It was another volatile session, with the dollar taking another hit on the back of some dovish Fed comment and more soft data from the US, increasingly suggesting that no Fed rate hike is required in the immediate future. Equities were steady, while the big winner was oil, where WTI appears set to retest $60.00 pb. The focus today will be on inflation, where the CPI figures are due from the EU, US and also from Canada. The other highlight will be the Rts/Michigan Consumer Sentiment Index although there is little to be seen from Asia. Have a good weekend.
EUR/USD: 1.0764
The dollar sank again today after some dovish Fed comments and on the back of some more soft US data, increasingly suggesting that there is no hurry for a Fed rate hike, with the Euro reaching a high of 1.0817. Housing starts rose to 0.93 mio annualized in March, below the expectation of 1.05 mio, while Building permits dropped to 1.04 mio, (exp 1.08 mio). Initial jobless claims rose to 294k in the week ended April 11.
The main event in the EU today will be the CPI (exp 1.1%mm, -0.1%yy, Core; 0.6%yy) after which it will be the turn of the US CPI to be the focus (exp 0.0%yy, ex Food/Energy+1.7%). The Rts/Michigan Consumer Sentiment Index will also be released.
Technically, the Euro seems to have a head of steam, and with the 4 hour charts pointing higher, if today’s high can be overcome, then the next targets are going to be at the Fibo resistance at 1.0836 (61.8% of 1.1033/1.0461), 1.0886 (8 Apr high) and at 1.0910 (76.4% of 1.1033/1.0461). Beyond here would take another look at 1.1000 and the highs of the rage at 1.1033 and 1.1052.
The downside remain well underpinned, for the time being, and support is now seen at 1.0725 (200 HMA) and then at 1.0700. Below here would see a run towards 1.650 and then to the session low/100 HMA at 1.0625/30.
Buying dips seems to be the plan right now, and it would take a dip to below 1.0630 to put the pressure back on the downside.
Economic data highlights will include:
EU Current Account, CPI, US CPI, Rts/Michigan Consumer Sentiment Index.
Meta Trader – AxiTrader EUR/USD: 1 Hour
USD/JPY: 119.00
US$Jpy has had a choppy session either side of 119.00, but has again held above the daily cloud base after having made another session low at 118.78.
The dollar has now made a daily close below the 100 DMA at 119.20, and further downside momentum looks possible, where further levels to watch would be at the 26 March low (118.32), the Fibo support at 118.20 (61.8% of 115.85/122.02) and at 118.00, but below which there is not too much to provide support until 117.30 (76.4%).
Back above the 100 DMA, the topside will find sellers at 119.50 and at yesterday’s session high at 119.74 and then at the 200 HMA at 119.85. 120.00 looks to be out of reach today, but if wrong, further gains would open up a move towards 120.50, 120.85 (both minor) and 121.00. As before, although unlikely to be seen yet, a topside break of 121.00 would open up the 20 March high at 121.20, the consolidation area at around 121.50 and the 10 March 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:
Consumer Confidence.
Meta Trader – AxiTrader USD/JPY: 4 Hour
GBP/USD: 1.4935
Cable continues to make good gains towards the major resistance just ahead of 1.5000, where it has recently been capped on several occasions, assisted again today by the soft US data.
While the hourly charts are becoming overbought, the 4 hourlies indicate that further gains are possible although the 1.4970/1.5000 area is going to be a tough nut to crack. If/when that happens look for further gains towards 1.5058 (50% pivot of 1.5551/1.4565) and then to 1.5100 (daily cloud base) and beyond, towards the 9 March high at 1.5136 and then next Fibo resistance at 1.5170 (61.8% of 1.5551/1.4565). This will be a very strong area of resistance, if seen, also being the top of the long term descending channel and the larger degree of Fibo resistance (23.6% of 1.7191/1.4565).
The downside will find bids now at 1.4900 (minor) and then at 1.4865 (daily Kijun). Below this would head back towards the Fibo support at 1.4815 (38.2% of 1.4565/1.4969) and then towards the 200 HMA at 1.4780 but seems unlikely to be seen today.
Economic data highlights will include:
Average Earnings, Unemployment.
Meta Trader – AxiTrader GBP/USD: 4 Hour
USD/CHF: 0.9556
US$Chf again headed lower today and met the objective at the 7 April low at 0.9556, by falling to a low of 0.9540.
Further losses look possible and if that turns out to be the case, then further targets would be 0.9500, the 200 HMA at 0.9465 and the 3 Apr low at 0.9454.
The hourlies are now oversold, so we could get a short term squeeze to the topside, where sellers will be seen at 0.9600 and then at 0.9660 (minor) and at the 200 HMA at 0.9695.
Selling rallies seems to be the ongoing theme.
Economic data highlights will include:
Retail Sales.
Meta Trader – AxiTrader USD/CHF: 4 Hour
AUD/USD: 0.7800
The Aud has been the star performer today, building on the gains seen prior to yesterday’s jobs data, by rising to a high of 0.7821 after the combination of some dovish Fed comments and more soft US data.
Currently back at 0.7790, the hourlies are rolling over after having become overbought and show some mild bearish divergence although the 4 hourlies suggest that this rally is not yet finished with.
It looks like being a choppy session, and with no local data due it could be late in the US session, after the CPI and Consumer Confidence that we see the real moves of the day.
Technically, bids are going to be seen at 0.7760, 0.7735 (both minor) and at the Fibo support at 0.7720 (38.2% of 0.7752/0.7821). Below here seems a bit unlikely in the near term, but below 0.7700, further bids would arrive at 0.7688 (50% pivot) and at 0.7655 (61.8%).
Dips currently look like buying opportunities and back above the session high, which will not be easy (0.7820: 38.2% of 0.8294/0.7552), will head towards 0.7884 (26 March high), 0.7904 (25 March high) and to the trend high at 0.7937.
Meta Trader – AxiTrader AUD/USD: 4 Hour
NZD/USD: 0.7669
The Kiwi has today reached the previous trend high at 0.7697 (24 March high), from where it has currently backed off, but with the 4 hour charts looking positive, further gains may be on the cards.
As elsewhere, the shorter term charts are now overbought so we could see a dip towards 0.7630 (23.6% of 0.7421/0.7697) and then to 0.7592 (38.2%).
The topside would see a run back to the session/trend high. A break of 0.7700 would take the Kiwi up to important trend resistance at 0.7730, beyond which would suggest a run to Fibo resistance at 0.7800 (38.2% of 0.8842/0.7175)..
Meta Trader – AxiTrader NZD/USD: 4 Hour
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