FXEmpire's Daily FX analysis - page 2
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Euro falling, yet fighting.
As many of you will undoubtedly know, the Euro just won't die. The EUR/USD pair has been very bearish, but there seems to be serious support in the form of 1.35 at the moment. There have been rumors of Central Banks out of Asia buying, but this of course is just that - rumor. The area is absolutely vital to be broken down if the bears can have their way. The fundamentals certainly favor it, but the level continues to frustrate the sellers. Currently, (this is being posted later US morning) the level is fighting back yet again. Notice though, over time we are going lower and lower......making us thinking it gives way sooner or later. A daily close below 1.35 is a very bearish turn of events.
Pound still looks weak, despite spike during midday.
Looking at the GBP/USD, this pair looks weak. The spike that was seen during the middle of the Friday session has been retraced significantly, and if the session were to finish in the same manner it looks now - well....this could be a real tell on the weakness of the GBP in general. The pair looks like it is destined to fall in the short-term, perhaps to 1.55 or even 1.53 as a result. The 1.50 level could even come into play, but this would be getting ahead of the market. The fact that the spike was pulled back from so quickly really told a story today.
Kiwi Dollar is the "Canary in the coal mine"
When looking at commodity currencies, without a doubt the one that will move the fastest is the New Zealand Dollar. The Kiwi is massively sensitive to risk appetite, and as a result is often the first to move up or down. With this in mind, we find the NZD/USD chart very interesting as it has just made a new daily low. If this move picks up to the downside, we could see another sell off of commodities and higher-yielding currencies. This should set up for shorts in the AUD/USD pair as well as longs in the USD/CAD and USD/NOK pairs....
Eur/gbp
Looking at this pair, we can see a classic shooting star set up on Tuesday that has been broken to the downside today. The pair looks weak, and set to return to the previous range between the 0.8650 and 0.85 mark. The 0.85 will provide support, but the trend is for a lower price over time we believe. The Germans had issues selling bonds today - a very bad sign that shows just how far behind the issues the EU really is. Contagion is starting to become full-blown at this point.
GBP/USD testing hourly trend line.
Looking at the longer-term bearishness, it often helps to try and fine tune your entries to maximize potential profits. Looking at cable in this light today, we cannot help but notice the shooting star on the hourly chart @ the 1.55 resistance level while testing a trend line. While nothing is ever 100% fool-proof, the reality is that the trend is down, and this chart shows weakness again.
Pound showing cracks....
After the "Hopium" rally of Monday, the GBP/USD pair has tipped it's hand we believe. Looking at the 1.55 level, we see a major battleground, and one that was completely blown past during the session. However, in the later part of the US session - we are seeing a real pullback. The daily candle looks to be a shooting star right at resistance....not a good sign for bulls. A breaking of the lows on Monday has the bulls running for cover.
USD/CHF quietly building steam.
While most of the world focuses on the Euro presently, over the last few weeks there have been strong gains to be had in the USD/CHF pair. The move makes sense, as the SNB is working against Franc strength, and the USD is the last clear safe haven currency. The daily chart isn't done forming, but you can see we are attempting to form a hammer - a very supportive sign. We have been buying pullbacks in this pair.
Euro slamming into 1.35
Looking at the EUR/USD pair, the spike from the central bank actions today has booted the "risk on" appetite for the markets. The pair has decidedly turned bullish for the day, but as you can see from this chart, the 1.35 level is massive as a resistance area. The area is looking like it will continue to be a major hurdle in this pair, and it should be watched for how it turns out by the end of the session. If we are over 1.35 - then the EUR/USD should continue to rise.....but so far - it looks like it will hold the pair down. At the end of the day, we will be long above 1.35, or short below it.
Swiss to have negative interest rates?
With the rumor of negative interest rates coming out of Switzerland, the idea is that they don't want your money. With this in mind, the theory is that there will be less money coming into the country, and therefore less FX transactions heading towards Zurich, and more leaving. This would drive the value of the Franc down, and that is something the Swiss National Bank will certainly have no problem with. With this in mind, we still like the long USD/CHF idea as the Dollar is a "safe haven" currency and the Franc can't be bought at the moment. 0.9000 looks like solid support at this point:
Muted response to NFP, Swissy continues to build support......
Looking at the USD/CHF, the pair continues to build support just above the 0.9000 support area. Presently, we like the idea of owning the Dollar as it is a "safe haven", and the Franc is being worked against by the SNB. Talk of negative interest rates in Switzerland will add fuel to the fire in this pair, and as a result.....it has the ability to go up in good or back times. After the Non-Farm Payroll number came is just a fractional amount under expectations.....the market has been fairly muted in it's response.