Market Summary and Pre-European Open, Technical Analysis

[MahiFX]

Continued declines in key commodity prices continue to hurt the aussie, .8215 last.

Market Summary

Further selling pressure was heaped on the Aussie today in Asian trade as it fell to .8205 lows on the back of a combination of a continued decline in key commodity prices (WTI Crude Oil ~$56.25 lows), deteriorating risk currency sentiment, and an unfolding hostage drama in Sydney. The JPY was again volatile after Japanese P.M. Shinzo Abe’s ruling coalition cruised to a large election win on Sunday. (117.80 highs against the USD, 118.80 last). The Euro trades at 1.2450 currently, off 1.2485 highs. October Eurozone IP data released on Friday saw a 0.1% (MoM) rise against expectations of 0.2%.

Pre-European Open, Technical Analysis

The commentary below represents our opinion on the state of the markets and our hypothetical trading strategies. This commentary is not a recommendation or advice. Please refer to the disclaimer below for further guidance. Please note that market volatility may have voided some scenarios.

EUR/USD Intraday: THE EURO ADVANCE PAUSES AHEAD OF 1.2490

Pivot: 1.24442, R1 1.25037, R2 1.25453, R3 1.26465, S1 1.24025, S2 1.23430, S3 1.22418 (Al pivots are daily 5pm NY).

Support Levels: Minor/Medium 1.2355/70 zone, Very Minor 1.2290/95.

Resistance Levels: Extremely Minor 1.2485/90, Medium 1.2495/10 zone, Very Minor 1.2530/35.

View: We mildly favour shorts overall with res. lvls near 1.2500 capping, first downside support is near 1.2370.

Technical Comment: The dailies are slowly firming (the Stochs are strong, the ADX is still low), the 4H's are firm but drifting (the Stochs are easing), the 1H's are soft.

GBP/USD Intraday: MUTED TRADE IN THE CABLE, 1.5746 HIGHS.

Pivot: 1.57205, R1 1.57458, R2 1.57719, R3 1.58233, S1 1.56944, S2 1.56691, S3 1.56177.

Support Levels: Very Minor 1.5690/00, 1.5645/55.

Resistance Levels: Minor 1.5755/65, 1.5825/40 zone.

View: We favour more lack-lustre trade today within 1.5690-1.5760, no bias. Further support lies around 1.5650 on the downside.

Technical Comment: The dailies are mainly drifting higher (the Stochs are o/bght, the ADX is declining), the 4H's are mainly firm (the Stochs are heavy, the RSI is declining), the 1H's are weak.

USD/JPY Intraday: P.M. ABE SECURES ELECTION VICTORY

Pivot: 118.667, R1 119.285, R2 119.823, R3 120.978, S1 118.130, S2 117.512, S3 116.356.

Support Levels: Extremely Minor 117.75/80, Minor 117.40/45, 117.00/20 zone.

Resistance Levels: MInor 119.05/15, Minor/Medium 119.45/60 zone.

View: We favour shorts overall and expect to see more volatile trade, shorts could target first res. near 119.10, stops above 119.65, demand should reside in the 117.45/80 zone.

Technical Comment: The dailies are sliding lower (the Stochs have ticked up a touch though), the 4H's are mixed, the 1H's are edging higher.

AUD/USD Intraday: COMMODITIES CONTINUE TO WEIGH HEAVILY ON THE AUSSIE.

Pivot: .82577, R1 .82881, R2 .83294, R3 .84011, S1 .82164, S2 .81860, S3 .81143.

Support Levels: Minor/Medium .8200/10, Minor .8150/60.

Resistance Levels: Extremely Minor .8280/85, .8300/05, Minor/Medium .8370/80.

View: Whilst shorts are heavily favoured we wouldn't initate until .8195/.8200 breaks. First real res. should lie in the .8280/.8300 zone. Longs could stop under .8195.

Technical Comment: The dailies continue to trade poorly with a high ADX, the 4H's are soft (the ADX is lifting), the 1H's are weak

For the fully Dail Score with currency heat maps and economic calendar please click here.

 

[MahiFX]

The russian ruble falls 10% on further oil price fallout

Market Summary

The tumbling oil price continued to dominate market sentiment in trade yesterday. The Russian Ruble was a standout victim as it fell ~10% to record lows of around 66.50 against the USD. The Russian central bank hiked the key interest rate from 10.5% to 17% in a move aimed at protecting against further declines in the Ruble as the economy grapples with declining oil prices. The Cable was a standout loser amongst the majors falling from highs near 1.5750 to 1.5602, a move exacerbated by the thinning market liquidity. The Aussie has held the key .8200 support area again after falling from .8268 highs. Safe haven demand again bolstered the JPY, to highs of 117.56 against the USD. U.S. data was mixed with strong out-turns for the Industrial Production and Capacity Utilization data being offset by a decline in the Empire State (NY Fed) index. The Euro trades at 1.2450 having traded ~ 1.2415-1.2478 yesterday.

Pre-European Open, Technical Analysis

The commentary below represents our opinion on the state of the markets and our hypothetical trading strategies. This commentary is not a recommendation or advice. Please refer to the disclaimer below for further guidance. Please note that market volatility may have voided some scenarios.

EUR/USD Intraday: SELLERS CONTINUE TO CAP THE EURO AHEAD OF 1.2500.

Pivot: 1.24439, R1 1.24728, R2 1.25083, R3 1.25726, S1 1.24085, S2 1.23796, S3 1.23152 (All pivots are daily 5 pm NY).

Support Levels: Extremely Minor 1.2410/15, Minor/Medium 1.2355/70 zone.

Resistance Levels: Minor 1.2480/90, Medium 1.2495/10 zone, Very Minor 1.2530/35.

View: We see a high probability of more lack-lustre trade ahead of the FOMC, 1.2410/1.2480 today.

Technical Comment: The dailies are moderately firm (but sidetracking and the ADX is low), the 4H's are also firm, the 1H's are mildly +ve.

GBP/USD Intraday: CPI DATA TODAY, BOE TOMORROW, THE FOCUS

Pivot: 1.56621, R1 1.57224, R2 1.58079, R3 1.59537, S1 1.55766, S2 1.55163, S3 1.53705.

Support Levels: Very Minor 1.5600/05, Extremely Minor 1.5580/85, Minor/Medium 1.5535/45.

Resistance Levels: Extremely Minor 1.5675/80, Minor/Medium 1.5750/65 zone.

View: The pace of the Cable fall was somewhat surprising, shorts are favoured overall higher (nearer 1.5750), otherwise spec longs could try near 1.5580, stops under 1.5535. Data risk today.

Technical Comment: The dailies are now declining (esp. the Stochs), the 4H's are weak (the Stochs have lifted slightly), the 1H's are mixed.

USD/JPY Intraday: THE JPY MOVES HIGHER ON FURTHER SAFE HAVEN BUYING

Pivot: 118.147, R1 118.730, R2 119.645, R3 121.144, S1 117.231, S2 116.648, S3 115.150.

Support Levels: Minor 117.40/45, 117.00/20 zone.

Resistance Levels: Extremely Minor 118.15/25, Minor/Medium 119.00/15 zone.

View: The Usd/jpy has lost its lustre. We favour shorts but bounces could make entries tough. Levels near 119.00 are favoured, we see the decline slowing in the 117.20/45 region.

Technical Comment: The dailies are weak (the Stochs are nearing the o/sold bound), the 4H's are heavy with an increasing ADX, the 1H's are mainly soft but lifting slightly.

AUD/USD Intraday: 82C CONTINUES TO HOLD DESPITE LOWER OIL/GOLD PX'S.

Pivot: .82273, R1 .82531, R2 .82935, R3 .83597, S1 .81869, S2 .81611, S3 .80949.

Support Levels: Medium .8195/05, Minor .8150/60.

Resistance Levels: Very Minor .8275/80, .8280/85, .8300/05.

View: Our view is unchanged from yesterday, that whilst favouring shorts we would wait for .8195/.8200 to break. We expect .8265/80 to cap.

Technical Comment: The dailies remain heavy with a high ADX, the 4H's are also weak, the 1H's are mixed (the Stochs are strong).

Read the full Daily Score here.

 

[MahiFX]

FOMC AND BoE MINUTES TO FEATURE TODAY, THIN LIQUIDITY SEES VOLATILITY RISE

Market Summary
Thinning holiday market liquidity has predicated some large moves in the majors during trade in the last 24 hours. The RUB had lost nearly 27% from its highs to its lows at one point, whilst the JPY surged to 115.57 highs against the USD as short JPY positioning was unwound (Usd/jpy rally highs 117.75, 116.70 last). The Cable rallied to 1.5785 on the broad based dollar selling, this despite an earlier very soft inflation print (core +1.2% YoY vs. +1.5% exp.). The Euro rallied to 1.2570, in part helped by better than expected German Flash Manufacturing PMI and ZEW data. The long dollar unwinding helped the Aussie trade back to .8274 however the key 82 cent level has broken in Asian trade where lows of .8180 have been seen. Todays data calendar is dominated by the BoE minutes and the FOMC Monetary Policy Statement.

Pre-European Open, Technical Analysis

The commentary below represents our opinion on the state of the markets and our hypothetical trading strategies. This commentary is not a recommendation or advice. Please refer to the disclaimer below for further guidance. Please note that market volatility may have voided some scenarios.

EUR/USD Intraday: LONG USD LIQUIDATION HELPS THE EURO TRADE TO 1.2570.

Pivot: 1.25050, R1 1.25752, R2 1.26400, R3 1.27750, S1 1.24402, S2 1.23700, S3 1.22350 (All pivots are daily 5pm NY).

Support Levels: Extremely Minor 1.2475/80, Very Minor 1.2410/15.

Resistance Levels: Minor/Medium 1.2570/80, Minor 1.2595/05.

View: The FOMC will dictate, we see 1.2410 to 1.2610 extremities as quite possible given the reducing liq. and market positioning. Will leave.

Technical Comment: The dailies are firming (the Stochs aside) and the ADX is edging higher, the 4H's are mainly strong (the Stochs aside), the 1H's are mainly soft.

GBP/USD Intraday: USD SELLING SEES THE CABLE SHRUG OFF A WEAK CPI (1.5785 HIGHS)

Pivot: 1.57160, R1 1.58193, R2 1.58888, R3 1.60616, S1 1.56465, S2 1.55432, S3 1.53704.

Support Levels: Extremely Minor 1.5710/15, Minor 1.5600/05.

Resistance Levels: Extremely Minor 1.5785/90, Minor 1.5830/45 zone.

View: Poor liq. and large positioning are exercerbating moves. We will leave with the FOMC today, longs are mildly favoured but we see anything in the range of 1.5600/1.5830 as possible today.

Technical Comment: The dailies are mixed (the MACD/RSI are the strongest), the 4H's are mixed to firm, the 1H's are soft.

USD/JPY Intraday: SHORT JPY POSITION HOLDERS BAIL, JPY 115.57 HIGHS

Pivot: 116.665, R1 117.758, R2 119.105, R3 121.544, S1 115.319, S2 114.226, S3 111.786.

Support Levels: Minor 115.40/55 zone, 114.85/00 zone.

Resistance Levels: Extremely Minor 117.75/85, 118.15/25.

View: With short Jpy holders re-weighting and poor tech's we continue to favour Usd/jpy shorts. Will leave with the vol. and FOMC today. Initial levels to watch are ~ 117.75/85 and 115.40/55.

Technical Comment: The dailies are heavy and declining, the 4H's are mainly weak but have lifted, the 1H's are mainly edging higher.

AUD/USD Intraday: THE AUSSIE BREAKS .8200 IN ASIAN TRADE

Pivot: .82311, R1 .82624, R2 .83057, R3 .83804, S1 .81877, S2 .81564, S3 .80818.

Support Levels: Minor .8150/60, Extremely Minor .8060/70

Resistance Levels: Very Minor .8195/.8205, Minor/Medium .8275/85, Very Minor .8300/05.

View: The break of .8200 opens fresh downside but with the FOMC out today the risk of a whipsaw higher is very real. Favour shorts but will leave here.

Technical Comment: The dailies are very weak (the Stochs are o/sold, the ADX is high), the 4H's are soft, the 1H's are also weak overall.

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[MahiFX]

The fed to exercise patience in normalizing monetary policy, usd lifts, eur/usd 1.234

Market Summary

Fallout from todays FOMC meeting dictated market sentiment as the dollar continued its surge after the Fed replaced the “considerable time” forward guidance. The Fed added that the labor market had “improved further” and that they would be “patient” in beginning to normalize monetary policy, adding that it is unlikely that they would begin the normalization process for at least the next couple of meetings. The Euro has traded as low as 1.2321 after the statement adding to its losses from yesterday which were fueled by comments to the WSJ from ECB member Couere who hinted that the ECB had already decided to ease policy further. The Aussie rose from lows near .8140 to .8234 briefly after the statement but has since traded as low as .8107, whilst the Cable finally found support at its prior 2014 lows around 1.5540 (1.5585 last). The Usd/jpy trades at 118.55 having peaked at 119.00.

Pre-European Open, Technical Analysis

The commentary below represents our opinion on the state of the markets and our hypothetical trading strategies. This commentary is not a recommendation or advice. Please refer to the disclaimer below for further guidance. Please note that market volatility may have voided some scenarios.

EUR/USD Intraday: ECB COUERE COMMENTS AND THE FOMC DENT THE EURO

Pivot: 1.23934, R1 1.24656, R2 1.25884, R3 1.27834, S1 1.22706, S2 1.21984, S3 1.20034 (All pivots are daily 5 pm NY).

Support Levels: Very Minor 1.2290/00, Minor/Medium 1.2240/45.

Resistance Levels: Very Minor 1.2370/80, 1.2470/85 zone, 1.2495/00.

View: LIke the Cable we favour shorts but thinning liquidity means bounces could be harsh. We prefer to wait until near 1.2470, although an agressive stance could be selling near 1.2370.

Technical Comment: The dailies are now easing (the Stochs are heavy), the 4H's are heavy (the Stochs are o/sold), the 1H's are mainly weak (the Stochs have lifted sharply though).

GBP/USD Intraday: THE CABLE GETS CAUGHT IN THE FOMC CROSSFIRE, BoE VOTE SPLIT IS UNCHANGED (~1.5540 LOWS).

Pivot: 1.56234, R1 1.57074, R2 1.58404, R3 1.60574, S1 1.54904, S2 1.54063, S3 1.51893.

Support Levels: Minor/Medium 1.5535/45, Very Minor 1.5515/25.

Resistance Levels: Very Minor 1.5600/10, Extremely Minor 1.5695/05.

View: We prefer shorts but we respect 1.5535/45, we will wait for nearer 1.5700 as the market liquidity dries up.

Technical Comment: The dailies are soft (esp. the Stochs), the 4H's are very heavy and the ADX is rising, the 1H's are beginning to recover from weak levels (esp. the Stochs).

USD/JPY Intraday: THE USD/JPY SURGES TO 119.00 POST THE FOMC

Pivot: 117.956, R1 119.595, R2 120.546, R3 123.137, S1 117.004, S2 115.365, S3 112.775.

Support Levels: Extremely Minor 116.80/00 zone, 116.20/25.

Resistance Levels: Very Minor 119.00/10, Minor/Medium 119.45/60, Minor 119.90/00.

View: The Jpy is for the brave and we prefer to trade elsewhere, shorts could target near todays highs adding near 119.40, stops above 120.00, we would not entertain longs until near 117.50 (moving up).

Technical Comment: The dailies are mixed having lifted from weak levels yesterday, the 4H's are strong (the Stochs are o/bght), the 1H's are starting to ease (the Stochs are weak).

AUD/USD Intraday: THE HAPLESS AUSSIE SETS ANOTHER 4 YR+ LOW (.8107).

Pivot: .81560, R1 .82047, R2 .82847, R3 .84134, S1 .80760, S2 .80273, S3 .78986.

Support Levels: Very Minor .8100/10, Extremely Minor .8060/70.

Resistance Levels: Very Minor .8145/55, Extremely Minor .8195/05, .8235/40.

View: We strongly favour shorts, initial res. is near .8150 but with liquidity thinning we will wait for .8190/.8210, stops above .8250, care req.

Technical Comment: The dailies remain very heavy with a high ADX (the Stochs/RSI are o/sold), the 4H's are soft, the 1H's are lifting.

The Daily Score in full is here.

 

[MahiFX]

The Daily Score for 19 December 2014

STRONG U.K. NOV. RETAIL SALES BOLSTERS THE CABLE, 1.5670 LAST

Market Summary

Mixed fortunes for the USD in trade yesterday as it gained further ground against the Euro (Eur/usd 1.2265 lows) but traded lower against the Cable after stronger than expected U.K. Retail Sales data for November which rose 1.6% (MoM) versus the 0.3% expectation (Gbp/usd 1.5678 highs). The Eur/chf was a significant mover (1.2010-1.2097) after the SNB announced they would impose negative interest rates on deposits at the central bank from the 22nd January, a move aimed at curbing safe-haven CHF buying as the Russian situation escalates. The Aussie rallied to .8203 highs before reverting to .8146 as oil surrendered its earlier gains (Jan 2015 WTI, 54.15 last). The Usd/jpy peaked at 119.31 but trades at 118.90 currently.

Pre-European Open, Technical Analysis

The commentary below represents our opinion on the state of the markets and our hypothetical trading strategies. This commentary is not a recommendation or advice. Please refer to the disclaimer below for further guidance. Please note that market volatility may have voided some scenarios.

EUR/USD Intraday: THE EUR CONTINUES TO SINK, SNB RATE MOVE ALSO WEIGHS

Pivot: 1.23017, R1 1.23377, R2 1.23888, R3 1.24759, S1 1.22506, S2 1.22146, S3 1.21275 (All pivots are daily 5pm NY).

Support Levels: Minor/Medium 1.2240/45, Very Minor 1.2200/10.

Resistance Levels: Very Minor 1.2355/65, 1.2370/80.

View: Whilst favouring shorts we see little chance of a sustained break below the 1.2240/45 support level in thinning markets so would target the 1.2350/70 zone to establish, tight stops could be above 1.2420.

Technical Comment: The dailies continue to remain heavy (the Macd line has crossed the signal line, the ADX is low), the 4H's are very weak (the Stoch/RSI are o/sold), the 1H's are mixed.

GBP/USD Intraday: STRONG NOV. RETAIL SALES BOOSTS THE CABLE

Pivot: 1.56319, R1 1.57146, R2 1.57603, R3 1.58887, S1 1.55862, S2 1.55035, S3 1.53751.

Support Levels: Very Minor 1.5595/05, Medium 1.5535/45.

Resistance Levels: Extremely Minor 1.5695/05, 1.5755/65.

View: We favour trade inside of 1.5600-1.5700 for the end of the week, chance of higher levels (1.5750/65 or even 1.5785) with thin markets, care req.

Technical Comment: The dailies are soft overall (the ADX is low), the 4H's are firming, the 1H's are also firm (the Stochs are o/bght).

USD/JPY Intraday: THE USD/JPY EASES OFF HIGHS AROUND 119.30.

Pivot: 118.801, R1 119.341, R2 119.850, R3 120.899, S1 118.292, S2 117.752, S3 116.703

Support Levels: Extremely Minor 118.25/30, Very Minor 116.80/00 zone.

Resistance Levels: Very Minor 119.30/35, Minor/Medium 119.45/60 zone, Minor 119.90/00.

View: We prefer to trade elsewhere but favour consolidation today in the 118.50/119.40 zone. A break of 118.20/25 should reinitiate selling interest.

Technical Comment: The dailies remain mixed although are improving (the Stochs are strong), the 4H's are firm (the RSI/Stochs are declining though), the 1H's are mildly soft.

AUD/USD Intraday: BOUNCE TO 82C PRIOR SUPPORT LVLS QUICKLY ENCOUNTERS FRESH SELLING

Pivot: .81619, R1 .82065, R2 .82479, R3 .83339, S1 .81205, S2 .80759, S3 .79899.

Support Levels: Extremely Minor .8145/50, Minor .8100/10.

Resistance Levels: Minor .8195/10 zone, Very Minor .8235/40.

View: We continue to favour shorts around 82c, would add more near .8230, a tight stop is above .8250 (small pos. in thin market), rotate risk.

Technical Comment: The dailies are very weak (the Stochs/RSI are lifting in the o/sold bounds), the 4H's are mixed and drifting, the 1H's add little.