Market Talk: FXWW

From the FXWW Chatroom: EUR:

EURUSD – Support: 1.1801 (low last week), 1.1798 (100DMA) Resistance: 1.1897 (high this week), 1.1961 (high last week)

A marginal new low for EURUSD came late in yesterday’s session, but managed to hold a 1.18 handle for the time being. It feels as though the tide is beginning to turn with rallies being less pronounced and met with good supply. We saw macro leveraged names selling yesterday, which also seems to be a slight change in their recent bias. Having been looking to buy dips, we are more neutral at present.

GBP:

GBPUSD – Support 1.3370 (low this week), 1.3355 (38.2% Fibbo of Nov rally) Resistance: 1.3460 (high yesterday), 1.3538 (high this week)
EURGBP – Support: 0.8757 (low this week), 0.8734 (November low) Resistance: 0.8868 (high this week), 0.8957 (100DMA)

Price action in Cable has been relatively stable following the disappointment of last week. UK Services PMI was much softer than expectations, but Cable managed to hold above 1.3400 with seemingly good demand around that level. Very much a waiting game from here as May tried to appease both the European negotiating team as well as her own party. I would be surprised if we reach ‘significant progress’ this week and feel it will be an 11th hour deal close to the 15th. The bullish/bearish pendulum has swung in the bullish direction over the past week and I feel further give back may come prior to an announcement. We are neutral on STG for now.

DB
JPY
USDJPY Support: 111.68 (200 DMA), 111.59(100 DMA) 110.85 (Nov 27 low) Resistance: 113.19(76.4 fibo last daily wave lower),113.26 (top daily cloud)
EURJPY Support: 131.64(100 DMA), 131.16 (20 Nov low) Resistance: 134.375 (Dec 1 high), 134.505 (25 Oct high)
Led by equity market weakness in Asia and short term positioning, UsdJpy weakens overnight testing down to just above 112. With the tax reform euphoria losing steam, issues continuing to linger around the Trump administrations contact with Russia, and geo-political concerns simmering, too much uncertainty persists and rallies in UsdJpy should be sold. That said does feel subject to headlines and short term drivers thus conviction levels are low. Next support is generated by the 100 and 200 day moving averages at 111.59/68. EurJpy remains firmly entrenched mid-range with little story to tell but favour a drift lower whilst equity market weakness persists.

AUD/NZD: 
AUDUSD Support: 0.7532 (two week’s low) 0.75 Resistance: 0.7654 (weekly high) 0.7700
NZDUSD Support: 0.6781 (cycle low) Resistance: .6945 (last week’s high) .6980 (post RBNZ high)
AUDNZD Support: 1.0950 (last week’s low) 1.0830 (strong support) Resistance: 1.1335 (2016 High)

Weaker Aussie data overnight in the form of GDP, which showed basically no growth in consumption, thanks to no growth in incomes. It was consistent with our views that consumers don’t feel good despite the better jobs growth. Interesting day price action yesterday, with this .7640/50 zone causing problems for AUD bulls. Largely the catalyst seems to be commodities correcting lower, Copper yesterday, Silver the day prior to that. This trumped any central bank hawkish tone by both the RBA and RBNZ. External factors over powering

DB
CHF
USDCHF – Support: 0.9843 (55 DMA),0.9741 (100 DMA), 0.9730(50% 0.97215-1.00395) Resistance: 0.9888 (05 Dec high)1.00395 (27 Oct high), 1.0100 psych)
EURCHF – Support: 1.1584 (55DMA), 1.1544 ( Nov 7 low) Resistance: 1.1737 (Dec 1 high), 1.2000 (psychological)

EurChf fails to reclaim 1.17 yesterday and is starting to look increasingly comfortable on a 1.16 handle. Expect equity market declines to weigh so a muted drift lower in EurChf and UsdChf looks to be on the cards as we head into ADP this afternoon. Continues to be hard to see ranges breaking in the near term, just a tad uninspiring.

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