(Ranges are calculated using recent high and lows and technical analysis - Fibonacci levels, trendlines and moving averages.)
USD/JPY--to consolidate with bullish bias after hitting five-week high 120.73 Tuesday. Spotlight Wednesday on 2350 GMT Japan 1Q preliminary GDP (forecast +1.5% on annualized basis), 1800 GMT Federal Open Market Committee meeting minutes. USD/JPY underpinned by positive dollar sentiment (ICE spot dollar index last 95.29 versus 94.12 early Tuesday) after stronger-than-expected 20.2% increase in U.S. April housing starts (versus forecast +10.2%) and 10.1% increase in U.S. April building permits (versus forecast +1.7%). USD/JPY also supported by higher U.S. Treasury yields (10-year rose 6.2 bps to 2.233% Tuesday); demand from Japan importers; ultra-loose Bank of Japan's monetary policy. But USD/JPY gains also tempered by Japan exporter sales. Daily chart positive-biased as MACD and stochastics bullish; five- and 15-day moving averages turning upward; bullish parabolic stop-and-reverse signal hit Tuesday. Resistance at 120.74-120.84 band (Tuesday's high-April 13 high); breach would target 121.20 (March 20 high), then 121.53 (March 17 high), 121.67 (March 12 high), 122.04 (7.5-year high hit March 10) and 123.66 (July 9, 2007 high). Support at 119.83 (Tuesday's low); breach would temper positive near-term view, exposing downside to 119.27 (Monday's low), then 119.16 (Friday's low), 118.88 (Thursday's low), 118.50 (April 30 low) and 118.33-118.30 (March 26 low-Feb. 20 low).
EUR/USD--to trade in lower range. Euro sentiment hurt by comments from ECB's Benoit Coeure made late Monday that the central bank would move forward its debt purchases in May and June in anticipation of less liquidity during the summer-holiday period, while Bank of France Governor Christian Noyer said Tuesday that the ECB is prepared to take further measures to hit its inflation target if its current bond-buying program proves insufficient. EUR/USD also weighed by positive dollar sentiment; weaker-than-expected Germany May ZEW indicator of economic sentiment of 41.9 (versus forecast 48.2); euro sales on soft EUR/GBP cross; fears about Greece's ability to pay creditors. Data focus: 0600 GMT Germany April PPI (forecast +0.2% on-month, -1.4% on-year). Daily chart negative-biased as stochastics falling from overbought levels; MACD staging bearish crossover against its exponential moving average; bearish parabolic stop-and-reverse signal hit Tuesday. Support at 1.1118 (Tuesday's low); breach would expose downside to 1.1066 (May 5 low), then 1.0959 (April 29 low) and 1.0860 (April 28 low). Resistance at 1.1216 (hourly chart), then at 1.1326 (Tuesday's high); breach would temper negative near-term view, exposing upside to 1.1450 (Monday's high), then 1.1468 (Friday's high), 1.1532 (Feb. 3 reaction high) and 1.1674 (Jan. 21 high).
AUD/USD--to trade in lower range. Undermined by positive dollar sentiment; soft iron ore prices (benchmark 62% grade iron fell $0.60 Tuesday to $58.40/ton); dovish Reserve Bank of Australia monetary policy stance. Data focus: 0030 GMT Australia May Westpac - Melbourne Institute consumer sentiment survey, 0100 GMT Australia May vacancy report. Daily chart negative-biased as stochastics bearish; MACD histogram bars turning negative. Support at 0.7903 (Tuesday's low); breach would target 0.7882-0.7873 band (May 12 low-May 11 low), then 0.7859 (May 8 low), 0.7795-0.7790 (May 5 low-April 27 low) and 0.7762 (April 24 low). Resistance at 0.7977 (hourly chart), then at 0.8010 (Tuesday's high); breach would temper negative near-term view, targeting 0.8051 (Monday's high), then 0.8089 (Friday's high), 0.8162 (Thursday's high), 0.8233-0.8243 band (Jan. 21 high-Jan. 19 high) and 0.8295 (Jan. 15 reaction high, near 200-day moving average).
NZD/USD--to trade in lower range. NZD sentiment dented by 2.2% drop in Fonterra's GDT Price Index and 0.5% drop in average price for whole milk powder to $2,390/mt at latest GlobalDairyTrade auction. NZD/USD also weighed by positive dollar sentiment; speculation that the RBNZ would cut interest rate cuts in coming months. But NZD/USD losses tempered by NZD-USD interest differential. Daily chart negative-biased as MACD and stochastics bearish; five- and 15-day moving averages declining. Support at 0.7332 (Tuesday's low); breach would target 0.7314 (May 13 low), then 0.7273 (March 18 reaction low), 0.7182-0.7174 band (March 11 low-Feb. 3 low), 0.7113 (March 17, 2011 reaction low), the psychological 0.7000 line and 0.6944 (Aug. 25, 2010 low). Resistance at 0.7421 (hourly chart), then at 0.7443 (Tuesday's high); breach would temper negative near-term view, targeting 0.7458 (Monday's high), then 0.7502 (Friday's high), 0.7562 (Thursday's high), 0.7577 (May 5 high) and 0.7627 (May 1 high).
GBP/USD--to consolidate with bearish bias after hitting six-day low 1.5445 Tuesday. Sterling sentiment dented by softer-than-expected U.K. April CPI of +0.2% on-month, -0.1% on-year (versus forecast +0.4% on-month, +0.0% on-year). GBP/USD also weighed by positive dollar sentiment. But GBP/USD losses tempered by sterling demand on soft EUR/GBP cross. Data focus: 0830 GMT U.K. May Bank of England MPC meeting minutes. Daily chart negative-biased as stochastics falling from overbought levels; positive MACD histogram bars contracting; bearish parabolic stop-and-reverse signal hit Tuesday. Support at 1.5445 (Tuesday's low); breach would expose downside to 1.5391 (May 11 low), then 1.5242 (May 8 low), 1.5162 (May 7 low) and 1.5149 (May 6 low). Resistance at 1.5532 (hourly chart), then at 1.5669 (Tuesday's high); breach would temper negative near-term view, exposing upside to 1.5745 (Monday's high), then 1.5807-1.5814 band (Friday's high-Thursday's high), 1.5825 (Nov. 27 reaction high) and 1.5944 (Nov. 11 reaction high).
USD/CHF--to trade in higher range. Underpinned by positive dollar sentiment; negative Swiss interest rates; threat of Swiss National Bank CHF-selling intervention. Data focus: 0900 GMT Switzerland May ZEW - Credit Suisse indicator of economic sentiment. Daily chart positive-biased as stochastics rising from oversold levels; MACD staged bullish crossover against its exponential moving average; bullish parabolic stop-and-reverse signal hit Tuesday. Resistance at 0.9385 (Tuesday's high); breach would target 0.9413 (May 5 high), then 0.9447 (April 30 high), 0.9513 (confluence of 100-day and 200-day moving averages) and 0.9574 (April 29 high). Support at 0.9293 (hourly chart), then at 0.9240 (Tuesday's low); breach would temper positive near-term view, exposing downside to 0.9140 (Monday's low), then 0.9108 (Friday's low), 0.9073-0.9065 band (Thursday's low-May 7 low, near 38.2% Fibonacci correction of advance from Jan. 15 low of 0.7360 to March 12 high of 1.0128) and 0.8762 (Jan. 26 low).
USD/CAD--to trade in higher range. Underpinned by positive dollar sentiment; softer oil prices (Nymex crude settled down $2.17 at $57.26 Tuesday). But loonie sentiment soothed by Bank of Canada Governor Stephen Poloz's speech that reaffirmed the central bank's relatively optimistic perspective on the economy. Data focus: 1230 GMT Canada March wholesale trade (forecast +0.7% on-month), 1430 GMT EIA weekly petroleum status report. Daily chart positive-biased as MACD and stochastics bullish; five-day moving average rising above 15-day moving average. Resistance at 1.2249 (Tuesday's high); breach would target 1.2268 (April 23 high), then 1.2305 (April 21 reaction high), 1.2343 (100-day moving average) and 1.2374 (55-day moving average). Support at 1.2159 (hourly chart), then at 1.2126 (Tuesday's low); breach would temper positive near-term view, exposing downside to 1.1997 (Monday's low), then 1.1976 (Friday's low), 1.1916 (Thursday's four-month low), 1.1799 (Jan. 15 low) and 1.1786 (200-day moving average).
EUR/JPY--to consolidate with bearish bias after hitting one-week low 133.90 Tuesday. Undermined by weak euro sentiment; Japan exporter sales. But EUR/JPY losses tempered by demand from Japan importers. Daily chart negative-biased as stochastics falling from overbought levels; MACD staging bearish crossover against its exponential moving average; bearish parabolic stop-and-reverse signal hit Tuesday. Support at 133.95 (Tuesday's low); breach would target 133.77 (May 12 low), then 133.49 (May 11 low), 133.12 (May 5 low) and 131.29 (April 30 low). Resistance at 134.71 (hourly chart), then at 135.82 (Tuesday's high); breach would temper negative near-term view, exposing upside to 136.96 (Monday's high), then 137.22 (200-day moving average), 137.63 (Jan. 20 reaction high), 138.80 (Jan. 15 high) and psychological 140.00 level.
EUR/GBP--to trade in lower range. Undermined by weak euro sentiment. Daily chart negative-biased as MACD in bearish mode, stochastics turning bearish. Support at 0.7142 (Tuesday's low); breach would target 0.7116-0.7107 band (May 13 low-April 23 reaction low), then 0.7090 (March 16 low), 0.7031 (March 12 low) and 0.7010-0.7000 band (March 11 seven-year low-psychological line). Resistance at 0.7232 (Tuesday's high); breach would temper negative near-term view, exposing upside to 0.7283 (Monday's high), then 0.7367 (100-day moving average), then 0.7394 (May 8 high), 0.7482 (May 7 high) and 0.7591 (Feb. 3 reaction high).
Write to Jerry Tan at jerry.tan@wsj.com
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May 19, 2015 19:44 ET (23:44 GMT)
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May 19, 2015 19:44 ET (23:44 GMT)
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