Immediate Range Larger Range
(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 reduced safe-haven appeal of yen and yen-funded carry trades amid positive global risk sentiment (VIX fear gauge eased 10.81% to 17.33; S&P 500 closed 1.44% higher at 2,050.03 overnight) as oil prices surged for third straight day, worries over Greece's future in the eurozone receded and the Reserve Bank of Australia joined other central banks in providing further stimulus. USD/JPY also supported by higher U.S. Treasury yields (10-year at 1.796% versus 1.673% late Monday); demand from Japan importers; ultra-loose Bank of Japan monetary policy. But USD/JPY gains tempered by Japan exporter sales; weaker dollar sentiment (ICE spot dollar index last 93.77 versus 94.56 early Tuesday) on bigger-than-expected 3.4% drop in U.S. December factory orders (versus forecast -2.5%). Data focus: 0135 GMT Japan January services PMI, 0145 GMT HSBC China January services PMI, 1315 GMT U.S. January ADP national employment report (forecast +240,000), 1445 GMT U.S. January services PMI, 1500 GMT Fed's Powell speaks, 1500 GMT U.S. January ISM non-manufacturing PMI (forecast 56.1). Daily chart mixed MACD bearish, but stochastics neutral, five- and 15-day moving averages meandering sideways, inside-day-range pattern completed Tuesday. Resistance at 117.75 (Tuesday's high), then at 117.88 (Monday's high); breach would expose upside to 118.50 (Thursday's high), then 118.66 (Jan. 27 high), 118.82-118.87 (Jan. 23 high-Jan. 20 high), 119.32 (Jan. 12 high) and 119.88-119.97 band (Jan. 9 high-Jan. 8 high). Support at 116.87 (Tuesday's low), then at 116.64 (Monday's low); breach would expose downside to 115.85 (Jan. 16 low), then 115.56 (Dec. 16 reaction low), 115.44 (Nov. 17 low) and 114.96 (100-day moving average).
EUR/USD--to consolidate with bullish bias after hitting eight-day high 1.1534 Tuesday. Supported by weaker USD sentiment after disappointing U.S. December factory orders data; euro demand on buoyant EUR/JPY cross amid positive risk sentiment; euro demand on buoyant EUR/GBP cross; increased hopes for a resolution of the debt standoff between Greece's new government and its international creditors. But euro sentiment dented by bigger-than-expected 2.7% on-year drop in eurozone December PPI (versus forecast -2.4%).
EUR/USD gains also tempered by European Central Bank's large-scale quantitative easing program. Data focus: 0855 GMT Germany January services PMI, 0900 GMT eurozone January services PMI, 1000 GMT eurozone December retail sales (forecast -0.2% on-month). Daily chart positive-biased as MACD and stochastics in bullish mode; bullish parabolic stop-and-reverse signal hit Tuesday. Resistance at 1.1534 (Tuesday's high); breach would expose upside to 1.1652 (Jan. 22 high), then 1.1680 (Jan. 21 high) and 1.1792 (Jan. 15 high). Support at 1.1395 (hourly chart), then at 1.1312 (Tuesday's low); breach would temper positive near-term view, targeting 1.1278 (Friday's low), then 1.1262 (Thursday's low), 1.1224 (Jan. 27 low), 1.1098 (11-year low hit Jan. 26) and psychological 1.1000 line.
AUD/USD--to consolidate with bullish bias after hitting five-and-a-half year low 0.7623 Tuesday. Underpinned by weaker USD sentiment; Aussie demand on buoyant AUD/JPY cross amid positive risk sentiment; firmer commodity prices (CRB spot index closed up 3.17% Tuesday at 227.41). But AUD sentiment dented after Reserve Bank of Australia on Tuesday cut its benchmark cash rate by 25 basis points to record-low 2.25%. AUD/USD gains also tempered by Aussie sales on soft AUD/NZD cross. Data focus: 0100 GMT Australia January VFACTS vehicle sales. Daily chart mixed as MACD bearish, 5- & 15-day moving averages falling; but bullish outside-day-range pattern completed Tuesday, stochastics bullish at oversold levels. Resistance at 0.7846 (Tuesday's high); breach would expose upside to 0.7905 (Thursday's high), then 0.8025 (Jan. 28 high), 0.8049 (Jan. 23 high), 0.8135 (Jan. 22 high) and 0.8233-0.8243 band (Jan. 21 high-Jan. 19 high). Support at 0.7708 (hourly chart), then at 0.7623 (Tuesday's low); breach would reinstate negative near-term view, exposing downside to 0.7449 (May 18, 2009, low), then to psychological 0.7000 line.
NZD/USD--to consolidate with bullish bias after hitting four-year low 0.7174 Tuesday. NZD sentiment boosted by 9.4% rise in Fonterra's GDT Price Index at latest GlobalDairyTrade auction. NZD/USD also underpinned by weaker USD sentiment; Kiwi demand on buoyant NZD/JPY cross amid positive risk sentiment; Kiwi demand on soft AUD/NZD cross. Daily chart mixed as MACD bearish, 5- & 15-day moving averages falling; but bullish outside-day-range pattern completed Tuesday, stochastics turned bullish at oversold levels. Resistance at 0.7436 (Tuesday's high); breach would target 0.7494 (Jan. 28 high), then 0.7526 (Jan. 23 high), 0.7582 (Jan. 22 high) and 0.7709 (Jan. 21 high, near 55-day moving average). Support at 0.7274 (hourly chart), then at 0.7174 (Tuesday's low); breach would reinstate negative near-term view, exposing downside to 0.7113 (March 17, 2011, reaction low), then psychological 0.7000 line and 0.6944 (Aug. 25, 2010, low).
GBP/USD--to trade in higher range. GBP sentiment boosted by surprise rise in U.K. CIPS / Markit construction PMI to 59.1 in January from 57.6 in December (versus forecast for drop to 57.0). GBP/USD also supported by weaker USD sentiment; sterling demand on buoyant GBP/JPY cross amid positive risk sentiment. But GBP/USD gains tempered by sterling sales on buoyant EUR/GBP cross; caution ahead of Bank of England interest rate decision Thursday. Data focus: 0930 GMT U.K. January official reserve, 0930 GMT U.K. January CIPS / Markit services PMI (forecast 56.5). Daily chart mixed as bullish outside-day-range pattern completed Tuesday, MACD in bullish mode, stochastics turning bullish; but five- and 15-day moving averages meandering sideways. Resistance at 1.5196 (Tuesday's high); breach would target 1.5222 (Jan. 27 high), then 1.5234 (Jan. 16 high), 1.5269-1.5273 (Jan. 14 high-Jan. 6 high) and 1.5336 (Jan. 5 high). Support at 1.5066 (hourly chart), then at 1.4986 (Tuesday's low); breach would tilt near-term view negative, targeting 1.4973 (Jan. 26 low), then 1.4948 (one-and-a-half year low hit Jan. 23), 1.4812 (July 9, 2013, swing low) and 1.4344 (June 8, 2010, low).
USD/CHF--to trade with risks skewed lower. Undermined by weaker USD sentiment. But USD/CHF losses tempered by negative Swiss interest rates; threat of SNB CHF-selling intervention. Daily chart still positive-biased as MACD and stochastics in bullish move; five-day moving average above 15-day moving average and advancing. Support at 0.9183 (Tuesday's low); breach would target 0.9165 (Friday's low), then 0.9040 (Thursday's low), 0.8980 (Jan. 28 low), 0.8933 (Jan. 27 low) and 0.8762 (Jan. 26 low). Resistance at 0.9296 (Tuesday's high), then at 0.9347 (Monday's high); breach would expose upside to 0.9562 (76.4% Fibonacci retracement of decline from Jan. 14 high of 1.0240 to Jan. 15 low of 0.7360; near 100-day moving average), then 0.9590 (55-day moving average) and psychological 1.0000.
USD/CAD--to trade in lower range. Undermined by weaker USD sentiment; firmer oil prices (Nymex crude settled up $3.48 at $53.05/bbl Tuesday); loonie demand on buoyant CAD/JPY cross amid positive risk sentiment. But CAD sentiment dented by bigger-than-expected 1.6% decline in Canada December industrial product price index (versus forecast -0.6%). Data focus: 1315 GMT Canada January official international reserves, 1500 GMT January Ivey PMI. Daily chart tilting negative as stochastics turning downward from overbought levels; MACD looks poised to stage bearish crossover against its exponential moving average; bearish parabolic stop-and-reverse signal hit Tuesday. Support at 1.2351 (Tuesday's low); breach would expose downside to 1.2310 (Jan. 22 low), then 1.2060 (Jan. 21 low). Resistance at 1.2532 (hourly chart), then at 1.2643 (Tuesday's high); breach would temper negative near-term view, exposing upside to 1.2772 (Monday's high), then 1.2799 (Friday's near-six-year high), psychological 1.3000 line and 1.3063 (March 9, 2009, swing high).
EUR/JPY--to trade in higher range. Supported by improved euro sentiment as worries over Greece diminish; positive risk sentiment; demand from Japan importers. But EUR/JPY gains tempered by Japan exporter sales. Daily chart positive-biased as MACD and stochastics in bullish mode; bullish parabolic stop-and-reverse signal hit Tuesday. Resistance at 135.19 (Tuesday' high); breach would expose upside to 137.31 (Jan. 22 high), then 137.64 (Jan. 20 high) and 138.78-138.88 band (Jan. 15 high-Jan. 14 high). Support at 133.43 (hourly chart), then at 132.40 (Tuesday's low); breach would temper positive near-term view, targeting 132.00 (Monday's low), then 130.16 (16-month low hit Jan. 26), psychological 130.00 line and 129.26 (Aug. 20, 2013, low).
(MORE TO FOLLOW) Dow Jones Newswires
EUR/GBP--to consolidate with bullish bias after hitting eight-day high 0.7591 Tuesday. Supported by diminished worries over Greece. Daily chart positive-biased as MACD and stochastics in bullish mode; bullish parabolic stop-and-reverse signal hit Tuesday. Resistance at 0.7591 (Tuesday's high); breach would expose upside to 0.7677 (Jan. 22 high), then 0.7715 (Jan. 21 high), 0.7746 (Jan. 15 high) and 0.7781 (Jan. 14 high). Support at 0.7520 (Tuesday's low); breach would temper positive near-term view, targeting 0.7472 (Monday's low), then 0.7432 (Jan. 27 low), 0.7402 (near-seven-year low hit Jan. 26), 0.7340 (Jan. 2, 2008, low) and 0.7087 (Dec. 3, 2007, low).
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
February 03, 2015 18:59 ET (23:59 GMT)
February 03, 2015 18:59 ET (23:59 GMT)
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