USD rally on hold
US CPI data surprised the market by not surprising and coming in as expected. The market was positioned for a higher than expected number and the USD rally was quickly swiped aside on Friday.
MAJOR HEADLINES – PREVIOUS SESSION
Quiet Asian session sees JPY weak across the board.
EUR/JPY is at key resistance around 139.25 area.
THEMES TO WATCH – UPCOMING SESSION
CPI release on Friday and the general medium term technicals still support the weaker USD scenario as we may see new highs soon in EUR/USD.
Not many data risks on the horizon of consequence until Wednesday – and even these are relatively second tier numbers
Trading Note: Violent swings on Friday suggest that the market sees any strengthening in the USD as a good sell opportunity. Let’s see if today offers any follow through to a weaker USD on this. EUR/JPY is at key resistance
EURUSDThe EUR/USD swings on Friday suggest that support is robust above 1.3240. Still, EUR/USD needs to take out the 1.3350/60 area to the upside to help erase the sell-off threat and improve the odds for the preferred scenario of a break higher towards the 1.3465 top and beyond to perhaps 1.3640. |
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GBPUSDGBP/USD reversed sharply higher Friday after a further sell-off threatened. The technicals are a bit ragged with the frantic back and forth of this pair, but a break above 1.9460 to the upside sets in motion a 1.9630 target. 1.9325 is a downside swing area. |
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USDJPYUSD/JPY can’t decide what to do around the 104.50 swing area. A decline below 103.90 could swing the pair lower towards 102.00, while a swing back through 104.50/60 suggests another attempt at the 105.50 area. |
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EURJPYEUR/JPY refused to follow through to the downside and rallied sharply in Monday’s Asian session. Ideal final resistance is at current levels around 139.15/20. The downside is still preferred back towards 137.50 if that resistance holds. |
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USDCADUSD/CAD also oscillated sharply back and forth Friday with the bears gaining the upper hand later in the day. The downside is preferred with a break below 1.2220 possibly opening up a rapid acceleration to 1.2100. A rise back through 1.2330 or so would neutralize the bearish potential. |
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USDCHFCHF is very weak, so USD/CHF didn’t correct back as sharply on the USD weakness late Friday as did other USD pairs. If the USD continues to weaken, USD/CHF may decline slowly to the 1.1475 swing area. Minor resistance comes in at 1.1575. |
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AUDUSDAUD/USD snapped back to life Friday – avoiding the 0.7550/40 downside swing area and rallying all the way back to the top of the recent range. A break through 0.7660 to the upside could see the pair threatening 0.7700 resistance soon. |
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NZDUSDNZD/USD appears supported above 0.7100 for now and could soon challenge the 0.7270 area top on a break of 0.7200 resistance. |
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The support/resistance levels used in the matrix’s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur
