US$ steady after Yellen sees gradual rake hike later in the year, but data dependent.

Friday ended up being choppy but with little direction coming from either the below par US GDP reading or from what Janet Yellen had to say, which was really nothing that awe did not already know. Rates will probably rise later on this year; maybe, depending on the data. That was about it from her, although there will be plenty more Fed-speak this week with someone due to talk on most days ahead of the US Jobs data and Non Farm Payrolls that will arrive on Good Friday. I would be pretty square well before then!. Elsewhere this week, there is a fair bit of secondary data due ahead of Easter, starting today with the EU Consumer Confidence, German Provisional CPI, US Personal Consumption/Expenditure and Pending Home Sales. UK Consumer Confidence is also due.

EUR/USD: 1.0884

The Euro had a choppy session on Friday, dipping to a low of 1.0800 before rallying to 1.0948 following the soft US Q4 GDP (2.2% vs exp 2.4%) and then settling at around 1.0900 after Janet Yellen had spoken. She was suitably vague as to when we might expect a rate hike, except that it is likely to be some time this year, depending on the jobs/inflation outlook. We will find out more about this later in the week, when the US Jobs/NFP data are released on Good Friday (exp 5.5%, 242K, Hourly Earnings +0.2%).

Although for most of us it will be a shortened week and liquidity will be very thin when Friday’s data is released, there is fair bit to contend with before then, with a whole swathe of Fed speakers  ahead of the Jobs data. Other key points this week will be the EU CPI, the global Manufacturing PMI’s/ISM and the German Unemployment.

Technically there is little real change, and as we noted last week, the parameters of the daily Kijun (1.0955)and the daily Tenkan 1.0800 have pretty much contained the action – on a daily close basis, – and may well do so over the next session or two. Even closer, having closed midway between the 100/200 HMA’s (1.0930/1.0825) this may well contain it early in the week. The charts are rather mixed so any directional move over the next session or two looks doubtful but the 4 hourlies do point lower, so below the 200 HMA we could return to Fridays 1.0800 low. Under here, the further points to watch are at the 61.8% Fibo support of the 1.0461/1.1057 rally at 1.0780, with further, minor support to arrive at 1.0750 and then at 1.0715 (76.4%) although I don’t think this is currently on the cards.

On the topside, back above 1.0900, 1.0930 may cap it, but above which would head back to Friday’s highs at 1.0948 and to the Tenkan at 1.0955. I would be doubtful of seeing 1.100 again today, but if wrong, another test of the trend high at 1.1057 should not be ruled out, above which could test the 26 Jan 10 low at 1.1096 (horizontal red line) and which I suspect is an important line in the sand. Beyond there would suggest that the downtrend has been put on hold and there is not too much to stop the Euro heading towards 1.1114 (5 March high) and then to 1.1159 (76.4% of 1.1378/1.0461).

Today, a choppy day with a mild downside bias seems likely, but there is a bit of data out from the EU/US (EU CC, German Provisional CPI, US Personal Consumption/Expenditure, Pending Home Sales) so we might get some activity later on. Liquidity is going to get thinner as the week progresses and we could see further excessive volatility as positions are squared ahead of the main event on Good Friday.

Economic data highlights will include:

M: EU Consumer Confidence, German Provisional CPI, US Personal Consumption/Expenditure, Pending Home Sales

T: German Unemployment, EU Provisional CPI, Unemployment, Case Schiller House Price Index, US Consumer Confidence

W: EU Non M-P meeting, Manufacturing PMI’s, US ADP Jobs data, ISM Manufacturing PMI

T: German Retail Sales, US Jobless Claims, EU MP Meeting Accounts, US Factory Orders

F: Good Friday,.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

…

 

USD/JPY: 119.11

$Jpy had a choppy Friday session, finishing not too far from where it started and looks set to begin the week in much the same vein. Expect increasing volatility as positions are squared ahead of the US Jobs data on Friday.

On the topside there is resistance at 119.40 (38.2% of 121.17/118.32), which is also the weekly Tenkan, having closed below it, and at Friday’s 119.48 high and thus could prove quite a hurdle to overcome. Above 119.50 though, would open up further minor Fibo levels at 119.75 and 120.49, with 120.00 likely to see sellers in between, although given the negative look of the dailies I am not sure that we already to head back up here yet.

Back to the downside, 119.00/118.90 will provide minor support ahead of the 100 DMA/daily cloud top at 118.75 and Thursday’s 118.32 lows and the thin daily cloud base at 118.15. I don’t think we are going back down here, but if wrong then look for a run to 118.00 and lower.

Look for another day not too far removed from 119.00, with any direction likely to come later in the day if the US data (Personal Consumption/Expenditure, Pending Home Sales) is too far from expectations, but with the real action likely to arrive on Friday.

Economic data highlights will include:

M: Industrial Production

T: Housing Starts,

W: Tankan, Nomura Manufacturing PMI

T:  Foreign Bond Investment

F: Good Friday.

Meta Trader – AxiTrader    USD/JPY: 4 Hour

…

 

GBP/USD: 1.4874

Sterling had another choppy session on Friday, trading a range of 1.4795/1.4921 before finishing roughly in the middle. The rally off the lows followed some words from Mark Carney who said the next move in UK rates was likely to be higher, which contrasted with recent statement by the BOE’s Haldane who, after the lower inflation figure last week, suggested that the Bank was as likely as not to cut rates before and possible rise.

The resistance ahead of 1.5000 held again and this looks increasingly formidable, but before then there are going to be interested sellers at minor levels at 1.4885 (100 HMA), 1.4920 and at 1.4950.

The downside, will find buyers once again at 1.4805 (61.8% of 1.4687/1.4994) and at Friday’s 1.4795 low, below which would head towards 1.4758 (76.4%) and then to the recent lows at 1.4713 and at 1.4633.

With the election approaching (6 May) and the chance of a hung parliament, the upside for Cable looks somewhat limited unless there is a major sell off in the dollar, so looking to sell near 1.5000 remains the theme with a SL placed above 1.5060.

Economic data highlights will include:

M: UK Consumer Confidence

T: UK GDP

W: UK Manufacturing PMI

T: UK Construction PMI

F: Good Friday.

Meta Trader – AxiTrader     GBP/USD: 4 Hour

…

USD/CHF: 0.9618

The dollar had a choppy 0.9556/0.9692 session on Friday, finishing at 0.9620. A similar sort of day could be in store, although the short term charts point mildly higher, so again buying dips for the day trade appears to be the plan.

Further out though, the dailies still point lower, so don’t get too carried away on the topside yet. Support will arrive again at the 100 DMA at 0.9585, below which Friday’s low at 0.9555, and then 0.9530 will provide minor support, ahead of last week’s low at 0.9490.

Meta Trader – AxiTrader    USD/CHF: 4 Hour

AUD/USD: 0.7749

The Aud has traded in heavy mostly fashion since last week’s spike up to 0.7937, and Friday was no different in closing just above the session lows of 0.7744.

Given the negative look of the short term indicators further losses seem possible, in which case we are headed towards the base of the minor descending channel at around 0.7730, which ties in with the Fibo support at that level (0.7735: 61.8% of 0.7559/0.7937).  A break of this would see a deeper decline towards 0.7700 and lower, towards 0.7687 (76.4%). Beyond here would then open the way towards 0.7662 (20 Mar low) and beyond, towards the rising trend support at 0.7640 and to the strong support in the 0.7600/10 area.

The dailies though, still retain a positive outlook, so don’t get too carried away yet on the downside. Rallies will find resistance at the 200 HMA at 0.7770, which ties in pretty much with the 100 Month MA that continues to act as a magnate, as it has done over recent weeks. Above here would take another look at 0.7800 and then at the 100 HMA at 0.7845, although this seems out of reach today.

Note that in Ichimoku land, the Aud made a valiant effort to break above the weekly Tenkan at 0.7795 by heading sharply higher last week, before closing back below it on Friday. We have not had a close above the Tenkan since August too 2014. The daily Tenkan is at 0.7765, and having closed below that, this will also act as interim resistance.

Look to sell rallies towards 0.7800 with a SL placed above 0.7850 as we head back towards 0.7700 and lower over the next few sessions.

Economic data highlights will include:

M:

T: ANZ Business Confidence, HIA New Home Sales, Private Sector Credit

W: AIG Manufacturing PMI, Official/HSBC China Manufacturing PMI’s

T: TD Inflation, Trade Balance

F: Good Friday.

Meta Trader – AxiTrader    AUD/USD: 1 Hour

…

 

NZD/USD: 0.7569

The Kiwi is chopping mostly sideways but with a mildly negative tone after rejecting last week’s high at 0.7694.

Currently sitting between the 100/200 HMA’s at 0.7613/0.7532, this could well contain it in coming sessions.

We are close to 0.7576 (23.6% of 0.7175/0.7696) and this may continue to attract today. If we do head lower, then we could revisit Friday’s low at 0.7545 and maybe 0.7500 (38.2%/200 HMA). A break of this would allow a deeper move towards 0.7440, but seems unlikely today.

On the topside, 0.7600 will again act as resistance, ahead furhter sellers at 0.7630, 0.7650 and 0.7670, although I don’t think we are heading back up here again today.

The bias remains to sell at close to 0.7600 with a SL placed at 0.7630, but looking for a run towards 0.7500, albeit that it may be slow going.

Economic data highlights will include:

M:

T: NZ Building Permits

W:

T: GDT Index

F: Good Friday.

Meta Trader – AxiTrader     NZD/USD: 4 Hour

I have not done any crosses this week as they are generally rather messy and I don’t really have much of an opinion. I suspect they will generally stay that way until Friday when the US Jobs data is released.

DXY: 97.38

Having fallen to a low of 96.16 last week, the DXY has since recovered to finish at 97.40, allowing a slightly more healthy look to the index for the chance of further gains this week although the daily indicators still point lower, but they are unwinding their previous oversold condition and now have the room to cross for another leg higher. It may be too early for this yet so caution is warranted, but the topside points to watch would be at 98.00 and then at 98.50, both minor resistance levels. Beyond there may be a stretch too far this week but further offers would then arrive above 99.00 and on an approach to 100.

The downside will see bids at 97.00 and then again at last week lows at 96.16, a break of which would allow the chance of a return to the first Fibo support at 95.37 (23.6% of 78.90/100.39).

Further out, if/when the dollar uptrend resumes, which I think it eventually will, but will be dependent this week on the outcome of Friday’s NFP result, the DXY will return to the trend high of 100.39. Beyond this, the next major target remains at 101.77 (61.8% of 121.02/70.69), a break of which would head towards the March 2003 high at 102.15. In the longer term the Jan 2003 high at 103.20 would come into view but right now looks as though it will take a while.

www.tradingview.com    DXY: Daily