U.S. Dollar Index Is Up, EUR Trading Lower Against The Dollar

Fundamental Currency Analysis

USD: The US Dollar Index is currently up +0.0050 to 85.9330 after opening the day at 85.8050 in Asia. The Greenback is trading steady or slightly higher against the major currencies after no significant U.S. economic data was released yesterday. Today’s U.S. data includes JOLTS Job Openings (+4.17M) and speeches by FOMC members Kocherlakota and Dudley.

EUR: The Euro is trading lower against the U.S. Dollar after yesterday’s release of lower than expected German Factory Orders. Also pressuring the rate was yesterday’s release of the Sentix Investor Confidence Index, which declined -13.7 versus an expected reading of -11.8 and EZ Retail PMI, which printed at 44.8 compared to a previous reading of 45.8. Today, German Industrial Production declined -4.0% m/m compared to an expected decline of -1.4%.

GBP: Sterling is up a fraction against the U.S. Dollar today after no significant economic data was released in the UK yesterday. Today’s UK numbers include Manufacturing Production (+0.2%) and the BOE’s Credit Conditions Survey.

JPY: The Japanese Yen is trading fractionally lower against the Greenback after the release of the BOJ’s Monetary Policy Statement. The statement reiterated the bank’s increase to their monetary base by 60-70 trillion yen per annum. The central bank also made some slight changes in the wording of the Statement. BOJ board member Sayuri Shirai had objections to the language that inflation expectations “appear to be rising on the whole,” instead saying that inflation expectations were on “an uptrend from a somewhat longer-term perspective.”

CHF: The Swiss Franc is trading fractionally lower against the U.S. Dollar today ahead of the release of Swiss Foreign Currency Reserves (453.8B last) and Swiss CPI (+0.2%). Also out later today will be Swiss Retail Sales (+0.8%).

AUD: The Aussie is trading higher against the Greenback today after the RBA left its benchmark Cash Rate unchanged at 2.5%. RBA Governor Glenn Stevens stated that, “On present indications, the most prudent course is likely to be a period of stability in interest rates.”

CAD: The Loonie is slightly lower against the Greenback today after rising sharply yesterday following the release of Ivey PMI, which printed at 58.6, significantly higher than the reading of 53.4 that was expected. Building Permits (-6.0%) are scheduled to be released later today.

NZD: The Kiwi is trading higher against the U.S. Dollar today despite yesterday’s release of NZIER Business Confidence, which printed at 19 compared to a previous reading of 32. No economic releases are expected out of New Zealand until Thursday.

Highlighted Chart of the Day: EUR/USD




A weekly candlestick chart of the EUR/USD currency pair appears above showing the rate falling in a sixth wave down leg within the converging trendlines of its long term triangle drawn in red as it approaches the apex. In addition, the rate is trading below its falling 200 week Moving Average shown in green, and its 14 week RSI drawn in blue in the indicator box has returned to oversold territory confirming the recent low. (See additional technical analysis in the section below.)

Technical Analysis for the Majors

EUR/USD: The Euro declined to 1.2604 this morning after rising notably to 1.2674 yesterday as it consolidates above its recent 1.2497 low. Support is seen at 1.2497/1.2508 and 1.2570, with resistance observed at 1.2613 and 1.2674. Its falling 200 day MA now lies at 1.3512, and its 14 day RSI remains in oversold territory at the 35.83 level. Its outlook is neutral near term but bearish medium term. (See highlighted chart above.)

USD/JPY: USD/JPY rose to 109.04 this morning but then fell sharply to 108.52 this morning, after falling to 108.00 yesterday, as it trades within what appears to be a near term triangular consolidation pattern. Resistance appears at 109.12/22 and 109.35/53, with support noted at 108.52 and 108.00. The rate’s 14 day RSI has fallen into central neutral territory at the 55.78 level, and the rate is trading above its rising 200 day MA currently at 103.11. Its outlook is neutral near term and bullish medium term.

GBP/USD: Cable came off to the 1.6025 this morning after rising to 1.6098 yesterday, although it then made back all of its losses. The rate has moved back above its 50.0% Fibonacci retracement level of its long term rally from 1.4812 to 1.7190 at 1.6001, with the 38.2% Fibo level providing theoretical resistance at 1.6282. Also, the rate’s 200 day MA lies at 1.6718 with a falling slope, and its 14 day RSI has returned to lower neutral territory to read at the 37.96 level. Its outlook is neutral near term and bearish medium term.

USD/CHF: The Swissy rose to 0.9618 after falling to 0.9567 yesterday, as it consolidates below its recent high at the 0.9683 level seen last Friday. Support is now seen at 0.9567 and 0.9595/96, with resistance at 0.9618 and 0.9683. The rate’s 14 day RSI has fallen into upper neutral territory to read at the 65.57 level, and the rate is trading above its rising 200 day MA now situated at the 0.9000 level. Its outlook is neutral near term and bullish medium term.

AUD/USD: The Aussie rose correctively to 0.8784 today after rising strongly to 0.8783 yesterday, as it corrects higher off of its recent low at the 0.8641 level seen on Friday. The rate has also sustained gains above its recently broken medium term down trend line now drawn at 0.8612. Resistance is seen at 0.8783/84 and 0.8825, with support noted at 0.8747/73 and 0.8641. The rate remains below its falling 200 day MA now at 0.9060, and its 14 day RSI has risen within lower neutral territory to the 39.33 level. Its outlook is neutral near term and bearish medium term.

USD/CAD: USD/CAD rallied to 1.1183 this morning after falling sharply to 1.1110 yesterday, as the rate corrects lower from its recent high made at the 1.1296 level last Friday. Despite this correction, the rate remains above a medium term trendline drawn at the 1.0940 level and a longer term support line currently at 1.0746. Its 14 day RSI now reads in central neutral territory at the 57.09 level, and the rate is still situated above its mildly rising 200 day MA now at 1.0940. Its outlook is neutral near term and bullish medium term.

NZD/USD: The Kiwi is slightly higher today after rising as high as 0.7865 yesterday in the wake of Friday’s strong drop to 0.7735. The rate is currently trading just under the lower support line of its medium term down channel now drawn at 0.7835. Its 14 day RSI has risen inside lower neutral territory to read at the 36.68 level, and the rate is trading well below its falling 200 day MA now at 0.8484. Resistance is noted at 0.7847/65 and 0.7927, with support seen at 0.7737/46 and 0.7706/12. Its outlook is neutral near term and bearish medium term.