Daily Strategy February 5th, 2014

EUR/USD:
Our preference: Bearish setups within 1.3510 - 1.3555 with targets @ 1.3478 & 1.3430 in extension.

Alternative scenario: Above 1.3555, watch for bullish setups with 1.3605 as target and 1.3684 in extension.

Comment: EUR/USD remains in consolidation mode. 20 MA and 50 MA are flat on hourly chart.



AUD/USD:
Our preference: Bullish setups on a pull-back move to within 0.8835 - 0.8880 with targets @ 0.8940 & 0.8890 in extension.

Alternative scenario: Below 0.8835, watch for bearish setups with 0.8779 as target and 0.8729 in extension.

Comment: Correction occurs on AUD/USD. Note that hourly stochastic has crossed up.



GBP/USD:
Our preference: Bearish setups on a pull-back move to within 1.6350 - 1.6410 with targets @ 1.6318 & 1.6256 in extension.

Alternative scenario: Above 1.6410, watch for bullish setups with 1.6456 as target and 1.6518 in extension.

Comment: GBP/USD is approaching the confluence zone. Hourly stochastic and RSI are overbought. Watch the level of 1.6387 (50% Fibonacci).



EUR/JPY:
Our preference: Bearish setups within 136.90 - 137.50 with targets @ 136.35 & 135.90 in extension.

Alternative scenario: Above 137.50, watch for bullish setups with 137.80 as target and 138.24 in extension.

Comment: EUR/JPY has pulled back into the confluence zone. Note that hourly stochastic has crossed up.



GOLD:
Our preference: Bullish setups within 1247.75 - 1255.30 with targets @ 1259.54 & 1266.20 in extension.

Alternative scenario: Below 1247.75, watch for bearish setups with 1244.64 as target and 1237.98 in extension.

Comment: Gold price has pulled back into the confluence zone. Note that hourly stochastic is falling

Technical Analysis: GBP/USD Pair May Move Downwards To 1.6510

EUR/USD
The euro is still moving inside descending correction. We think, today price may form ascending structure to reach level of 1.3800. Alternative scenario implies that pair may continue moving downwards to reach level of 1.3600 and then start new ascending movement towards main target at level of 1.4100.



GBP/USD
The pound is still being corrected. We think, today price may leave this correctional channel to reach target at level of 1.6680. Alternative scenario implies that pair may move downwards to reach level of 1.6510, and only after that start new ascending correction to reach above-mentioned target.



USD/CHF
The swiss franc is still moving near its current minimums. We think, today price may form consolidation pattern and reach new minimum. Later, in our opinion, market may return to level of 0.8950 and then continue falling down towards main target at 0.8300.



USD/JPY
The yen is still forming the fifth descending wave. We think, today price may reach level of 101.70 and then form new ascending structure towards level of 103.80. Later, in our opinion, market may continue this correction to reach level of 100.00.



AUD/USD
The Australian dollar is forming another descending structure towards target at level of 0.8400. Later, in our opinion, market may start new ascending movement to return to level of 0.9070.



GOLD
Gold completed its correction. We think, today price may form another descending structure to break level of 1254. Later, in our opinion, market may consolidate for a while and then form continuation pattern to continue falling down and reach local target at 1239. After that, instrument may return to level of 1250.

Daily Strategy January 30th , 2014

EUR/USD:
Our preference: Bearish setups within 1.3690 - 1.3630 with targets @ 1.3578 & 1.3530 in extension.

Alternative scenario: Above 1.3630, watch for bearish setups with 1.3739 as target and 1.3788 in extension.

Comment: EUR/USD remains in consolidation mode. Hourly stochastic and RSI are mixed. Note that the price currently is moving below 20 MA and 50 MA on hourly chart.



AUD/USD:
Our preference: Bearish setups on a pull-back move to within 0.8735 - 0.8775 with targets @ 0.8709 & 0.8682 in extension.

Alternative scenario: Above 0.8775, watch for bullish setups with 0.8797 as target and 0.8825 in extension.

Comment: AUD/USD currently is under pressure. 20 MA has crossed below 50 MA on hourly chart. However, note that hourly stochastic is rising.



GBP/USD:
Our preference: Bearish setups within 1.6550 - 1.6590 with targets @ 1.6519 & 1.6473 in extension.

Alternative scenario: Above 1.6590, watch for bullish setups with 1.6621 as target and 1.6667 in extension.

Comment: GBP/USD remains in consolidation mode. Hourly stochastic and RSI are mixed.



EUR/JPY:
Our preference: Bearish setups within 139.75 - 140.35 with targets @ 139.55 & 139.04 in extension.

Alternative scenario: Above 140.35, watch for bullish setups with 140.72 as target and 141.24 in extension.

Comment: EUR/JPY is has pulled back into the confluence zone. 20 MA has crossed below 50 MA on hourly chart.



USD/JPY:
Our preference: Bearish setups within 102.30 - 102.75 with targets @ 101.83 & 101.45 in extension.

Alternative scenario: Above 102.75, watch for bullish setups with 103.05 as target and 103.43 in extension.

Comment: USD/JPY has pulled back into the confluence zone. Note that 20 MA has crossed below 50 MA on hourly chart, while stochastic is overbought.



GOLD:Our preference: Bullish setups within 1261.30 - 1270.25 with targets @ 1278.80 & 1285.55 in extension.

Alternative scenario: Below 1261.30, watch for bearish setups with 1255.81 as target and 1248.71 in extension.

Comment: Gold price is pushing higher. 20 MA has crossed above 50 MA on hourly chart. Hourly stochastic is oversold.

Forex - USD/CAD off 4-1/2 year highs before Fed statement

The U.S. dollar pulled back from four-and-half year highs against the Canadian dollar on Wednesday as investors turned their attention to the Federal Reserve’s policy statement later in the trading day.

U.S. dollar backs off four-and-a-half year highs against Canadian dollar before Fed

USD/CAD was down 0.25% to 1.1124 after rising to highs of 1.1187 earlier, the strongest level since July 2009.

The pair is likely to find support at 1.1065 and resistance at 1.1350.

The U.S. central bank was expected to roll back its asset purchase program by another $10 billion, to $65 billion per month. The central bank announced the first cut to its stimulus program in December.

A renewed selloff in emerging market currencies hit investor confidence after South Africa’s central bank hiked interest rates to 5.5% from 5% in a bid to arrest the steep decline in the rand. The rand initially rose against the dollar, before tumbling to five year lows.

Turkey’s lira also weakened against the dollar, falling back to levels seen before Tuesday’s night’s dramatic rate hike by Turkey’s central bank.

Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.

The loonie, as the Canadian dollar is also known, remained under heavy selling pressure following a policy stance shift by the Bank of Canada last week. The BoC said inflation would remain below target for some time to come and left the door open to a rate cut.

Elsewhere, the loonie was higher against the euro, with EUR/CAD down 0.23% to 1.5316.

Orders for U.S. Durable Goods Unexpectedly Slump

Orders (CGNOXAI%)for durable goods unexpectedly slumped in December by the most in five months, reflecting a broad-based retreat that raises the risk business investment will cool in early 2014.

Bookings for goods meant to last at least three years dropped 4.3 percent, exceeding the weakest forecast of 82 economists surveyed by Bloomberg, after a 2.6 percent gain in November that was smaller than previously reported, a Commerce Department report showed today in Washington. Orders for non-military capital goods excluding aircraft also declined.

The figures are difficult to square with other reports that showed factories were contributing to economic growth at the end of 2013 and into this year as companies geared up to meet more demand. While the weakness is hard to pin on bad weather, the across-the-board nature of the declines is similar to the retreat shown in employment last month that some economists said was related to the dip in temperatures.

“Clearly this is a weak report to cap off what was kind of a weak year for business investment,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who projected orders would decline. “We will see better business investment in 2014” as a budget agreement in Washington and pent-up demand boost business confidence and spending, Hoffman said.

Photographer: Ty Wright/Bloomberg

Customers browse appliances for sale at a store in Sarasota, Florida. Stagnant wages... Read More

Stock-index futures dropped after the report, trimming earlier gains. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2 percent to 1,779.3 at 9:04 a.m. inNew York. It had been up as much as 0.6 percent earlier.

Survey Results

The median estimate of economists surveyed by Bloomberg called for a 1.8 percent advance in total orders. Forecasts ranged from an increase of 10 percent to a 1.2 percent drop. The gain in November was revised from a previously reported 3.4 percent advance.

Excluding transportation equipment, where demand is often volatile month to month, orders decreased 1.6 percent, the biggest decline since March, after a 0.1 percent increase in November.

Bookings (DGNOCHNG) for non-military capital goods excluding aircraft dropped 1.3 percent after a 2.6 percent gain in November that was smaller than previously estimated. Demand for such products is considered a proxy for future business investment in equipment such as computers and electronics.

Shipments of those goods, a measure used to calculate gross domestic product, declined 0.2 percent in December after rising 2.3 percent the prior month. Sales were up 6.5 percent over the past three months at an annualized rate, compared with a 2.1 percent drop at the end of the third quarter, indicating business investment contributed to growth last quarter.

Boeing Orders

Bookings for commercial aircraft unexpectedly declined 17.5 percent in December after rising 21.1 percent the prior month even as Chicago-based Boeing Co. (BA) showed a surge in demand. The government statistics don’t always match industry data on a month-to-month basis.

Boeing said earlier this month it received orders for 319 aircraft in December, up from 110 in November. The world’s largest planemaker also reported record jet deliveries for 2013, handing over 648 planes as carriers globally take advantage of low-cost financing to replace older models.

Bookings for computers, communications equipment, automobiles and metals all declined last month, according to the Commerce Department’s report.

Today’s durable goods report is one of the last bits of data that economists will use to finalize their growth projections. The decline in demand and revisions to previous months may prompt some analysts to reduce forecasts.

GDP Forecast

The world’s largest economy grew at a 3.2 percent annualized rate in the fourth quarter following a 4.1 percent gain in the previous three months, according to the median forecast of economists surveyed by Bloomberg ahead of a Commerce Department report on Jan. 30. It would complete the strongest six months in almost two years.

Honeywell International Inc. (HON), whose product line spans aviation controls to thermostats, posted a fourth-quarter profit that beat analysts’ estimates as sales of energy-related products and turbochargers increased.

The Morris Township, New Jersey-based company’s defense business “continues to be impacted by planned program ramp downs and delays in U.S.,” Chief Financial Officer David Anderson, said on a Jan. 24 conference call. Looking ahead, the backlog for defense was up “significantly” last year, Anderson said, “a positive sign as we look forward to the next five years.”

Purchases of durable goods such as automobiles, furniture and appliances have been a consumer spending bright spot as Americans replace the oldest household goods since the 1960s. Continued momentum in household durable-goods demand would provide a lift to U.S. growth in 2014.

To contact the reporter on this story: Victoria Stilwell in Washington at vstilwell1@bloomberg.net

Intraday Outlooks For EUR/USD, EUR/GBP, USD/JPY, SP500 - SEB

The following are the intraday outlooks for EUR/USD, EUR/GBP, USD/JPY, and S&P500 as provided by the technical strategy team at SEB Group. 

EUR/USD: Over 1.3717 would be bullish: The ongoing decline from the recent high (1.3740) looks correctional. Intraday conditions would once again be bullish if/when the "B-wave high" at 1.3717 is taken out. Though without extraordinary drivers hitting the orderflow, current stretches (as defined by the distance to the 24hr average) at 1.3590 & 1.3760 ought to be respected..

EUR/GBP: Under 0.8211 would target a fresh low. The recent push higher could turn into another failed attempt to break a sequence of short-term lower highs and lower lows, in play since mid-Dec should 0.8211 be lost again. If so – looks for a print somewhere below 0.8168. From the monthly observations the next interesting attraction/support would then be the Jan’13 bullish benchmark candle low at 0.8086.

USD/JPY: Rechecking 102.94\ 103.60. Price action yesterday indicates renewed near-term balance and a retest of resistance at 102.94\103.60 looks possible. Well if breaking back under 102.19, this would look a tad less likely as it would turn attention back to the recent 101.77 low again (and medium-term refs at 101.62/54). Over 104.93 is needed for bulls to become happy again.

S&P 500: Consolidating/correcting the decline. As often after a benchmark candle such as last Friday’s the market the following day makes a marginally new low before starting to consolidate/correct the stretches created. If following the normal path the market will during two to three days slowly recover back towards the mid body point, 1803, of the falling benchmark candle before starting to explore the downside again.

Daily Strategy January 28th , 2014

EUR/USD:
Our preference: Bullish setups within 1.3690 - 1.3630 with targets @ 1.3739 & 1.3788 in extension.

Alternative scenario: Below 1.3690, watch for bearish setups with 1.3578 as target and 1.3530 in extension.

Comment: EUR/USD currently is in consolidation mode. Hourly stochastic and RSI are mixed. Note that 20 MA and 50 MA are flat on hourly chart.



AUD/USD:
Our preference: Bullish setups on a pull-back move to within 0.8700 - 0.8750 with targets @ 0.8777 & 0.8805 in extension.

Alternative scenario: Below 0.8700, watch for bearish setups with 0.8659 as target and 0.8625 in extension.

Comment: AUD/USD is pushing higher. 20 MA has crossed above 50 MA on hourly chart. Note that hourly stochastic and RSI are overbought.



GBP/USD:
Our preference: Bearish setups within 1.6565 - 1.6620 with targets @ 1.6547 & 1.6519 in extension.

Alternative scenario: Above 1.6620, watch for bullish setups with 1.6667 as target and 1.6710 in extension.

Comment: GBP/USD is pushing higher. Note that 20 MA has crossed above 50 MA on hourly chart. However, hourly stochastic and RSI are overbought.



EUR/JPY:
Our preference: Bearish setups within 140.15 - 141.00 with targets @ 139.77 & 139.16 in extension.

Alternative scenario: Above 141.00, watch for bullish setups with 141.76 as target and 142.40 in extension.

Comment: EUR/JPY remains moving within the confluence zone. Note that hourly stochastic and RSI are overbought.



GOLD:
Our preference: Bearish setups on a pull-back move to within 1258.65 - 1265.45 with targets @ 1251.91 & 1245/56 in extension.

Alternative scenario: Above 1265.45, watch for bullish setups with 1272.46 as target and 1278.80 in extension.

Comment: Gold price currently is under pressure. Note that 20 MA has crossed below 50 MA on hourly chart. Hourly stochastic is overbought.

DON’T EXPECT FX VOLATILITY TO SUBSIDE NEXT WEEK

• GBP: Hit By Dovish Comments from BoE Carney
• EUR: Supported by Optimism from ECB Draghi
• USD/CAD Retraces, Ignoring Drop in CPI
• AUD: RBA Policymaker wants A$ at 80 Cents
• NZD: Gold and Oil Unchanged
• JPY: Hit Hard by Risk Aversion

Don’t Expect FX Volatility to Subside Next Week

At the beginning of the week, we warned our readers not to become complacent because of the lack of U.S. economic data. The abundance of key economic reports from other parts of the world along with the earnings season meant there could still be big moves in currencies. While data from China, Canada, Europe and Australia played a role in this week’s breakout in FX, today’s volatility was triggered by something we did not expect to occur this week – which was the massive liquidation out of emerging market assets. If investors continue to dump emerging market currencies in the coming week, the majors could be vulnerable to steeper losses. In addition to the moves in emerging markets, there’s also a heavy economic calendar to keep forex traders busy. The most important event risk of the week is the Federal Reserve’s monetary policy announcement. Ben Bernanke will have to decide at the final FOMC meeting of his career whether or not asset purchases should be cut by another $10 billion. He expected to do so back in December but that was before the shockingly weak non-farm payrolls report and mixed consumer spending numbers. We will spend a lot more time talking about what to expect from the FOMC next week but right now what is important for forex traders to realize is that the Fed policy uncertainty means continued volatility for currencies. With a RBNZ meeting on the calendar along with fourth quarter GDP numbers from U.S. and U.K., the IFO report, unemployment numbers and retail sales figures expected from Germany, it should be an active and exciting week in currencies. This means that we will be watching the key levels in EUR/USD,GBP/USD, USD/JPY and NZD/USD closely for breakouts.

We’ve got a major crisis of confidence in emerging market currencies and when that happens, the liquidation can last longer than most expect. There’s a reasonable possibility for another 5% move lower in EM currencies before everything stabilizes. In our 2014 outlook, we talked about how this will be the year of DM (developed markets) versus EM because slower growth in China will encourage investors to move money out of emerging market assets, particularly money that is parked in countries heavily reliant on Chinese growth like Brazil and South Africa who supply raw materials to China. Countries with massive current account deficits like Turkey are particularly vulnerable. With Chinese growth expected to slow for the next 5 years, emerging market currencies could under perform for some time to come. For the major currencies, an additional sell-off in global markets would lead to more risk aversion, which means a deeper sell-off in pairs such as USD/JPY,AUD/USD and GBP/USD ahead of next Wednesday’s FOMC rate decision. If the U.S. central bank decides to provide a bit more support to the U.S. and the global economy by keeping asset purchases unchanged this month, we could see a relief rally in EM and DM currencies but the chance is slim.

GBP: Hit By Dovish Comments from BoE Carney

The British pound traded sharply lower against the U.S. dollar on the back of comments from Bank of England Governor Carney. With the unemployment rate dropping to 7.1% in the month of December, Carney said they will consider a “range of options” for their forward guidance. He admitted that the 7% unemployment threshold will be hit earlier than the central bank anticipated but he reminded investors that it is a threshold and not a target. While there is evidence of a pickup in the global economy, Carney warned that the risks remain. For the U.K. he wants to see a sustained recovery in productivity, before considering a rate hike. The recent gains in sterling are a problem because it poses a risk to the export sector and growth. These are hardly the words of a central banker who has grown less dovish. In fact, it sounds like the 2.5 year high in the GBP/USD has made Carney slightly more concerned. Come February he faces the difficult decision of advancing the timing for a rate hike or lowering the unemployment rate threshold. Back in November, they said the unemployment threshold would be reached in the third quarter of 2015 but it now looks like it could be hit as early as next month. The market had been pricing in a rate hike in late 2015 but there are some economists are now calling for tightening in the first quarter of next year. So while Carney would like to see a weaker currency, he can’t ignore the general improvements in the U.K. economy. Next week’s fourth quarter U.K. GDP numbers are expected to show a significant acceleration in annualized GDP growth and for all of these reasons, we do not expect the sell-off in sterling to last for long.

EUR: Supported by Optimism from ECB Draghi

Of all the high beta currencies, the euro was one of the most resilient. Its value against the U.S. dollar was virtually unchanged and it rose strongly against the British pound and Australian dollar. The currency was supported by slightly more optimistic comments from ECB President Draghi and of course, yesterday’s better than expected flash PMI numbers. Speaking in Davos today, Mario Draghi said the risks have decreased all across the board since mid 2012 and we are finally beginning to see a recovery in the Euro zone. “Survey data has been more and more solid” showing evidence that “loose ECB policy is finally being passed on to the economy.” While he also said “the overall risks remains to the downside and recovery is still weak, fragile and uneven,” this is the first time in a while that we have heard optimistic comments from the central banker. On a day with more bad news than good, investors are latching onto Draghi’s comments. The sell-off in U.S. 10 year bond yields also drove investors out of dollars and the recent positive surprises in Europe has made EUR/USD more attractive. However that could all change next week if the Federal Reserve presses forward with tapering. For the time being, the levels to watch in EUR/USD continue to be 1.35 and 1.37 – today’s failed break of 1.37 makes this level of resistance even more important.

USD/CAD Retraces, Ignoring Drop in CPI

For the first time in 4 trading days, the Canadian dollar ignored the drop in consumer prices and overall risk aversion to strengthen against the U.S. dollar. This confirms that profit taking and liquidation is the main driver of flows in the foreign exchange markets today. Consumer prices dropped 0.2% in the month of December with core prices falling 0.4%. While all of this was in line with expectations, the annualized increase in CPI was only 1.2% compared to a forecast of 1.3%. The decline in inflation is consistent with the central bank’s concerns about price pressure but with speculators holding extreme amounts of short CAD positions, profit taking overshadowed data allowing the CAD to be one the day’s best performing currencies versus the dollar. Meanwhile the Australian dollar dropped to a fresh 3 year low against the greenback after Reserve Bank of Australia Board Member Heather Ridout said “AUD/USD around 0.80 would be a fair deal for everybody.” It is clear that even after the 4.5% slide since December 1st, the central bank wants to see a weaker currency. Ridout’s comment is even more dovish than RBA Governor Glenn Stevens who said last month that he preferred to see the currency near 85 cents. Either way, both policymakers seem to support another 2 to 3 cent move lower in AUD and that is where we expect the currency pair to go.

JPY: Hit Hard by Risk Aversion

Hands down, the best performing currency pair today was the Japanese Yen but unfortunately its out performance meant severe under performance for all the yen pairs. AUD/JPY and GBP/JPY were the biggest movers, losing another 1.7% in value. NZD/JPY was not far behind, falling by 1.6% while USD/JPY dropped 0.9%. The sell-off in the Nikkei and drop in U.S. yields contributed to the move but the story today is risk aversion. As our colleague Boris Schlossberg noted, “The unease over the risk in EM has spilled over into the majors with yen strengthening markedly as Nikkei futures plunged by -230 ticks while European stocks led by near 2% decline in the IBEX also fell sharply. Over the past 24 hours USD/JPY has now broken below the 104.00 and the 103.00 figures with 102.50 support barely holding (it has now been broken). The pair has seen a lot of technical damage this week as sentiment clearly shifted. The lackluster US economic data, the decline in US yields and now the new fears over EM stability have contributed to the downfall in the pair and the decline is unlikely to stop unless US data begins to improve reviving expectations of stable global growth this year.” Next week is a busy one for Japan with a number of key economic reports scheduled for release including the trade balance, retail sales, inflation and the jobless rate. According to latest CFTC data, traders have trimmed their bets on higher USD/JPY.

GLOBAL NEWS JANUARY 2014

⇒ NASDAQ ended modestly higher on Friday, led by gains in defensive names after a weaker-than-expected payrolls report raised new questions about both the strength of the economy and the aggressiveness of Federal Reserve stimulus. For the week, the SandP 500 rose 0.6 percent, while the NASDAQ climbed 1 percent. The Dow Jones industrial average finished the week down 0.2 percent – Source: Reuters

⇒ The U.S. dollar gave up gains on Friday, pushing it to a weekly loss against major rivals, after the American economy in December saw the smallest monthly job gain in three years. The ICE dollar index, a measure of the greenback against six other currencies, fell to 80.646 from 80.978 late Thursday. The index had touched an intraday high of 81.14 just ahead of the report, according to FactSet. Friday’s move lower pushed the dollar index to a weekly loss of 0.2% – Source: Marketwatch

⇒ The dollar fell 0.7 percent to 104.18 yen this week in New York, the biggest drop since the five days eneded Oct. 18. It touched 105.44 on Jan. 2, the strongest since October 2008. The U.S. currency weakened 0.6 percent to $1.3670 per euro – Source: Bloomberg

⇒ The yen gained as futures traders trimmed bets for a second week that the currency would drop figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain — so-called net shorts — was 128,868 on Jan. 7, compared with net shorts of 135,228 a week earlier – Source: Bloomberg

⇒ Gold gained the most in a week after payrolls in the U.S. climbed less than projected, increasing speculation that the Federal Reserve will slow the pace of cuts to economic stimulus. Silver also jumped. Gold futures for February delivery rose 1.4 percent to settle at $1,246.90 at 1:47 p.m. on the Comex in New York, the biggest advance since Jan. 2. Earlier, the metal fell as much as 0.2 percent – Source: Bloomberg

⇒ The United States added just 74,000 jobs in December to mark the smallest gain in three years, a disappointing number likely influenced by poor weather. Yet the weaker pace of hiring could also be a sign of slowing momentum in the up-and-down U.S. economy as it entered 2014. The unemployment rate fell three ticks last month to 6.7%, the first time it’s dropped below 7% in 60 months, the Labor Department said Friday. The decline mainly occurred because more people dropped out of the labor force – Source: Marketwatch

⇒ U.S. wholesale inventories rose a bit more than expected in November, suggesting that restocking would probably contribute to economic growth in the fourth quarter. The Commerce Department said on Friday wholesale inventories increased 0.5 percent after a revised 1.3 percent rise in October. Economists polled by Reuters had expected stocks at wholesalers to rise 0.4 percent in November after a previously reported 1.4 percent increase in October – Source: Reuters

DAILY FOREX POST – EUR/USD, GBP/USD, AUD/USD, GOLD JANUARY 24, 2014

EUR/USD Technical view

SPOT EUR/USD Previous day OHLC

Open	High	Low	Close	Change
1.3546	1.3698	1.3529	1.3694	0.0148

Today's Support and Resistance

Resistance
Support
R3	1.3930
R2	1.3800
R1	1.3700
S1	1.3650
S2	1.3620
S3	1.3550

EURO ended the session on Thursday with gains of 1.09%, versus the greenback, rallying to settle at more than 3 - weeks high. The close above 1.3650 has negated the near term term bearish view. However, concerns if the rally will sustain will be known over the next couple of sessions. As long as prices do not close below 1.3600- 1.3650; top end of the near term bearish channel, the near term view remains bullish and the gains should extend to 1.3800. The medium to long term view is also bullish for targets of 1.4200; targets for the symmetrical triangle in an uptrend

TREND DIRECTION

• Short term: Bullish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

• At 1.3630 with a stop at 1.3580 for a profit target of 1.3760

GBP/USD Technical view

SPOT GBP/USD Previous day OHLC

Open	High	Low	Close	Change
1.6574	1.6643	1.6554	1.6636	0.0062

Today's Support and Resistance

Resistance
Support
R3	1.6700
R2	1.6680
R1	1.6650
S1	1.6610
S2	1.6580
S3	1.6520

Sterling ended the session on Thursday with gains of 0.37%, versus the greenback, extending its gains to the fifth successive session and closing at more than 32- months highs. The gains however look to be capped around the 1.6675- 1.6700 levels; top ends of the near and medium term bullish channels respectively. Leading indicators are also signalling negative divergences, so Sterling for now remains a sell on rally strategy. ONLY a close above 1.6700 will negate the near term bearish view with the rally likely to extend to 1.7200- 1.7300

TREND DIRECTION

• Short term: Bearish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • Hold on to short positions initiated at 1.6610 with a stop at 1.6650 for a profit target of 1.6520
  • If stops are triggered, short again at 1.6680 with a stop at 1.6730 for a profit target of 1.6520

• Long:

• N/A

AUD/USD Technical view

SPOT AUD/USD Previous day OHLC

Open	High	Low	Close	Change
0.8851	0.8852	0.8730	0.8767	-0.0084

Today's Support and Resistance

Resistance
Support
R3	0.8970
R2	0.8850
R1	0.8820
S1	0.8750
S2	0.8730
S3	0.8500

The Aussie ended the session on Thursday with losses of 0.95%, versus the US dollar, closing at the lowest levels since July 2010. Near term view bearish with the upside likely to be capped at 0.8800- 0.8850; near term breakouts. ONLY a close above 0.8850 will negate the near term bearish view. Supports placed at 0.8730- 0.8750, the final barrier before the Aussie could slide to 0.8500, with the medium to long term targets placed at 0.8400- 0.8500; targets for the symmetrical triangle in a downtrend

TREND DIRECTION

• Short term: Bearish
• Medium term: Bearish
• Long term: Bearish

TRADING RECOMMENDATIONS

• Short:

  • At 0.8830 with a stop at 0.8880 for a profit target of 0.8750
  • At 0.8850 with a stop at 0.8900 for a profit target of 0.8750

• Long:

• N/A

GOLD Technical view

SPOT GOLD Previous day OHLC

Open	High	Low	Close	Change
1236.24	1265.40	1231.36	1263.95	27.90

Today's Support and Resistance

Resistance
Support
R3	1280.00
R2	1276.00
R1	1266.00
S1	1262.00
S2	1244.00
S3	1232.00

Spot gold ended the session on Thursday with gains of 2.25%, rallying sharply to close at more than 2 months highs. The precious metal is closing in on crucial near term resistances at 1275.00- 1280.00; top end of the medium term bearish channel, where the near term upside is likely to be capped, before prices could begin sliding to 1225.00- 1230.00. The medium to long term view is extremely bearish with the precious metal likely to target 1000.00- 1050.00 per troy ounce; targets for the symmetrical triangle in a downtrend. Short the precious metals on gains up to 1280.00

TREND DIRECTION

• Short term: Bearish
• Medium term: Bearish
• Long term: Bearish

TRADING RECOMMENDATIONS

• Short:

  • At 1265.00 with a stop at 1273.00 for a target of 1230.00
  • At 1275.00 with a stop at 1283.00 for a target of 1230.00

• Long:

  • N/A