US$ under pressure ahead of a busy data load this week. Commodities, equities strongly higher.

The dollar came under heavy pressure again on Friday, with NY sending the EU majors back towards last Thursday’s highs as traders continue to digest the Fed’s mildly more dovish than expected outlook. Commodities rallied strongly, giving a reprieve to the commodity bloc currencies, while equities had a good session, with the FTSE making an all time high, reaching 7000. This week will be largely dominated by US data, with the CPI, Durable Goods and GDP all due. Merkel/Tsipras  meet in Berlin today. Elsewhere the main focus will be on the flash global PMI’s, the UK CPI/PPI and assorted secondary data from the various centres. It will be a busy one, and a nimble stance will be required. The US CPI  (Tues )will be of key importance after the FOMC statement increased the focus on the inflation side of the Fed’s mandate.

EUR/USD: 1.0816

A sharp drop in US$Jpy at the NY open, on the back of soft US bond yields, initiated a round of broad-based US$ sales on Friday, sending the Euro sharply higher, from below 1.0700 to a high of 1.0882 as stops were triggered, with the dollar not assisted in any way by some dovish comments from the Fed’s Lockhart & Evans.  The Euro also received some assistance from the news that the EU is considering bringing forward a financial lifeline for Athens by a few weeks, although there is no major change in the overall situation. Market focus today will be on Berlin, where a key meeting between Greek PM Tsipras and Chancellor Merkel will take place, which may cause increased volatility, depending on the outcome and will be worth watching out for.

Having reached its peak at 1.0882, the dollar regained some minor ground late in the day when it returned to 1.0800 before closing at 1.0825 but after having recovered strongly from its lows, the Euro does now seem at a tipping point and a fairly nimble stance will be required this week, with a mildly bullish intra-day bias as per the short term charts. The overall direction though, is going to be driven largely by US data, with the CPI (Tues), Durable Gods (Wed) and the Q4 GDP (Fri) being the key focus for traders looking for any hint as to when we might expect the Fed to begin raising rates. If the recent trend of soft data continues, then we are going to find the dollar under pressure again as any US hike looks like being postponed from the previously favoured June towards September.

Technically, with the 4 hour and the daily indicators pointing higher, it would seem that the Euro is going to remain relatively underpinned over the next few sessions. Back below 1.0800, the initial support will arrive at 1.0780, (38.2% of Friday’s run up from 1.0612/1.0882) and then at 1.0750 and 1.0720 (61.8%). Under there would retest 1.0700 and 1.0680 (76.4%) although this looks unlikely to be seen ahead of the US CPI. Given the increased volatility though, anything could happen and further losses would look towards the minor rising trend support, currently at around 1.0650 which lies just ahead of Friday’s 1.0612 low. Eventually I would expect the longer term US$ uptrend to continue and would look for a return to 1.0460 and lower, but this appears to have been postponed for now.

On the topside, we could see a run above minor 1.0825 resistance and back towards the 1.0882 high, seen on Friday. Beyond there would see sellers at 1.0900 and then on towards 1.0920 and to the Fibo resistance at 1.0935 (76.4% of 1.1039/1.0612) and the daily Kijun at 1.0950, but above which, there would be little to stop the Euro heading on towards last week’s spike top at 1.1039. I think the US data is going to need to be very soft for the Euro to find the legs to reach those heights again but If wrong, the weekly Tenkan lies at 1.1070 and should provide stern resistance.

Look for a choppy session to start the week using 1.0750/1.0930 as a guide. Keep an eye out for headlines from Berlin.

Economic data highlights will include:

M: EU Consumer Confidence, Existing Home Sales, Chicago Fed Activity Index

T: EU Manufacturing, Services, Composite PMI’s, US CPI, Case Schiller Home Price , US Markit Composite, Services PMI, Index, US Markit Manufacturing PMI, Consumer Confidence, New Home Sales

W: US Durable Goods

T: German Consumer Confidence, US Jobless Claims, Services PMI, Composite PMI

F: US GDP .

Meta Trader – AxiTrader   EUR/USD: 4 Hour

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USD/JPY: 120.02

After trading at close to 121.00 during Friday’s European session,  US$Jpy fell sharply at the NY open on the back of soft bond yields closing at 120.05 after reaching a low of 119.89.

The focus this week will be on the US data to see if it improves dramatically from the weather affected Jan & Feb results and if there is no improvement the dollar is going to come under further pressure this week, as is suggested by the indicators, which hint that the dollar may have some more downside ahead. Japan FY is at the end of the month and will see some book squaring ahead of that.

Below 119.90, the first support would be seen at 119.50/60, where the rising trend support at the base of the channel as well as 2 Fibo levels currently lie, beyond which the dollar would revisit the weekly Tenkan at 119.40 and Thursday’s spike low at 119.27. Under here would see strong support at 119.00 (Fibo support at 119.02 (61.8% of 115.85/122.02) and 118.90 (50% of 117.16/122.02)) below which would open the way for a deeper move towards 118.60 and then towards 118.30 (76.4% of 115.85/122.02).

If the dollar does recover, then the initial resistance will be at the daily Kijun, nearby at 120.15 above which would see another choppy run towards 120.60 (minor) and then on towards 121.00 where the 100/200 HMA’s will provide a hurdle.  Although unlikely to be seen today a topside break of 121.00 would open up 121.50 and the recent 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.

Economic data highlights will include:

M:

T: Nomura Manufacturing PMI

W:

T:

F:..

Meta Trader – AxiTrader    USD/JPY: 4 Hour

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GBP/USD: 1.4943

Cable headed sharply higher from the 1.4722 low at the US open on Friday as short positions were squeezed, en- route to the session high of 1.4989 as the market still comes to grips with what was perceived as a dovish Fed statement on Wednesday. The picture will become clearer this week with some major US data to be released, while the UK get to see the CPI, PPI (Tues) and the Retail Sales (Thur).

Technically, Cable finished the week on a strong note at 1.4950 and looks set to test the sellers at 1.5000. Above here would see a run on towards Fibo resistance at 1.5090 (50% pivot of 1.5551/1.4633) and to last week’s spike top at 1.5165.

Back to the downside support will arrive at 1.4920 (minor) ahead of 1.4900. Below this would then head to the 200 HMA at 1.4850 and the 100 HMA at 1.4800.

A neutral stance is needed at present while the market continues to recover from last week’s volatility and the direction this week will depend on the outcome of the data, but the daily indicators do appear to be turning to point higher, so for the time being buying dips may be the plan.

Economic data highlights will include:

M:

T: UK CPI, PPI, RPI

W:

T: Retail Sales

F:..

Meta Trader – AxiTrader    GBP/USD: 4 Hour

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USD/CHF: 0.9752

The dollar headed lower again on Friday finishing near to the session low of 0.9728.

The next support is at 0.9710 (23.6% of 0.8336/1.0122) which comes ahead of last week’s spike low at 0.9625.

The topside will see sellers at 0.9800 and again at 0.9850 and 0.9900. As before, stand aside.

Economic data highlights will include:

M:

T:

W: SNB Quarterly Bulletin

T:

F:.

Meta Trader – AxiTrader    USD/CHF: 4 Hour

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AUD/USD: 0.7770

The Aud staged a strong recovery on Friday on the back of a weaker US$ and bond yields, thus enabling a decent rally in commodities, pushing the Aud to a high of 0.7802, and which now appears to be making a serious attempt at a sustained break of the top of the descending channel for a potential run to higher levels, at least in the near term.

This week will be driven by international flows, largely on the back of the US data due to be released in the next few days, stating with tomorrows CPI.

Technically, the indicators do suggest that the recovery could have a bit more in it, and a retest of 0.7800 would not now surprise. Above here would see a further squeeze towards last week’s spike to 0.7846, beyond which would suggest a run towards 0.7900 and the 26 Feb 0.7912. Beyond here would see a bigger squeeze, with the potential to revisit the Fibo resistance at 0.8010 (61.8% of 0.8294/0.7559), although it is too early to think of it at this stage.

Although it does currently look bid, from these levels it is hard to see too much upside for the Aud unless there is another major selloff in the US$ and Friday’s close, right on the 100 Month MA at 0.7775 may well continue to act as pivot for a while to come. The RBA want the currency lower and a rate hike appears to be on the way in May, if not April, with the only impediment seeming to be the overheated real estate sector. The Iron Ore price (which accounts for every $1 in $5 export dollars) appears headed for US$50 pt (currently around US$54 pt) and possibly lower, putting material pressure on the GDP, and with unemployment probably trending higher, a (substantially) lower Aud$ would appear to be on its way in the months ahead.

If and when the Aud does head lower, which may take a while, the support levels to watch are now at 0.7730 (38.2% of 0.7610/0.7802), 0.7705 (50%) and 0.7683 (61.8%). The 100/200 HMA’s lie at close to 0.7560 below which would head back to the stronger support seen between 0.7590/0.7610.

Further out, the recent low at 0.7559 would provide strong support, a break of which would then hint at a run to the RBA’s stated target of 0.7500. I think we are eventually heading there and lower over time, below which there is not too much to hold the Aud ahead of 0.7414 (Oct 2010 low). Under here there is very strong support at around 0.7200 where two important Fibo levels are lining up (0.7210: 61.8% of 0.4773/1.1082 and 0.7180:76.4% of 0.6006/1.1082). I suspect that eventually 0.7000 will appear on the horizon (and eventually 0.6000!), but this is going to be some way off yet.

The plan seems to be for the Aud to be headed a bit higher in the near term although I still prefer to look for levels to sell it for the longer term decline that I think we are going to see over the next few months.

Economic data highlights will include:

M: CB Leading Indicator, CB China Leading index, RBA Edey Speech

T: HSBC China Manufacturing PMI

W: Financial Stability Review

T: HIA New Home Sales

F:..

Meta Trader – AxiTrader    AUD/USD: 4 Hour

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NZD/USD: 0.7563

The Kiwi had a strong session in rallying from 0.7400 to almost reach 0.7600 (high 0.7592) and then finishing at 0.7565, but with the indicators hinting that a test of the topside could lie ahead. Friday’s move saw the Kiwi take out Thursday’s spike high, which the Aud (and most of the other majors) has yet to do.

If 0.7600 can be taken out, look for a run towards the 4 March high at 0.7613 and the 100 DMA at 0.7630 which should be very strong resistance. A break of this though would suggest a bigger run towards 0.7700 and possibly even to descending trend resistance at 0.7780 although this would be some way off unless the US$ sees another aggressive selloff.

A turn to the downside, which looks a little less likely in the next couple of sessions would see minor bids at 0.7540 and then at Fibo support at 0.7495 (23.6% of 0.7175/0.7592). Below here would then head towards the next Fibo supports at 0.7435 (38.2%) and to 0.7390 (50% pivot) although this seems unlikely in the next couple of days.

Economic data highlights will include:

M: WBC Consumer Survey

T: NZ Trade Balance

W:

T:

F:..

Meta Trader – AxiTrader    NZD/USD: 4 Hour

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EURJPY: 129.80

EURJPY: 129.80. Eur Jpy had a pretty hectic week in falling to 126.90 before recovering in highly volatile trade to reach the 3 month descending trend resistance at 131.71 and then finishing the week back below 130.00. With some bullish divergence becoming apparent in the daily charts further upside progress would seem possible and a run to back above 130.00 would take a look at the descending trend resistance now at 131.00. A break would then head towards the 131.70 high and on towards the Fibo resistance at 132.25 (23.6% of 149.77/126.89). Buying dips looks to be the plan and the levels to watch would be at around 129.00 (100 HMA), 128.70 (200 HMA) and then at 128.00. Below here looks unlikely but given the recent volatility we could see a dip towards 127.00 and the 126.89 trend low.Meta Trader – AxiTraderEURJPY: 4 Hour

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GBPJPY: 179.50

GBPJPY: 179.50. Whereas the tone in EurJpy looks mildly positive, GbpJpy does not look quite so healthy, which may point to higher levels ahead for EurGbp (see below).  GbpJpy had a wide 177.15/181.04 range last week before finishing roughly in the middle and less than 50 points from where it began it, and with the daily and weekly indicators pointing lower, another test of the downside may lie ahead the 100/200 HMAs are at 178.95/179.95 which may provide the initial range with a downside break likely to head back to the important rising trend support at 177.40. A break of 180.00 would head back to last week’s high although the indicators do not suggest that this is likely in the near term.Meta Trader – AxiTrader    GBPJPY: Daily

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EURGBP: 0.7225

EURGBP: 0.7225. The cross traded much as we expected last week in rallying strongly  from 0.7110 to a high of 0.7292 before easing back a little to finish Friday at 0.7225. The dailies still look positive and another test of the topside could be seen for a run back towards 0.7300 and beyond, to the Fibo resistance at 0.7340 (23.6% of 0.8399/0.7014) and the 100 Month MA at 0.7370. I would again be a seller on an approach to this level, with a SL placed above the 100 MMA, looking for another reversal towards 0.7000 and eventually lower, towards the Nov 2007 low at 0.6919, and then lower still, but not yet.

Meta Trader – AxiTrader    EURGBP: Daily

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GBPAUD: 1.9220

GBPAUD: 1.9220. The cross was choppy within a 1.9140/1.9470 range but with a generally soft bias and more of the same would seem possible this week.

Further losses do look likely to me, as long as we stay below last weeks high and I suspect the way is open for another run to 1.9180 (50% pivot of 1.8339/2.0028) and the base of the channel at 1.9130 and possibly to 1.8980 (61.8%).Above 1.9470 would prove me wrong and would see the cross head back into  the middle of its recent range for more choppy consolidation and the chance to rise to 1.9550/1.9650. Right now, if seen up at these levels it would appear to be a sell, but not overly confident of buying the Aud in the crosses right now.Meta Trader – AxiTrader    GBPAUD: Weekly

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EURAUD: 1.3915

EURAUD: 1.3915 The cross recovered after a choppy week after holding on to the strong support at 1.3720 (50.% pivot of 1.1611/15831) and reaching a spike high of 1.4069 in the volatile conditions seen last week. With the dailies pointing higher we could revisit this levels beyond which will find resistance at 1.4150 and at 14225.The weeklies do not look so sure about a sustained move higher and if last weeks low gives way, then a run to the 200 WMA at 1.3630 and on to the base of the major channel, currently at 1.3525 would seem to be on the cards. A break of the channel base would then open up 1.3225 (61.8% of 1.1611/1.5831).Looking for a near term rally before a resumption towards the base of the channel appears to be the medium term plan. .Meta Trader – AxiTrader   EURAUD:Weekly

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DXY: 97.80

The DXY headed sharply lower from its 100.39 high in the latter half of last week, reaching a low of 96.60 on Thursday. With the daily indicators now pointing lower, another test of 97.00 and of 96.60 could be on the cards, a break of which would see a return to the first Fibo support at 95.35 (23.6% of 78.89/100.39).

Back to the topside, which currently appears the less likely outcome, the initial resistance will arrive at 98.00 ahead of minor Fibo resistances at around 98.50 and 99.00.

In the short term, above 99.00 seems unlikely but the longer term US$ bull trend remains intact and further out, beyond the important psychological level of 100.00, will see a 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.

The overall picture seems to put the dollar under some near term pressure although further out the monthly charts suggest that the longer term uptrend remains intact.

www.tradingview.com:   DXY Daily

 DXY Weekly