(Ranges are calculated using recent high and lows and technical analysis - Fibonacci levels, trendlines and moving averages.)
USD/JPY--to consolidate with risks skewed higher as markets await 1245 GMT European Central Bank monetary policy decision. USD/JPY underpinned by positive dollar sentiment on divergent U.S. monetary policy stance versus other major central banks; stronger-than-expected 4.4% increase in U.S. December housing starts to 1.089 million (versus forecast +1.0% to 1.04 million); reduced allure of haven yen amid diminished risk aversion (VIX fear gauge eased 5.23% to 18.85; S&P 500 closed up 0.47% at 2,032.12 overnight) as investors widely expect the ECB to deliver on monetary stimulus Thursday; higher U.S. Treasury yields (10-year at 1.859% versus 1.791% late Tuesday); demand from Japan importers. But USD sentiment dented by surprise 1.9% drop in U.S. building permits to 1.032 million in December (versus forecast +1.0% to 1.06 million). USD/JPY gains also tempered by Japan exporter sales. Other data: 2350 GMT Japan December preliminary retail sales, 2350 GMT Japan January provisional trade statistics for first 10 days, 0500 GMT January Bank of Japan monthly report, 1330 GMT U.S. jobless claims in week ended Jan. 17 (forecast 300,000), 1400 GMT U.S. November house price index, 1600 GMT January Kansas City Fed manufacturing activity index (forecast 7 versus December's 8). Daily chart mixed as MACD bearish, but stochastics rising from oversold levels. Resistance at 118.82-118.87 (Wednesday's high-Tuesday's high); breach would target 119.32 (Jan. 12 high), then 119.88-119.97 band (Jan. 9 high-Jan. 8 high), 120.68 (Jan. 5 high), 120.74-120.82 band (Jan. 2 high-Dec. 23 high), 121.00 (Dec. 9 high) and 121.86 (seven-year high hit Dec. 8). Support at 117.18 (Wednesday's low); breach would target 116.92 (Monday's low), then 115.85 (Friday's low), 115.56 (Dec. 16 reaction low), 115.44 (Nov. 17 low) and 114.88 (Nov. 12 low).
EUR/USD--to consolidate with risks skewed lower as markets await 1245 GMT European Central Bank monetary policy decision. The Wall Street Journal reported Wednesday a proposal from the ECB's executive board that called for monthly bond purchases of roughly EUR50 billion, lasting for at least one year, suggesting bond purchases could amount to at least EUR600 billion. EUR/USD undermined by prospect of large-scale ECB quantitative easing; positive dollar sentiment; fears of Greece exit from the eurozone if the anti-austerity left-wing Syriza party win snap elections Sunday and renege on the country's reform program. But EUR/USD losses tempered by subdued risk aversion. Other data: 1500 GMT eurozone January flash consumer confidence indicator (forecast -10.3 versus December's -10.9). Daily chart negative-biased as MACD bearish, stochastics stays suppressed at oversold levels; five- and 15-day moving averages declining. Support at 1.1540-1.1530 band (Tuesday's low-Monday's low); breach would expose downside to 1.1459 (Friday's 11-year low), then 1.1375 (Nov. 7, 2003, reaction low) and the psychological 1.1000 line. Resistance at 1.1680 (Wednesday's high); breach would expose upside to 1.1792 (Jan. 15 high), then 1.1846 (Jan. 14 high), 1.1859 (Jan. 13 high), 1.1871 (Jan. 12 high) and 1.1897 (Jan. 7 high).
AUD/USD--to trade in lower range. Undermined by increased bets that the Reserve Bank of Australia will soon follow the surprise interest rate cut by the Bank of Canada on Wednesday. AUD/USD also weighed by positive dollar sentiment. But AUD/USD losses tempered by diminished risk aversion; firmer commodity prices (CRB spot index closed up 1.03% at 221.23 Wednesday). Data focus: 0000 GMT Australia January consumer inflationary expectations survey. Daily chart mixed as MACD bullish, but stochastics in bearish mode. Support at 0.8074-0.8066 band (Wednesday's low-Jan. 14 low); breach would target 0.8031 (five-and-a-half year low hit Jan. 7), then psychological 0.8000 line and 0.7700 (July 13, 2009, reaction low). Resistance at 0.8233-0.8243 band (Wednesday's high-Monday's high); breach would target 0.8256 (Friday's high), then 0.8295 (Jan. 15 high), 0.8334 (55-day moving average), 0.8375 (Dec. 11 reaction high) and 0.8429 (Dec. 4 high).
NZD/USD--to consolidate with bearish bias after hitting two-and-a-half year low 0.7546 Wednesday. Undermined by lower-than-expected New Zealand 4Q CPI which, together with the surprise interest rate cut by the Bank of Canada on Wednesday, raised odds that the Reserve Bank of New Zealand will leave rates on hold longer. NZD/USD also weighed by positive dollar sentiment. But NZD/USD losses tempered by subdued risk aversion. Daily chart negative-biased as MACD & slow stochastic indicators bearish; five- and 15-day moving averages declining. Support at 0.7546 (Wednesday's low); breach would expose downside to 0.7451 (June 1, 2012, swing low), then 0.7367 (Nov. 25, 2011, swing low). Resistance at 0.7709 (Wednesday's high); breach would expose upside to 0.7781 (Tuesday's high), then 0.7808 (Monday's high), 0.7856 (Friday's high, near 100-day moving average) and 0.7890 (Jan. 15 high).
GBP/USD--to trade with risks skewed lower. GBP sentiment dented after January Bank of England MPC meeting minutes revealed unexpectedly a unanimous decision to leave interest rates unchanged with two members, Martin Weale and Ian McCafferty, dropping their call for immediate rate rise. GBP/USD also undermined by positive dollar sentiment; lower-than-expected three-months-to-November average weekly earnings increase of +1.8% (versus forecast +1.9%). But GBP sentiment soothed by bigger-than-expected fall in U.K. unemployment rate to 5.8% in the three months to November from 6.0% in the three months to October (versus forecast 5.9%), more-than-expected 29,700 decrease in U.K. December jobless claimants (versus forecast -25,000). GBP/USD losses also tempered by receding risk aversion. Data focus: 0930 GMT U.K. December CML mortgage lending figures, December public sector net borrowing (forecast GBP 9.7 billion), 4Q Bank of England trends in lending report; 1100 GMT U.K. January CBI quarterly industrial trends survey. Daily chart mixed as MACD bullish, stochastics turning bullish; but five-day moving average meandering sideways below falling 15-day moving average, inside-day-range pattern completed Wednesday. Support at 1.5074 (Wednesday's low), then at 1.5055 (Tuesday's low); breach would target 1.5032-1.5026 band (Jan. 8 low-July 15, 2013, low), then psychological 1.5000 line and 1.4812 (July 9, 2013, swing low). Resistance at 1.5178 (Wednesday's high), then at 1.5199 (Tuesday's high); breach would expose upside to 1.5234 (Friday's high), then 1.5266-1.5273 band (Jan. 15 high-Jan. 6 high), 1.5336 (Jan. 5 high), 1.5584 (Jan. 2 high) and 1.5619 (Dec. 31 high).
USD/CHF--to range-trade. Undermined by franc demand on cross trades versus major currencies. But CHF sentiment dented by drop in Switzerland ZEW-Credit Suisse indicator of economic sentiment to minus 10.8 in January from minus 4.9 in December. USD/CHF downside also limited by positive dollar sentiment; negative Swiss interest rates; threat of SNB CHF-selling intervention. Daily chart mixed as MACD in bearish mode, but stochastics neutral. Support at 0.8499 (Wednesday's low); breach would expose downside to 0.8452 (hourly chart), then 0.8350 (Friday's low), 0.8252 (hourly chart), 0.8043 (hourly chart) and psychological 0.8000 line. Resistance at 0.8773 (Wednesday's high); breach would expose upside to 0.8837 (Tuesday's high), then 0.9139 (hourly chart, near 61.8% Fibonacci retracement of decline from Jan. 14 high of 1.0240 to Jan. 15 low of 0.7360), 0.9562 (76.4% Fibonacci retracement) and psychological 1.0000.
USD/CAD--to consolidate with bullish bias after hitting five-and-a-half year high 1.2394 Wednesday after Bank of Canada unexpectedly cut its overnight interest rate by 25 basis points to 0.75%, adjusting its policy rate for first time since September 2010. USD/CAD also supported by positive dollar sentiment; surprise 0.3% on-month decrease in Canada wholesale trade to C$54.04 billion in November (versus forecast for no change). But USD/CAD gains tempered by improved risk tolerance; firmer oil prices (Nymex crude settled up $1.31 at $47.78/bbl Wednesday). Data focus: 1330 GMT Canada November employment insurance. Daily chart positive-biased as MACD bullish; stochastics stays elevated at overbought levels; five- and 15-day moving averages advancing. Resistance at 1.2394 (Wednesday's high); breach would expose upside to psychological 1.2500 line, then 1.2715 (April 1, 2009, high). Support at 1.2188 (hourly chart), then at 1.2060 (Wednesday's low); breach would expose downside to 1.1930 (Monday's low), then 1.1799-1.1792 band (Jan. 15 low-Jan. 8 low), 1.1728 (Jan. 6 low), 1.1596 (Jan. 2 low) and 1.1563-1.1557 band (Dec. 31 low-Dec. 17 low).
(MORE TO FOLLOW) Dow Jones Newswires
January 21, 2015 19:00 ET (00:00 GMT)
EUR/JPY--to consolidate as markets await 1245 GMT European Central Bank monetary policy decision. EUR/JPY supported by subdued investor risk aversion; demand from Japan importers. But EUR/JPY upside limited by Japan exporter sales; weak euro sentiment. Daily chart mixed as MACD bearish, but stochastics bullish at oversold levels. Resistance at 137.10 (Wednesday's high), then at 137.64 (Tuesday's high); breach would expose upside to 137.95 (10-day exponential moving average), then 138.78-138.88 band (Jan. 15 high-Jan. 14 high), 140.51 (Jan. 13 high), 140.88 (Jan. 12 high), 141.36 (Jan. 9 high) and 141.71 (Jan. 8 high). Support at 135.81 (Wednesday's low); breach would tilt near-term view negative, exposing downside to 135.16 (Monday's low), then 134.70 (Friday's low), 134.11 (Oct. 16 swing low) and 131.18 (Nov. 7, 2013, low).
EUR/GBP--to consolidate as markets await 1245 GMT European Central Bank monetary policy decision. Daily chart still negative-biased as MACD bearish, stochastics stays suppressed at oversold levels; five- and 15-day moving averages declining. Support at 0.7609 (Wednesday's low); breach would target 0.7593 (Friday's near-seven-year low), then 0.7403 (Feb. 14, 2008, low) and 0.7340 (Jan. 2, 2008, low). Resistance at 0.7715 (Wednesday's high); breach would expose upside to 0.7746 (Jan. 15 high), then 0.7781 (Jan. 14 high), 0.7830 (Jan. 13 high) and 0.7855 (Jan. 8 high).
Write to Jerry Tan at jerry.tan@wsj.com
This is a financial news and information service. It is provided in general terms and does not take account of or address any individual user's position. To the extent that this article includes suggestions as to various possible investment strategies which users might consider, it does so in only general terms without reference to the personal factors which should determine any user's investment decisions. Nothing contained in this service constitutes personalized investment advice. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors shall not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article. This article does not constitute or form part of any invitation or inducement to buy or sell any security.
(END) Dow Jones Newswires
January 21, 2015 19:00 ET (00:00 GMT)
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