EUR Trading Steady To Slightly Lower Against USD; GBP Continues Decline

Fundamental Currency Analysis

USD: The US dollar index is currently down -0.0100 or -0.010 to 84.2540 after opening at 84.2390 in the Asian session earlier today. The Greenback continues consolidating after its previous gains and ahead of Wednesday’s FOMC Meeting. U.S. economic numbers to be released later today will be PPI (+0.1%), Core PPI (+0.1%) and TIC Long Term Purchases (+24.3B).

EUR: The euro is trading steady to slightly lower against the U.S. dollar in Asia today after yesterday’s selloff. Economic data for the Eurozone expected later today will be German ZEW Economic Sentiment (5.2) and Eurozone ZEW Economic Sentiment (21.3).

GBP: Sterling continues its decline against the U.S. dollar in the Asian session today. UK numbers expected later include CPI (1.5%), PPI Input (+0.1%) and RPI (+2.5%).

JPY: The Japanese yen is trading lower against the U.S. dollar in Asia today after BOJ Governor Haruhiko Kuroda spoke at a press conference in Osaka earlier. Kuroda reiterated that he would adjust BOJ monetary policy “without hesitation”, and that, “the Bank will continue with quantitative and qualitative easing (QQE), aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner”.

CHF: The Swiss Franc is trading steady against the U.S. dollar today in the Asian session, with no important economic releases expected out of Switzerland until Wednesday.

AUD: The Aussie is trading lower today against the U.S. dollar in the wake of the RBA’s Monetary Policy Meeting Minutes for the September 2nd meeting out earlier today. The central bank reiterated its stance on keeping the benchmark Cash Rate at 2.5% and expressed concern over speculation in the housing market. The minutes also stated that, “the exchange rate remained above most estimates of its fundamental value, particularly given the declines in key commodity prices and, overall, had offered less assistance to date than would normally be expected in achieving balanced growth in the economy.”

CAD: The Loonie is trading lower against the U.S. dollar in Asia today, with Manufacturing Production (+1.1%), as well as a speech by BOC Governor Stephen Poloz at the Drummondville Economic Development Society, scheduled for later today.

NZD: The Kiwi is trading lower against the Greenback today, with the New Zealand Current Account (-1.04B) set to be released later in the day.

Highlighted Chart of the Day: USD/CHF

A daily candlestick chart of the USD/CHF currency pair appears above showing the rate bumping up against the upper trendline of its rising medium term channel shown in red in a near term triangular consolidation pattern. The rate remains above its rising 200 day Moving Average shown in green, and its 14 day RSI appears almost overbought in blue in the indicator box after confirming the most recent high. (See additional technical analysis in the section below.)

Technical Analysis for the Majors

EUR/USD: The Euro is still trading in a mildly rising near term consolidation pattern this morning below the psychological 1.3000 resistance level and above key support at the 1.2859 recent low. Its declining 200 day MA now lies at 1.3592, and its 14 day RSI has remains just inside oversold territory at the 29.30 level. Resistance is seen at 1.2957/62 and 1.2978/87, and support shows at 1.2881/83 and 1.2859/66. Its outlook is neutral near term but bearish medium term.

USD/JPY: USD/JPY spent this morning consolidating below resistance noted at its 107.39 high made last Friday, and above support at 106.92 and 106.47/64. The rate has almost achieved its 107.51 target set after it broke up from a descending triangle pattern on August 19th. Its 14 day RSI remains overbought at 81.46, and the rate remains considerably above its rising 200 day MA currently reading at 102.49. Its outlook is neutral near term but medium term bullish.

GBP/USD: Cable softened to 1.6177 this morning after failing to break back into its broken down channel. Resistance is seen at the recent gap top of 1.6278 and at the falling channel’s bottom line drawn at 1.6257, while support is noted at the recent 1.6051 low. Also, the rate is trading between the 38.2% Fibonacci retracement level of its rise from 1.4812 to 1.7190 situated at 1.6282 and the 50% level at 1.6001. The rate’s 200 day MA lies at 1.6741 with a negative slope, and its 14 day RSI is now just oversold at the 29.99 level. Its outlook is bearish in the near and medium terms.

USD/CHF: The Swissy continued consolidating in a triangular pattern under last week’s 0.9395 high this morning, with support noted at 0.9334/36 and 0.9314 and resistance seen in the 0.9371/79 regions and at 0.9395. The rate’s 14 day RSI has normalized to upper neutral territory and reads at the 69.00 level. The rate is trading well above its rising 200 day MA now at the 0.8954 level. Its outlook is neutral in the near term but bullish medium term. (See highlighted chart above.)

AUD/USD: The Aussie took another breather from its near term downtrend today, as it pushed up to 0.9053 while consolidating above its recent low at the 0.8983 level. Also, its recently broken 0.9201 to 0.9504 medium term trading range targets 0.8898. The rate remains below its still rising 200 day MA now at the 0.9234 level, and its 14 day RSI is in oversold territory at the 24.46 level. Support is noted at 0.8983 and 0.8889, with resistance seen at 0.9937/57 and 0.9111. Its outlook is bearish in the near term and turning bearish medium term.

USD/CAD: The Loonie consolidated below yesterday’s 1.1098 high this morning and above support at 1.1082. Additional support is seen at 1.1030 and 1.0996. Its 14 day RSI remains in neutral territory at the 58.43 level, and the rate is trading above its flat 200 day MA now situated at 1.0937. Its outlook is neutral near term and turning bullish in the medium term.

NZD/USD: The Kiwi traded above its recent 0.8121 low this morning, trading as high as the 0.8199 level before relaxing lower again. The rate remains within the parallel trendlines of its medium term down channel, with an upper resistance line now drawn at the 0.8270 level and a lower support line drawn at 0.8034. Its 14 day RSI remains oversold at the 27.36 level and the rate is trading well below its falling 200 day MA now at 0.8511. Support is noted at 0.8121 and 0.8155, with resistance seen at 0.8199/0.8209 and 0.8221. Its outlook is neutral in the near term but bearish medium term.