The pick of the day is USD/CHF, who is no longer dancing within the downward channel we were talking about for months, which was formed back in November 2013, and firmly broke above it. Not so good news for the bears. It is still teasing to break above the 50% Fibonacci level at 0.8977. It still hasn’t been confirmed but if it does… Man we could see gains towards a previous top at 0.9150 and .09250 in extension. Remember my horror story about this pair a few weeks ago where my broker didn’t complete my exit? I’m still stuck with my bearish position with my stop loss order set a little above the 0.61% Fibonacci level. This is totally not good for my forex soul as we famously say “Hope is not profitable in forex trading” hence I’m literally “hoping” that the pair won’t confirm the break above 61% Fibo 🙂
The RSI is well directed and haven’t reached the overbought zone yet. The pair is dancing above the Ichimoku cloud, adding salt to my injury.
Will the 61% Fibo level hold? That is our alternative scenario which could be a perfect entry point for new bears, with targets at 0.87, 0.858 and 0.8275 in extension.
Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. And wait, are we hooked up on the social media? To get the most recent intraday updates, don’t forget to follow Invest Diva on Twitter and Facebook.
Intraday Forex Technical Levels
EUR/USD Intraday: under pressure.
Invest Diva likes: Short positions below 1.358 with targets @ 1.3525 & 1.35 in extension.
If pair goes nuts: Above 1.358 look for further upside with 1.3615 & 1.364 as targets.
What’s up on the dance floor: The pair stands below its resistance and remains under pressure.
Supports and resistances:
1.364
1.3615
1.358
1.3546 Last
1.3525
1.35
1.347
GBP/USD Intraday: caution.
Invest Diva likes: Long positions above 1.677 with targets @ 1.682 & 1.6845 in extension.
If pair goes nuts: Below 1.677 look for further downside with 1.673 & 1.67 as targets.
What’s up on the dance floor: The RSI is mixed and calls for caution. The pair is pulling back on its support and is challenging its support.
Supports and resistances:
1.688
1.6845
1.682
1.6783 Last
1.677
1.673
1.67
USD/JPY Intraday: the bias remains bullish.
Invest Diva likes: Long positions above 102.15 with targets @ 102.6 & 102.8 in extension.
If pair goes nuts: Below 102.15 look for further downside with 102 & 101.85 as targets.
What’s up on the dance floor: The pair is rebounding above its support.
Supports and resistances:
103.1
102.8
102.6
102.326 Last
102.15
102
101.85
USD/CHF Intraday: the upside prevails.
Invest Diva likes: Long positions above 0.8965 with targets @ 0.9015 & 0.9035 in extension.
If pair goes nuts: Below 0.8965 look for further downside with 0.894 & 0.8905 as targets.
What’s up on the dance floor: The pair stands above its support and remains on the upside.
Supports and resistances:
0.906
0.9035
0.9015
0.8999 Last
0.8965
0.894
0.8905
NZD/USD Intraday: bullish bias above 0.8475.
Invest Diva likes: Long positions above 0.8475 with targets @ 0.853 & 0.8555 in extension.
If pair goes nuts: Below 0.8475 look for further downside with 0.8445 & 0.84 as targets.
What’s up on the dance floor: A support base at 0.8475 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
0.8575
0.8555
0.853
0.8512 Last
0.8475
0.8445
0.84
AUD/USD Intraday: bullish bias above 0.9335.
Invest Diva likes: Long positions above 0.9335 with targets @ 0.939 & 0.941 in extension.
If pair goes nuts: Below 0.9335 look for further downside with 0.9315 & 0.929 as targets.
What’s up on the dance floor: The pair is trading within a bullish channel.
Supports and resistances:
0.9435
0.941
0.939
0.9367 Last
0.9335
0.9315
0.929
USD/CAD Intraday: the downside prevails.
Invest Diva likes: Short positions below 1.0925 with targets @ 1.0885 & 1.0865 in extension.
If pair goes nuts: Above 1.0925 look for further upside with 1.0955 & 1.099 as targets.
What’s up on the dance floor: The pair is posting a rebound but stands below its resistance.
Supports and resistances:
1.099
1.0955
1.0925
1.0912 Last
1.0885
1.0865
1.0835
US Index Intraday Levels
S&P500 (CME)
Long positions above 1934 with targets @ 1955 & 1959 in extension.
Alternative scenario: Below 1934 look for further downside with 1924 & 1914 as targets.
Dow Jones (CBT)
Long positions above 16790 with targets @ 17000 & 17050 in extension.
Alternative scenario: Below 16790 look for further downside with 16735 & 16660 as targets.
Nasdaq 100 (CME)
Long positions above 3749 with targets @ 3815 & 3838 in extension.
Alternative scenario: Below 3749 look for further downside with 3706 & 3688 as targets.
Russell 2000 (ICE)
Long positions above 1143 with targets @ 1184 & 1192 in extension.
Alternative scenario: Below 1143 look for further downside with 1129 & 1116 as targets.
Hot Market Moving Events and Forex Gossip
With some of Europe closed and the data sheet light, yesterday’s trading was pretty limited across asset classes. Shares rose, but only posting slightly unconvincing gains, following last week’s buying spree – still, even an unconvincing rise at these levels means another record high being set. Foreign Exchange markets were also fairly quiet, though we did see the Euro lose some of the ground it recovered at the back end of last week. The move in the euro wasn’t particularly large, but it will bring some temporary relief to Mario Draghi who won’t have wanted to see the strength the currency found following his announcement of measures.
An interesting story from Bloomberg shows how Mario Draghi might not be able to see the currency weaken as much as he’d like, thanks to China. Beijing currently sells Renminbi for Dollars to keep their currency from strengthening too quickly. The problem then is that they hold too many Dollars as a percentage of reserves and as such have to diversify into another liquid currency, the Euro.
In another office in Europe, Jean Claude Juncker is awaiting confirmation that he will be the next in line for the EU presidency, but he won’t be if David Cameron has anything to do with it. Mr Cameron has now got Labour’s European MP’s on side to block Mr Juncker from taking the helm and is also holding talks today with Sweden and Holland, who also agree that Mr Juncker isn’t a symbol of change. Christine Lagarde, who had been suggested for the job has said that she is happy to see her term out at the IMF, so probably won’t be in contention. So is Tony Blair the ace up his sleeve?
Ukraine is worth a quick mention. Petro Poroshenko is still negotiating with Gazprom over a gas price deal with a deadline of tonight to make a pre-payment still standing, according to Russia. The other objective of the talks is to stabilise the East of Ukraine, which also remains inconclusive.
Yesterday’s US session was very similar to Europe’s . A couple of comments from Fed speakers contradicted each other, so what could have been an opportunity for movement became an opinion stalemate.
Overnight trading has seen Asia push higher, though Japan bucked the trend and fell, as investors took profits and a stronger Yen added some downward pressure. The reason for the general upturn was partly driven by China’s decision to reduce the reserve ratio requirements for some of its smaller banks (the amount of capital they have to hold with the central bank) which is probably a move to get those banks lending to more businesses. Beijing is playing it slightly cautiously for now though and hasn’t reduced the RRR for all banks.
An interesting comment from Morgan Stanley overnight, who say that the Australian Dollar could regain the parity handle with the US Dollar over the course of the year. They see the move being driven by the demand for the yield and safety of Australian government debt that we alluded to yesterday and say that Japan could be the biggest buyers as they continue to look to diversify pension fund portfolios and find some significant yield.
Overnight UK data showed retail sales miss the 1.6% market forecast and come in at 0.5% for May. April was always going to be a tough month to beat with the Easter bank holidays, but it was food retailers who held the numbers back as they cut prices to try and maintain their sales volumes.
Today we’re back to business as usual, with UK industrial and manufacturing production and a UK GDP estimate this afternoon. We’ve also got some US wholesale inventories and a load of ECB members sharing their views on last week’s policy changes.
