A quiet session. The RBA meeting and US ISM manufacturing data, today's highlights.


It has been quiet in the absence of NY, with the slightly softer than expected EU manufacturing PMI’s causing little reaction in the Euro. It could be another steady session for the major pairs, with little to disturb the markets until the US ISM manufacturing PMI later in the day, although as ever, the markets will be keeping a close eye on the developments in the Ukraine. The RBA will be meeting today, so Aud will be in focus and while no change is expected to policy, an overly dovish tone in the statement could see it come under pressure once again. Australian Building Approvals and the Current Account are also due.


EUR/USD: 1.3128

There is little to add today due to the NY holiday, with the Euro currently sitting just above its lows but under pressure due to the ramping up of the tensions in the Ukraine, and with traders now looking towards Thursday’s ECB meeting.

The EU PMI’s were mixed, but generally on the soft side (EU 50.7; exp 50.8, – Germany 51.4; exp 52, – France 46.9; exp 46.5) and did little to stir any interest although the coming session will see the US ISM manufacturing PMI which could cause some volatility if it is too far from expectations (56.8). Other than that there is little to stir too much interest today and the market is likely to sit on the sidelines ahead of the ECB, and then the NFP on Friday.

Technically there is no real change, and as with yesterday, the first downside target is close by at 1.3104 (6 Sept ’13 low). A break of 1.3100 would most likely see the Euro accelerate lower towards 1.3045(76.4% of 1.2754/ 1.3993), which if seen should prove strong support. The 4 hour charts still look as though they may be running out of downward momentum in the short term, so I suspect that if we do head down towards here it will hold and bounce, at least at the first attempt. If wrong, look for a run towards 1.3000, which will also be heavily protected, but a break of which will open up the possibility of a decline towards the major Fibo extension, this being the 161.8% projection of 1.3993 to 1.3502, from 1.3700 at 1.2906 and then beyond that to the 9 July low 2013 at 1.2754. Goldman Sachs last week lowered their 3, 6 and 12 month EUR/USD forecasts to 1.29, 1.25 and 1.20 respectively , and I would tend to agree with their view, with 1.2042, the July 2012 low, being the obvious long distance target.

On the topside, minor resistance is again seen at 1.3150 and then at 1.3165 (100 HMA). I don’t think that we are going above here today unless the ISM comes in a long way below expectations, but the market remains heavily short of the Euro and we could yet get a nasty squeeze. A break of 1.3165 could produce a run back to 1.3200 (200 HMA), above which would then take the Euro back to the Fibo resistance at 1.3225 (38.2% of 1.3411/1.3118). Beyond this would trigger stops, possibly taking the Euro back up to the top of the channel at Fibo resistance (61.8% of 1.3411/1.3118) at around 1.3300. Right now this looks unlikely.

Use 1.3100/65 to contain the action today as the market holds its ammunition for the heavy data at the end of the week. Keep the potential bullish divergence of the 4 hour charts in mind, which could produce a bounce in the Euro, but which would give another sell opportunity for further rallies in the dollar.

Economic data highlights will include:

EU PPI, US ISM Mfg PMI

Meta Trader – AxiTrader


EUR/USD: 4 Hour

Euro


USD/JPY: 104.33

US$/Jpy is quiet but has made new trend highs at 104.30 and is proving remarkably resilient to any urge to any run towards the  safe haven of the Yen given the ramping up of the tensions in the Ukraine.

I don’t think we are going anywhere too far today and the dollar seems likely to hang around here as it awaits the outcome of the BOJ meeting (Thursday) and then, more likely, the NFP (Friday).

A break to the topside would see a run up towards 104.50 beyond which would head on towards 105.00, although almost certainly not today. Beyond that, as I have previously said, I suspect that we are eventually headed back up towards the 200 month MA at 106.50.

Back below 104.00, which seems equally unlikely today, minor support is now seen at 103.70 and then below there at last week’s lows just above 103.50. A break of 103.45/50, which looks doubtful unless the Ukraine issue really heats up, causing a mass exodus from the dollar and  back towards the Yen, would then open up the chance of a test of the daily Tenkan/  Fibo support (38.2% of 101.50/104.30)  at 103.35, below which would then head lower, towards 103.00.

Use 1.4.00/50 as a guide today, or more likely 104.10/50.

Meta Trader – AxiTrader

USD/JPY:4 Hour

Yen


GBP/USD: 1.6608

Sterling jumped up to a 2-week high at 1.6643 today, triggering stops above 1.6610. It then attempted to break the top of the channel but ran into sell orders near 1.6650 and fell back towards 1.6600 in the thin US holiday market.The momentum indicators do suggest that Cable could make another push to the topside, although the daily Tenkan, now at 1.6610 is currently sitting in the way.  Above there, 1.6650 will not be easy to break, but if Cable can find the legs to do so, then it would find further sellers at around 1.6685 (200DMA/23.6% of 1.7191/1.6535).On the downside, back below the session lows of 1.6585, which looks a little unlikely today, would head back to support at 1.6560 (minor) and then to the trend low at 1.6535. A break of this would most likely signal the next leg lower, initially for a run towards 1.6500 and then eventually towards the 24 March low at 1.6462, which is roughly where the channel base currently lies.With little data due out today, another session close to 1.6600 looks the most likely outcome.Meta Trader – AxiTrader

GBP/USD: Daily

Gbp


USD/CHF: 0.9194

US$/Chf made a new trend high today (0.9197) but was still unable to conquer the hurdle at 0.9200.

Once this has been overcome, the path would then open up for the chance of a run back to the November 2013 high at 0.9249 and, beyond there, towards the 50% pivot of 0.9838/0.8698 at 0.9265.

Below today’s 0.9176 low, the downside will find minor support once more at 0.9160. I doubt we are headed below here today, but if wrong look for a dip back to 0.9140 and possibly to 9125. If seen, this should prove solid support, but a break would then see a return towards 0.9115 and 0.9100(daily Kijun/Tenkan).

Look for 0.975/0.9215 to cover it today.

Economic data highlights will include:

GDP

Meta Trader – AxiTrader

USD/CHF:4 Hour

Chf


AUD/USD: 0.9330

Despite an early session sell-off, the Aud remained firm for much of the session, reaching a high of 0.9351, despite the slightly softer than expected Chinese manufacturing data.

Today’s focus will be on Glen Stevens’s statement following the RBA meeting. No change is expected in rates, which have now been at their 2.5% lows for 12 months, but the statement is likely to contain a dovish tone, and he will no doubt, once again lament the high value of the dollar.

It is unlikely to have much impact, but if we do see a move to the downside, a break of the rising trend support, right here at 0.9330 would find some bids at 0.9320 (200 HMA) and then again at 0.9300/10.

Below 0.9300, look for a run back towards 0.9285 and eventually towards 0.9260.I doubt we see it down here today, by the 4 hour indicators do look rather soggy and a break of 0.9300 would not really surprise as we head towards the Q2 GDP on Thursday, which is not expected to be supportive of the Aud.

Further out, a sustained break of the recent 0.9236 low 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, offers are seen at the base of the daily cloud/daily Kijun at 0.9355/0.9360, and above here at 0.9373, where we have a minor double top, with further offers to be seen at 0.9380 (61.8% of 0.9472/0.9236). I doubt we are headed close to this today, but if incorrect, a break would see a bit of a squeeze towards 0.9400 and possibly to 0.9416 (76.4%).

I mlldly prefer the short side today, and would look for a test of 0.9300, and then possibly lower as we head towards the expected soft Q2 GDP reading on Thursday.

Economic data highlights will include:

Building Permits, Current Acc, RB A I/R Decision/Statement

Meta Trader – AxiTrader

AUD/USD:4 Hour

Aud


NZD/USD: 0.8375

The Kiwi is better bid today, having reached a session high of 0.8388 following the improved trade data yesterday. It is currently attempting to break the top of the descending channel  but has run into offers and currently sits at 0.8375.

While the 4 hour charts are neutral, the dailies still look as though we could see another probe to the topside, and if the Kiwi can find the legs, then above the session high it could reach 0.8400 (daily Tenkan). A break of the 28 August high at 0.8407 would see stops triggered and would be likely to take the Kiwi a bit higher although I cannot see this happening today. If wrong, look for a squeeze up to 0.8430 (23.6% of 0.8514/0.8310), beyond which would target 0.8445 (daily Kijun) and the 200 DMA at 0.8465.

On the downside, back below today’s session low at 0.8347, the next support is seen at around 0.8320/25, below which would take the Kiwi back to the trend low at 0.8310, which should act as strong support. A break of 0.8300 would hint at a run towards 0.8275(50% Fib of 0.7670-0.8839) and then 0.8242 (February 20 low).Below here would suggest further losses for a run to 0.8200 and lower towards the 5  Feb  low  (0.8187) and possibly to the 4 Feb low (0.8051).

Use 0.8350/0.8400 as a guide today.

Economic data highlights will include:

ANZ Commodity Price Index

Meta Trader – AxiTrader

NZD/USD:4 Hour

NzdNzd

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

Gold price sits at all-time highs above $2,230

Gold price sits at all-time highs above $2,230

Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures