Dollar continues last weeks reversal ahead of today's US CPI. Global flash PMI's coming up.

The dollar remains under pressure today, as the follow through from last weeks FOMC meeting continues to dominate the action on the back of the growing view that any Fed rate hike is likely to come later rather than sooner. Commodities rose, while equities are slightly lower. Today will be busy, with the focus to be on the global PMI’s, and then followed later in the day by the important US CPI and Consumer Confidence figures. From the UK we get the CPI/PPI/RPI. Asia focus will be on the China HSBC flash Mfg PMI.

EUR/USD: 1.0965

It has been a choppy session today. After an early Asian squeeze to 1.0880 was followed by a dip to 1.0766 the Euro has moved steadily higher,  finishing close to the day’s peak of 1.0970, with the market now awaiting the outcome of today’s important round of data which includes the global PMI’s, the US Consumer Confidence and New Home Sales but with most of the focus likely to be in the US CPI figure (exp +0.2%mm, -0.1%yy. Ex-food Energy exp +0.1mm, +1.6% yy).

Elsewhere, in Berlin, there has been no major fallout, so far,  between Merkel/Tsipras over the Greek debt discussions, which has lent the Euro some support. The talks are ongoing.

Today could be another volatile session, depending on the data, but technically the Euro still looks to be in a positive frame of mind and a weak inflation figure from the US could see a run back towards last week’s peak at 1.1039.(1.1025: 61.8% of 1.1378/1.0461). Beyond that, further hurdles will arrive at 1.1114 (5 March high) and at 1.1159 (76.4% of 1.1378/1.0461). Before any of those though, the daily Kijun lies at 1.0955 and this will need to be overcome if further progress is to be made.

If the Euro falls, possibly on the back of weaker EU Manufacturing PMI’s, then the support levels to watch will be at 1.0880 (minor) and then at the Fibo support levels at 1.0825 (38.2% of 1.0461/1.0955), 1.0785 (50%) and at 1.0745 (61.8%).

All up another busy day lies ahead, but with the indicators looking positive a break of the descending trend resistance, at close to current levels, could see an acceleration higher late in the day. In the meantime use 1.0880/1.1000 as a guide.

Economic data highlights will include:

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.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

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USD/JPY: 119.72

The dollar has made it down to the support area mentioned yesterday by bottoming out at 119.57, where the base of the channel and the two Fibo support levels have so far propped it up.

The 1 and 4 hourly indicators are now somewhat mixed, but with the dailies pointing lower a retest of 119.50/60 would not surprise, below which would find decent support at 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 120.00 and then at the day’s high at 120.15 (daily Kijun), above which would see another choppy run towards 120.60 (minor) and then on towards 121.00.  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:

Nomura Manufacturing PMI.

Meta Trader – AxiTrader    USD/JPY: 4 Hour

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GBP/USD: 1.4967

Cable had a rocky ride today, initially falling sharply, to 1.4838 following some soft CBI UK export data, but it has since recovered to sit unchanged on the session after earlier reaching 1.4990.  Further gains, to break above 1.5000 were not possible, with some decent offers both against the dollar and also against the Euro, where the market continues to unwind  short Eur/long Gbp positions in the cross, which today rose from 0.7227 to 0.7331.

The 4 hour/daily indicators do look positive  and we could eventually see a break of 1.5000, although this will depend on a stronger UK CPI/PPI/RPI reading later on, and needs to be followed up by a soft CPI reading from the US. If 1.5000 can be overcome, then we could 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 where the 100/200 HMA are crossing at today’s session low at 1.4830.

A neutral stance is required, but given the positive look of the daily indicators, a more substantial test of 1.5000 would not surprise.

Economic data highlights will include:

UK CPI, PPI, RPI.

Meta Trader – AxiTrader    GBP/USD: 4 Hour

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USD/CHF: 0.9644

The dollar has headed lower again today finishing near to the session low of 0.9645 which comes ahead of last week’s spike low at 0.9625. A break of this would head back towards the Fibo support at 0.9436 (38.2% of 0.8332/1.0122)

The topside will see sellers at 0.9700 and again at 0.9750 and 0.9800. As before, stand aside.

Meta Trader – AxiTrader    USD/CHF: 4 Hour

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AUD/USD: 0.7892

The Aud continues to make good gains while benefiting form the US$ weakness, and after an early dip to 0.7763 it has headed steadily higher to close the session at the day’s high of 0.7896.

The indicators look generally positive, although the 1 and 4 hour charts are becoming a little overstretched and direction today will depend on external data, beginning with the HSBC China Manufacturing PMI (exp 50.5).

Further gains would suggest a run towards 0.7900 and then to 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.

The downside will find bids at last week’s spike high at 0.7846 and then at the Fibo support at 0.7827 (23.6% of 0.7559/0.7891) ahead of 0.7800. Below here currently looks a little unlikely but further bids would arrive at 0.7785 (38.2%).

Economic data highlights will include:

HSBC China Manufacturing PMI, China CB  Leading Indicator , RBA Edey Speech.

Meta Trader – AxiTrader     AUD/USD: 4 Hour

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NZD/USD: 0.7660

The Kiwi had a strong session, and after an early dip to 0.7547 it has headed steadily higher to reach 0.7671, where it is finishing the US session and now waits on the China manufacturing data for direction.

Having broken above the 100 DMA at 0.7630 and with the indicators generally looking positive, further gains would take the Kiwi on towards 0.7700 and possibly even to  the descending trend resistance at 0.7780 although this is still some way off and would need another aggressive selloff, potentially after the CPI release if it is much weaker than expected.

The downside will now see bids at the 100 DMA (0.7630) and then at 0.7600 and at 0.7560 (23.6% of 0.7175/0.7671)

Buying dips for the time being currently looks to be the ongoing theme.

Meta Trader – AxiTrader     NZD/USD: 4 Hour