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Holiday Slow Down Begins

Published 12/20/2013, 07:07 AM
Updated 07/09/2023, 06:31 AM

As the Christmas slowdown starts to take hold we have only a few data points left for the year and in reality these will likely not see much action with liquidity thinning out at a rapid pace. The dollar, although still bullish may see some profit taking ahead of the holidays before a continuation, although with further US data on the 24th, it seems that may wait until next week. After then, the markets will be the playground for bored skeleton staff at trade desk around the world causing spikes in the barely traded range-bound market place.
USD Percentage Index
The dollar has broken out of it’s mildly bearish consolidation channel and in now looking to test recent highs, although the holiday season has slowed the pace right down. Upside remains likely although it is not guaranteed that we will see a fresh high until the new year. I am bullish USD

USD% Index Resistance (EUR/USD support): EUR/USD 1.3600, 1.3580
USD% Index Support (EUR/USD support): EUR/USD 1.3650, 1.3661, 1.3700
EUR
The EUR% index still looks heavy, although things seem to have ground to a halt for the holidays already. Not even poor US jobs data on Thursday could get a proper reaction. If we do get a break of a strong level then the thin conditions could make it move. Bias remains bearish.
I am bearish EUR

EUR% Index Resistance: EUR/USD 1.3650, 1.3700, 1.3725
EUR% Index Support: EUR/USD 1.3600, 1.3581, 1.3474
JPY Percentage Index
The Nikkei has recently rallied strongly which has pushed the JPY% index to a very weak position. With the BOJ now talking about expansion of stimulus, the divergence between USD and JPY will be quite pronounced. As such upside remains likely for USDJPY which should keep the JPY index at lows. We are fast approaching some slightly stiffer support though so if we get there over the holidays it will likely hold and reject.
I am bearish JPY

JPY% Index Resistance (USD/JPY Support): USD/JPY 104.00, 103.50, 103.21
JPY% Index Support (USD/JPY Resistance): USD/JPY 105.00, 105.32
 GBP Percentage Index
Still displaying a suborn reluctance to buckle in the face of dollar strength, the pound remains strong although the thin conditions are eating away at orders and grinding it lower. With an upward revision to year on year GDP, bullish remains the preferable bias, even if we have to wait for next year for a fresh high.

I am bullish GBP for the time being

GBP% Index Resistance: GBP/USD 1.6445, 1.6473
GBP% Index Support: GBP/USD 1.6300, 1.6287, 1.6234
AUD Percentage Index
Aussie seems to be trying for a push higher although there seems a theme lately with mild retracements following a strong drop lower, which just get sold again after a few days for another leg lower. This seems likely to happen again. I am bearish AUD

AUD% Index Resistance: AUD/USD 0.8888, 0.8900, 0.8918, 0.8900
AUD% Index Support: AUD/USD 0.9925, 0.8783
 CHF Percentage Index
The Swiss Franc has fallen from grace somewhat and has sharply dropped as a result of dollar strength to support. This support has held for the time being although the bias remains firmly bearish given the Fed taper. The holiday season may mean that the range doesn’t move too far from current levels for a week or two though. I am bearish CHF

CHF% Index Resistance (USD/CHF support): USD/CHF 0.8938, 0.8881,
CHF% Index Support (USD/CHF resistance): USD/CHF 0.9000, 0.9100, 0.9150

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