FX Daily Dose – January 21, 2014
January 21, 2014 in FX Daily Dose
Forex Daily Dose- January 21, 2014: The FxDailyDose presents a quick snapshot of the price-action of EUR/AUD, EUR/GBP, USD/INR, USD/CAD, EUR/USD, GBP/USD, USD/JPY and AUD/JPY for the immediate and medium-term outlook. Please note that the daily outlook is for current pairs in focus and we may add or remove some of the currency pairs accordingly.
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USD/JPY moved up strongly to touch 104.69. We remain in favor of further gains however the immediate outlook stays neutral till there is a break over 104.92 but more specifically 105.00. In case such a move takes place then the pair should retest the resistance zone of 105.35 to 105.44 resistance zone. However, this outlook will change if USD/JPY breaks below 103.83 which is 3 pips below the recent support. Even if such a move takes place the next support will be expected at or above 103.57 but any decisive failure of that support will turn the focus back for the retest of 102.85.
- The recovery came well ahead of retesting the low (1.3490) of the hammer styled daily candle of November 25, 2013.
- 1.3500 psychological level held.
- The short-term support trend-line as shown in the daily chart above also seems to be holding.
- The support was also slightly over the 200-day moving average which indicated that the recent trend of support is holding.
Considering all the above points, we expect further gains towards 1.3600 where the resistance Tenkan line of the daily Ichimoku cloud may act and also the pull of 1.3500 level may come into the picture. On the upside if there is a decisive break of 1.3605 then further gains towards the resistance zone of 1.3640 to 1.3650 will be expected. The focus will turn towards downside only if the price-action overcomes the psychological support of 1.3500 by falling below 1.3490. Today’s ZEW surveys for economic sentiments from Germany and European Monetary Unions may also act as the driver for the short-term direction
USD/CAD has been in a volatile sideways mode for past 5 trading days. Overall sentiments and outlook stays bullish but till the resistance of 1.1000 is not overcome we stay neutral for upside. More specifically a break out on either side i.e. below 1.0905 or above 1.0991 is required to determine the short-term direction. An upside breakout should target 1.1050 next, however if the support at 1.0905 fails then further consolidation towards the next support zone of 1.0842 to 1.0860 will be expected. The immediate outlook will turn towards bearish side for some deeper consolidations only if a decisive break below 1.0842 but more importantly 1.0823 takes place.
CAD/JPY remains in a sideways mode for past 8 trading days after the recovery attempt failed at 95.90. If the resistance at 95.90 holds then the possibilities of deeper consolidations can not be ruled out but the break of 94.58 support is required as confirmation. CAD/JPY’s recent moves presented an excellent example of number psychology. The pair was in a strong uptrend but faced an equally strong resistance before hitting the major psychological level of 100.00. The sharp fall broke the psychological support of 95.00 but marginally. The recent price action after the recovery from 94.58 is indicating that the psychological support of 95.00 is also in place. In case there is no decisive break of 94.58, but more importantly 94.00, then some extended sideways moves can be expected. We stay neutral for CAD/JPY from short-term perspective.
GBP/USD maintains the overall bullish sentiments. However the drastic drop in the volatility and the continuous resistance of 1.6500 key psychological level are keeping us neutral for the pair, as far as the immediate outlook is concerned. To turn the focus back towards upside, the failure of 1.6464 resistance but more importantly a break of a.6517 resistance is crucial. In case such a move takes place then GBP/USD should target a retest of 1.6603 next. However if these resistances hold and the support of 1.6309 fails then the focus will turn back towards downside for 1.6217 or below.
EUR/GBP has not only gone into a sideways range but the volatility has gone down drastically. The overall outlook stays bearish but some upward consolidation cannot be ruled out. On the upside the first resistance is expected in the range of 0.8330 to 0..8348. This range not only represents the recent resistance but also the 55-day EMA resistance. Even if this resistance fails we expect any upward consolidation to be limited to 0.8392 to bring another drop. On the downside a break below 0.8230 but more specifically 0.8220 is required to continue the ongoing fall to target 0.8180 or more.
EUR/AUD’s strong recovery from 1.5030 i.e. well ahead of the psychological a.5000 level stalled after a brief break of 1.5500. We remain in the favor of further gains as long as the price-action stays above 1.5280. However a break above 1.5508 is critical to maintain this outlook. If such a break takes place then EUR/AUD should target the resistance zone of 1.5557 to 1.5597. However if this resistance holds and the expected support at 1.5280 fails then the focus will turn back towards 1.5030 or below. Our immediate outlook stays neutral.
USD/INR remains in a narrow sideways range between 61.07 and 61.71 after failing below the resistance zone of 62.44/62.50. The price -action is clearly showing the psychological support of 60.00 ranges and a fear of entering that range by breaking below 61.00. Overall, as we have been mentioning is some of the previous updates, we expect some deeper consolidations in the days to come but our immediate outlook stays neutral for USD/INR.
You may also check the daily and weekly analysis for 8 currency pairs on the following pages:
- EUR/USD daily analysis
- USD/JPY daily analysis
- GBP/USD daily analysis
- USD/CHF daily analysis
- AUD/USD daily analysis
- EUR/JPY daily analysis
- GBP/JPY daily analysis
- AUD/JPY daily analysis