EURUSD clings onto 1.380 support

ASIA ROUNDUP:

• AUS200 gains up 0.6% early trading driven by Finance and Mining.

• RBA minutes today reiterated that A$ is still high by historical standards but the cash rates are appropriately set to maintain inflation within target. AUDUSD held firmly onto 5-month highs.

• USDCNH approaches 14-month high

• Chinese bank stocks dragged Hang Seng down 1.2% as lending estimates fell short and shadow banking finance more than doubles.

• BoJ Gov Kuroda met with PM Abe today but didn't provide any clues regarding monetary policies. USDJPY traded sideways and currently near the daily high around 101.20

• EURUSD clings onto 1.380 support; A break below targets 1.375

UP NEXT:

• The markets will be closely watching the wording from FED Chair Lady Yellen to see how she corrects her previous speech regarding interest rate rise within 6 months. Since her last talk other board members have played down her comments.

• GBP CPI y/y is forecast lower at 1.6% vs 1.7% previously. CPI is within a downtrend so a positive number today (1.7% or above) should generate fresh buyers on Cable which currently sits on 1.67% support

• EURUSD has held firmly (only depreciating 0.5% following Draghi's jawboning yesterday) so positive data from EUR and Germany tonight could see it hold above 1.380 support

• US Core CPI typically comes in at 0.1% so tradable deviations with more subsequent moves to take not of are 0.2% or -0.1%

• CAD Manufacturing Sales m/m is forecast at 1.1% as USDCAD sits just below 1.10 resistance; Positive CAD data and poor US data could fuel another bearish move below 1.10 and target 1.091 swing low

TECHNICAL ANALYSIS:

EURUSD: Clings onto 1.3810 support

At time of writing we rest precariously around the 1.3816-25 support zone awaiting further direction.

The opening gap on Monday has not been closed (unless you count Friday low and MOnday high as the Gap) and the USD Index analysis favours a leg lower, which would see EURUSD target 1.390.

However a break below 1.3820 could well target 1.3750. For now my approach would be to seek bullish setups above 1.3825 and bearish setups below 1.3810

With data out from the Eurozone and US tonight it really could go either way. However we do have clear levels of support and resistance to target on intraday timeframes when the market decides to show its hand.

GOLD: Awaiting next catalyst, resting on lower channel

To follow on from yesterday's analysis we have seen #1328 (ish) cap as resistance and a retracement to $1318 achieved. It was by no means a pleasant ride though a price ricochet between these levels, but overall the levels have held quite well.

Today we find ourselves at the lower bullish channel line which could produce both bullish and bearish opportunities.

Due to the bullish channel then any buy setups above $1328 could be considered with initial target back at the $1328 resistance and 2nd target around $1342.

The break of the trendline could be a little trickier to time but initial target would be $1314. Due to the tight target then intraday trading would be the preference (probably below M30).