(Ranges are calculated using recent high and lows and technical analysis - Fibonacci levels, trendlines and moving averages.)
USD/JPY--to consolidate with bearish bias after hitting near-two-month low 120.38 Wednesday. Undermined by flows to haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge surged 22.19% to 19.66, S&P 500 closed 1.67% lower at 2,046.68 overnight) as a deepening rout in China's stock markets heightened anxiety over the potential knock-on effect on global growth outlook. USD/JPY also weighed by lower U.S. Treasury yields (10-year slipped 3.3 bps to 2.197% Wednesday); weaker dollar sentiment (ICE spot dollar index last 96.22 versus 96.68 early Wednesday) after minutes from the Federal Reserve's June policy meeting signaled continued caution in shifting into higher interest rates; less-than-expected $16.09 billion increase in U.S. May consumer credit (versus forecast +$19.0 billion). But USD/JPY losses tempered by ultra-loose Bank of Japan's monetary policy. Data focus: 2350 GMT Japan May orders received for machinery, Japan June money stock; 0600 GMT Japan June preliminary machine tool orders; 1230 GMT U.S. jobless Claims in week ended July 4 (forecast 275,000). Daily chart negative-biased as MACD and stochastics bearish, five- and 15-day moving averages declining. Support at 120.38 (Wednesday's low); breach would target psychological 120.00 line, then 119.22 (May 18 low) and 118.86 (May 14 reaction low). Resistance at 121.69 (hourly chart), then at 122.57 (Wednesday's high); breach would temper negative near-term view, targeting 122.88-122.92 (Tuesday's high-Monday's high), then 123.19 (Friday's high), 123.72 (July 2 high) and 123.99 (June 26 high).
EUR/USD--to trade in higher range. Euro sentiment soothed by hopes that impasse between Greece and its international creditors could be lifted at Sunday's summit of all 28 European Union members in Brussels as Greece formally requested a three-year bailout from the eurozone rescue fund Wednesday and pledged to start implementing some of the reforms demanded by its creditors, while the IMF and U.S. urged European leaders to grant debt relief to Greece and help the country to avoid an exit from the eurozone. EUR/USD also supported by weaker dollar sentiment; euro demand on buoyant EUR/GBP cross. But EUR/USD gains tempered by European Central Bank's large-scale quantitative easing program. Data focus: 0600 GMT Germany May trade balance (forecast surplus EUR20.3 billion). Daily chart mixed as MACD bearish, but stochastics turned bullish near oversold levels. Resistance at 1.1092-1.1095 (Wednesday's high-Monday's high); breach would target 1.1117-1.1122 (Friday's high-July 2 high), then 1.1171 (July 1 high), 1.1243 (June 30 high), 1.1278 (June 29 high) and 1.1347 (June 23 high). Support at 1.1005 (hourly chart), then at 1.0972 (Wednesday's low); breach would expose downside to 1.0915 (Tuesday's low), then 1.0887 (June 1 low), 1.0819 (May 27 reaction low), 1.0784 (April 24 low) and 1.0658 April 21 reaction low).
AUD/USD--to consolidate with bearish bias after hitting six-year low 0.7368 Wednesday as markets await 0130 GMT Australia June unemployment rate (forecast 6.1%) & jobs change (forecast -5,000) data. AUD/USD weighed by continued selloff in China stocks; weak iron ore prices (benchmark 62% grade iron fell $5.60 Wednesday to $44.10/ton); Aussie sales on soft AUD/NZD cross. But AUD/USD losses tempered by weaker dollar sentiment. Aussie also vulnerable to 0130 GMT China June CPI (forecast +0.1% on-month, +1.3% on-year), PPI (forecast -4.6% on-year) data. Data focus: 0130 GMT Australia June unemployment rate (forecast 6.1%) & jobs change (forecast -5,000). Daily chart negative-biased as MACD bearish, stochastics stays suppressed at oversold levels; five-day moving average below 15-day moving average and declining. Support at 0.7368 (Wednesday's low); breach would expose downside to 0.7240 (May 1, 2009 low), then the psychological 0.7000 line. Resistance at 0.7459 (Wednesday's high); breach would temper negative near-term view, targeting 0.7501 (Tuesday's high), then 0.7533 (Monday's high), 0.7648-0.7656 band (July 2 high-July 2 high), 0.7738 (July 1 high), 0.7752 (June 25 high) and 0.7771 (June 24 high).
NZD/USD--to trade in higher range. Supported by weaker dollar sentiment; Kiwi demand on soft AUD/NZD cross. But NZD/USD gains tempered by increased risk aversion; divergent Reserve Bank of New Zealand-Federal Reserve monetary policy stances; soft dairy prices. Daily chart tilting positive as MACD and stochastics turning bullish. Resistance at 0.6750 (Wednesday's high); breach would expose upside to 0.6810 (July 1 high), then 0.6854 (June 30 high), 0.6880 (June 29 high) and 0.6924 (June 25 reaction high). Support at 0.6683 (hourly chart), then at 0.6621-0.6619 (Wednesday's low-Tuesday's five-year low); breach would expose downside to 0.6559 (May 25, 2010 reaction low), then 0.6192 (July 13, 2009 low).
GBP/USD--to consolidate with bearish bias after hitting one-month low 1.5328 Wednesday as markets await 1100 GMT Bank of England monetary policy decision: BOE is expected to keep its benchmark interest rate at 0.5%. GBP/USD weighed by sterling sales on buoyant EUR/GBP cross; increased risk aversion. But GBP/USD losses tempered by weaker dollar sentiment. Daily chart negative-biased as MACD and stochastics bearish, although latter at oversold levels; five-day moving average below 15-day moving average and declining. Support at 1.5328 (Wednesday's low); breach would expose downside to 1.5270 (100-day moving average), then 1.5256 (June 9 low), 1.5219 (June 8 low) and 1.5188 (June 5 reaction low). Resistance at 1.5412 (hourly chart), then at 1.5465 (Wednesday's high); breach would temper negative near-term view, exposing upside to 1.5608 (Tuesday's high), then 1.5628 (Monday's high), 1.5643 (Friday's high), 1.5732 (July 1 high) and 1.5774 (June 30 high).
USD/CHF--to range-trade. Undermined by weaker dollar sentiment. But USD/CHF downside limited by franc sales on rebounding EUR/CHF cross; threat of Swiss National Bank CHF-selling intervention; negative Swiss interest rates. Daily chart still positive-biased as MACD and stochastics bullish, although latter at overbought levels. Resistance at 0.9512-0.9515 (Wednesday's high-Tuesday's high); breach would target 0.9527 (200-day moving average), then 0.9545 (May 27 reaction high), 0.9598 (April 28 high) and 0.9718 (April 23 reaction high). Support at 0.9403 (Wednesday's low, matching Monday's low); breach would target 0.9392 (Friday's low), then 0.9337 (July 1 low), 0.9241 (June 29 low) and 0.9207 (June 23 low).
USD/CAD--to consolidate. Loonie sentiment dented by larger-than-expected 14.5% on-month drop in Canada May building permits (versus forecast -5.0%). USD/CAD also supported by softer oil prices (Nymex crude settled down 68 cents at $51.65/bbl Wednesday). But USD/CAD upside limited by weaker dollar sentiment. Data focus: 1215 GMT Canada June housing starts (forecast +190,000); 1230 GMT Canada May new-housing price index (forecast +0.1%). Daily chart still positive-biased as five-day moving average above 15-day moving average and advancing; MACD and stochastics bullish, although latter at overbought levels, inside-day-range pattern completed Wednesday. Support at 1.2684 (Wednesday's low), then at 1.2640 (Tuesday's low); breach would expose downside to 1.2560 (Monday's low), then 1.2534 (Friday's low), 1.2471 (July 1 low), 1.2358 (June 30 low) and 1.2302 (June 29 low). Resistance at 1.2768 (Wednesday's high), then at 1.2779-1.2783 (Tuesday's high-March 31 reaction high); breach would expose upside to 1.2833 (March 18 swing high), then the psychological 1.3000 line and 1.3063 (March 9, 2009 swing high).
EUR/JPY--to consolidate with bearish bias after hitting six-week low 133.26 Wednesday. Undermined by flows to haven yen amid increased risk aversion. Daily chart negative-biased as MACD and stochastics bearish; five- and 15-day moving averages declining. Support at 133.26 (Wednesday's low); breach would target 133.05 (May 26 reaction low), then 131.26 (April 30 low) and 130.22 (April 29 low). Resistance at 134.56 (hourly chart), then at 134.96 (Wednesday's high); breach would temper negative near-term view, exposing upside to 135.67 (Tuesday's high), then 135.99 (Monday's high), 136.85-136.90 (Friday's high-July 2 high), 137.39 (July 1 high) and 137.74 (June 30 high).
EUR/GBP--to trade in higher range. Daily chart positive-biased as MACD and stochastics bullish; five-day moving average rising above 15-day moving average. Resistance at 0.7223 (Wednesday's high); breach would target 0.7250 (June 16 high), then 0.7266 (June 12 high) and 0.7316 (June 11 high). Support at 0.7153 (hourly chart), then at 0.7102 (Wednesday's low); breach would temper positive near-term view, exposing downside to 0.7056-0.7050 band (Tuesday's low-Monday's low), then 0.6981 (seven-and-a-half year low hit June 29), 0.6891 (Oct. 9, 2007 low) and 0.6677 (July 26, 2007 low).
Write to Jerry Tan at jerry.tan@wsj.com
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July 08, 2015 19:41 ET (23:41 GMT)
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July 08, 2015 19:41 ET (23:41 GMT)
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