Tag Archives: usd

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EURUSD long-term risks should still be on the downside

 

Credit Agricole report “some downside risks for EUR could linger as well. In particular, uncertainty about Greece should continue to haunt the single currency, with concerns about the country’s debt-sustainability likely to escalate as the bailout extension draws to an end in June.

Long-term risks should still be on the downside, however, and we expect EUR/USD to hit parity in Q3 with the USD-rally resuming as we get closer to the Fed’s first hike”.

Source: Credit Agricole

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Gold Trading Week Ahead

 

Bullion Index report: Late last week gold managed to stem the recent losses as the dollar rally paused. An 8 day run of consecutive losses on gold came to an end on Thursday, not before posting a new 4 month low.

Last week we saw solid buying from our clients at the low US$1,150’s/oz levels.

This week is going to be a key week for gold with the Federal Reserve’s two day policy meeting Tuesday and Wednesday. The main focus will be Fed Chair Janet Yellen’s press conference following the FOMC announcement at 2pm Wednesday New York time. The price of gold is being driven almost solely by US dollar movements at the moment (dollar up, gold down or dollar down, gold up), so if any wording coming out of the Fed next week hints at a June rate rise, look to see further US dollar strength and gold soften. If the Fed notes that it still remains ‘patient’, the market is going to take that as a post June rate rise which should give gold a boost. Gold investors should also look out for any commentary from Yellen surrounding the US dollar. Traditionally the Fed would not mention the US dollar however given its stunning run it may play a factor in the Fed’s monetary policy. If it does come into play then the Fed may look to hold off tightening until later on in the year or even possibly next year.

The Fed is facing one of its biggest decisions since the GFC, they do not want to go too early or too late when it comes to raising interest rates.

The other events of the week that gold traders should be aware of include; ECB President Mario Draghi’s speech on Monday, US Building Permits and Housing Starts on Tuesday, Swiss National Bank Monetary Policy Decision and Philadelphia Fed Manufacturing Index both on Thursday.

I do not expect to see any further big moves on gold until after Yellen’s press conference on Wednesday. Between the open on Monday and her press conference I expect to see investors adding to long gold trades on any dips.

Investors have been showing more interest in platinum in the past week as they look for value, platinum has recently hit lows not seen since mid-2009.

Gold closed at US$1,158.60oz in New York on Friday, down US$10oz on the week.

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Courtesy of:  www.bullionindex.com.au

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Credit Suisse revise EUR/USD forecast lower

 

Credit Suisse report “we are now of the view that the market is increasingly willing to hold short EUR positions on crosses in G10 space. If EUR really does replace JPY as the funding currency of choice due to negative rates, this trend can have a lot further to run, to EUR’s overall detriment.

We are revising our EURUSD forecast set to 1.05 in 3m (1.09 prior) and 0.98 in 12m (1.02 prior)”.

Source: Credit Suisse

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Credit Agricole remain short EUR/USD

 

In a note to clients, Credit Agricole report that “in order to push EUR/USD considerably lower from current levels Fed rate expectations may need to rise further. As there seems to be scope for the Fed to consider higher rates as soon as mid-year, we anticipate further diverging monetary policy expectations to the detriment of the pair.

We remain short EUR/USD targeting a move towards 1.06″.

Source: Credit Agricole

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UBS – Sell USD/CAD rallies to 1.2570

 

While other brokers such as SEB and SwissQuote recommend clients to look short USD/CAD, UBS has taken a different view noting USD/CAD “remains stuck right in the middle of the recent trading range. We expect the range play to continue. Sell rallies to 1.2570 with stops above 1.2670 and buy on dips to 1.24 with stops below 1.23″.

Source: UBS

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NZD/USD Look To Re-Enter Strategic Short – BNZ

 

BNZ look To re-enter a strategic short position on NZD/USD. In a note to clients they report “NZD has bounced back admirably from cyclical lows hit after the RBNZ dropped its tightening bias. But the medium-term outlook is still negative, even with recent strong gains in dairy prices at auctions. We would consider rallies toward 0.76 as
opportunities to enter strategic short positions, targeting 0.70″.

They also note “we feel that levels above 0.7550 offer attractive risk-reward for a strategic NZD/USD short, on the premise that the mega-rally in the USD continues to grind higher. We would set a wide stop, 0.77 or higher, as is prudent in volatile markets such as these”.

Sell NZD/USD at 0.7550, stop >0.7700 with a profit target of 0.7000.

Source: BNZ

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SwissQuote buy USD/CAD recommendation

 

SwissQuote report to clients that the “USD/CAD has seen a pickup in buying interest near the key support area between 1.2352 and 1.2314. However, the succession of lower highs remains thus far intact. Hourly resistances can
now be found at 1.2566 (02/03/2015 high) and 1.2664. An hourly support lies at 1.2449 (27/02/2015 low).

In the longer term, the technical structure looks like a rounding bottom whose maximum upside potential is given by the strong resistance at 1.3065 (09/03/2009 high). The recent weakness is seen as a medium-term corrective phase. Key supports stand at 1.2314 (22/01/2015 low) and 1.2047 (intraday low)”.

Buy limit 2 units at 1.2363, Obj: Close unit 1 at 1.2646, remaining at 1.2950, Stop: 1.2290

Source: SwissQuote

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BOC is likely to remain on hold this week buy USD/CAD – SEB

 

SEB is recommending to clients to buy USD/CAD on dips. They report “the Loonie is vulnerable to additional Bank of Canada (BOC) rate cuts and continued weak oil prices in H1 2015. We expect unchanged rates at tomorrow’s central bank meeting. We would look to buy on a dip in USD/CAD. An April rate reduction looks increasingly likely. We forecast USD/CAD at 1.30 in Q2 2015″.

Buy USD/CAD on dips below 1.24 as BOC is likely to remain on hold this week.

Source: SEB

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SEB sell order on AUD/USD

 

Trading company SEB have suggest to clients to get short AUD/USD. They report “the RBA left its cash rate unchanged at today’s meeting. However, the statement gives a clear signal more rate cuts should come. The AUD appreciated following the decision as a rate cut was widely expected. Use this uptick as an opportunity to short the AUD/USD”.

Sell AUD/USD at 0.7810 targeting 0.73, stop loss on daily close above 0.7930.

Source: SEB

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USDCHF eyes 0.9529 as gold referendum looms

 

Capital Trust Markets reports “the US Dollar (USD) extended upside movement against the Swiss Franc (CHF) on Thursday, increasing the price of USDCHF to more than 0.9630 ahead of the Swiss Gold Referendum. The short term sentiment remains bearish due to Lower High on the daily chart thus the pair is expected to print a Lower Low below the 0.9529 support area.

Technical Analysis

As of this writing, the pair is being traded around 0.9635. A hurdle can be noted around 0.9660, the 61.8% fib level ahead of 0.9691, the 76.4% fib level and then 0.9740, the swing high of the last upside rally as demonstrated in the following chart.

On the downside, the pair is expected to find a support around 0.9610, the 38.2% fib level ahead of 0.9579, the 23.6% fib level and then 0.9529, the swing low of the recent downside move.

Gold Poll

Switzerland seems to be in the eye of a storm lately, as several indications have resulted in a code red situation. The Swiss Franc is trading at its highest level versus the Euro since 2011 when the central bank had to intervene in the forex market to safeguard its purchasing power. The USD/CHF exchange rate is also vital for the Swiss economy, and the Swiss National Bank needs to keep a very close eye on this exchange rate as (unfortunately for Switzerland), the CHF is still widely being considered as a safe haven. Back in 2011 the fear for the collapse of the Eurozone was absolutely real and investors were scrambling to get their hands on Swiss Francs in a flight to safety.

 Trade Idea

Keeping in view the overall technical and fundamental outlook, selling the pair around the current levels still appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 0.9741 resistance area”.

(Source: Capital Trust Markets)

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Reduction in NZD short positioning

 

SwissQuote report “net short positions in New-Zealand dollar have been reduced from elevated levels. Even if NZD/USD is more sensitive to the upside given the large net short NZD positions, the technical structure remains negative as long as prices remain below the key resistance at 0.8052 (04/02/2014 low)”.

swissquote nzd nov14

(Source: SwissQuote)

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Canadian inflation data set for release on Friday morning

 

As the markets open in the US on Friday morning, we will get the latest Canadian inflation data reported out of the nation.

Capital Trust Markets reports “the Canadian dollar gained strength during today’s session on the back of better-than-expected wholesale sales data, and markets will be looking for strong inflation figures to reinforce the data and compound the bullish momentum. With this in mind, what’s expected and how can we set up to profit from a release either side of the consensus forecast? Here is what you need to know.

First, what did the wholesale sales data tell us about the Canadian economy? The data – reported at 1.8% growth versus a forecast of 0.7% – comes amid a spate of strong releases this month. Manufacturing sales beat expectations of 2.1% at the end of last week, while unemployment throughout October dipped to 6.5% with employment rising 43.1 K, and building permits reported at the beginning of the month expanding by 12.7% month over month during September. This being said, there are some concerns about deceleration in the house price growth over the last few months, and this is likely to force the bank of Canada to hold interest rates at their current lows so as to avoid jeopardizing any sustainable growth over the coming quarters. With this in mind, what of levels to keep an eye on in the USDCAD? Take a look at the chart below.

USDCAD

As the chart shows, we have seen a certain amount of consolidation in the pair over the past few weeks. However, we could see this consolidation come to an end and the US dollar resume its upside momentum versus its Canadian counterpart, as we approach a combination of key level and 200 SMA support. 1.1266 and 1.1464 are the levels to keep an eye on. Consensus forecasts the upcoming core CPI data (MoM) – the likely headliner – at 0.2% for October. With this in mind, look for anything below to reinforce aforementioned support and validate 1.1464 medium-term to the upside”.

(Source: Capital Trust Markets)

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AUDUSD broke important support – heavy downside expected

 

Capital Trust Markets reports “recent market sentiment suggests that the AUDUSD pair might head lower in the near term as the US dollar might gain traction moving ahead.

Technical Analysis

There was a monster trend line on the 4 hour chart of the AUDUSD pair, which was breached earlier during the Asian session. The most important point to note from the charts is the fact that the pair is now trading below all three key simple moving averages (100, 200 and 50). This might add pressure on the Aussie dollar buyers. Currently, the pair is trading around the 50% Fibonacci retracement level of the last leg from the 0.8540 low to 0.8795 high. So, there is a chance of a correction in the near term towards the broken support area which might act as a resistance now. Immediate resistance is around the 50 SMA, followed by the 100 SMA. The 4H RSI is well below the 50 level, which could encourage the Aussie sellers to take the pair lower moving ahead.

AUDUSD 11.19.2014

On the downside, initial support can be seen around the 0.8600 area. A break and close below the mentioned area might call for a move towards the 0.8550 level”.

(Source: Capital Trust Markets)

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Australian monetary policy meeting minutes set for release Monday evening

 

Shortly after the markets close in the US on Monday evening, the latest monetary policy meeting minutes will be reported out of Australia.

Capital Trust Markets reports “the meetings come at a time when markets are looking at the Australian property sector very closely in order to gain insight into whether the house prices and construction activity will continue to expand into 2015, or whether the current deceleration of those aforementioned will lead to a halting and eventual decline. This scrutiny surrounding the Australian economy means that any bias inferred by the monetary policy meeting minutes as far as possible interest rate policy is concerned could impact the value of the Australian dollar versus its major counterparts during the Asian session. With this in mind, what of the minutes likely to show and what are the levels to keep an eye on as we head into the release? Let’s take a look.

First, let’s look at the minutes. The likely outcome of the release will be that Australia’s monetary policy committee will hold interest rates low for the foreseeable future. The property market is expanding, but inflation remains low and wages – and in turn – retail activity are showing very little movement month on month. Through keeping interest rates at lows as we head into the end of the year and throughout the beginning of 2015, the reserve bank of Australia (RBA) hopes it will be able to stimulate Australian households into engaging in consumer activity. So what are the levels to keep an eye on as we head into the release? Take a look at the chart below.

2014-11-17_10-07-58

Action earlier today saw the AUD USD into the open of the Asian session, but at the open of the European morning session the pair dipped back below its 200 SMA (H4) to validate 0.8595 and 0.8761 as in term support and resistance respectively. These are the levels to keep an eye on. If we get a hawkish tone to the meeting minutes – unlikely – we could see a break back above the 200 SMA and the turning of the overall trend to the upside. Such a situation would validate 0.8910 longer-term. However, if we get a dovish tone the bearish momentum is likely to continue – a situation in which 0.8595 would serve as an initial downside target”.

(Source: Capital Trust Markets)

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USDCAD finally stops recored breaking winning run

 

Capital Trust Markets reports “the US Dollar (USD) extended downside movement against the Canadian Dollar (CAD) on Wednesday, dragging the price of USDCAD to less than 1.1350 following the emergence of a bearish pin bar on the weekly timeframe. The long term bias however remains bullish due to Higher High on the daily chart.

Technical Analysis

As of this writing, USDCAD is being traded around 1.1345. A hurdle can be seen near 1.1465, the swing high of the bearish pin bar as demonstrated in the following daily chart. A break and daily closing above the 1.1461 resistance area could incite renewed buying interest, validating a fresh rally above the 1.1500 handle.

On the downside, the pair is expected to find a support around 1.1310, the 23.6% fib level ahead of 1.1215, the 38.2% fib level and then 1.1138, the 50% fib level as demonstrated in the above chart. The bias will remain bullish as long as the 1.1300 support area is intact.

Dollar Plunges

The US Dollar came under a renewed selling pressure yesterday as many of the oversold currencies and commodities pulled back, halting the record breaking winning streak by the US Dollar. The correction phase might continue in the coming days since many pairs are currently being pulled back from the key levels.

Trade Idea

Keeping in view the overall technical and fundamental outlook, selling the USDCAD pair around the current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 1.1465 resistance area”.

(Source: Capital Trust Markets)

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Short EURUSD trade – Westpac

 

Westpac suggest to clients to take a short trade on EUR/USD. They reason-

Macro: EUR/USD remains heavy even as some data points (e.g. PMIs) begin to show tentative signs of stability and resentment with Draghi’s policy path from the conservative faction of the ECB Governing Council lingers despite his stronger language at the Nov meeting. These developments should have offered more support for EUR than has been the case. Despite that, yield spreads continue to push against EUR/USD, anchoring the pair lower. EUR/USD downmove is likely to extend to 1.22 on this leg. EUR may fare better on select European crosses though.

Model: Draghi’s strong commitment to steer the Bank’s balance sheet back to early 2012 levels (signed off by the Governing Council) has tipped the model back into EUR shorts via a weaker total yield signal. That said, the position is only moderate at -6.4%. While our EUR growth signal is also firmly negative the model seems unlikely to return to aggressive EUR shorts (i.e. of the order of -20% of the portfolio) anytime soon. In the wake of the single currency’s fall this year long term valuation has swung from a meaningful negative to neutral, implying that either our growth and/or total yield signals need to turn even more negative to nudge the model into outsized EUR shorts.

Technical: Monday’s bounce provided a healthy correction from which to launch the next leg down. Target further decline towards 1.20/1.21.

Trade: Short EUR at 1.2435; stop above 1.26; target 1.21

(Source: Westpac)

 

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NZDUSD Buyers nervous ahead of RBNZ’s Wheeler keynote speach

 

NZDUSD sellers enjoyed selling the pair recently as buyers struggled to break the 07810-20 resistance area. Captial Trust Markets reports “if the RBNZ sticks with the dovish tone, then more losses cannot be denied moving ahead.

Technical Analysis

There are a couple of important bearish trend lines formed on the 4 hour chart of the NZDUSD pair. One of the trend lines recently acted as a barrier for the Kiwi buyers, which also coincided with 50% Fibonacci retracement level of the last drop from the 0.7977 high to 0.7660 low. So, a failure to move above the mentioned confluence area can be seen as a completion of correction. The NZDUSD pair is now trading below all three key simple moving averages – 100, 200 and 50. We can consider this as another bearish sign, which might encourage sellers in the near term. The 4H RSI is just floating around the 50 level, and if it breaks it, then it will add to the bearish pressure on the pair.

NZDUSD - 11.11.2014

On the upside, initial resistance can be seen around the 50 SMA, followed by the first bearish trend line which is just sitting below 100 and 200 SMA’s. In short, there are several hurdles on the way up for the pair as it approaches major risk events.

NZ Financial Stability Report

New Zealand Financial Stability Report will be released by Reserve Bank of New Zealand during the upcoming Asian session. It would be interesting to see what the central bank has to say about the soundness and efficiency of the New Zealand financial system. Any negative remarks to weigh on NZDUSD moving ahead”.

(Source: Capital Trust Markets)

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USD/JPY Breaks resistance – new target 117.50

 

Capital Trust Markets reports “market participants are showing renewed interest in selling JPY across the board, with USD/JPY already priced above a major resistance level.

Technical Analysis

USDJPY11thNovember

Late last week, USD/JPY showed several weakness signals post-NFP, forming a double top reversal pattern over the course of two days. This weakness was followed by a moderate drop down to 113.82, approximately 170 pips from top to bottom; as a result we cannot complain that pattern didn’t pan out as planned, at least in intraday trading.

Since the 10th/11 U.S. trading session, however, buying momentum began building again at a steady pace, lifting USD/JPY up to last week’s resistance and ultimately above. Spot is currently trading around 115.60, as the pair is about the re-test 115.50 from above. If this level holds and USD/JPY continues to trade above resistance, traders will focus on 117.50/60 next, a price pivot level dating back to 2007, which could also be an intermediary target on the way towards 120.00 in the long term.

Stochastic is warning of extreme overbought conditions on all major timeframes, but with no price action signs confirming a correction and while the Higher Highs & Higher Lows swing configuration holds, buying dips and resistance breakouts remains the preferred strategy”.

(Source: Capital Trust Markets)

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Australian house price data set for release Monday evening

 

A few hours after the markets close in the US on Monday, the latest house price index and NAB business confidence data will come out of Australia.

Capital Trust Markets reports “both releases are effective headliners, and a surprise in either could catalyze considerable volatility in the value of the Australian dollar versus its major counterparts. However, at present, the house price index is likely to have the most impact. Why? Because the property sector is considered fundamentally overvalued at present in Australia, and markets are looking for signs that either a – that this overvaluation is justified or b – that there is enough retail and consumer demands to support it. With this in mind, what are the levels to keep an eye on as we head into the release, and how can we profit from anything unexpected on either side of the consensus forecast? Here is what you need to know.

So, what’s going on in Australia at present? Well, there are two sides to the coin. The Chinese economy has cooled considerably this year, which has translated to a decline in mining sector output in Australia. This – in turn – has led to a decrease in employment across the sector – which accounts for a large proportion of Australian GDP. In response, the Australian government has held interest rates at record lows in order to boost the property market and shift some of the nation’s reliance on mining towards this sector. It worked, and now house prices are at levels that some call a bubble. However, other areas of the Australian economy are not as advanced as the real estate market. Employment is relatively low, and some are suggesting that a large shift of baby boomers towards retirement could put further pressure on Australia’s ability to maintain sustainable growth. For this reason, markets will be looking for strong housing data to suggest that the property sector can maintain its buoyancy while the rest of the economy catches up. If it doesn’t, and we see a sharp decline in house prices amid a relatively unstable fundamental economy, we could see some serious weakness in the Australian dollar. So what are the levels to keep an eye on? Take a look at the chart below.

AUDUSD

As is so often the case in the markets, the levels we have been watching for a few weeks remain the relevant levels in the AUD USD as we head into the upcoming release. 0.8595 and 0.8761 of levels to keep an eye on. Consensus forecasts the house price index figure to show a 1.6% increase in prices – a small decline on the previous release of 1.8%. If we get anything above this, despite the fact that it would maintain that house prices are growing unsustainably, markets will likely see this as a positive thing for the Australian dollar. With this in mind, look for anything above 1.6% to validate aforementioned in term resistance as an initial upside target, with October highs at 0.8910 the level to watch if we get a close above resistance. Conversely, weak data would bring 0.8595 into play, with a break below this level validating 0.8552 medium-term”.

(Source: Capital Trust Markets)

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Bullish price action signals showing for NZD/USD

 

Capital Trust Markets reports “don’t fall for rumors that a major USD correction is coming, at least not just yet. Before all else, wait for technical confirmations around the main resistance areas.

Technical Analysis

NZDUSD10thNovember

NZD/USD traded near the edge for all of last week, at a huge technical crossroad, 0.7660/80 support area from June 2013 to be more precise. Post NFP, when all the news was digested, greenback bulls eventually caved based on worse-than-expected U.S. data. This allowed the Kiwi to rally and close the day with a large bullish engulfing bar, signaling a potential recovery for this week.

Friday’s bullish reaction saw a modest continuation in Asian trading and during the first half of the European session on Monday. Traders pushed NZD/USD up to 0.7793, where the bullish rally ended based on insufficient economical triggers to push higher. From a swing configuration perspective NZD/USD downtrend remains intact, with Lower Highs and Lower Lows.

While everyone believes the USD gains have overextended in recent weeks, traders should refrain from targeting higher levels for now. A huge resistance confluence lies around 0.7841, marked by previous Lower High, 100 and 200 Simple Moving averages on 4H. Unless the pair can rally above this levels and completely turn bullish (with targets at 0.7975 and 0.8050) NZD/USD will remain at risk for further losses in the near future”.

(Source: Capital Trust Markets)

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Sell AUDUSD – JP Morgan

 

JP Morgan suggest to clients to go short AUDUSD, they report “commodity currencies extended their slide in tandem
with commodity prices this week. Brent has taken the brunt of it, but the move lower in commodities has been
relatively broad-based with iron ore, coal and gold all declining, and only livestock and agriculture faring better. Next week, a key event risk for commodity currencies is the monthly China data release. Our economists expect a month of stability, but notably, their forecasts for FAI, retail sales, IP and CPI are all below consensus. While there are considerable errors around these forecasts, our bias is to trade commodity FX from the bearish side, especially given that most of them appear too expensive relative to terms of trade. AUD stands out in this regard: its largest commodity exports are iron ore, coal and gold and all three have been hit hard recently, resulting in a material decline in its commodity index (chart 4), it appears rich on our short term fair value models and spec shorts are not yet that extreme in AUD (as they are in other commodity currencies such as RUB, BRL and NZD).

Sell AUD/USD in cash at 0.8609. Stop at 0.8860.

JP Morgan AUD Nov14

 

(Source: JP Morgan)

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Outlook for AUD/USD exchange rate – CBA

 

CBA forecast AUDUSD to fall over the next 12 months, they reason -

  • „ Strong demand for the USD vis-à-vis the JPY and EUR will continue to lower AUD/USD. AUD cannot remain immune.
  • „ However, Australia’s terms of trade are also falling as commodity prices, particularly the iron ore price, declines.
  • „ Australia’s two-year bond yield is below the RBA’s cash rate and the Australia-US two-year bond spread is narrowing.
  • „ A firmer USD, declining commodity prices and narrowing Australia-US yield spreads will further guide AUD/USD lower.
  • „ While the Australian trade-weighted index is holding up much better, it too risks edging lower on the above factors.
  • „ Our forecast for AUD/USD depreciation next year is occurring earlier than anticipated. The USD is not correcting lower.

 

Our current AUD/USD forecasts are tabled below. They have the AUD declining to 0.8500 in September 2015. While the AUD typically undertakes a 20.5% annual trading range (it has averaged this every year since the currency floated in December 1983), the forecasts provide guidance of the likely medium-term direction. We are forecasting the AUD lower. But the speed of the decline has been aided by the current USD bid in the market vis-à-vis the JPY and EUR. The rapidly declining Australian terms of trade and the downward pressure on the Aus-US interest rate spreads have only added to the depreciation pressure on the AUD being brought forward”.

cba aud nov 14

(Source: CBA)

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USDCAD buyers looking for more gains

 

Capital Trust Markets reports “USD/CAD uptrend continues to accelerate despite a ballooning U.S. trade deficit, underlining investors’ confidence in the greenback.

Technical Analysis

A fresh Higher High is being pursued by USD/CAD bulls now that price has successfully rallied above 15thOctober high at 1.1384. Only last week price broke above the resistance of a bearish channel (temporary consolidation in the shape of flag pattern on Daily timeframe), and in less than three days the pair has successfully recovered all losses from previous weeks. This solidifies the uptrend configuration while paving the way for more gains in the near future.

USDCAD4thNovember

Spot is currently trading at 1.1405, stabilizing above last month’s resistance. Although buying pressure is showing no signs of decreasing, overbought conditions are likely to take their toll soon. We expect rallies to continue towards 1.4160/70, with a possible dip soon afterwards in order to re-test 1.1382 and confirm this level as support.

Long term targets towards the upside include 1.1600, currently the resistance of a bullish channel dating back to 2012, with an even larger target at 1.1750, where a multi-year price pivot zone should be the ultimate target for long-term buyers”.

(Source: Capital Trust Markets)

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NZDUSD Traders targeting 0.7710 – likely to be hit next week

 

Steady grinds higher followed by extremely fast sell-offs has been NZD/USD distinguished mark in recent weeks. Capital Trust Markets reports “based on today’s technical landscape, confirmed by fundamental triggers, the pair is pursuing a fresh lower low.

Technical Analysis

NZDUSD31stOctober

Similarly with AUD/USD, NZD/USD price action has been quite tricky in recent weeks. Although U.S. economic recovery is undeniable and greenback strength dominates all around, traders preferred a zig-zag approach, baiting buyers on several occasions only to lead them to the slaughterhouse. After two identical repeats of the same event, buyers refused to be fooled for a third consecutive time. On our 4H chart, NZD/USD couldn’t correct higher before selling pressure exploded.

Spot is currently trading around 0.7785 in the early hours of U.S. trading. A large bearish engulfing bar has formed on 4H and a continuation below 0.7766 could lead to the same pattern forming on Daily as well.

0.7700/10 represents the main area of attraction for sellers, marked by 29th September and 6th October double lows. Stop losses from short positions will begin to accumulate just above today’s high, at approximately 0.7880. Only a rally above this level could trigger a bullish reversal, however this appears unlikely at this point”.

(Source: Capital Trust Markets)

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Swiss PMI out Monday morning

 

Shortly before the markets open in the US on Monday, we will get the latest SVME PMI data out of Switzerland.

Capital Trust Markets reports “after the release of the KOF economic indicator yesterday, it looks as though the Swiss economy is set to remain relatively stable over the coming quarters and as we head into early 2015. However, the situation in the wider Eurozone cannot be ignored, and some leading analysts suggest that the stable outlook is flawed and that Switzerland cannot insulate itself entirely from the ongoing turmoil that surrounds it. Which of these biases is likely to play out, and what are the implications for the Swiss franc in either scenario? Markets will be looking to the upcoming release in order to gain insight into these questions, and this scrutiny could offer up considerable volatility in the value of the Swiss franc versus its major counterparts if we get anything unexpected from the release. So, what does consensus forecast the data at, and what are the levels to keep an eye on as we head into Monday morning? Let’s take a look.

First, let’s take a quick look at the Swiss economy. The aforementioned KOF economic indicator release showed the index rising 0.5 points during October to 99.8, beating expectations of 97.7. The release puts the indicator just shy of its long-term average, and offers up the suggestion that the Swiss economy is likely to expand moderately throughout the last few months of this year. However, Eurozone demand accounts for more than 50% of total Swiss exports, and if – as expected – Eurozone economies contract, this demand could weaken quickly. Weakening demand could put pressure on Swiss GDP – and in turn – its currency. So what are the levels to keep an eye on? Take a look at the chart below.

swissy

As the chart shows, the Swiss franc lost strength versus its US counterpart throughout yesterday’s session and early today’s – primarily as a result of strong data out of the US. This strength puts in term support at 0.9542 and resistance at 0.9620 as the levels to keep an eye on. Trading above the 200 period SMA, the initial technical bias is to the upside, but this could change if we get a strong release out of Switzerland on Monday. Consensus forecasts the release at 51.5, so look for anything above this to catalyze a return to the bearish momentum in the USD CHF, with aforementioned in term support an initial downside target. Conversely, if we get weak data look for a run towards 0.9620 – with a close above this level validating 0.9683 longer-term”.

(Source: Capital Trust Markets)