Market Snapshot:
The Chinese yuan is currently trading at its highest level since September 2013 after movement in which many suspect is a warning to speculators.
AUD: Private capital expenditure came in at a 4-year low to see AUD sell off across all major currencies. See today's post for further details.
CAD: Current account is expected lower than last month, with a lower reading suggesting a lower demand for Canadian Dollars.
CHF: Swiss GDP q/q is forecast at 0.4%. In light of a vulnerable USD then USDCHF longs may be considered if GDP comes in better than expected.
EUR: M3 money supply, private loans and German unemployment up in a few hours. German unemployment has been dropping for 2 consecutive months however the consensus as an increased unemployment at -10k.
GBP: GDP 2nd estimate remained fixed at 0.7%
NZD: Exports were up as trade balance came in positive and beating expectations.
USD: At 1:30pm GMT Core durable goods is forecast at -0.1%, however this is a particularly volatile release which tends to deviate from the forecast so may provide good trading opportunities for news traders. However the markets are more than likely waiting for Yellen to speak tomorrow which could cause some spikes and / or meaningful moves across the markets.
INDICES: US equities continue to trade sideways awaiting Yellen's testimony tomorrow. Whilst the broader trends are clearly bullish there is chance of a pullback prior to a trend continuation taking the market cycles into consideration.
CHARTS OF THE DAY:
NZD/JPY: Potential H&S forming
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The observant will notice this analysis completely contradicts my analysis from the 20th Feb (which targeted 80.40). Consider this this counter-analysis! Price never broke beneath the 83.90 support zone and instead this level now forms a suspected head of an H&S reversal pattern.
We are currently trading between Monthly Pivot and S1 however we are nearly at the end of the month so these levels will be shifted up assuming we close the month above the pivot.
Therefore whilst we are trading just beneath a neckline if we break above here before the weekend we may find resistance around 85.90 so a break above this level may provide a safer entry, before targeting 86.80.
We may trade sideways, in which case keep this trade setup in your watch list and seek bullish setups above the neckline for March.
CHF/JPY: Consolidating but still technically bullish
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Overall I am awaiting JPY weakness and whilst this bullish setup on CHFJPY is taking longer than anticipated it is still sound in the overall analysis. Refer to the larger timeframes to see why, and you will see how clearly bullish this is with clear levels of support to seek bullish setups in the event of any deeper retracements.
The bullish trendline around 113.80 is a secondary trendline which would not confirm any major reversals, but merely a deeper pullback in the grand scheme of things. But for now as long as we trade above 113.80 and / or the bullish trendline then bullish setups remain the preference.
I am confident we will retest 117.6 and 119 highs and even further over the coming weeks.
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