USDCAD – Fresh Highs Ahead?

USDCAD – Fresh Highs Ahead?

by Boris Schlossberg Chart Of The Day

The loonie has been one of the weakest currencies against the buck this week. The pair has been affected by everything from risk aversion flows to NAFTA concerns to capital outflows. But the underlying reason for its weakness is the market’s appreciation of divergent monetary policies between the two neighbors. With the Fed clearly taking a more hawkish stance the interest rate differentials will begin to weigh on the pair as we move through the year.

That’s why tomorrow’s CAD GDP data could be of great interest to the market. The consensus view is for a decline to 0.1% versus 0.4% and if that numbers prints the pair could test the 1.2900 level in the aftermath of the release. Having now barely cleared the triple overhead resistance at the 1.2850 level USDCAD stands poised to test the key 1.3000 mark if the data does not go its way.

GBPUSD – Double Top or Fresh Highs?

GBPUSD – Double Top or Fresh Highs?

by admin Chart Of The Day

Cable has stalled ahead of the 1.3600 figure since the start of the year failing to make fresh multi-month highs. The pair looks to be carving out a double top near the key 1.3500 figure, but the battle between bulls and bears is not over. A small retrace down to the 1.3300 level will still keep the uptrend intact.

In the meantime, however, a small correction appears to be due especially if US yields continue to rise and UK data starts to falter. Tomorrow’s Trade Balance is expected to miss and could be the catalyst for a move below the 1.3500 figure opening the way for a deeper correction to 1.3300. A break above 1.3600 however, will put a much more bullish structure on the chart paving the path to post Brexit highs above 1.3700

EURUSD – Breakout to New Highs?

EURUSD – Breakout to New Highs?

by admin Chart Of The Day

The EURUSD is closing in on multi-month highs as the pair reaches for the 1.2100 figure amidst very bullish sentiment in the market. The market clearly wants to take the pair higher on the assumption the better growth in the region will force the ECB to taper QE sooner rather than later. ECB officials, meanwhile, are wary of the rising euro, fearing that it may reignite deflationary pressures in the region, but with growth at decade level highs, they may have no choice but to tighten policy over the near term horizon and the market is clearly anticipating the move.

Tomorrow the market will get a look at German Unemployment data which should confirm that labor demand in EZ powerhouse economy remains buoyant and could serve as a catalyst for move higher that could take the pair through the 1.2100 figure.

EURJPY – To Fresh Highs?

by admin Chart Of The Day Uncategorized

Tomorrow the Fed is expected to give the dollar a boost but at the same time, the EURUSD hasn’t slowed a bit. The pair made fresh multi-month highs today as positive data out of Germany indicates that the rising currency is not hurting growth in the region.

Therefore, even if the Fed reaffirms its goal to hike rates once more before the end of the year, the rise in USDJPY won’t be accompanied by a fall in EURUSD which makes EURJPY such a compelling trade at the moment. The pair has held the 130.00 mark and could push to 132.00 if the FOMC meeting proves dollar positive as we believe it will be.

USDCAD – Can Range Highs Hold?

USDCAD – Can Range Highs Hold?

by admin Chart Of The Day

It’s been a rollercoaster ride for loonie this week as Trump Administration put the Northern neighbor trough the wringer, first slapping tariffs on soft lumber, then threatening to pull out of NAFTA. Adding insult to injury has been the lackluster performance of oil as crude slipped below the $50/bbl level.

Tomorrow’s Canadian GDP report may be another hit to the pair if it misses rather modest expectations of 0.1% growth versus 0.6% the month prior. With Canadian real estate market in a massive bubble and the country’s banking sector in a credit crunch due to deteriorating loan quality, the loonie may be in for more pain.

Given the Trump Administration’s penchant for protectionism, it is not at all certain if further flare-ups will be in store and loonie remains vulnerable for the time being. USD/CAD has breached the top of its range and unless the pair comes back below the 1.3400 mark the near term trend suggests that the pair could push towards 1.4000 over the near term horizon.

AUDJPY – Back to the Highs?

AUDJPY – Back to the Highs?

by admin Chart Of The Day

The Australian dollar has been a monster over the past few days rocketing through resistance at the .7450 level and pushing all the way to .7600 before finding sellers. The pair is benefiting from renewed investor interest in the carry trade and growing speculation that the RBA will reconsider tightening if inflation starts to accelerate.

To that end today AU CPI numbers will loom large and if the number prints hotter Aussie and the whole Aussie complex to could rally further. Meanwhile, USDJPY has started to stabilize after testing the 112.50 level three times over the past 24 hours. If AU data proves positive it could pull AUD/JPY to a retest of recent highs at 87.00 while 84.00 provides strong support for the pair.

Can USD/JPY Hit Fresh Highs?

Can USD/JPY Hit Fresh Highs?

by Boris Schlossberg Chart Of The Day

The market has turned decidedly dollar bullish as traders are now anticipating a December rate hike. But USD/JPY has stalled at the 123.00 level as doubts linger. One key factor that would tip the pair over the edge would be some positive news on the US consumption front.

The US consumer comprises more than 75% of the US GDP and tomorrow’s US Retail Sales as well as U o M consumer survey will provide some very important insight into the strength of the US economy. The market is anticipating a big jump with Core Retail Sales rising to 0.4% from -0.3% the month prior. If the news proves positive it could lift USD/JPY through the key 124.00 resistance level as expectations for a rate hike will rise. If on the other hand the number misses once again, USD/JPY could quickly retreat to the lower end of the recent range at 121.00 as doubts begin to creep in.

GBP/CAD – Test of Old Highs Ahead?

GBP/CAD – Test of Old Highs Ahead?

by Boris Schlossberg Chart Of The Day

One of the cleanest uptrends over the past year has been in GBP/CAD pair which continues show no signs of exhaustion. After taking a breather from fresh highs above the 2.0700 level the pair looks ready to roar higher especially if UK data continues to impress.

Earlier this week the UK PMI Manufacturing report came in much better than expected, but the true test of the state of the UK economy will come tomorrow when the market gets a look at the PMI Services data. If that release beats expectations than the BoE will have little choice but to consider tightening by year end.

Although no one expects any change out of the BoE on Thursday, the central bank may hint at a more hawkish posture in its communique and that in turn would send GBP/CAD towards its recent highs at 2.0500 level

USD/CAD – Back to the Highs?

USD/CAD – Back to the Highs?

by Boris Schlossberg Chart Of The Day

The last few days have been quite volatile for USD/CAD with the pair swinging wildly with every tick in the price of oil, but crude has ultimately been capped at the $50/bbl level and that suggests that loonie isn’t going to rally anytime soon.

In fact looking at he long term chart of the pair it appears that the Canadian dollar has made a bottom at the 1.2700 figure and that its recent move higher could continue especially if the Fed makes good on it promise to hike rates, while the BOC will remain in easing mode for the foreseeable future.

Tomorrow the market will get a glimpse of the the Canadian GDP which is expected to print at paltry 0.1% versus 0.3% the month prior. If the data prints negative it could spur another upleg in the USD/CAD and 1.3300 could quickly come into view.

GBP/JPY – New Highs in View

GBP/JPY – New Highs in View

by admin Chart Of The Day

GBP/JPY has hit fresh multi-year highs at 193 and the pair may be headed higher. Although the BoE is not expected to move on rates this year the strong economic performance of UK has positioned the central bank as “2nd to hike” in the advanced industrialized world and has put the bid under the pound.

In addition to growth, cable is also attracting some safe harbor flows as the worries over Greece continue to plague the Eurozone. Tomorrow the pair is sure to see some action as the market will get both the UK employment report as well as the FOMC meeting. If the labor proves strong and Chairwoman Yellen hints that a hike is coming in September, the pair could easily explode to 195.00

Technically, GBP/JPY has cleared multi year highs and does not have any significant resistance until 2008 levels of 200.00. Meanwhile 190.00 looks to support the downside.

NZD/CAD – Fresh Highs Ahead?

NZD/CAD – Fresh Highs Ahead?

by admin Chart Of The Day

Fundamentals
We talked about the kiwi strength earlier today when we noted that,”The New Zealand dollar was propelled by comments from the country’s Prime Minister John Key, a former currency trader himself, who stated in CNBC interview that in his opinion intervention would not work. Mr. Key was referring to the kiwi’s strength especially against the Australian dollar as the cross continues to hover near parity.

In Mr. Key’s view intervention only works at the points of extreme, but is ineffective against a long sustained trend. With RBNZ resolutely set against lowering rates in the foreseeable future the kiwi remains the preeminent carry trade in the industrialized world and that factor continues to prop the unit against G-10 currencies.”

With tomorrow’s CAD employment data due at 12:30 GMT the prospect of big miss and a therefore the possibility of yet another rate cut by the BOC looms large. Therefore, we could have a trigger that could push the pair to fresh yearly highs as rate differentials continue to widen out.

Technicals
Having made a series of higher lows the uptrend in the pair remains in tact and the 9600 figure is the next target of the longs which if broken opens up the way to a run towards .9800

USD/JPY – A Retest of 122.00 Highs?

USD/JPY – A Retest of 122.00 Highs?

by admin Chart Of The Day Uncategorized

Fundamentals
Although the US labor markets have started to slow and US data overall has shown some disappointments as of late, many traders in the fixed income markets remain convinced that the Fed may consider a rate hike as early as June. The US 10 year yields have started to rise and that has put the bid back into USD/JPY which recovered the 120 figure and looks ready to test the recent highs at 122.00 Tomorrow’s FOMC minutes could offer a clue as to how the Fed is leaning and if the tilt is hawkish than the pair has more upside left.

Technicals
USD/JPY has found strong support at the 118.00 level and has now made a higher low at 119.00 but the 122.00 overhang still provides considerable resistance. A break above however could target the pair to 125.00 over the medium term horizon.