FX Majors Outlook

From the FXWW Chatroom: EURUSD found a good base around 1.1070/80 yesterday, above the major support at 1.1050, the 200-day moving average. We don’t see any clear trend, and movements for risk, equities and oil continue to spill over into the EURUSD market. There is some resistance at 1.1120/30, which was a decent support previously. We think 1.1150/60 would be a nice level to get short. Watch for news from the EU summit.

USDJPY remains capped at 115.00 on the topside, and the pair is slowly beginning to test the downside. Risk seems steady at the moment, so we expect to see some support for the pair today. The key resistance is at 114.50/115.00, and we expect an eventual test of 112.78 and 112.00. The big support is this year’s low just below 111.00.

USDCHF consolidation continues, with the pair trading around the 100-day moving average of 0.9945. There is no clear trend developing, so try and play the range. There is resistance at 0.9960/80, while 0.9900/20 seems well supported. There is very limited interest in EURCHF and the cross is trading in the 1.1000-1.1050 range. We are slightly biased to sell on rallies.

Cable: The UK-EU talks continue in Brussels and it looks like we will have to wait until the weekend before we get something meaningful out of the summit. For today there is not much else to do other than trying not to get too excited about sporadic news headlines, while respecting the ranges. The first real GBPUSD resistance is at 1.4500, but a few sellers are likely to show up ahead of 1.4380/1.4400. The pair has been well-supported at 1.4250 and we expect Cable will remain above there until the summit is out of the way. UK retail sales data is due at 10:30am CET. Support at 1.4250, 1.4230 and 1.4150; resistance at 1.4370, 1.4450 and 1.4500.

AUDUSD: Sideways traded has resumed. The pair topped ahead of 0.7200 and tested the lower end of this week’s trading range in Asia, dealing to a low of 0.7093, on a combination of risk trading soft and comments by the RBA’s Edwards, who said he would be more comfortable with AUDUSD at 0.6500. Stick to playing the range. We expect 0.7040/80 to hold on the downside, while there is good resistance at 0.7200/50. Support at 0.7110, 0.7040 and 0.6975; resistance at 0.7210, 0.7250 and 0.7335.

NZDUSD: Stick to buying the pair on dips towards 0.6550, with a stop below 0.6500. There is good resistance between 0.6700 and 0.6760. Support at 0.6550, 0.6500 and 0.6420; resistance at 0.6680, 0.6760 and 0.6900.

USDCAD has retraced all the way up to 1.3785 after 1.3650 held, as the pair continues to track oil price movement. Watch today’s data to see if it supports the recent uptick in economic data; CPI and retail sales figures are due at 2:30pm CET. We prefer selling on rallies, with a tight stop. Look to establish fresh shorts between 1.3825 and 1.3875, with a stop through 1.3925, targeting a test of 1.3625/50.

EURNOK remains stuck between 9.4000-9.6000, with 9.7500 the bigger resistance. Look to fade rallies towards 9.6000, as we think there will be an eventual break to the downside. Support at 9.5000, 9.3850 and 9.2000; resistance at 9.7500, 9.8900 and 10.0000.

EURSEK dipped to 9.4175 from 9.4700 after strong CPI data from Sweden yesterday. EURSEK then continued lower, reaching 9.3775 late in the day. Unemployment data is due at 9:30am CET today, and strong numbers will fuel a EURSEK move even lower. Look to fade spikes to 9.4300/4400, targeting a continuation of yesterday’s move towards 9.3000. Support at 9.4050, 9.3450 and 9.2525; resistance 9.5000, 9.5500 and 9.6145. (UBS)

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