(Ranges are calculated using recent high and lows and technical analysis--Fibonacci levels, trendlines and moving averages.)
USD/JPY--to trade in higher range. Underpinned by bullish dollar sentiment (ICE spot dollar index hit eight-and-a-half year high 90.265 overnight; last 90.195 versus 90.027 early Monday) as a stronger U.S. economy stands in contrast to other major economies such as Japan and eurozone that are seeing anemic growth and persistently low inflation, and as expectations prevail that the Federal Reserve would raise interest rates sooner than other major central banks. USD/JPY also supported by demand from Japan importers; weak yen sentiment on Bank of Japan's large-scale monetary easing policy. But USD sentiment dented by drop in Dallas Fed business activity index to 4.1 in December from November's 10.5. USD/JPY gains also tempered by Japan exporter sales; lower U.S. Treasury yields (10-year at 2.204% versus 2.250% late Friday); flows to haven JPY amid diminished investor risk tolerance (VIX fear gauge rose 3.86% to 15.06, U.S. stocks closed around the flat line overnight with S&P 500 up 0.09% and DJIA down 0.09%) as political crisis flared in Greece after the nation's parliament failed to elect a new president on Monday for the third time in a three-stage poll, forcing the country into snap elections on Jan. 25; positions adjustment ahead of Japan public holidays from Wednesday to Friday. Data focus: 1400 GMT U.S. October S&P / Case-Shiller home price index, 1500 GMT U.S. Conference Board December consumer confidence index (forecast 94.0 versus November's 88.7). Daily chart mixed as stochastics bullish, five-day moving average above 15-day moving average and advancing; but MACD in bearish mode. Resistance at 120.74-120.82 band (Monday's high-Dec. 23 high); breach would target 121.00 (Dec. 9 high), then 121.86 (seven-year high hit Dec. 8), 123.66 (July 9, 2007 high) and 124.16 (June 22, 2007 swing high). Support at 120.17-120.12 (Monday's low-Friday's low), then at 120.00 (Thursday's low); breach would expose downside to 119.31 (Dec. 22 low), then 118.82 (Dec. 19 low), 118.26 (Dec. 18 low), 116.30 (Dec. 17 low) and 115.56 (Dec. 16 low).
EUR/USD--to consolidate with bearish bias after hitting two-year low of 1.2143 Monday. Undermined by positive dollar sentiment; reduced investor risk appetite; political turmoil in Greece as the government failed to secure the presidency for its party's candidate in the third parliamentary vote of a three-stage poll, raising the prospect of victory for the anti-austerity Syriza party in a snap election on Jan. 25; expectations that the ECB would embark on further quantitative easing measures early next year; euro sales on soft EUR/NZD, EUR/AUD, EUR/CAD crosses. Data focus: 0900 GMT November monetary developments in the euro area. Daily chart negative-biased as MACD bearish; five-day moving average below 15-day moving average and declining; stochastics stays suppressed at oversold levels. Support at 1.2143 (Monday's low); breach would target 1.2132 (Aug. 2, 2012 low), then 1.2040 (July 31, 2012 swing low), psychological 1.2000 line and 1.1875 (June 7, 2010 swing low). Resistance at 1.2220-1.2226 (Monday's high-Friday's high); breach would temper negative near-term view, targeting 1.2256 (Thursday's high), then 1.2273 (Dec. 22 high), 1.2302 (Dec. 19 high), 1.2353 (Dec. 18 high) and 1.2516 (Dec. 17 high).
AUD/USD--to consolidate after hitting one-week high 0.8162 Monday. Supported by Aussie demand on buoyant AUD/JPY cross amid weak yen sentiment; Aussie demand on soft EUR/AUD, GBP/AUD crosses and on buoyant AUD/CHF, AUD/CAD crosses. But AUD/USD upside limited by positive dollar sentiment; soft commodity prices (CRB spot index closed down 0.6% at 233.24 Monday, a five-year low); subdued investor risk appetite; Aussie sales on soft AUD/NZD cross (hit nine-year low 1.0426 Monday). Daily chart tilting positive as MACD and stochastics turned bullish; bullish parabolic stop-and-reverse signal hit Monday. Resistance at 0.8162 (Monday's high); breach would target 0.8173 (Dec. 22 high), then 0.8192 (Dec. 19 high), 0.8203 (Dec. 18 high), 0.8235 (Dec. 17 high) and 0.8274 (Dec. 15 high). Support at 0.8107-0.8101 band (Monday's low-Friday's low), then at 0.8084 (Dec. 23 low); breach would target 0.8065 (May 25, 2010 swing low), then psychological 0.8000 line and 0.7700 (July 13, 2009 reaction low).
NZD/USD--to consolidate with bullish bias after hitting eight-day high 0.7799 Monday. Supported by Kiwi demand on cross trades versus major currencies; NZD-USD interest differential. But NZD/USD gains tempered by positive dollar sentiment; receding investor risk appetite. Daily chart positive-biased as MACD and stochastics bullish. Resistance at 0.7799-0.7802 (Monday's high-Dec. 17 high); breach would target 0.7848 (Dec. 16 high), then 0.7870 (Dec. 11 high) and 0.7889 (Dec. 2 high). Support at 0.7741 (Monday's low); breach would temper positive near-term view, targeting 0.7726 (Friday's low), then 0.7690 (Dec. 23 low), 0.7679 (Dec. 18 low), 0.7659 (Dec. 10 low), 0.7606 (two-and-a-half year low hit Dec. 9) and 0.7451 (June 1, 2012, swing low).
GBP/USD--to trade in lower range. Undermined by positive USD sentiment; diminished investor risk tolerance; sterling sales on soft GBP/NZD, GBP/AUD and GBP/CAD crosses. Data focus: 0700 GMT U.K. December Nationwide house price index, 0930 GMT U.K. November Land Registry house price index. Daily chart negative-biased as bearish outside-day-range pattern completed Monday; MACD bearish; five-day moving average below 15-day moving average and declining; stochastics stays suppressed at oversold levels. Support at 1.5484 (Dec. 23 near-16-month low); breach would expose downside to 1.5426 (Aug. 28, 2013 reaction low), then 1.5205 (Aug. 7, 2013 low). Resistance at 1.5585 (Monday's high), then at 1.5607 (Dec. 23 high); breach would target 1.5665 (Dec. 22 high), then 1.5682 (Dec. 19 high), 1.5756 (Dec. 17 high), 1.5785 (Dec. 16 reaction high) and 1.5825 (Nov. 27 reaction high).
USD/CHF--to consolidate with bullish bias after hitting two-year high 0.9908 Monday. Supported by bullish dollar sentiment; ultra-loose Swiss National Bank's monetary policy; contagion from weak euro on the Swiss franc; CHF sales on buoyant AUD/CHF, NZD/CHF, CAD/CHF crosses. Daily chart positive-biased as MACD bullish; stochastics stays elevated at overbought levels; five- and 15-day moving averages advancing. Resistance at 0.9908 (Monday's high); breach would expose upside to 0.9972 (July 24, 2012 swing high), then psychological 1.0000 line and 1.0066 (Dec. 1, 2010 reaction high). Support at 0.9842-0.9832 band (Monday's low-Friday's low); breach would temper positive near-term view, targeting 0.9793-0.9785 band (Thursday's low-Dec. 19 low), then 0.9719 (Dec. 18 low), 0.9592 (Dec. 17 low) and 0.9552 (Dec. 16 low).
USD/CAD--to trade in higher range. Underpinned by bullish dollar sentiment, soft oil prices (Nymex crude hit five-and-a-half year low $52.90/bbl Monday); subdued investor risk appetite; loonie sales on buoyant AUD/CAD, NZD/CAD crosses. But USD/CAD gains tempered by loonie demand on soft EUR/CAD, GBP/CAD crosses and on buoyant CAD/CHF cross. Daily chart mixed as five- and 15-day moving averages advancing, stochastics stays elevated at overbought levels; but MACD still in bearish mode. Resistance at 1.1649 (Monday's high); breach would target 1.1667-1.1673 band (Dec. 23 high-Dec. 17 five-year high), then 1.1724 (July 8, 2009 reaction high) and 1.1814 (May 18, 2009 high). Support at 1.1601 (Friday's low), then at 1.1586 (Wednesday's low); breach would target 1.1575 (Dec. 22 low), then 1.1562-1.1557 (Dec. 19 low-Dec. 17 low), 1.1545 (Dec. 15 low), 1.1512 (Dec. 12 low) and 1.1449 (Dec. 11 low).
EUR/JPY--to trade in lower range. Undermined by weak EUR sentiment; Japan exporter sales. But EUR/JPY losses tempered by demand from Japan importers. Daily chart mixed as MACD bearish, but stochastics in bullish mode. Support at 146.53-146.45 band (Monday's low-Wednesday's low); breach would expose downside to 145.95 (Dec. 19 low), then 145.61 (Dec. 18 low), 145.36 (Dec. 17 low), 144.96 (Dec. 16 low) and 144.75 (Nov. 17 low). Resistance at 147.23 (Monday's high); breach would expose upside to 148.45 (Dec. 15 high), then 148.86 (Dec. 9 high), 149.79 (six-year high hit Dec. 8) and psychological 150.00 line.
EUR/GBP--to consolidate. Daily chart still negative-biased as MACD and stochastics bearish, although latter at oversold levels. Support at 0.7812-0.7809 (Monday's low-Dec. 22 low); breach would target 0.7794 (Nov. 12 low), then 0.7781 (Oct. 2 low), 0.7758-0.7753 (Sept. 30 reaction low-July 23, 2012 swing low) and 0.7692 (Oct. 20, 2008 swing low). Resistance at 0.7853-0.7857 (Monday's high-Friday's high); breach would target 0.7877 (Thursday's high), then 0.7930 (Dec. 18 high), 0.7954 (Dec. 17 high), 0.8006 (Dec. 16 high, near 200-day moving average) and 0.8027 (Nov. 20 high).
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(END) Dow Jones Newswires
December 29, 2014 18:45 ET (23:45 GMT)
Write to Jerry Tan at jerry.tan@wsj.com
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December 29, 2014 18:45 ET (23:45 GMT)
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