..

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USD/JPY: 118.87

As with the EurUsd, US$Jpy has had another choppy, sideways session of its own, trading a narrow 118.62/119.05 range today so there is nothing new to add, with the technical picture still being largely unchanged. It looks as though it could stay that way for much of the day, at least until the US data, or even until tomorrow when there is a fair bit of Japanese data due for release, head by the CPI, and Unemployment and IP.

The 100/200 HMA’s are still sitting at around 118.95, as is the daily Tenkan, which has now fallen to join them and will add to the resistance at around 119.00, and in the short term we seem unlikely to travel too far from here. If we do head higher, then minor resistance is seen at 119.25, a break of  which would see the dollar head towards 119.50 and back to Tuesday’s session high at 119.83. Beyond here, we could see another squeeze beyond 120.00 and on to the 11 Feb, 120.46 high, although unlikely to be seen today.

On the downside, below today’s 118.62 low, where the  daily Kijun propped the dollar up, lies the Fibo support at 118.40 (61.8% of 117.17/120.46), beneath which would head back to the recent 118.23 low and to the daily cloud top, now at 118.05. Below 118.00 would then head back into the previous 117/118 consolidation area and could even see the chance of a move towards the 116.40 area, mentioned above, although right now this looks over the horizon.

Another sideways day, close to current levels looks likely, at least until the US data.

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GBP/USD: 1.5527

Cable found a bit of direction today  after triggering stops above the previous 1.5470 resistance, in heading higher to meet the top of the descending channel at 1.5538.

While the momentum indicators remain positive, Cable has run into strong resistance here which will not be easily taken out although a positive Q4 GDP reading today (exp 0.5%qq, 2.7%yy) will ensure the topside does get a decent workout. Aside from being the top of the channel, this level is also 38.2% retracement of 1.6523 to 1.4950 and beyond this, Cable is shortly going to run into the 100 DMA (1.5580).

On the downside, note that Cable looks like making a close above the top of the daily cloud (1.5525 – chart below) which should now act as support, and we really need to stay above this level if the positive momentum is to be maintained. Back below here would see a return to 1.5500 and then to the previous resistance at 1.5470. Below here,  the 100 /200 HMA’s lie at 1.5430 and 1.5415 , a break of which would see a return to the rising trend support, now at 1.5390.

Overall, while the indicators look set to underpin Cable for now, I suspect that this move is corrective, and the 4 hour charts are hinting at some bearish divergence, so selling it at the 100 DMA with a SL above 1.5620 (31 Dec high; 1.5619) may be a plan.

Economic data highlights will include:

GDP

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USD/CHF: 0.9476

US$Chf is pretty much unchanged today after a range of 0.0.9465/0.9509 and still holds the rising trend support, although below today’s low would bring about a downside break and could wee a decline towards 0.9400 or lower, towards 0.9370 (20 Feb low) where it may be a buy, although below there it could head back to Fibo support at around 0.9250.

Solid resistance remains in the 0.9500/30 area.

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AUD/USD: 0.7891

The Aud extended its gains after taking out the stops above 0.7850 today, in reaching a high of 0.7900, where it currently sits towards the end of the NY session.

This are should continue to act as short term resistance (23.6% of 0.8794/0.7625-4 hour chart), although the indicators do look positive and we could therefore see a run towards 0.7925 (23.6% of 0.8910/0.7625 -daily chart), the daily Kijun  (0.7930) and then to the descending trend resistance at around 0.7945. Above here would see an acceleration towards 0.8000, beyond which would trigger a serious amount of stops, with the potential for a run towards the pivot (red horizontal line) at 0.8030. Above this would put serious doubts into the near term resumption of the downtrend, although I don’t really see it happening unless the US$ sees a major selloff.

If the Aud does run out of steam up here, then a reversal will find bids nearby at 0.7870 and again at 0.7850. Below there would head back towards 0.7830 and 0.7800 for an extension of the recent choppy directionless trade above 0.7740.

Today will get its direction from the Capex figures, with expectations of a reading of -1.9% following on from the previous +0.2%. If the result is better than the expectations, then the short squeeze will continue, possibly for a look at 0.8000.

For the time being, it looks as though buying the dips is the plan, although as we approach 0.8000, I still prefer the idea of building a medium term short position.

Economic data highlights will include:

Private Capital Expenditure.

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NZD/USD: 0.7545

After triggering stops above 0.7500, in running up from 0.7474 to a high of 0.7562, the Kiwi has spent much of the latter half of the session consolidating near 0.7550. It was unable to make any further gains late in the day after Fonterra maintained its 2014/15 milk payout at NZ$4.70 per kg.  Some analysts had speculated that a rise in the price would be seen due to increased prices at recent auctions, however Fonterra noted that the prices rises at the auction were not sufficient to raise the Farmgate milk price at this time.

The short term indicators still look supportive, as do the dailies, so further advances cannot be ruled out, which would take the Kiwi beyond today’s high and on towards the trend high at 0.7573.  Above this, the Kiwi could then advance to the 22 Jan high at 0.7582, ahead of 0.7600 and the Fibo resistance at 0.7615 (61.8% of 0.7889/0.7175). Beyond this would open up 0.7618 (5 Jan low) and then 0.7689 (15 Jan low), ahead of the next Fibo resistance at 0.7718(76.4%).

On the downside, the 100/200 HMA’s sit at 0.7515, below which 0.7500 and then 0.7475 will again see buyers. Below this will head to 0.7450 and the previous session low at the Fibo support at 0.7421 (38.2% of 0.7175/0.7573), beneath which, the next target will be the 13 Feb low at 0.7410 and then 0.7400.

Below 0.7400, which currently looks a little unlikely, for a while, would move back to minor Fibo supports 0.7375 and 0.7325 (50/61.8% of 0.7175/0.7573). I don’t really see it down here for some time, but if wrong, further bids would arrive at the 12 Feb session low at 0.7313 and then again at 0.7300.

Further out, below 0.7300 would see a run towards minor supports at 0.7250 and 0.7225, and then further out we could then be in for another test of 0.7200 and the trend low of 0.7185. Below this there is little support to be seen until the spike low at 0.7115 (17 Mar 2011) and even further out, I think we are eventually headed towards 0.6962 (38.2% of 0.3900/0.8842) and possibly to the 200 Month MA at 0.6538. Don’t get excited; this is still a long way off.

Economic data highlights will include:

Trade balance.

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