By Jerry Tan
The following is a technical analysis of seven major currency pairs for this week:
USD/JPY
1st support - 117.02 (minor)
1st resistance - 120.48 (moderate)
2nd support - 116.64 (moderate)
2nd resistance - 120.82 (minor)
USD/JPY (last 118.65) is likely to trade in a lower range this week as the daily slow stochastic indicator is turning downward from overbought levels. Support is at the Feb. 5 low of 117.02. A breach would target the Feb. 2 reaction low of 116.64, and then the Jan. 16 reaction low of 115.85 which is currently near the 100-day moving average. An extension of the fall would target the Dec. 16 reaction low of 115.56, and then the Nov. 17 low of 115.44. Resistance is at Wednesday's reaction high of 120.48. A breach would target the 120.74-120.82 band, marked by the Jan. 2 high and the Dec. 23 high. An extension of the rise would target 121.86--the seven-year high hit on Dec. 8; and then the July 9, 2007 high of 123.66. USD/JPY is likely to consolidate in the weeks ahead. The 15-week moving average is advancing, but the weekly slow stochastic measure is falling from overbought levels. A rise above 121.86 would reinstate the positive medium-term outlook, exposing the upside to the June 22, 2007 swing high of 124.16, and then to the Dec. 5, 2002 reaction high of 125.70.
EUR/USD
1st support - 1.1262 (minor)
1st resistance - 1.1443 (minor)
2nd support - 1.1098 (moderate)
2nd resistance - 1.1499 (minor)
EUR/USD (last 1.1411) is likely to consolidate this week as long as the currency pair trades between the Jan. 29 low of 1.1262 and Friday's high of 1.1443. The daily chart is mixed as the MACD indicator is bullish, but the stochastic measure is bearish, while the five-day moving average is meandering sideways. A rise above 1.1443 would tilt the near-term outlook positive, targeting the Feb. 5 high of 1.1499, and then the Feb. 3 reaction high of 1.1534. An extension of the rise would target the Jan. 21 reaction high of 1.1680, and then the Jan. 12 reaction high of 1.1871. But a fall below 1.1262 would turn the near-term outlook negative, exposing the downside to 1.1098, the 11-year low hit on Jan. 26, and then to the psychological 1.1000 line. An extension of the fall would target the Sept. 3, 2003 reaction low of 1.0760, and then the March 21, 2003 reaction low of 1.0498. The EUR/USD medium-term outlook is negative as the five- and 15-week moving averages are declining, while the weekly slow stochastic measure is staying suppressed at oversold levels. A drop below 1.1098 support would target 1.0760, and then the psychological 1.0000 line in the weeks ahead.
AUD/USD
1st support - 0.7641 (minor)
1st resistance - 0.7841 (minor)
2nd support - 0.7623 (moderate)
2nd resistance - 0.7875 (minor)
AUD/USD (last 0.7774) is likely to consolidate this week as long as the currency pair trades between Thursday's low of 0.7641 and Tuesday's high of 0.7841. The daily chart is mixed as the MACD and slow stochastic indicators are bullish, but the five- and 15-day moving averages are declining. A rise above 0.7841 would tilt the near-term outlook positive, targeting the Feb. 6 reaction high of 0.7875, and then the Jan. 28 reaction high of 0.8025. An extension of the rise would target the Jan. 23 high of 0.8049, which is currently near the 55-day moving average, and then the Jan. 22 high of 0.8135. But a fall below 0.7641 would turn the near-term outlook negative, targeting 0.7623, the five-and-a-half year low hit Feb. 3; and then the May 18, 2009 low of 0.7449. A drop below 0.7449 would encounter no significant support until the psychological 0.7000 line. The AUD/USD medium-term outlook is negative as the five- and 15-week moving averages are declining. The currency pair may fall to the psychological 0.7000 line in the weeks ahead.
NZD/USD
1st support - 0.7312 (minor)
1st resistance - 0.7526 (minor)
2nd support - 0.7174 (moderate)
2nd resistance - 0.7582 (minor)
NZD/USD (last 0.7490) is likely to trade in a higher range this week as the daily MACD and slow stochastic indicators are bullish, while the five-day moving average is above the 15-day moving average and advancing. Resistance is at the Jan. 23 high of 0.7526. A breach would target the Jan. 22 high of 0.7582, and then the 55-day moving average, now at 0.7631. An extension of the rise would target the Jan. 21 high of 0.7709, and then the 100-day moving average, now at 0.7730. Support is at Thursday's reaction low of 0.7312. A breach would temper the positive near-term outlook, exposing the downside to 0.7174, the four-year low hit Feb. 3, and then to the March 17, 2011 reaction low of 0.7113. An extension of the fall would target the psychological 0.7000 line, and then the Aug. 25, 2010 low of 0.6944, followed by the July 1, 2010 reaction low of 0.6791. The negative medium-term NZD/USD outlook is tempered as the weekly slow stochastic measure has turned bullish at oversold levels. The currency pair may consolidate in the weeks ahead as long as it stays above 0.7174. A drop below the 0.7174 support would reinstate the negative medium-term outlook, exposing the downside to the psychological 0.7000 line, and then to the May 25, 2010 reaction low of 0.6559.
GBP/USD
1st support - 1.5195 (minor)
1st resistance - 1.5619 (minor)
2nd support - 1.5135 (minor)
2nd resistance - 1.5682 (minor)
GBP/USD (last 1.5415) is likely to trade in a higher range this week as the daily MACD and slow stochastic indicators are bullish, while the five- and 15-day day moving averages are advancing. Resistance is at the Dec. 31 high of 1.5619, which is currently near the 100-day moving average. A breach would target the Dec. 19 high of 1.5682, and then the Dec. 16 reaction high of 1.5785. An extension of the rise would target the Nov. 27 reaction high of 1.5825, and then the Nov. 11 reaction high of 1.5944. Support is at Tuesday's reaction low of 1.5195. A breach would temper the positive near-term outlook, targeting the Feb. 4 low of 1.5135, and then the Feb. 3 reaction low of 1.4986. An extension of the fall would target 1.4948, the one-and-a-half year low hit Jan. 23, and then the July 9, 2013 swing low of 1.4812, followed by the June 8, 2010 low of 1.4344. The negative medium-term GBP/USD outlook is tempered as the weekly slow stochastic measure has turned bullish at oversold levels and the five-week moving average has turned upward. The currency pair may consolidate in the weeks ahead as long as it stays above 1.4948. A drop below the 1.4948 support would reinstate the negative medium-term outlook, exposing the downside to 1.4812, and then to the May 20, 2010 swing low of 1.4230 in the weeks ahead.
USD/CHF
1st support - 0.9169 (minor)
1st resistance - 0.9345 (minor)
2nd support - 0.8980 (minor)
2nd resistance - 0.9537 (minor)
USD/CHF (last 0.9290) is likely to trade with risks skewed to the upside this week as long as the currency pair stays above the Feb. 6 low of 0.9169. The daily MACD and slow stochastic indicators are bullish, but the latter is at overbought levels. Resistance is at the Feb. 2 high of 0.9345. A breach would expose the upside to the 55-day moving average, now at 0.9537, and then to 0.9562--the 76.4% Fibonacci retracement of the decline from the Jan. 14 high of 1.0240 to the Jan. 15 low of 0.7360, and which is currently near the 100-day moving average. An extension of the rise would target the psychological 1.0000 line. But a drop below 0.9169 would temper the positive near-term outlook, exposing the downside to the Jan. 28 low of 0.8980, and then to the Jan. 27 low of 0.8933. An extension of the fall would target the Jan. 26 low of 0.8762, and then the Jan. 23 low of 0.8677. The USD/CHF medium-term outlook is consolidative as the weekly MACD indicator is bearish, but the weekly slow stochastic measure is at neutral level. The currency pair may trade sideways between the Jan. 21 low of 0.8499 and the psychological 1.0000 line in the weeks ahead.
USD/CAD
1st support - 1.2351 (moderate)
1st resistance - 1.2697 (moderate)
2nd support - 1.2310 (minor)
2nd resistance - 1.2799 (moderate)
USD/CAD (last 1.2435) is likely to trade in a lower range this week as the daily MACD and slow stochastic indicators are bearish. Support is at the Feb. 3 low of 1.2351. A breach would expose the downside to the Jan. 22 low of 1.2310, and then to the Jan. 21 low of 1.2060. Resistance is at Wednesday's reaction high of 1.2697. A breach would temper the negative near-term outlook, exposing the upside to 1.2799, the near-six-year high hit Jan. 30, and then to the psychological 1.3000 line. An extension of the rise would target the March 9, 2009 swing high of 1.3063, and then the Sept. 1, 2004 high of 1.3166, followed by the Aug. 12, 2004 high of 1.3344. The medium-term USD/CAD outlook is positive as the five- and 15-week moving averages are advancing. The currency pair in coming weeks may test the 1.3063 resistance; a breach would open the way up to the May 18, 2004 reaction high of 1.4001.
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 15, 2015 21:48 ET (02:48 GMT)
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