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Fundamental Currency Analysis
USD: The U.S. Dollar Index is currently down -0.0950 or -0.11% to 85.2020 after opening the day at 85.2140 in Asia. The Greenback is lower against all major currencies today after yesterday’s release of the Feds Meeting Minutes for their September meeting. The Minutes showed that members were concerned that the strong dollar and global slowdown could negatively affect the economic outlook for the United States. Elsewhere, Crude Oil Inventories rose to +5.0M compared to +2.1M expected and the 10-year Bond Auction had a yield of 2.38% with a bid to cover ratio of 2.5 versus a previous auction results of 2.54/2.7. Today’s U.S. data is limited to Weekly Initial Jobless Claims (291K). Today is the first day of the G20 Meeting in Washington D.C.
EUR: The Euro is higher against the U.S. Dollar today after yesterday’s release of the FOMC Meeting Minutes. No economic data is expected later today from the Eurozone.
GBP: Sterling is gaining against the U.S. Dollar today after the Halifax HPI increased +0.6% m/m compared to an expected increase of+0.2%. Later today, the BOE will release its Official Bank Rate (0.50%) and the Asset Purchase Facility (375B), with the tentative release of the MPC Rate Statement.
JPY: The Japanese Yen is trading higher against the Greenback today after Japanese Core Machinery Orders increased +4.7% m/m versus an expected increase of +1.1%.
CHF: The Swiss Franc is higher against the U.S. Dollar today in the absence of any significant economic data out of Switzerland.
AUD: The Aussie is gaining against the Greenback today despite Australian Employment Change, which showed a decline of -27.7K jobs in September, significantly worse than the expected increase of +17.6K, with the previous number downwardly revised from +121.0K to +32.1K.
CAD: The Loonie is higher against the Greenback today after yesterday’s release of Housing Starts, which increased to +197K compared to an expected +195K. Canadian NHPI (+0.2%) is the only significant Canadian number to be released later today.
NZD: The Kiwi is trading higher against the U.S. Dollar today in the absence of any economic data out of New Zealand.
Highlighted Chart of the Day: USD/CHF
A daily candlestick chart of the USD/CHF currency pair appears above showing the rate rising well above its up channel drawn in red before returning to retest it in recent sessions. In addition, the rate is trading below its rising 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box has normalized to central 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, as it rose for the fourth consecutive day as it corrects higher from its recent 1.2500 low. Support is seen at 1.2674/81 and 1.2698, with resistance observed at 1.2759 and 1.2815. Its falling 200 day MA now lies at 1.3502, and its 14 day RSI has recovered to central neutral territory to read at the 45.29 level. Its outlook is bullish near term but bearish medium term.
USD/JPY: USD/JPY fell slightly this morning after an almost flat day yesterday as it seems to be forming a three wave a-b-c correction off of its recent 110.08 high. Resistance appears at 108.00 and 108.53, with support noted at 107.75/81 and 107.39. The rate’s 14 day RSI remains in central neutral territory at the 48.44 level, and the rate is trading above its rising 200 day MA currently at 103.16. Its outlook is mildly bearish near term and bullish medium term.
GBP/USD: Cable rose for the fourth consecutive day this morning, as it continues to correct higher from its recent 1.5951 low. The rate is trading above its 50.0% Fibonacci retracement level of its long term rally from 1.4812 to 1.7190 at 1.6001, and below the 38.2% Fibo level providing theoretical resistance at 1.6282. Falling trendline resistance also appears at 1.6322. Furthermore, the rate’s 200 day MA lies at 1.6712 with a falling slope, and its 14 day RSI has risen to central neutral territory to read at the 44.63 level. Its outlook is bullish near term and bearish medium term.
USD/CHF: The Swissy fell again this morning after declining for the last four days, as the rate consolidates below its recent 0.9683 high seen last Friday. Support is now seen at 0.9497 and 0.9432, with resistance at 0.9554/67 and 0.9595/ 0.9618. The rate’s 14 day RSI has fallen to central neutral territory to read at the 55.56 level, and the rate is trading above its rising 200 day MA now situated at the 0.9006 level. Its outlook is mildly bearish near term and bullish medium term. (See highlighted chart above.)
AUD/USD: The Aussie rose for the fourth day this morning, touching 0.8884 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 0.8549 that provides theoretical support. Resistance is seen at 0.8884 and 0.8999, with support at 0.8747/84 and 0.8825/33. The rate remains below its mildly falling 200 day MA now at 0.9225, and its 14 day RSI has risen to read in central neutral territory at the 47.22 level. Its outlook is mildly bullish near term and bearish medium term.
USD/CAD: USD/CAD fell to 1.1089 this morning after also falling yesterday, as the rate corrects lower off its recent 1.1296 high made last Friday. The rate remains above a rising medium term trendline drawn at the 1.0950 level and a longer term support line currently situated at 1.0746. Its 14 day RSI has fallen to now read in central neutral territory at the 51.02 level, and the rate is still trading above its mildly rising 200 day MA now at 1.0941. Its outlook is mildly bearish near term and bullish medium term.
NZD/USD: The Kiwi rose for the second consecutive day this morning, hitting 0.7950 as it consolidates above its recent lows of 0.7706 and 0.7712. The rate has just exceeded the lower support line of its medium term descending wedge pattern now drawn at 0.7905. Its 14 day RSI has recovered to read in central neutral territory at the 46.16 level, and the rate remains well below its falling 200 day MA now at 0.8480. Resistance is noted at 0.7950 and 0.8076, with support seen at 0.7847/71 and 0.7927. Its outlook is mildly bullish near term and bearish medium term.
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