Foreign Exchange markets were incredibly quiet yesterday, trading in tight ranges across the board as a lack of data presented little opportunity for volatility.
The pick of the day is AUD/USD as Mr. Aussie seems to be getting exhausted with its recent jumps on the forex dance floor and may be looking to go down, dragging Ms. USA with him. Here is how the forex puppet masters are playing the poor Mr. Aussie:
1- Australian government needs to cut in their spending, especially health care, welfare, higher education, and pensions, so that they can turn the growing budget deficit into a surplus within the next ten years.
2- There could be a slowdown in China’s economy. “Who cares?” you ask? Well, for one China is the world’s second largest economy and is Australia’s number one trade buddy. So no only the global economy could get hurt by China, but Mr. Aussie could get crushed because China’s slowdown could take a huge toll on Australia’s commodity exports.
3- Reserve Bank of Australia (RBA) is being ultra-cautious with its policy making and noted that hiring and spending have moderated in the recent months but that this might not be sustained in the coming quarters. The RBA report shows that policymakers are not expecting further gains in export activity.
4- While Ukraine in very much in the public eye in the west, Thailand is slipping by under the radar. Yesterday the military introduced martial law as a way of keeping “peace and order,” rather than becoming a slow-motion coup. While these may not directly affect the Australian economy and Mr. Aussie, as discussed in the Fundamental Beans of Invest Diva’s education program, geopolitical risk tends to result in risk aversion, which doesn’t make higher-yeilding currencies such as Mr. Aussie any stronger.
Back on the dance floor, the pair is challenging both the 23% Fibonacci level and the upper band of the Ichimoku cloud. The RSI is below the neutrality area heading south. A break below the 23% Fibo level could call for further drops towards the 38% Fibo level at 0.9144 and 0.9100 in extension. Alternatively a break above the recent high of 0.9420 could get the pair back up to the 0.97 area.
Today’s calendar is a little busier, with UK inflation in focus, as well as Italian industrial orders and a host of ECB, BoE and Fed speakers this afternoon.
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Intraday Daily Forex Technical Levels
EUR/USD Intraday: intraday support around 1.368.
Invest Diva likes: Long positions above 1.368 with targets @ 1.3735 & 1.375 in extension.
If pair goes nuts: Below 1.368 look for further downside with 1.3645 & 1.362 as targets.
What’s up on the forex dance floor: The RSI lacks downward momentum. The pair is drawing a consolidation in a 1.368-1.3735 trading range area.
Supports and resistances:
1.775
1.375
1.3735
1.3702 Last
1.368
1.3645
1.362
GBP/USD Intraday: towards 1.6905.
Invest Diva likes: Long positions above 1.68 with targets @ 1.6875 & 1.6905 in extension.
If pair goes nuts: Below 1.68 look for further downside with 1.676 & 1.673 as targets.
What’s up on the forex dance floor: The RSI broke above a bearish trend line.
Supports and resistances:
1.6935
1.6905
1.6875
1.6834 Last
1.68
1.676
1.673
USD/JPY Intraday: bullish bias above 101.05.
Invest Diva likes: Long @ 101.53 with targets @ 101.7 & 101.9 in extension.
If pair goes nuts: Below 101.05 look for further downside with 100.75 & 100.3 as targets.
What’s up on the forex dance floor: The RSI is supported by a rising trend line.
Supports and resistances:
102.1
101.9
101.7
101.345 Last
101.05
100.75
100.3
USD/CHF Intraday: under pressure.
Invest Diva likes: Short positions below 0.894 with targets @ 0.891 & 0.8895 in extension.
If pair goes nuts: Above 0.894 look for further upside with 0.8955 & 0.8975 as targets.
What’s up on the forex dance floor: As long as the resistance at 0.894 is not surpassed, the risk of the break below 0.891 remains high.
Supports and resistances:
0.8975
0.8955
0.894
0.8918 Last
0.891
0.8895
0.8875
NZD/USD Intraday: the downside prevails.Invest Diva likes: Short positions below 0.861 with targets @ 0.857 & 0.8545 in extension. If pair goes nuts: Above 0.861 look for further upside with 0.8635 & 0.8655 as targets. What’s up on the forex dance floor:The RSI is capped by a declining trend line. Supports and resistances: |
AUD/USD Intraday: the downside prevails. |
Invest Diva likes: Short positions below 0.932 with targets @ 0.925 & 0.923 in extension.
If pair goes nuts: Above 0.932 look for further upside with 0.9345 & 0.937 as targets.
What’s up on the forex dance floor: The break below 0.932 is a negative signal that has opened a path to 0.925.
Supports and resistances:
0.937
0.9345
0.932
0.9264 Last
0.925
0.923
0.92
USD/CAD Intraday: key resistance at 1.089.
Invest Diva likes: Short positions below 1.089 with targets @ 1.0845 & 1.081 in extension.
If pair goes nuts: Above 1.089 look for further upside with 1.0925 & 1.096 as targets.
What’s up on the forex dance floor: The upward potential is likely to be limited by the resistance at 1.089.
Supports and resistances:
1.096
1.0925
1.089
1.0888 Last
1.0845
1.081
1.074
US Index Corner
S&P500 Intraday: Short positions below 1888 with targets @ 1865 & 1855 in extension.
Alternative scenario: Above 1888 look for further upside with 1899 & 1906 as targets.
Dow Jones Intraday: Short positions below 16620 with targets @ 16300 & 16240 in extension.
Alternative scenario: Above 16620 look for further upside with 16695 & 16775 as targets.
Nasdaq 100 Intraday: Short positions below 3625 with targets @ 3540 & 3507 in extension.
Alternative scenario: Above 3625 look for further upside with 3657 & 3705 as targets.
Russell 2000Intraday: Short positions below 1119 with targets @ 1093 & 1078 in extension.
Alternative scenario: Above 1119 look for further upside with 1136 & 1143 as targets.
