Chart of the Day

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[Mysticforex 13]

Since NZD/CAD is trading at a record high so there is no obvious resistance level for the pair. 95 cents is a psychologically significant level that could stall gains and above that price point, the rally could meet resistance at every big figure. If NZD/CAD starts to turn lower, 94 cents will be the first level of support followed by the January high of 0.9285.

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CAD/JPY is obviously weak. The previous 1 year low of 90.78 was set in February and tested in early March. If this level is broken in a meaningful way, there is no major support until 90. Should CAD/JPY recover, the first level of resistance will be around 92.25 with a more significant resistance level at 94.

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The EUR/AUD has downside support at the 1.4775 level but if that does not hold then 1.4500 could come into view. Meanwhile 1.5000 caps the upside, but a break above that figure could take the pair towards 1.5200 as the strong bottom develops.

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Fundamentals

Ever since bottoming out below 1.2150 EUR/CHF has slowly climbed back the crisis in Crimea faded off the front pages. The ease in risk aversion has certainly helped the pair, but it may now face a new hurdle as traders begin to price in the prospect of ECB easing. The latest rumors to swirl around were that the ECB has modeled a possible 1 Trillion euros worth of QE, although no official has confirmed this story and so far the central bank remains stationary as to its policy intentions. Next week the calendar is relatively quiet, but if the market continues to focus on possible ECB easing then the EUR/CHF pair is clearly stalling at the 1.2250 may turn and begin to test the recent lows set earlier this month.

Technicals

The 1.2250 level remains critical to any near term breakouts for the pair as it appears to have made a double top at those levels. The break above however could open a run towards the 1.2350 target while a failure cold lead to a retest at 1.2150

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Taking a look at the daily chart of AUD/JPY, 95 is clearly a significant short term support level for the pair. However if this level is broken, 94.25 becomes the more significant level because this was a former resistance point. Resistance on the other hand is at the April high of 96.50.

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With GBP/USD hovering near 4 year highs and USD/JPY quietly inching upwards, GBP/JPY rose to its strongest level in 2 weeks.

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Technically EUR/GBP enjoys triple bottom support at the 8150 level and further support at 8100, but a break through those levels opens up the prospect of a move towards the key 8000 figure, while only a move above 8250 relives the downside bias.

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The recent rally in GBP/NZD found resistance right at the 38.2% Fibonacci retracement of the year to date highs and lows. With today’s reaction to the RBNZ rate decision, the currency pair retreated further. There is no major support until 1.9400, the 23.6% Fib retracement of the same move, which is also area where the currency pair found support in mid-March. We expect this level to be tested especially if UK retail sales miss.

[Mysticforex 13]

On a technical basis, EUR/GBP has strong triple bottom support at 8200 but a break of the 8150 level could open the path to a move towards the key 8000 figure. Meanwhile upside looks contained by the 8250-8300 range.

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Technically the failure ahead of the the key 1.0900-1.1100 level bodes badly for AUD/NZD longs and a breakdown below 1.0700 could open the path towards a test of recent swing lows at the 1.0500 level.

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While 1.50 is a psychologically significant resistance level in EUR/AUD, the real level for the currency pair to break is the April high of 1.5022. Above this point there is no major resistance until 1.52. Should the upside momentum in EUR/AUD fade and the currency starts to trend lower, support will be found at the April low of 1.4655.

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The NZD/USD chart highlights the currency pair’s move after recent dairy auctions. On a technical basis, higher lows and higher highs signal strength for the currency but 87 and 8750 are significant resistance levels for NZD/USD. If both levels are broken it should be clear sailing up to 8845 but if NZD/USD fails below 87 cents, a drop to 86 becomes likely.

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[Mysticforex 13]

Technically EUR/JPY has triple bottom support at the 140.00 level and a break there opens the run to 137.00 and possibly a full unwind towards the 135.00 level. Only a break above 142.50 relies the negative bias and put the pair on an upward trajectory.

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Although GBP/USD retraced off its 1.70 high, as long as it holds above 1.6760, the uptrend remains intact. If it breaks below 1.6760, there is no major support until 1.6600. On the upside, if GBP/USD clears 1.70, there is minor resistance at the 2009 high of 1.7043 and nothing beyond that until 1.75.

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The GBP/CHF pair faces key resistance at the 1.5000 level, but a break above opens the prospect of a run towards recent highs at 1.5100 and then further to 1.5300. The downside is supported by the 1.4800 and 1.4700 levels where there is a firm base.

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Taking a look at the daily chart of AUD/JPY, the currency pair is closing in on its 1 month low of 94.25. If this level is broken, there is no major support until the 38.2% Fib retracement of the 2011 to 2013 rally near 92.65. If AUD/JPY holds 94.25 and rises back above 95.35, the next stop could be its May high of 96.

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The GBP/AUD posted a major move today but must overcome the resistance in the 1.8200-18250 region before it can tackle the the key 1.8500 target. Meanwhile 1.8000 offers strong support to the

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With EUR/GBP trading at 16-month lows, we have to turn to the monthly chart for support. The 23.6% Fibonacci retracement of the 2011 to 2012 decline sits right at the 2010 swing low at 0.8068. If EUR/GBP breaks through this level, there is no major support until 80 cents and even this level could give way as more significant support sits at 0.7750. As for resistance, rallies should be limited to 0.8265 for the time being.

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Taking a look at the daily chart of EUR/CAD, the currency pair has just broken below the 50% Fibonacci retracement of the massive 2008 to 2012 decline. While this level is significant, if EUR/CAD also clears its Jan 20th swing low at 1.4788, then there is no support for the currency pair until 1.4600. Resistance is up at 1.50 so EUR/CAD would need to rise back above this level to negate the downtrend. There is also a fairly clear head and shoulders pattern that point to further losses for EUR/CAD

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Taking a look at the daily chart of AUD/JPY, the currency pair has risen out of the sell zone according to our Double Bollinger Bands. While this signals a potential turn in the currency pair, there is stiff resistance below 95.25. If AUD/JPY drops back below 94, the currency pair could take a stab at its 1 month low near 93.

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A funny thing has happened to the AUD/NZD pair. What looked like the easiest one way trip to the downside has now turned into a reversal trade. Although interest rates in New Zealand are supposed to rise while rates in Australia will remain stationary at best, the pair has stubbornly climbed higher over the past week and is now on the verge of piercing the key 1.0900 level. What has turned the price action around has been a noticeable decline in business sentiment in New Zealand spurred by dropping prices for milk - the country's principal export. The latest ANZ Business sentiment survey printed at 53.5 a whopping decline of more than 10 points from the period prior when it recorded a value of 64.8. The markets are now worried that the sudden collapse in confidence may make the RBNZ hold off on any further rate hike for the time being. That sentiment has pushed the kiwi below the key 8500 level and may now send it lower towards 8400. Meanwhile in Australia the conditions appear to have stabilized and if tonight's Private Capital Expenditure numbers surprise to the upside the AUD/NZD cross could push through the 1.0900 figure.

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EUR/JPY has been in a drift for the past several weeks as the pressure from euro and tepid price action in USD/JPY have pushed the pair well below the 140.00 figure. Today however the pair appears to have found a modicum of support as euro essentially stabilized at 1.3600 and USD/JPY found buyers at 101.50. Although the woes in the EZ are well known and the ECB is very likely to cut rates at the next meeting in June, most of the downside news in the euro appears to be priced. Meanwhile the relentless decline in US rates which has been the main culprit for USD/JPY's decline has likely runs its course as well. US 10 year yields have slipped below the 2.50% barrier but now look like they have found some buyers ahead of the 2.40% level. The bonds are obsessed with US deflation that's why tomorrow's US Personal Income and Spending may be key to the markets. If the number print better than expected then they could signal that US economic growth is translating into gains in income which should help rally US yields and USD/JPY thus providing a lift to EUR/JPY back towards the 140.00 level.

 

Technicals

EUR/JPY has deep support around the 136.00 level but the buying ahead of the 138.00 figure suggest that the pair may be carving out a higher low which would be a bullish formation that could signal a turn back towards 140.00. A break of 137.00 however would suggest a test of the 136.00 support.

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Cable has been in a correction mode for the better part of the week as markets are beginning to question the prospect of early BOE rate hikes despite the booming UK economy. One nagging issue is the possibility of secession of Scotland which could wreak havoc with BoE's well laid plans. Another growing concern is the weakening UK housing market which reduces the need for BoE to act sooner rather than later. This week we get a slew of UK PMI data and although no one anticipates contractionary readings, the strong prospect of slowdown in activity could only reinforce the negative sentiment toward sterling. On the other hand the Aussie has been relatively robust holding bid above the 9200 level. This week the market will also get a glimpse of a smattering of Australian data and its provides steady results the sentiment towards Aussie will only strengthen setting up the prospect of further downside action on GBP/AUD.

 

 

Technicals

Technically GBP/AUD is approaching key support at the 1.7800 level as its corrective action accelerates. A move through 1.7800 opens the prospect of test of double bottom and a run through 1.7700 which would break the support and target the pair towards the 1.7500 figure