FX Majors Outlook

From the FXWW Chatroom: EURUSD: The range play remains intact and it is difficult to see this changing in the short term. We prefer the short side, but for now it makes no sense to aim for a larger move, with buyers expected to emerge below 1.0800 and sellers lined up ahead of 1.1000. Play the intraday moves and only get involved on the extremes. Support at 1.0850, 1.0820 and 1.0790; resistance at 1.0915, 1.0950 and 1.1000.

USDJPY: With losses for equities in the US and China, as well as lower UST yields, USDJPY is under pressure. There is an outside chance of further easing from the BoJ tomorrow, though. Look to go short around 118.60/70, with a stop above the post-FOMC high of 119.08. The next resistance after that is at 119.77. Support at 118.40 and 117.70.

EURCHF continues to trade bid, having closed above the important resistance at 1.1050. However, interest in the pair is quite limited, which is not a very bullish sign. Look to buy dips towards 1.0990/1.1010. USDCHF continues to trade in its recent range, with good support around 1.0120 and good resistance at 1.0180 and 1.0250. US data due later will be the main highlight today.

Cable: Whippy price action has continued. Price action suggests that interest and liquidity are very low, and that this a very transactional market. Watch GBPJPY as a reference for GBPUSD moves, and monitor the BoJ meeting on Friday. UK Q4 GDP data is due today at 10:30am CET. Sell Cable towards 1.4350, and buy the pair below 1.4200. Support at 1.4230, 1.4175 and 1.4080; resistance at 1.4355, 1.4445 and 1.4500.

EURGBP: Liquidity hasn’t been good of late. The cross has bounced off 0.7550 but doesn’t seem to want to move above 0.7800. Support at 0.7565, 0.7550 and 0.7500; resistance at 0.7665, 0.7756 and 0.7799. (Zurich spot desk)

20:05:54

AUDUSD has been supported since yesterday’s CPI numbers, but has run out of momentum after touching a high of 0.7081 yesterday. Equities would need to stabilize in order for the pair to break above 0.7100. The first support on the downside is 0.6990/0.7000, followed by 0.6920 and 0.6825. Resistance at 0.7100, 0.7260 and 0.7400.

NZDUSD: The RBNZ left the OCR unchanged today, but turned more dovish and adopted an easing bias. This wasn’t a big surprise, but NZDUSD slipped a bit lower on the back it. The pair remains stuck in the middle of its recent range of 0.6350-0.6600, with no clear momentum in either direction. Support at 0.6350, 0.6225 and 0.6000.

AUDNZD has broken above 1.0850, helped by the decent CPI data from Australia yesterday. We don’t expect a big move, but the cross could move up to trade 1.0850-1.1100 from 1.0550-1.0850 previously.

USDCAD: We expect price action to remain very choppy. The big level on the downside is 1.4000, while the first resistance is at 1.4350. Play this range until there is a break to either side; our preference is to sell on rallies. Support at 1.4000, 1.3780 and 1.3500; resistance at 1.4335, 1.4540 and 1.4690.

EURNOK has been drifting lower, helped by higher oil prices. It is trading right above the lower end of its recent trading range. A break below 9.39 would provide further momentum to the downside. Support at 9.39, 9.33 and 9.20; resistance at 9.49, 9.52 and 9.58.

EURSEK: The reaction to today’s retail sales and unemployment data has been slow and EURSEK has moved up to 9.2750 from 9.2550. Clearly this will halt the downside momentum for EURSEK. Play the 9.25-9.32 range. (UBS)

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