EUR Firms Against USD While GBP Trading Higher Against The USD

USD: The US Dollar Index is currently up +0.3700 or +0.44 percent to 84.7150 after opening at 84.7580 in the Asian session earlier today. The Greenback is approaching levels not seen since 2010 against most of the majors on the back of the FOMC Statement yesterday. The statement showed the Fed tapered another 15 billion in asset purchases and is on track for ending its program next month. There were two dissenting members, Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser. The Fed plans to leave rates low for a “considerable time”, but some members believe that rates might begin rising before year’s end. Wednesday’s U.S. numbers had CPI decline -0.2% versus an expected increase of +0.1%, while Core CPI came out at 0.0% compared to a forecast of +0.2%. Also, the U.S. Current Account showed a contracting deficit of -99B versus an anticipated deficit of -114B, with the previous number downwardly revised from -111B to -102B.

EUR: The euro firmed against the U.S. dollar in today’s morning session after yesterday’s sharp decline in the wake of Eurozone Final CPI, which increased +0.4% y/y compared to an expected increase of +0.3%.

GBP: Sterling is trading higher against the U.S. dollar after the MPC Meeting Minutes showed two dissenting members in favor of raising interest rates and a unanimous vote on the size of the Asset Purchase facility. The two dissenters were Ian McCafferty and Martin Weale. Cable was up sharply in the wake of the Claimant Count Change, which declined -37.2K compared to forecasts of a -29.7K decline, and with the previous number upwardly revised from -33.6K to -37.4K. In addition, the UK Unemployment Rate declined to 6.2% from 6.4% and the UK Average Earnings Index rose +0.6% 3m/y versus +0.5% expected.

JPY: The Japanese yen continued selling off against the U.S. dollar this morning, trading at a level not seen since August of 2008, in the wake of the FOMC Statement. Yesterday’s Japanese economic data had the Trade Balance show a deficit of -0.92T versus an anticipated deficit of -0.99T. BOE Governor Kuroda is scheduled to speak at the National Securities Industry Convention later today in Tokyo.

CHF: The Swiss franc is gaining against the U.S. dollar today despite the Swiss Trade Balance showing a contracting surplus of +1.39B compared to +2.56B, with the previous number revised down from +3.98B to +3.90B. Later this morning, the SNB will release its Libor Rate (<0.25%) and the SNB Monetary Policy Assessment.

AUD: The Aussie extended its losses against the U.S. dollar in this morning’s session on the back of yesterday’s FOMC Statement and in the absence of any significant Australian economic releases today.

CAD: The Loonie firmed against the U.S. dollar earlier today in the absence of any economic data out of Canada yesterday. Canadian Foreign Securities Purchases (+2.47B) will be released later today.

NZD: The Kiwi is up slightly today versus the Greenback after yesterday’s release of New Zealand GDP, which increased +0.7% q/q compared to an expected rise of +0.6%. Visitor Arrivals (-0.5% last) and Credit Card Spending (+4.5% last) are due out later today.



A daily candlestick chart of the AUD/USD currency pair appears above showing the rate falling sharply yesterday and continuing lower this morning as it approaches the 0.8898 target of the downside breakout of its 0.9201 to 0.9504 medium term trading range drawn in red. The rate is trading below its rising 200 day Moving Average shown in green, and its 14 day RSI drawn in blue in the indicator box has moved back into oversold territory but failed to confirm the most recent low. (See additional technical analysis in the section below.)

Technical Analysis for the Majors

EUR/USD: The euro hit a new recent low at the 1.2834 level this morning after selling off yesterday as well after it broke its near term consolidation pattern to the downside. Its declining 200 day MA now lies at 1.3584, and its 14 day RSI has returned to oversold territory to read at the 29.93 level but failed to confirm today’s low. Resistance is seen in 1.2859/83 and 1.2957/87 regions. Its outlook has turned bearish near term and remains bearish medium term.

USD/JPY: USD/JPY rose to a new six year high at 108.86 after also rising sharply yesterday. Support is noted at 107.39 and in the 106.80/92 zone. The rate has now met its 107.51 target from a recent descending triangle pattern break. Its 14 day RSI remains very overbought at 86.63 and confirmed today’s high. The rate moved further above its rising 200 day MA now at 102.55. Its outlook has turned bullish near term and remains bullish medium term.

GBP/USD: Cable consolidated this morning below its recent 1.6310 high and above its recent 1.6161 low. Resistance is also seen at the rate’s falling channel top line at 1.6438, and support lies at the channel’s bottom line drawn at 1.6232, as well as at the recent 1.6051 low. The rate is also trading around the 1.6282 level of its 38.2% Fibonacci retracement level of its rise from 1.4812 to 1.7190, with the 50% Fibo level at 1.6001. The rate’s 200 day MA lies at 1.6738 with an increasingly negative slope, and its 14 day RSI remains in lower neutral territory at the 39.93 level. Its outlook is neutral near term but bearish medium term.

USD/CHF: The Swissy rose to a new recent high this morning at 0.9432 after rallying notably yesterday. Support is noted at 0.9395 and in the 0.9299/0.9336 region. The rate’s 14 day RSI remains in upper neutral territory at the 68.38 level, and the rate now trades well above its rising 200 day MA at the 0.8958 level. Its outlook is bullish in the near and medium terms.

AUD/USD: The Aussie fell to a new recent low at 0.8937 this morning after falling sharply yesterday. The downside break of its 0.9201 to 0.9504 medium term trading range still targets 0.8898, with resistance seen at 0.9037/57 and 0.9111. The rate is trading increasingly below its rising 200 day MA now at 0.9236, and its 14 day RSI has moved back into oversold territory at the 28.34 level but failed to confirm today’s low. Its outlook is bearish in the near and medium terms. (See highlighted chart above.)

USD/CAD: The Loonie dropped sharply to 1.0925 yesterday, but recovered today as high as the 1.1022 level. Resistance is noted in the 1.1096/98 zone, with support now seen at 1.0941 and 1.0933. The rate appears poised to break above the upward slanting neckline now drawn at the 1.1000 level of a medium term head and shoulders type bottom. Its 14 day RSI reads in central neutral territory at the 54.73 level, and the rate is now hovering above its mildly falling 200 day MA situated at 1.0935. Its outlook is neutral near term but bullish in the medium term.

NZD/USD: The Kiwi made a new recent low yesterday at the 0.8075 level, which it has thus far not fallen below this morning. The rate is trading lower within a medium term down channel bounded by an upper resistance line now at 0.8248 and a lower support line drawn at 0.8015. Its 14 day RSI has fallen back into oversold territory to read at the 27.28 level, but failed to confirm yesterday’s low. Also, the rate remains below its mildly falling 200 day MA now at 0.8510. Support is seen at 0.8075, with resistance noted at 0.8121 and 0.8228. Its outlook is bearish in the near and medium terms.