2-1 Economic Calendar
China’s PMI Manufacturing
China’s Manufacturing PMI reading for January came in softer than expected but still expansionary at 52.9 vs. the survey 53.5 and the prior reading of 53.9.
The HSBC Manufacturing PMI beat the prior months reading of 54.4, coming in at 54.5. The markets however have had basically no reaction to these releases as we’ve seen the USD sell off across the board heading into the Nikkei’s break.
Aussie Business Confidence and House Prices
The NAB Business Confidence for December came in well below the prior reading at -3 vs. 6 the prior month. The AUD/USD fell a few pips as we see risk gain a bid early in the Asian session. The Business Conditions reading however improved somewhat moving from4 the prior reading up to 6.
Housing Prices appreciated in the 4th quarter; however that has done little to help the Aussie gain a bid.
House Price Index (QoQ) – Survey:-0.2% Actual:0.7% Prior:0.1%
House Price Index (YoY) – Survey:5.6% Actual:5.8% Prior:11.5%
NY Evening Forex Commentary is available for viewing
EURJPY consolidating between the “Goal Posts”
I define the “Goal Posts” as the space between the 100 and 200 bar MA. In the chart above the 100 (blue line in the chart above) and 200 bar MA (green line) are 40 or so pips away from each other. Over the last 10 hours, the price has been ranging between the two MA levels. In other words, it has traded between the Goal Posts.
With the price currently below the 100 hour MA, the bias is to the downside, but until the 200 hour MA is broken, traders will use the MA level as a borderline to buy against. Keep an eye on the level. A break should lead to further selling. If the 200 bar MA level can not be broken, look for the shorts to cover by buying with the 100 bar MA the target. The longer the pair consolidates between the MA, levels, typically the tighter the spring becomes until the market price breaks.
Oil price move higher but the CAD$ does not follow
Oil prices are up $3.31 in NY afternoon trade on the risk that there may be disruptions through the Suez Canal. Typically, the C$ benefits from a rise in oil prices as it is a large exporter of oil – especially to the US. However, although the USDCAD is off the highs it remains up slightly on the day (closes at 1.0008 on Friday). The spike higher in oil may be considered temporary. It may be that higher oil prices has a negative impact on exports as global growth slows. It may be a flight out of risk and the C$ is considered risky. The point is, the price is not doing what it should be doing with the sharply higher oil prices.
The bearish news from a technical perspective is the USDCAD price is below the trendline support on the daily chart (See chart above). That level comes in at the 1.0025 level. It is also below the high for January before today’s quick move higher. That level comes in at 1.0032. However, if these levels can be breached to the upside, the technical picture would turn more bullish/positive for the pair.
In the mean time, assume the price is mispricing the pair and a downside move can be expected with a target of the 0.9976.82 area the next key support area However, something doesn’t smell just right with oil up so high.
Watch for EURUSD 1.3686 -92 to provide resistance now
USDJPY tests solid topside trendline resistance. Watch 81.97 below
The USDJPY is testing solid topside trendline resistance at the 82.10 level. There are no fewer than 10 points along that line. A break should solicit buying interest. A confirming level to get through above is the 82.25 level and above that the 100 hour MA at the 82.33 level (blue line in the chart above).
On the downside if the 81.97 level is held, the bullish bias has a chance to take charge. A break of this level to the downside and the bears remain in charge.
Loading ...
