Yen, commodities weaker, stocks rally as Putin says no need for force in Ukraine

Aus, Kiwi, choppy but rangebound ahead of todays Australian Q4 GDP.

An easing of tensions has seen a turnaround in the need for safe haven assets with the Yen and Commodities all heading lower, while equities have recovered, with the S+P making new all time highs. Today sees the global services PMI’s and the US ADP Jobs data. Australia, and then later the EU, get the Q4 GDP. Focus is beginning to turn towards Thursday’s ECB/BOE meetings and then to Friday’s US Jobs/NFP release. Until the the market is headline watching for the latest from Russia/Ukraine.

EUR/USD: 1.3737

Risk assets generally rallied and the Euro headed a little higher as tensions appeared to have eased in the Ukraine after Putin pulled back Russian troops, but it  is once again stuck in a relatively narrow range against the dollar with the market remaining nervous and wondering what happens next. While common sense takes control, focus will now turn towards the ECB meeting on Thursday, although another flare up will see the Euro again come under pressure.

There is little change from a technical point of view, and aside from watching what Mr Putin has to say,  the global services PMI’s and the US ADP Jobs data will be in focus, ahead of Fridays NFP release.

Having rallied to 1.3781 on the news that said Mr Putin saw no need to use military force in Crimea, the Euro is now back at the lower end of the range and treading water, with the 4 hour charts looking as though they may want to test 1.3700 and possibly lower, although the dailies remain rather non committal so I don’t think we are going too far in either direction.

Below 1.3700 would potentially head back to minor rising trend support at 1.3680 and then to last week’s 1.3643 base, below which, 1.3610 (61.8% of 1.3475/1.3824) would be the target but probably not today.

On the topside, 1.3680/90 will again find decent sellers, ahead of 1.3800. Above here, there is strong resistance at 1.3825/30 (61.8% of 61.8% of 1.4939/1.2042) where the descending trend resistance, going back to 2008 lies and will not be easily overcome; probably not before Thursdays ECB meeting, or perhaps before Friday’s NFP.  If we do get above 1.3830, the next target would be 1.3892 (27 Dec high) and then 1.3950 (50% of 1.6037/1.1876/ Monthly cloud top).  Above 1.4000, then don’t sand in the way, as I do not see a lot to stop it heading to the Oct 2011 high of 1.4246, which is also 76.4% of 61.8% of 1.4939/1.2042.

Once again look for a session of rangebound trade, stuck mostly between 1.37/1.38, but with a mild bias to the downside, possibly towards 1.3680.

The DXY is slightly higher once again at 80.15 and stays above the strong support at 79.90/00. As long as that remains the case, then maybe the dollar can make further headway to the topside.

Economic data highlights will include:

EU Services PMI’s, GDP, US ADP Jobs Data, Markit Services PMI, ISM Non-Mfg PMI, Beige Book

Meta Trader – AxiTrader

EUR/USD: 4 hour

USD/JPY: 102.25

Safe haven demand for the Yen has turned around as tensions ease in the Crimea, which has seen the dollar climb steadily throughout the session, eventually taking out some stops, once 102.00 was overcome, in heading to a high of 102.26. EurJpy is also higher, with the cross back at 140.50.

The short term charts are now rather overbought, so the upside momentum may slow somewhat, but the 4 hour charts do remain positive so I suspect that for the time being, dips will be buying opportunities.

All up, it looks as though it will remain choppy and any turn for the worse in the Russian situation will see the dollar lower once again. Until then, 102.25 is the immediate hurdle, above which would head back to 102.50 (102.53: 38.2% of 105.43/100.75) and then to last week’s high at 102.67 and the Feb 21 high at 102.83.  Above that, 103.00 is the descending trend resistance, and I am doubtful that this will be taken out today, although if wrong, 103.63 is the 61.8% Fibo target.

On the downside, back below 102.00 would see a return towards the 100 DMA at 101.85 and below there towards 101.40, the session low. I doubt we are heading under here, but if wrong look for bids at 101.00 and then at 100.75.

The dailies remain neutral, so I dont think we should expect too much in either direction. Use 101.85/102.60 as a guide.

Meta Trader – AxiTrader

USD/JPY: 4 hour

GBP/USD: 1.6667

There is little to add to Cable today after a choppy session which saw a brief move up to 1.6715, as we currently sit pretty much in the middle of the day’s range, currently unchanged from this time yesterday.

The momentum indicators are all fairly non committal and some more of the same could be in store as we hang close to the 200/100 HMA at 1.6675/85 respectively, with the UK Inflation Report likely to be the driver later in the session, as far as Cable is concerned.

A return to the topside, above the short term MA’s will now see sellers at 1.6700 and then at today’s 1.6715 high. Above there, minor descending trend resistance is at 1.6750 above which 1.6780 and 1.6800 will see further sellers. I don’t think we are heading up here, at least ahead of the BOE meeting on Thursday.

Today’s low of 1.6640 will find buyers, below which would test 1.6605 (38.2% of 1.6251/1.6821), the 24 Feb low of 1.6582 and then the 50% pivot of the whole rally, at 1.6535.

Use 1.66/1.67 as a guide once more in what looks like a rather trendless session ahead.

Economic data highlights will include:

Inflation Report Hearing

Meta Trader – AxiTrader

GBP/USD: 4 hour

USD/CHF: 0.8788

The Chf is a bit lower today; both against the dollar and against the Euro (1.2185) as tensions in the Ukraine have eased, diminishing the need to use it as a safe haven.

Now back above the 0.8850 pivot, the dollar is pretty much at session highs, with the next resistance to be seen at 0.8900 and then at and at 0.8920 (38.2% of 0.9156/0.8777).

Back under 0.8850 would see a return towards the session low of 0.8825 and then to 0.8900.

Momentum seems to point a bit higher, so a test of 0.8900 could be on the cards, although with the Euro probably stuck in a reasonably tight range, we should not expect too much from Usd/Chf.

Meta Trader – AxiTrader

USD/CHF: 4 hour

AUD/USD: 0.8945

Aside from some choppy action after the release of the RBA statement, the Aud is pretty much unchanged from this time yesterday and now looks forward to today’s GDP release (exp 2.5%yy, 0.7% mm). The Services PMI and the HSBC China Services PMI are also due and could provide some volatility.  Recent data from both China and Australia has been soft and should that be the same today, the Aud could head to the downside to test the stops that supposedly lie below 0.8875/80.

The indicators are currently mixed though and from a technical perspective it looks as though we are in for another range trade session mostly stuck between 0.8900/0.8980 I suspect.

Below the recent low at around 0.8890 would potentially head to towards the stops where the support arrives at  0.8870 (50% pivot of 0.8659/0.9080) and then 0.8835 (rising trend support) and 0.8820 (61.8%). Below 0.8800 would head to 0.8760 (76.4%), but not yet.

Above the session high of 0.0.8968, where the 200 HMA now lies, would suggest a run towards 0.8985 and possibly to 0.9000. I doubt we are headed above here, but if wrong, further sellers would appear at 0.9020 and 0.9040.

Economic data highlights will include:

AIG Services PMI, GDP, HSBC China Services PMI

Meta Trader – AxiTrader

AUD/USD: 4 hour

NZD/USD: 0.8387

The Kiwi made it to 0.8399, before once again heading a little lower to consolidate, and another session near to 0.8400 would seem to look likely today.

A break to the topside would find further sellers at 0.8415 and then at 0.8425 ahead of the 14 Jan high at 0.8432. I don’t think we are going above here today unless the Aud heads strongly higher or the China services PMI is particularly strong – unlikely – , and in the bigger picture as we said yesterday, until the RBNZ meeting next week, we may continue to gyrate in a 0.8300/0.8425 range.

The downside today looks limited to around 0.8350,  below  which  further support remains at 0.8340 (23.6% of 0.8051/0.8424), 0.8325 (200 HMA), 0.8300 and then 0.8280 (38.2%).

Use 0.8350/0.8410 as a guide.

Meta Trader – AxiTrader

NZD/USD: 4 Hour