Orbex Daily Forex Analysis Oct 10, 2014

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Fundamental Currency Analysis

 

USD: The U.S. Dollar Index is currently down -0.0450 or -0.05% to 85.4770 after opening the day at 85.5340 in Asia. The Greenback is trading mixed against the major currencies today after yesterday’s release of Weekly Initial Jobless Claims, which showed 287K new claims versus an expected 291K. Today’s U.S. economic calendar will have Import Prices (-0.5%) and the Federal Budget Balance (-128.7B last) and a speech by Dallas Federal Reserve President, Richard Fisher.  Also, today marks the second day of the G20 Meetings and the first day of IMF meetings in Washington D.C.

 

EUR: The Euro is trading moderately higher against the U.S. Dollar today after a speech given by ECB President Mario Draghi at the Brookings Institute in Washington D.C. Draghi noted the transition of the central bank’s monetary policy from passive provision of central bank credit to taking a more active role in managing the ECB’s balance sheet in an attempt to stimulate inflation. Draghi said, “We are accountable to the European people for delivering price stability, which today means lifting inflation from its excessively low level. And we will do exactly that”.

 

GBP: Sterling is trading higher against the U.S. Dollar today after the BOE will released its Official Bank Rate, which remained at 0.50%, and the Asset Purchase Facility, also unchanged at 375B, both numbers were in line with expectation. No statement was issued by the central bank. Today’s data will have the UK Trade Balance (-9.6B).

 

JPY: The Japanese Yen is trading fractionally higher against the Greenback today and is set to close the week with a gain, its first in six weeks. The BOJ released its Monetary Policy Meeting Minutes today, which showed that at least one of the nine members said that the 2% sustained inflation target will be difficult to attain, and that the majority of members said that monitoring inflation expectations across the Japanese economy is a key element for monetary policy . Also, Tertiary Industry Activity declined -0.1% m/m compared to an expected increase of +0.2%.

 

CHF: The Swiss Franc is fractionally higher against the U.S. Dollar today in the absence of any significant economic data out of Switzerland.

 

AUD: The Aussie is moderately higher against the Greenback today despite Australian Home Loans, which declined -0.9% m/m compared to an expected increase of +0.2%.

 

CAD: The Loonie is trading lower against the Greenback today despite yesterday’s release of Canadian NHPI, which increased +0.3% m/m versus an expected rise of +0.2%.Canadian Employment Change (+18.7K) and the Unemployment Rate (7.0%) are scheduled to be released later today.

 

NZD: The Kiwi is steady against the U.S. Dollar today in the absence of any economic data out of New Zealand.

 

Highlighted Chart of the Day: USD/CAD

 

2014-10-10_12-10-07

 

 

A daily candlestick chart of the USD/CAD currency pair appears above showing the rate rising overall within its up channel drawn in red and forming a near term triangle consolidation pattern below its recent high point. In addition, the rate is trading below its mildly rising 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box has fallen to upper neutral territory after being overbought. (See additional technical analysis in the section below.)

 

Technical Analysis for the Majors

 

EUR/USD: The Euro rose mildly this morning, but fell yesterday after first rising to 1.2791, as it corrects higher from its recent 1.2500 low. Support is seen at 1.2663/81 and 1.2698, with resistance observed at 1.2759 and 1.2791/1.2815. Its falling 200 day MA now lies at 1.3497, and its 14 day RSI is now in lower neutral territory at the 43.34 level. Its outlook is mildly bullish near term but bearish medium term.

 

USD/JPY: USD/JPY rose slightly this morning after falling to 107.52 yesterday as its three wave a-b-c correction off of its recent 110.08 high unfolds. Resistance appears at 108.00/18 and 108.53, with support noted at 107.75/81 and 107.39/52. The rate’s 14 day RSI remains in central neutral territory at the 48.06 level, and the rate is trading above its rising 200 day MA currently at 103.19. Its outlook is mildly bearish near term and bullish medium term.

 

GBP/USD:  Cable rose a bit this morning after rising to 1.6226 yesterday before closing down on the day, as it continues to correct higher from its recent 1.5951 low. The rate is still trading above its 50.0% Fibonacci retracement level of its long term rally from 1.4812 to 1.7190 at 1.6001, and below its 38.2% Fibo level that provides theoretical resistance at 1.6282. Falling trendline resistance also appears at 1.6310. Furthermore, the rate’s 200 day MA lies at 1.6709 with a falling slope, and its 14 day RSI has fallen to lower neutral territory to read at the 42.14 level. Its outlook is mildly bullish near term and bearish medium term.

 

USD/CHF:  The Swissy fell a bit this morning after declining to 0.9468 yesterday only to end up higher on the day, as the rate consolidates below its recent 0.9683 high seen last Friday. Support is now seen at 0.9497 and 0.9468, with resistance noted at 0.9554/67 and 0.9595/ 0.9618. The rate’s 14 day RSI now reads in upper neutral territory to read at the 57.20 level, and the rate is trading above its rising 200 day MA now situated at the 0.9009 level. Its outlook is mildly bearish near term and bullish medium term.

 

AUD/USD:  The Aussie was unchanged this morning, after rising to 0.8897 yesterday and then closing the day lower, as it corrects higher off of its recent low at the 0.8641 level made last Friday. The rate remains above its recently broken medium term down trend line now drawn at 0.8517 that provides theoretical support. Resistance is seen at 0.8825/33 and 0.8884/97, with support at 0.8747 and 0.8683. The rate remains below its mildly falling 200 day MA now at 0.9224, and its 14 day RSI now reads in lower neutral territory at the 40.06 level. Its outlook is neutral near term and bearish medium term.                                                                                               

                    

USD/CAD:  USD/CAD rose to fell to 1.1198 this morning after rising notably yesterday, as the rate consolidates in what seems to be a triangular pattern below its recent 1.1296 high made last Friday. The rate remains above a rising medium term trendline drawn at the 1.0954 level and a longer term support line currently situated at 1.0753. Its 14 day RSI now reads in upper neutral territory at the 58.94 level, and the rate is still trading above its mildly rising 200 day MA now at 1.0942. Its outlook is neutral near term and bullish medium term. (See highlighted chart above.)

 

NZD/USD: The Kiwi rose slightly this morning, after rising to 0.7972 yesterday and then closing lower on the day, as it consolidates above its recent similar lows of 0.7706 and 0.7712 seen over the past two weeks. The rate has fallen back below the falling lower support line of its medium term descending wedge pattern now drawn at 0.7907.  Resistance is noted at 0.7927 and 0.7972, with support seen at 0.7781 and 0.7706/12. Also, its 14 day RSI has fallen to read in lower neutral territory at the 40.22 level, and the rate remains well below its falling 200 day MA now at 0.8477.  Its outlook is mildly bullish near term and bearish medium term.

 

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