New Highs For GBP/NZD? (Click on Chart to Zoom In)

New Highs For GBP/NZD? (Click on Chart to Zoom In)

Chart Of The Day

Fundamentals

Today the RBNZ backed away from committing to a rate hike at the next meeting in March while the Fed stood firm and tapered another 10 Billion maintaining its tightening stance. That suggests that risk currencies such as the kiwi may be in for a correction as trader temper their expectations. It is no surprise why RBNZ held back today. With EM crisis exploding and its currency still at very high levels the last thing the New Zealand monetary authorities want to do is push the unit even higher. Meanwhile cable has been holding up very well and despite repeated dovish commentary from Governor Carney, the market is convinced that the BoE will raise rates ahead of the Fed. All of this suggests that the GBP/NZD pair could be headed to new highs over the next week as trader rotate out of kiwi and into the poound.

Technicals

GBP/NZD is within reach of the yearly highs and a break above the 2.0300 level puts the pair on path towards 2.0500 while 2.000 now offers solid support.

AUD/JPY- Bottom in place?(Chart to Zoom In)

AUD/JPY- Bottom in place?(Chart to Zoom In)

Chart Of The Day

Fundamentals

After relentless selling the Aussie appears to have found a bottom ahead of the 8650 level and may now consolidate for week or so assuming to further negative data is released from Down Under. At the same time USD/JPY which dropped more than 200 points off its highs on EM worries also looks to have stabilized for now as US equity markets appeared to have calmed. The US data sp far this week has been mixed, but the market is expecting the Fed to remain committed to its QE schedule and that is likely to provide support for the pair for now. Tonight’s NAB Business confidence data could prove to be spark for further rally if it prints no worse then the month prior and that would suggest that AUD/JPY has made a near term bottom.

Technicals

Technically the AUD/JPY has made a higher low at the 88.50 level and as long as that low holds the formation remains bullish with 90.00 now the topside resistance level in the near term.

EUR/AUD – Headed for 1.60? (Click on Chart to Zoom In)

EUR/AUD – Headed for 1.60? (Click on Chart to Zoom In)

Chart Of The Day

EUR/AUD – Headed for 1.60? (Click on Chart to Zoom In)

Fundamentals


The best performing currency pair today was EUR/AUD. Thanks to better than expected Eurozone flash PMIs and weaker than expected Chinese data, the pair rose to its strongest level since February 2010. The 2% breakout is one of the biggest moves that we have seen in EUR/AUD in months. There is nothing more important for a currency pair’s outlook than economic divergence and in the case of EUR/AUD the gap is growing between the Eurozone and Australia. Manufacturing activity in China, Australia’s largest trading partner contracted for the first time since August while manufacturing activity in the Eurozone grew at its fastest pace since May 2011. This trend is expected to continue with Australia feeling the pain of slower Chinese growth and Europe benefitting from low expectations. Fundamentally, EUR/AUD should head higher with 1.60 being a reasonable medium term target.

Technicals


Technically, we have to turn to the monthly chart to find resistance in EUR/AUD. 1.56 was an important breakout point for the currency pair. It is now the first level of support and below that, the level to watch is 1.55. As for resistance, 1.60 is the next key level. Not only is it a psychologically significant round number, but it is also the point at which the sell-off stalled in February 2010. The next level above that would be the 50% Fibonacci retracement of the 2008 to 2012 sell-off at 1.6390.