US$ eases back ahead of Jackson Hole speeches from Yellen & Draghi, later today.


Aud, Kiwi recover well from session lows after soft China data.

The dollar gave back some of its recent gains today, despite some  firm US data as the market focuses on Janet Yellen’s speech, due later on at Jackson Hole. It will be a busy end to the week, with Mario Draghi lined up to follow Yellen, where the market will be waiting to see if he uses the forum to announce a further easing of liquidity to boost growth in the EU. Until the fireworks begin it will be a session of sitting on hands, so a good day to catch up with the admin! Have a good w/e.


EUR/USD: 1.3280

The Euro managed to withstand the mostly softer manufacturing PMI’s from the EU and having made a new trend low at 1.3242 in Asia, has squeezed a bit higher, despite some firm US data, as the market now waits for the major events of the weeks, these being the speeches from Janet Yellen and Mario Draghi at Jackson Hole. The general feeling seems to be that while Yellen will retain her cautious outlook for the US economy, Mario Draghi could well use the occasion to announce some form of easing in order to boost the EU economy, including the possibility of introducing quantative easing.

The US dollar would seem to be the winner if it all turns out as expected, but the market is heavily short the Euro, in anticipation of further dollar gains, and the 4 hour charts are now turning to point higher so we could yet be in for a short squeeze that would take the Euro to back above 1.3300.

Currently sitting just below session highs at 1.3287, if the Euro does turn higher, then above 1.3300 would take us back towards the descending trend resistance/100 HMA at 1.3320 and then the 200 HMA at 1.3340 (1.3348: 23.6% of 1.3699/1.3242). Above 1.3350 would suggest a further squeeze higher towards 1.3400 and possibly to the recent tops in the 1.3415/30 area.

While the short term charts do suggest the chance of a squeeze, the dailies still point lower and eventually I think the 1.3242 low will give way for a run towards 1.3228 (61.8% of 1.2754/1.3993), below which there is not a huge amount of support to hold the Euro up ahead of 1.3104 (6 Sept ’13 low).

There is no other data out ahead of Jackson Hole so find something else to do until then.It could be a rather hectic end to the week later on though so be cautious..

Economic data highlights will include:

Jackson Hole Symposium

Meta Trader – AxiTrader

EUR/USD: 4 Hour


USD/JPY: 103.85

The dollar did pretty much as expected in consolidating below 104.00, dipping to 103.60, but coming back to remain unchanged on the day while the overbought conditions unwind themselves ahead of the Jackson Hole summit later on..

More of the same looks likely for much of the coming session, with the 4 hour charts still at overbought extremes, and further dips would not really surprise. The points to watch, below 103.60 are at 103.50 and then 103.20 (23.6% of 100.82/102.95), below which 103.00/10 would provide support. Back below there, which looks unlikely, would see a return to 102.70/80 and then 102.40 (200 DMA).

While the upside looks a bit sticky in the short term, the daily charts still point higher and once 104.00 is taken out, the 3 April high at 104.10 will act as a nearby resistance. Beyond there, the next target coming into view would be the 21 Jan high at 104.74 but unlikely to be seen yet, I think.

Further out, as we said before, we could well be making a run towards the 200 month MA at 106.50; currently some way off but worth watching.

Look for a right range today, but the strategy remains one of looking to buy short term dips in anticipation of the longer term dollar rally.

Meta Trader – AxiTrader

USD/JPY: 4 Hour


GBP/USD: 1.6580

Cable saw new trend lows at 1.6563 after the soft UK retail sales data release, before a bit of a bounce back towards 1.6600, above which proved a hurdle too far, and it is settling back towards 1.6580 heading into the NY close.

There will be little action now until Jackson Hole, but the daily technicals still point lower and over time it looks as though the downtrend has further to run although in the short term the hourly charts are showing some bullish divergence and the 4 hourlies are turning to point higher as well. If Mario Draghi is particularly dovish today over the outlook for the EU, Cable could well receive some decent support through inbound flows through the cross, where Eur/Gbp currently sits at around 0.8000 but would come under downside pressure if he is overly negative in his outlook

On the topside, back above 1.6600 would potentially see a squeeze back towards minor trend resistance at around 1.6635, beyond which could see a squeeze up to the Fibo resistance at 1.6670 (23.6% of 1.7191/1.6563) where the 200 DMA also lies. Above that sees a return to 1.6700 but looks unlikely at present.

If Janet Yellen is more hawkish than expected, taking the dollar higher and sending Cable lower, then below today’s session low, the next port of call could be the 4 April low at 1.6551. Further losses would then hint at a deeper decline, potentially below 1.6500, for a run towards the 24 March low at 1.6462.

Short term traders may want to try and buy dips, but should be square ahead of Janet Yellen at 10.00 am NY and then Mario Draghi at 2.30pm.

Meta Trader – AxiTrader

GBP/USD: 4 Hour


USD/CHF: 0.9115

Having squeezed up to 0.9145, the dollar has given up minor ground as it consolidates ahead of Jackson Hole later today.

The points to watch remain pretty much unchanged.

 Support currently remains intact at 0.9100 and below there at 0.9088 (100 HMA) and at 0.9078 (200 HMA/23.6% of 0.0.8864/0.9045) A break of this would see a return to 0.9040/50 but currently looks unlikely.

 On the topside, a clean break of 0.9130 (23.2% of 0.9838/0.8698) would see another run up to the 0.9145 high and then on towards the 100/200 WMA’s, which both currently lie at around 0.9160. This should be strong resistance, but a break of which would suggest a run up towards 0.9190 (20 Nov ’13 high) and then to 0.9249 (7 Nov 13 high).

As elsewhere, while the dailies point higher, the 4 hour charts are still overbought and we may need a bit of a dip before the rally can continue.

Meta Trader – AxiTrader

USD/CHF: 4 Hour


AUD/USD: 0.9300

The Aud had a choppy session in falling sharply to 0.9236 on the release of the soft China data yesterday, before recovering later in the day, helped by yield seekers and a generally softer US dollar ahead of today’s Jackson Hole summit.

The Aud is therefore back at 0.9300 and despite the choppy conditions the technical outlook remains pretty much unchanged.

The Aud currently looks relatively comfortable between the 100 HMA (0.9305) and the 200 HMA (0.9297) and it could well sit around here for much of the coming session. A downside break would most likely find support again at around 0.9260, although I think it unlikely that we see it down here, at least ahead of Janet Yellen speaking. If wrong, below there would suggest a return to wards the session lows at 0.9236.

A sustained break of 0.9235/40 would most likely see an acceleration towards 0.9200 below which, the next target would be the 200 DMA/38.2% Fibo support of the rally from 0.8660/0.9505 at 0.9175. A break of this could see a deeper move towards minor support at around 0.9135 and then to 0.9100 and maybe to 0.9050 (50% pivot of 0.8660/0.9505).

On the topside, the first hurdle will be at yesterday’s session high at 0.9317, above which 0.9325 and then 0.9340 (100 DMA: 0.9336) will once more find decent sellers. I can’t see it above here today, ahead of Jackson Hole, but if wrong, we could be in for a run towards 0.9355 (daily cloud base/Kijun) and possibly back towards 0.9373(6 Aug high) and 0.9382 (61.8% of 0.9472/0.9239). Above this would open the way up for a run to 0.9400 and possibly to 0.9416 (76.4%).

I am neutral on the Aud today, but the charts do tend to lean to another squeeze to the topside. If Yellen turns out to be rather hawkish though, the US$ is going to be the winner and the Aud will quickly run out of steam.

Meta Trader – AxiTrader

AUD/USD: 4 Hour


NZDUSD: 0.8405

Having made a new trend low at 0.8347, after poor consumer confidence data, the Kiwi has recovered well to regain 0.8400 and now looks as though it could make some further headway given the positive momentum in the shorter term charts.

Above 0.8415 would see a run towards the 100 HMA (0.8430) and then 200 DMA (0.8445). Above there would hint at a return to 0.8500 and the recent 0.8514 top, although at this stage I don’t see it.

On the downside, back below the session low at 0.8347 would hint at the chance of a  deeper decline seems possible that would most likely head towards the next meaningful support levels at 0.8275/0.8300.

As with everything else, it could be very quiet before the fireworks begin in the US session.

Meta Trader – AxiTrader

NZD/USD: 4 Hour

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates. 

EUR/USD News

GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone

GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone

GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the Bank of England will begin the rate-cut cycle this year.

GBP/USD News

Gold ends Q1 2024 at record highs, what’s next?

Gold ends Q1 2024 at record highs, what’s next?

Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.

Gold News

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple's move above this key level could trigger nearly 50% rally for XRP

Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.

Read more

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount

The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.

Read more

Majors

Cryptocurrencies

Signatures