Orbex Daily Forex Analysis, October 13 2014

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Fundamental Currency Analysis

USD: The U.S. Dollar Index is currently down -0.3800 or -0.44% to 85.5320 after opening the day at 85.8180 in Asia. The Greenback is off against all major currencies as the United States and Japan observe public holidays. Nevertheless, while banks and the bond market are closed, U.S. stock markets will be open. The perception on U.S. interest rates has shifted, with a 32 percent expectation that the Fed will raise rates by July of 2015, from a 56 percent expectation on September 30th. The shift has weighed on the Greenback, which hit a four week low against the Yen today.

EUR: The Euro is trading higher against the U.S. Dollar today, after the German Wholesale Price Index increased +0.1% m/m as widely anticipated. No other economic numbers are expected today out of the Eurozone, with Eurogroup Meeting taking place in Brussels.

GBP: Sterling is higher against the U.S. Dollar today in the absence of any significant data out of either country. Traders are looking to tomorrow’s release of UK CPI, RPI and PPI Input.

JPY: The Japanese Yen is trading higher against the Greenback today, making a four week high as safe haven buying ahead of a global economic slowdown supported the currency. No economic data is expected out of Japan until tomorrow.

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

AUD: The Aussie firmed against the Greenback today after making a four year low last week. The currency gained after a report of improving exports to China — Australia’s largest trading partner.

CAD: The Loonie is trading fractionally higher against the Greenback today in the absence of any significant data out of either country.

NZD: The Kiwi is higher against the U.S. Dollar today despite New Zealand FPI, which declined -0.8% m/m versus a previous reading of +0.3%. Also, the REINZ HPI increased +0.2% m/m compared to a previous increase of +1.1%.

 

Highlighted Chart of the Day: USD/JPY

 

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 [see image above]

A daily candlestick chart of the USD/JPY currency pair appears above showing the rate breaking its recent up channel drawn in red and forming a near term descending wedge drawn in orange below its recent high point. In addition, the rate is trading above its rising 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box is falling gently within central neutral territory. (See additional technical analysis in the section below.)

 

Technical Analysis for the Majors

 

EUR/USD: The Euro rose this morning to 1.2697, after a flat day yesterday, as it corrects higher from its recent 1.2500 low. Support is seen at 1.2663 and 1.2605, with resistance observed at 1.2681/98 and 1.2759. Its falling 200 day MA now lies at 1.3486, and its 14 day RSI is now in central neutral territory at the 42.72 level. Its outlook is mildly bullish near term but bearish medium term.

USD/JPY: USD/JPY fell this morning to 107.05 after falling slightly yesterday as its three wave a-b-c correction off of its recent 110.08 high unfolds lower within a descending wedge pattern. Resistance appears at 107.52/81 and 107.75/81, with support noted at 107.05 and 106.80. The rate’s 14 day RSI remains in central neutral territory at the 43.67 level, and the rate is trading above its rising 200 day MA currently at 103.24. Its outlook is mildly bearish near term and bullish medium term. (See highlighted chart above.)

GBP/USD:  Cable rose to 1.6125 this morning after not moving much yesterday, as the rate continues to consolidate above its recent 1.5951 low and below 1.6226. 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 1.6287. Furthermore, the rate’s 200 day MA lies at 1.6704 with a falling slope, and its 14 day RSI has fallen almost to lower neutral territory at the 40.67 level. Its outlook is neutral near term and bearish medium term.

USD/CHF:  The Swissy fell to 0.9512 this morning after closing virtually unchanged yesterday, as the rate consolidates below its recent 0.9683 high and above 0.9468. 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 central neutral territory at the 57.74 level, and the rate is trading above its rising 200 day MA now situated at the 0.9016 level. Its outlook is neutral near term and bullish medium term.

AUD/USD:  The Aussie rose to 0.8749 this morning, after falling slightly yesterday, as it consolidates above its recent 0.8641 low and below 0.8897. The rate remains above its recently broken medium term down trend line now drawn at 0.8454 that provides theoretical support. Resistance is seen at 0.8747 and 0.8825/33, with support at 0.8683 and 0.8641/51. The rate remains below its mildly falling 200 day MA now at 0.9220, and its 14 day RSI now reads in lower neutral territory at the 38.00 level. Its outlook is neutral near term and bearish medium term.

USD/CAD:  USD/CAD rose to 1.1215 this morning after also rising yesterday, as the rate consolidates below its recent 1.1296 high and above 1.1081. The rate remains between a rising resistance trendline now at 1.1314 and a rising support line drawn at the 1.0959 level, with a longer term support line currently situated at 1.0756. Its 14 day RSI now reads in upper neutral territory at the 60.53 level, and the rate is still trading above its mildly rising 200 day MA now at 1.0943. Its outlook is neutral near term and bullish medium term.

NZD/USD: The Kiwi rose to 0.7886 this morning, after falling mildly yesterday, as it consolidates above its recent similar lows of 0.7706 and 0.7712 and below the 0.7972 level. The rate rose to briefly touch the falling lower support line of its medium term descending wedge pattern now drawn at 0.7889. Resistance is noted at 0.7886 and 0.7927, with support seen at 0.7781/93 and 0.7706/12. Also, its 14 day RSI now reads in central neutral territory at the 41.59 level, and the rate remains well below its falling 200 day MA now at 0.8473.  Its outlook is mildly bullish near term and bearish medium term.

 

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.