Forex Market News
We have White Russians and Black Russians but it is the Bloody Mary of Red Russians that dominated the markets towards the end of last week. The market saw safe haven flows move into predominately the Swissy, Yen and gold whilst avoiding the US.
Aside from Putin’s involvement in Ukraine’s domestic affairs, I see the greenback stronger as Aunty Janet slows down the Fed’s monthly spending on Wed night, Thursday morning. I also see the Euro weaker along with the cable, but the euro will weaken further and faster as Draghi battles deflation. The Cable is still showing great signs of economic strength but is top heavy against a growing US dollar. The Loonie should hold up ok against most peers as it hits the bottom of its economic cycle. The Kiwi will also hold up due to the rate hike last week, however I do not see the Kiwi holding for long. Yen will continue to weaken every time safe haven flows stop, unfortunately Putin is a pushy ambitious man.
The Aussie I expect sideways to weaker ahead of the federal budget on May 13th, and as it will be a slashing budget I expect it to weaken the currency slightly further, before bouncing again in June.
The end of this week will be tricky with the FOMC, May day holiday and Non-Farm Payrolls
DATA HIGHLIGHTS TODAY – US Pending home sales
AUDUSD – Inside test bar give us nothing to look at, more selling expected this week.
EURUSD – When I say a good run, I mean a trend. The direction of that trend could be either way, but I am leaning to the downside, despite it going sideways mostly.
GBPUSD – Resistance too much and momentum showing signs that sellers are building.
NZDUSD – Also sideways and not far from the price (8525) we were at when rates were back at 2.5%! So the carry trade doesn’t seem to be holding well for the Kiwi.
USDCAD – Not much to see here at all.
USDJPY – Nor here.
GOLD – The madness of Kiev is keeping a bid in gold at a time when it is technically going lower, and fundamentally there is no reason to own it either as it is unlikely this “fire” will spread beyond Ukrainian borders.
AUDCAD – Mid phase 2 that will played out and may see price push through the 50ema.
AUDCHF – Nice cycle above the ema. On good support and if buying steps in would be the start of a new cycle long.
AUDJPY – A protracted Phase 2 that is deepening. Support in the low 94’s might see this end.
AUDNZD – Also another nice cycle and start of turn back into phase 1.
AUDSGD – Mid Phase 2.
AUDUSD – Support at 9215 area for the end of this phase 2.
EURAUD – Resistance up at 1.50 which would see the end of this cycle.
GBPAUD – Momentum is topping out as the end of the cycle finishes, 1.82 resistance and fib level would be a likely turning point.
EURCAD – Right on resistance at 1.5275. With momentum this high a sustainably break higher is unlikely.
EURGBP – An inside doji bar and mid phase 1.
EURJPY – Still nothing as the battle of the weakest economy and currency continues.
EURNZD – Would like to short this from here as euro continues to weaken. Need to see the selling intention in the price action first though.
EURUSD – 1.3833 resistance but the euro is hanging in there.
GBPCAD – 1.8557 resistance and like the eurcad, with momentum this high it is doubtful a sustainable run higher.
GBPCHF – Price working off an overbought position and looks to be in mid phase 2.
GBPJPY – Engulfing bar and working its way into the tight end of a wedge with Lower Highs and Higher Lows.
GBPNZD – Reversal divergence and overbought suggests a new phase 1 short is presenting itself soon. More sellers required though.
GBPUSD – 1.6820 too much for the cable and divergence showing clearly I expect sellers to step in this week.
CADCHF – I see this like the highly correlated pairs, GBPCAD & EURCAD, as trading sideways and unlikely to weaken further.
CADJPY – LHLL confirms a track lower in this range with minor support at 92.25 and major at 90.75
CHFJPY – Same as eurjpy, this is doing nothing and going nowhere.
NZDJPY – On support and 50ema & 50 Fibonacci, potential end of phase 2 and cycle.
NZDUSD – Hasn’t closed too far from 8580 in over a week, despite a rate hike on Thursday. Expect that hike to hold price up artificially as this is full of selling still.
USDCHF – Looks to be starting new P1 down, however, there are no LHLL’s in the cycles. So choppy conditions ahead.
USDSGD – Tested 200ema, 50ema, 61.8% fib and resistance at 1.280, a LHLL in today’s bar would see a trade setup for short continuation.
USDZAR – Has completed a cycle and back to trend line, wait for sellers to show.
USDCAD – The Loonie is gaining strength against most of its peers however the greenback is too strong at the moment. This will be range bound as the battle continues. Range of 1.08 to 1.12.
USDJPY – Failed to carry higher but stuck to the 50ema so therefore could go either way.
David Long/ Proprietary Trading Manager