The rebound is on and the forex week started with a ton of gaps on the forex dance floor. Risk appetite seems to be back. Ms. US dollar left the forex dance floor low before the weekend and jumped back high on Monday, starting her dance moves at the higher price against her major dancing partners, including Mr. Japanese Yen and Mr. Euro. But then she decided to go to where she was at before. Here is the story of the reasons behind her moves:
Risk appetite seemed to have improved among investors over the weekend. However the Asian Monday session was mostly silent on economic data, followed by a slow London session. The Reserve Bank of Australia (RBA)’s assistant governor Kent spoke about inflation consistency with the central bank’s target, which barely moves Mr. Aussie dollar.
Later, the German Producer Price Index (PPI) came in worse than expected. Germany’s central bank said that the German economy – the largest in the euro zone – risks coming dangerously close to recession, forecasting little or no economic growth in the second half of the year.
At the New York open, the Canadian wholesales trade came out unchanged, and Dallas Fed President Richard Fisher said he continues to support ending the central bank’s bond-buying program this month despite the longest skid in equities in three years.
Tuesday we could expect some moves in the Australian dollar with the Aussie’s Monetary Policy Meeting Minutes release, and Australia’s trading buddy, China’s industrial data.
Intraday Forex Technical Levels
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Long positions above 1.2753 with targets at 1.2828 and 1.2903 in extension.
If Pair Goes Nuts: Below 1.2753 look for further downside towards 1.2661 and 1.2511.
What’s up on the Forex Dance Floor: The pair is consolidating between the 50% and 38% Fibonacci levels above the Ichimoku’s cloud. The RSI is above the neutrality area.
Supports and Resistances
1.2903
1.2828
1.2753 Pivot Point
1.2661
1.2511
GBP/USD 4-hour: Broke above the Ichimoku’s cloud.
Invest Diva Likes: Long positions above 1.6114 with targets at 1.6186 and 1.6258 in extension.
If Pair Goes Nuts: Below 1.6114 look for further downside towards 1.6025 and 1.5882.
What’s up on the Forex Dance Floor: The pair is trying to break the 38% Fibonacci level above the Ichimoku’s cloud. The RSI is heading to the overbought zone.
Supports and Resistances
1.6258
1.6186
1.6114 Pivot Point
1.6025
1.5882
USD/JPY 4-hour: Moving below the Ichimoku’s cloud.
Invest Diva Likes: Short positions below 106.71 with targets at 105.67 and 104.63 in extension.
If Pair Goes Nuts: Above 106.71 look for further upside towards 108 and 109.17.
What’s up on the Forex Dance Floor: The pair is moving below the Ichimoku’s cloud and back to the 38% Fibonacci level at 106.71. The RSI is around the neutrality area.
Supports and Resistances
109.17
108
106.71 Pivot Point
105.67
104.63
USD/CHF 4-hour: Moving down.
Invest Diva Likes: Short positions below 0.9491 with targets at 0.9392 and 0.9336 in extension.
If Pair Goes Nuts: Above 0.9491 look for further upside towards 0.9573 and 0.9689.
What’s up on the Forex Dance Floor: The pair is consolidating between the levels at 0.9491 and 0.9392 below the Ichimoku’s cloud. It is now around the middle boundary of the Bollinger band which is on an downtrend with the RSI heading below the neutrality area.
Supports and Resistances
0.9689
0.9573
0.9491 Pivot Point
0.9392
0.9336
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