EUR Gaining Against USD, While AUD Trading Down Against USD
ORBEX | Sep 22, 2014 07:19AM ET
Fundamental Currency Analysis
USD: The US dollar index is currently down -0.1640 or -0.19 percent to 84.5710 after opening at 84.7920 in the Asian session earlier today. The Greenback is consolidating at a lower level after the last day of the G20 Meetings held in Cairns, Australia. U.S. Treasury Secretary Jacob Lew addressed the meeting on its last day saying, “In the wake of the Financial Crisis, the United States implemented an ambitious financial reform agenda, which includes ending the notion that any firm is too big to fail, as a matter of law. As we work to complete implementation of our domestic reforms last year, I called for an international race to the top on financial reform to help ensure a safer, sounder global financial system, and to raise standards, generally.” Later today, the National Association of Realtors releases Existing Home Sales (+5.21M).
EUR: The euro is gaining against the U.S. dollar today ahead of testimony on monetary policy by ECB President Mario Draghi before the European Parliament's Economic and Monetary Committee in Brussels. Also, the German Bundesbank will tentatively release its Monthly Report later today.
GBP: Sterling is trading higher against the U.S. dollar today as Sterling gained across the board against other currencies in the wake of last week’s Scottish referendum, which saw the nation reject independence from the UK. The market is also signaling a higher likelihood of a BOE rate hike early next year. No significant economic data is expected out of the UK today.
JPY: The Japanese Yen is gaining against the U.S. dollar today after a former official of the Bank of Japan, Kazumasa Iwata, said in an interview published on Sunday that Japan is in danger of falling into a recession due to the Yen’s decline. His rationale was that the drop in the currency reduces the purchasing power of Japanese households, thereby affecting corporate profits in the long run.
CHF: The Swiss Franc is up against the U.S. dollar today in the absence of any Swiss economic data releases later today.
AUD: The Aussie is trading down against the U.S. dollar today with the Australian economic calendar showing no releases until Wednesday.
CAD: The Loonie is gaining today against the U.S. dollar on the back of Friday’s release of Core CPI, which increased +0.5% m/m compared to an expected rise of +0.2%. In addition, CPI came out with a reading of 0.0% m/m versus an anticipated decline of -0.1%, and Wholesale Sales declined -0.3% m/m versus an expected increase of +0.8%. No significant Canadian economic data is expected today.
NZD: The Kiwi opened higher today versus the Greenback after Prime Minister John Key’s National Party won a record victory in the September 20th parliamentary election. The National Party won 48 percent of the vote giving the party the first single party majority in New Zealand’s Parliament since proportional representation was begun in 1996. The Kiwi subsequently sold off and is currently trading lower against the Greenback.
Highlighted Chart of the Day: NZD/USD
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A daily candlestick chart of the NZD/USD currency pair appears above showing the rate trading within a near term triangular consolidation pattern within its medium term trading down channel drawn in red. The rate is also trading below its rising 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box has returned to lower neutral territory after it failed to confirm the most recent low. (See additional technical analysis in the section below.)
Technical Analysis for the Majors
EUR/USD: The Euro rose this morning after making a new recent low at the 1.2825 level late yesterday. Its declining 200 day MA now lies at 1.3573, and its 14 day RSI has recovered to lower neutral territory to read at the 33.85 level after failing to confirm yesterday’s new low. Resistance is seen at 1.2883 and 1.2908, with support noted in the 1.2825/34 region. Its outlook is neutral near term and bearish medium term.
USD/JPY: After USD/JPY rose to a new six year high at 109.45 last week, it pulled back yesterday and this morning as far as the 108.67 level, with additional support noted at 107.39. Its 14 day RSI remains very overbought at 84.52 and confirmed the recent 109.45 high. The rate also remains well above its rising 200 day MA now at 102.65. Its outlook is neutral in the near term but bullish medium term.
GBP/USD: Cable rose sharply last week to make a new recent high at 1.6524, but it then came off sharply to 1.6283 on Friday, before rallying to 1.6364 this morning. In doing so, the rate briefly exceeded its falling medium term downtrend line now at 1.6402 but then fell back below it. The rate remains above the 1.6282 level of its 38.2% Fibonacci retracement level of its rise from 1.4812 to 1.7190 and below the 23.6% Fibo level at 1.6629. The rate’s 200 day MA lies at 1.6737 with a gentle negative slope, and its 14 day RSI reads in central neutral territory at the 46.84 level after confirming last week’s 1.6524 high. Its outlook is neutral near term but bearish medium term.
USD/CHF: The Swissy fell to 0.9379 this morning after making a new recent high at the 0.9432 level last week. Good support is noted in the 0.9299/0.9336 region, with resistance seen at 0.9395 and 0.9432. The rate’s 14 day RSI remains in upper neutral territory at the 61.05 level, and the rate is trading considerably higher than its rising 200 day MA at the 0.8964 level. Its outlook is neutral in the near term but bullish medium term.
AUD/USD: The Aussie fell to a new recent low at 0.8904 this morning. The downside break of its former 0.9201 to 0.9504 medium term trading range still targets 0.8898, with resistance seen at 0.8993/99 and 0.9037/57. The rate remains well below its still rising 200 day MA now at 0.9239, and its 14 day RSI lies just inside oversold territory at the 27.23 level but it failed to confirm today’s low. Its outlook is bearish in the near and medium terms.
USD/CAD: The Loonie fell to the 1.0925 level this morning, but the rate then bounced to 1.0976 as it trades above its recent low of 1.0886 made late last week. Its 14 day RSI reads in central neutral territory at the 44.50 level, and the rate is now hovering just above its falling 200 day MA now situated at 1.0932. Its outlook is bearish near term but bullish turning neutral in the medium term.
NZD/USD: The Kiwi fell today as it consolidates within a near term triangular pattern above its 0.8075 recent low and below the 0.8228 reaction high. The rate also remains inside a medium term down channel with an upper resistance line drawn at 0.8219 and a lower support line now at 0.7985. Its 14 day RSI reads in lower neutral territory at the 35.71 level and has been rising after failing to confirm the recent 0.8075 low. The rate remains below its mildly falling 200 day MA now at 0.8510. Support is seen at 0.8075 and 0.8115/21, with resistance noted at 0.8171/76 and 0.8228. Its outlook remains neutral near term but bearish medium term. (See highlighted chart above.)
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