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After lively sessions yesterday, major currency pairs took a breather overnight. Except for, perhaps, USD/JPY which keeps grinding up, in tandem with U.S. treasuries (10's traded 3.13%). The pair is approaching a major resistance, the trendline drawn off of 2015, 2016 and 2017 highs. Broken 110 level and 200 DMA near 110.15 should now act as a firm support.
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GBP/USD still deciding where to go next
U.S. dollar started the week on the back foot. GBP/USD closed last week right on the 200 DMA but moved north of it in early hours today. 1.36 - 1.3630 is the area where it gets interesting though. A move above that should see at least some short-covering. On the flipside, a sustained move below the mentioned average and then 1.35 will be needed for the bears to maintain control.
BOE proceeds with caution, pound sells off
Bank of England left the official bank rate unchanged. Market had expected a hawkish hold, ideally a green light for a hike in August. That wasn't to be, instead they said the timing of the next hike depends on incoming economic data. GBP/USD adjusted lower but bounced back after U.S. CPI missed estimate prompted some profit taking on long dollar positions. 200 DMA near 1.355 is the bull/bear line in sand.
USD/CAD a bit higher after the BOC
Bank of Canada left overnight rate at 1.25%, as widely expected. They see higher rates over time but will proceed with caution. USD/CAD jumped, found resistance at 1.265 and then stabilized about 75 pips above pre-release levels. The pair's currently trading right at 200 DMA and above the initial support at 1.26.
EUR/JPY recovers from seven-month lows
USD and JPY selling has been the theme of the week so far. EUR/JPY gained nearly 200 pips yesterday and added another 30 today but may find it more challenging to chew through the strong resistance area around 132, which includes five-week range top and 200 DMA. 131 is the initial support.
A volatile turn of the month in FX markets
Quite some action in FX markets at the turn of the month. Several pairs (EUR/JPY, GBP/JPY, USD/CAD, AUD/USD) broke their respective 200 DMA, and few other ones (EUR/USD, GBP/USD, NZD/USD) their 50 DMA, which sparked some momentum. Stock markets turning lower has also contributed to the volatility.
Kiwi looks poised to break lower
Kiwi dollar looks heavy as it holds just above 200 DMA. The currency is being weighed on by the wait for the election outcome, which could still take a few more weeks, by October 7th or even 12th.
The mentioned moving average is the immediate support and August low is the next one. If that gives way, 61.8% retracement of the May - July rally will come into focus. 0.72 is the first stronger resistance level.
The mentioned moving average is the immediate support and August low is the next one. If that gives way, 61.8% retracement of the May - July rally will come into focus. 0.72 is the first stronger resistance level.
Anticipating Upside in Nikkei 225
There was a remarkable rally in Japaneses Nikkei 225 Index from July 2012 to July 2015 which took it from the levels 8300 to all time highs of around 20900. The August 2015 crash in Chines equities and later on commodities driven crash in February 2016 brought it down to sub 15000 levels. It has been consolidating for past 10 months while fallowing the headwinds in broader global markets.
As we can see on weekly charts there seems a nice break out on the upside of downward sloping trend line. It…
As we can see on weekly charts there seems a nice break out on the upside of downward sloping trend line. It…
Swissie settles near 200 DMA
Swissie is struggling to maintain foothold above 200 DMA. I closed above it four times last week but upper tails on daily candles are suggesting substantial supply coming in ahead of 0.99 level.
If the level gives way, 0.9950 (May high) is the next target before parity. Trendline drawn off of November and January highs is currently running at 1.01. A half-cent area above 50 DMA shall hold, if the uptrend is to continue.
If the level gives way, 0.9950 (May high) is the next target before parity. Trendline drawn off of November and January highs is currently running at 1.01. A half-cent area above 50 DMA shall hold, if the uptrend is to continue.
EURo starts the week and the month well
Euro started the week and the month on a bullish note. It has been rising right from the open with so far shallow pullbacks. It is back above 1.09 and approaching the declining 2014 - 2015 trendline.
Unless the pair turns sharply lower soon, the trendline will inevitably give way and this may lend bulls enough confidence to continue buying into 100 and 200 DMA. Ability to get and hold above 1.10 will be crucial though.
Unless the pair turns sharply lower soon, the trendline will inevitably give way and this may lend bulls enough confidence to continue buying into 100 and 200 DMA. Ability to get and hold above 1.10 will be crucial though.