GBPUSD
GU opened the week at 161404, continuing the ascension from a bottom of 160616 to reaching a high of 162596 by mid week. Forming an intermediary top, price declined dramatically inspired by weaker PMI figures, which saw some profit taking upon the approach to the next key level. Falling from the high 162 area to a low of 160046, GU settled towards the end of the NY session closing the week slightly higher at 160570.
This week, GU opens higher at 160454 though still under the 23% level (160454). With the BOE announcing their Interest Rate decision and any changes to their Asset Purchasing Facility program on October 10, it is possible to see GU remaining subdued until the approach of critical date, which may be the catalyst to instigate another major move in GU.
This week, GU opens higher at 160454 though still under the 23% level (160454). With the BOE announcing their Interest Rate decision and any changes to their Asset Purchasing Facility program on October 10, it is possible to see GU remaining subdued until the approach of critical date, which may be the catalyst to instigate another major move in GU.
Level to Watch:
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160807
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What to look for:
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BUY: 161366(break above)
SELL: 160454(break below)
A break above 160807 will see 161366 (76%) as the next test point which may contain GU within its current downtrend. If this is the case, look for rejection and a move back through 160807 with support at 160454.
If GU breaks above 161366, this may provide a long opportunity to re-test higher corrective levels. Above 161774, the next resistance level to watch is 161774. Continuing north, the higher targets lie at: 161597, 163171 and 163956. Should price break through 160454, this will open GU to an extended fall to the following targets: 159237, 158480 and 156877. |
Bullish Levels:
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T1: 161597, T2: 163171, T3: 163956
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Bearish Levels
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T1: 159237, T2: 158480, T3: 156877
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Potential Catalysts:
| Manufacturing Production, Trade Balance, GDP (Oct 9), BOE Interest Rate Decision, BOE Asset Purchase Facility (Oct 10) |
EURUSD
It was an interesting week for EU who made a new high to 136458 on the back of the ECB Interest Rate decision, only to decline back to the mid 135 area by Friday's NY session. Last week saw developments in the Italian political arena which saw Italy's Prime Minister Enrico Letta win the confidence vote, keeping his coalition in tact while in a news press conference following the Interest Rate decision, the ECB re-affirmed its current economic outlook and expectations. This week EU opens the Asia session higher at 135637, currently above the 23% level (135999) with a test of DP coming up ahead. I remain more biased to a bearish outlook for this pair.
Level to Watch:
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135800
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What to look for:
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BUY: 136093 (break above)
SELL: 135599 (break below)
A break above 135800 will see the first test of resistance at 136093. Another attempt above 136 cannot be ruled out if the US disappoint with developments in their own domestic affairs especially and a sudden bout of weakness takes over whilst anticipation over a resolution is expected to bring relief. However, I still see any movement north as corrective and favour an opportunity to short.
If EU does break above 136093, the first test will be 136194. Breaking above this will open up to a re-test of 136313, followed by 136870 and then 137290 (or around the 137 figure).
Alternatively, a break through 135800 (DP) will see 135599 (23%) as the next support level. A confirmed break through the 23% level, will promote further bearish momentum and expose the following levels: 135108, 134720 and 134050.
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Bullish Levels:
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T1: 136313, T2: 136870 T3: 137290
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Bearish Levels
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T1: 135108, T2: 134720 T3: 134050
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Potential Catalysts:
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Sentix Investor Confidence (Oct 7), German Trade Balance, German Factory Orders(Oct 8), German Industrial Production, Monthly ECB Report, ECB Speech (Oct 9), German CPI, German Harmonised Consumer Prices (Oct 11)
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AUDUSD
AU was the best performer last week, tipping the scale against its counterparts with a bold finish at higher end of the spectrum at 94348. The RBA kept rates on hold at 2.5% once again, spurring buying interest as speculation entered regarding future monetary decisions regarding possible rate hikes in 2014, whilst commentary offered by the RBA within their Monetary Policy statement left many interpreting the RBA to not see the appreciation of the domestic currency a major issue (given that it is still lower in value than April 2013). As such, there is speculation that we may see the AUD re-test the 95 area and possible higher. If this is the case, I still see this as part of an extended corrective move and will be looking for sellers to enter the arena, guarding the higher key levels.
Although the RBA has done well with containing its economic decline to a minimum (in comparison to other advanced nations), a rise in the AUD may still encourage the RBA to to look at other options including Interest Rate adjustments should economic performance remain subdued or the domestic currency moves away from assisting with the "re-balancing" of the domestic economy. Currently AU still maintains poised at the top cautiously testing the 76% level in the early Asia session.
Although the RBA has done well with containing its economic decline to a minimum (in comparison to other advanced nations), a rise in the AUD may still encourage the RBA to to look at other options including Interest Rate adjustments should economic performance remain subdued or the domestic currency moves away from assisting with the "re-balancing" of the domestic economy. Currently AU still maintains poised at the top cautiously testing the 76% level in the early Asia session.
Level to Watch:
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94178
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What to look for:
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BUY: 94416 (break above)
SELL:94043 (break below)
AU needs to re-test 94178. Once this level has been tested, direction will be set. Look to 94416 (76%). A break above this level will promote bullish momentum and bring the following targets into view:94706, 95097, 95629.
Alternatively, should AU continue to break lower through 94178 (DP), the next support level to watch is 94043(23%), which will contain AU within its recent bullish run. However breaking this level will expose 93797, 93280 and then 92877. I remain bearish on this pair despite the reasons that have seen this pair rise. I do think that any move north will be met with resistance. A push from the US (USD strength) will assist in pushing AU down. However should we see USD weakness set in upon confirmation upon disappointing developments in the US situation, AU may take this opportunity to re-test 95-96. This week remains heavy with data for AU, this will certainly play a significant role as well.
In conjunction with the levels, also watch for price action around the 94, 95 and 96 round figures.
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Bullish Levels:
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T1: 94706, T2: 95097 , T3: 95629
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Bearish Levels
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T1: 93797, T2: 93280, T3: 92877
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Potential Catalysts:
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NAB Business Conditions, CNY HSCB PMI, Westpac Consumer Confidence (Oct 8), Consumer Inflation Expectations, Unemployment Rate, Employment Change (Oct 10)
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USDJPY
Last week saw UJ decline from a high of 98720 down to the
lower 97 region by the NY session, closing at 97448. With the US is still in
prime focus over their debt ceiling issue, the markets are on close watch as
the October 17 deadline draws closer. This week sees UJ opening the Asia
session lower at 97197, with intra day movement commencing locked in a
consolidation. No doubt that any movement in the US will spurt a momentum in
the USD, however for now, the pair still retains its bearish bias while
uncertainty in the US remains.
Currently UJ is positioned at the 50% level (around 97220),
with the 4 hour chart still showing movement within a downtrend. However with
the daily still showing UJ locked within a range, it is very possible to see UJ
move north should the USD receive strength. This is a big week for US
economic data which includes last week's postponed NFP figure due out on
Oct 11.
Level to Watch:
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97387
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What to look for:
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BUY: 97474 (break above)
SELL: 96946 (break below)
A break above 97474 will promote bullish momentum
level which will open up to to the following targets: 97865, 98353 and 98841
Alternatively, a break through 97387 (DP) will see the first
test of support at 97071 at the 23% level (current position) with a break
through this level exposing the
following targets: 96928, 96454 and 960183
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Bullish Levels:
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T1: 97865, T2: 98353, T3: 98841
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Bearish Levels
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T1: 96928, T2: 96454, T3: 960183
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Potential Catalysts:
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Consumer Credit Change (Oct 7), Trade Balance (Oct 8), FOMC
Minutes (Oct 9), Export Price Index, Initial Jobless Claims (Oct 10), NFP,
Average Hourly Earnings, Average Weekly Hours, Unemployment Rate, PPI, Retail
Sales, Reuters/Michigan Consumer Index, Business Inventories (Oct 11)
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