CHF Softer Against The USD While CAD Gains Ground
ORBEX | Sep 17, 2014 06:35AM ET
Fundamental Currency Analysis
USD: The US dollar index is currently up +0.0460 or +0.05 percent to 84.1200 after opening at 84.0770 in the Asian session earlier today. Yesterday’s U.S. economic releases had PPI show a reading of 0.0% m/m versus an expected increase of +0.1%, while Core PPI increased +0.1% m/m in line with forecasts. Also, TIC Long Term Purchases declined -18.6B, which was significantly lower than the expected increase of +24.3B. Wednesday’s U.S. numbers include CPI (+0.1%), Core CPI (+0.2%) and the U.S. Current Account (-114B). Later in the U.S. session will be this week’s highlights, the Federal Funds Rate (<0.25%), FOMC Economic Projections, the FOMC Statement and Press Conference. Traders are weighing a possible change in the FOMC’s language in today’s policy statement that may indicate a possible time frame for the first interest rate hike in the United States since 2006.
EUR: The euro softened slightly versus the U.S. dollar in today’s morning session after yesterday’s release of German ZEW Economic Sentiment, which printed at 6.9 versus an expected reading of 5.2. Also, the Eurozone ZEW Economic Sentiment survey failed to meet expectations by printing at 14.2 versus an anticipated reading of 21.3. Today’s only significant Eurozone economic release is Eurozone Final CPI (+0.3%).
GBP: Sterling is mildly higher in the Asian session today after yesterday’s release of UK CPI, which came out at 1.5%, as was widely anticipated. Nevertheless, UK PPI Input declined -0.6% m/m, which was notably lower than the expected increase of +0.1%. Also, RPI printed at 2.4% versus the +2.5% expected. Today’s UK economic data includes the Average Earnings Index (+0.5%), Claimant Count Change (-29.7K) and the UK Unemployment Rate. Also out later today will be the MPC’s Monetary Policy Meeting Minutes, which are expected to show a unanimous vote on the Asset Purchase Facility and two dissenting votes to raise the Official Bank Rate. This week’s UK highlight is the looming Scottish Independence referendum on Thursday that is keeping trading in Sterling nervous.
JPY: The Japanese yen is trading slightly lower against the U.S. dollar this morning today in the absence of any economic data out of Japan until Thursday.
CHF: The Swiss franc is softer against the U.S. dollar today this morning with Swiss ZEW Economic Expectations (2.5 last) expected out later today.
AUD: The Aussie is down against the U.S. dollar in this morning’s session amid speculation that China’s attempt to stimulate the economy by providing its five largest banks with $81.4 billion in liquidity will not significantly change the PBOC’s monetary policy. Today’s only Australian economic release was the MI Leading Index, showing a decline of -0.1%, unchanged from its last reading.
CAD: The Loonie is gaining ground against the U.S. dollar in Asia today in the absence of any Canadian economic data. Yesterday’s only release was Manufacturing Sales, which increased +2.5% m/m versus an expected increase of +1.1%, with the previous number upwardly revised from +0.6% to +0.9%.
NZD: The Kiwi came off versus the Greenback today after Westpac Banking Corp announced that Fonterra Cooperative Group Ltd., the world’s largest dairy exporter will reduce its payment forecast from its current estimate of NZD $6.00 to NZD $5.30 per kilogram. Yesterday’s data included the New Zealand Current Account, which showed a deficit of -1.07B versus an expected deficit of-1.04B. Today’s only significant release will be New Zealand GDP (+0.6%).
Highlighted Chart of the Day: USD/CAD
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A daily candlestick chart of the USD/CAD currency pair appears above showing the rate exceeding but then falling back below the upward slanted neckline of a possible head and shoulders style bottom pattern drawn in red. The rate is trading just above its flat 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box has now normalized to central neutral territory after failing to confirm the most recent high. (See additional technical analysis in the section below.)
Technical Analysis for the Majors
EUR/USD: The Euro remained within a mildly rising near term consolidation pattern this morning, trading above the 1.2859 recent low and below key psychological resistance at the 1.3000 level. Its declining 200 day MA now lies at 1.3588, and its 14 day RSI has recovered to read in lower neutral territory at the 32.10 level. Resistance is seen in the 1.2957/62 and 1.2978/87 regions, while support shows in the 1.2881/83 and 1.2859/66 zones. Its outlook is neutral to mildly bullish near term but bearish medium term.
USD/JPY: USD/JPY consolidated below its recent 107.39 high this morning and remained above support in the 106.80/92 zone, with additional support seen at 106.47/64. That high was just below its 107.51 target from a recent descending triangle pattern break. Its 14 day RSI remains quite overbought at 81.02 and the rate remains well above its rising 200 day MA at 102.51. Its outlook is neutral near term but medium term bullish.
GBP/USD: Cable remained below yesterday’s 1.6310 high this morning after moving back up into its broken down channel. Resistance is seen at 1.6310 and the channel’s top line at 1.6453, while support lies at the channel’s bottom line now at 1.6245 and the recent 1.6051 low. The rate is also trading just below the 1.6282 38.2% Fibonacci retracement level of its rise from 1.4812 to 1.7190, with the 50% level situated at 1.6001. The rate’s 200 day MA lies at 1.6740 with an increasingly negative slope, and its 14 day RSI has recovered to read in lower neutral territory at the 38.13 level. Its outlook is turning bullish in the near term but remains bearish medium term.
USD/CHF: The Swissy consolidated again this morning under last week’s 0.9395 high, as it trades within what looks to be a near term flag or pennant pattern. Support is noted in the 0.9334/36 and 0.9299/0.9314 regions, while resistance is seen in the 0.9371/79 region and at 0.9395. The rate’s 14 day RSI remains in upper neutral territory at the 65.04 level, and the rate now trades comfortably over its rising 200 day MA at 0.8956 level. Its outlook is neutral near term but bullish medium term.
AUD/USD: The Aussie pulled back a bit this morning to 0.9060 after pushing up to 0.9111 yesterday, as the rate corrects its notable recent downtrend that made a recent low at the 0.8983 level on the 15th. If sustained, the break of its 0.9201 to 0.9504 medium term trading range still targets 0.8898, with support seen at 0.9037/57 and resistance at 0.9111. The rate is trading below its rising 200 day MA now at 0.9236, but its 14 day RSI has recovered to read in lower neutral territory at 32.74 level. Its outlook is turning bullish near term but bearish medium term.
USD/CAD: The Loonie dropped sharply to 1.0965 yesterday, after falling to 1.1034 the day before, as it corrects lower off a very near term double top formed in the 1.1096/98 zone. Support is now seen at 1.0941 and 1.0933. The rate appears to have failed in its initial attempt to penetrate above the upward slanting neckline of a medium term head and shoulders type bottom. Its 14 day RSI has normalized to central neutral territory to read at the 52.08 level, and the rate is now hovering above its flattening 200 day MA situated at 1.0936. Its outlook is bearish near term but bullish in the medium term. (See highlighted chart above.)
NZD/USD: The Kiwi continued correcting from its recent 0.8121 low yesterday, peaking at 0.8228 yesterday, before giving up most of its gains this morning. The rate is trading within a medium term down channel bounded by an upper resistance line now at 0.8260 and a lower support line at 0.8025. Its 14 day RSI has recovered from oversold territory to read at the 31.03 level, and the rate remains below its flattening 200 day MA now at 0.8511. Support is seen at 0.8121 and 0.8143, with resistance seen at 0.8199/0.8209 and 0.8221/28. Its outlook is bullish near term but remains bearish medium term.
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