More soft data keeps the US$ under pressure. Eurogroup Meeting, US Durable Goods Orders today.

The US$ is generally under pressure again today on the back of more soft US data and some relatively upbeat news from Greece, where the prospect of a default and an exit from the EU seem to be waning (or more likely, postponed). Today sees the Eurogroup meeting, at which the situation in Greece will be the centre of attention and will largely drive the direction of the markets, although Greece will not present a list of economic reforms and the whole deal seems set to be kicked down the road, to the next meeting on May 11. The US Durable Goods Orders will also be released, where another soft reading would again delay the prospect for the need for a Fed rate hike and will keep the dollar under pressure. Have a good weekend.

EUR/USD: 1.0821

The choppy conditions continued today, with the Euro higher once again in completing a bullish outside day as short covering drove it higher, while being assisted by some weak US housing data which kept the dollar under pressure. It was also underpinned by some relatively upbeat Greek news but not before a minor dip early in the Europe session to a low of 1.0665, seen after some weak PMI’s (EU mfg PMI April 51.9 vs 52.6 exp, German mfg PMI April 51.9 vs 53.0 exp).

Today it is the turn of the Eurogroup Meeting to dominate direction, although there seems to be little sign that much progress is likely to be made with Greece over the debt negotiations, with some suggestion that any deal could delayed until the next meeting on May 11.

Today’s other important event will be the US Durable Goods Orders (exp +0.6%), with another failure to meet expectations likely to put the dollar under further pressure as any prospect of a Fed Rate hike recedes until late 2015 or even until 2016.

Technically, the Euro has so far fallen short of triggering stop losses  that sit above 1.0850, although at some stage it would appear that these will attract, above which would see the Euro head towards  the 8 April high at 1.0887 and to the Fibo resistance at 1.0911 (76.4% of 1.1034/1.0461). Above this may be tricky today, but further gains would see the Euro head on towards 1.0954 (7 Apr high) and then to the 1.1034 pivot, above which would put any thoughts of an immediate return to the downtrend on hold.

Back to the downs side, bids will arrive at 1.0800 and then at 1.0750 (100 HMA) and at 1.0705 (200 HMA). Below 1.0700 would head to the minor double bottom at 1.0660/65 and then to minor Fibo levels at 1.0645 and 1.0600, below which would then take another look at the congestion ahead of 1.0500.

The indicators seem to suggest that we could head towards 1.0900 –  and further soft US data could well assist such a move. In the meantime wait for any headlines coming from the EU meeting. Ahead of that, Asia seems to be confined to a 1.0800/50 range.

Economic data highlights will include:

Eurogroup Meeting, German IFO Business Climate/Expectations, US Durable Goods Orders.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

USD/JPY: 119.56

Despite a brief foray above 120.00 (high 120.08) the dollar is now back in familiar territory, currently sitting at 119.50, with little change to the outlook.

Another 119/120 day seems on the cards, although a surprise from the US Durable Goods Orders, later in the day, may prompt a break on one side or the other.

A sustained break of 120.00, would open the way for a rally towards 120.40 (daily cloud top), 120.85 (13 Apr high) and 121.00. As we said before, although unlikely to be seen yet, a topside break of 121.00 would open up the 20 March high at 121.20, the consolidation area at around 121.50 and the 10 March high at 122.02. If/when this level can be overcome, the way would open up for a run towards the 15 July 2007 high at 122.42, and in the longer term, the target of 124.13 (17 June 2007 high) would appear on the horizon but will take time.

The downside would see the dollar head back below the session low at 119.42 (200 HMA) to the 100 DMA at 119.20 and the daily cloud base at 118.90. Below this would then head back to Monday’s low at 118.52, but which seems unlikely to be tested again for a while. If wrong, the next  support levels to watch, are at the 26 March low (118.32), the Fibo support at 118.20 (61.8% of 115.85/122.02) and at 118.00, but below which there is not too much to provide support until 117.30 (76.4%).

Use 119.20/120.00 as a guide.

Meta Trader – AxiTrader    USD/JPY: 4 Hour

GBP/USD: 1.5056

Cable had a choppy day, initially turning lower after the soft UK Retail Sales sent it back below 1.5000 to the days low at 1.4958, before regaining the lost ground after the soft US housing data, to reach a high of 1.5070.

More choppy trade appears likely, with traders reluctant to buy it too aggressively ahead of the 7 May UK election, at which the result seems likely to be a hung parliament.

Technically, Cable has now recovered, to close inside the daily cloud, for the first time since early March. The parameters of the cloud are currently at 1.4990/1.5090, and a topside break would see a run towards the 9 March high at 1.5136 and the next Fibo level at 1.5170 (61.8% of 1.5551/1.4565). If seen, 1.5135/70 will be a very strong area of resistance, also being the top of the long term descending channel and the larger degree of Fibo resistance (23.6% of 1.7191/1.4565). A break above here would then head to the 100 DMA at 1.5190 but beyond this seems somewhat distant right now.

Back below 1.5000 would then head towards the rising trend support at 1.4980 and to the session low (1.4958). Below here minor supports lie at 1.4920 and 1.4900 ahead of Fibo support at 1.4885 (38.2% of 1.4565/1.5078), 1.4865 (daily Kijun) and yesterday’s 1.4855 session low..

Meta Trader – AxiTrader    GBP/USD: 4 Hour

USD/CHF: 0.9540

US$Chf has made a sharp turn lower today, reversing almost all yesterday’s gains, in falling from a high of 0.9718 to a low , so far, of 0.9530.

We are now back near the lows of the week and another break lower would test 0.9490/00, where the 200 DMA may well continue to hold the dollar up, but below which would head towards the recent lows at 0.9453. Below here would see an acceleration towards the 20 Feb low at 0.9370, although this is some way off yet.

A turn higher will find offers once more at 0.9590 (100 DMA) above which will see a return to the 0.9600/0.9700 band..

Too hard. Stand aside.

Meta Trader – AxiTrader    USD/CHF: 4 Hour

AUD/USD: 0.7779

The Aud remains within the 0.7700/0.7800 band, and with no data due today direction will be driven by offshore events.

Technically there is no change.

The downside will see bids at 0.7750 (100 HMA) and then at the 200 HMA at 0.7710 (200 HMA)

Further out, below 0.7700 would head to the week’s low at 0.7682, ahead of the minor Fibo supports at 0.7665 and 0.7620. If/when we ever head back below 0.7600, decent support would lie at 0.7575, 0.7550 and at the trend low of 0.7532 (2 April low). Below this, the RBA’s line in the sand at 0.7500 will provide stronger support but a break of which would open up the way to 0.7414 (Oct 2010 low).

On the topside, back above 0.7800 and Wednesday’s high at 0.7806 would allow a return to  last Friday’s high of 0.7842, above which would suggest a run towards 0.7884 (26 March high), 0.7904 (25 March high) and to the trend high at 0.7937.

The charts are mixed, although a short term bullish flag appears to be forming which could see an advance on the 0.7840 area.

Meta Trader – AxiTrader    AUD/USD: 4 Hour

NZD/USD: 0.7588

The Kiwi is lower today, under pressure following yesterday’s comments from the RBNZ assistant governor McDermott that the Bank is not considering further rate increases at present. I’m not sure why the market saw that as a reason to sell the Kiwi so aggressively, as he did not indicate any rate cuts either, but it has fallen quite hard from above 0.7700 to a low of 0.7535 (0.7530 : 38.2% of 0.7175/0.7740), before bouncing to sit back below 0.7600.

The wide consolidation band within the 0.7400/0.7740 range seems set to continue and a neutral stance is therefore currently required while we sit in the middle.

The immediate resistance is seen at 0.7600 and 0.7610 (200 HMA), above which could then see a squeeze back to minor levels at 0.7635 and at 0.7655 (100 HMA). Above here looks unlikely today but further gains would see a run towards 0.7700 and back to the 0.7740 trend high.

The downside will find buyers at 0.0.7565 (100 DMA) and at the session low. Below 0.7530 would run towards 0.7500 and 0.7460 although at this stage such a move seems unlikely.

Meta Trader – AxiTrader     NZD/USD: 4 Hour