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USDCHF moves to the highest level since March 2017

  
Analysis, Forex

Above 2018 high at 1.01276

The USDCHF moved above the 2018 high at 1.01276 and the March 2019 high at 1.01236.  The high reached 1.0137. It is currently trading at 1.0130.
USDCHF Above 2018 high at 1.01276
Looking at the 4 hour chart, the pair is moved aboved a channel trend line at 1.0103 currently.   That level, and the 1.0092-97 will be levels to get below to weaken the technical bias.
Until, the broken levels give way (one by one), the buyers remain more in control.   The pair has been racing higher since the weekend comments from SNB Jordan who said the central bank could still lower rate and/or intervene. The low this week was down at 1.0008.
USDCHF moves to the highest since March 2017

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China growth pick up and the EUR vs AUD contest

  
Analysis, Forex

Scanning a few overnight notes, this from Société Générale on the euro and the Australian dollar.

But first, on China:
  • China’s stimulus package has delivered better than expected
  • Industrial production growth has picked up
  • retail sales growth has picked up
  • The equity market is the winner … The FX market looks on jealously
Strategically, we like EUR/AUD. Both EUR and AUD benefit from a Chinese pick-up, but only the euro is vulnerable to a US/European trade dispute.

USDJPY – at the lows today – held above the old ceiling. Buyers remain in control.

  
Analysis, Forex

Buyers and sellers are battling

The USDJPY is also in a down and up market as the pair continues to consolidate the sharp move up at the end of the week last week (from 110.838 to 112.09). The pair since the high has traded down of 111.835. That is just above the old ceiling at 111.79-817 area.   Support held and the price moved back higher.

Buyers and sellers are battling

The pair has stalled against a topside trend line at 112.03 and below the 1.1209 highs (double top).

So technical levels are holding. The problem is 111.83 to 112.03 is only 20 pips. That  ain’t a lot of price action. The price will not stay that confined for long.  There will be a break at some point.
Given the run higher higher from last week and the holding of the old ceiling on the correction, I have to give the nod to the buyers as long as the ceiling can hold.   Traders would have more confidence the longer that support level holds.
Looking at the daily chart, the pair based last week near the 100 day MA and moved above the 200 day MA as well (green line). The pair has the 112.076 to 112.279 area as an area to get above. That is upside target now for the pair (see chart below).
USDJPY on the daily chart has overhead resistance to get above.

ICYMI – Currency intervention in the US cross hairs

  
Analysis, Forex

This from Friday but an ICYMI on measures discussed in the US – China trade talks.

  • US and China have agreed to greater disclosure of economic actions in an effort, say US
  • officials, to deter China from currency manipulation
  • deal could include penalties for China if it manipulates the yuan to increase exports
Report is from the Wall Street Journal, citing unnamed sources.
US Treasury Secretary Mnuchin in an interview:
  • The fundamental issue on currency across the board is we want to make sure people meet their obligations, that they don’t devalue their currency for competitive purposes
Adds the Journal:
  • The trade deal is still under negotiation and American officials caution that nothing will be final until both sides agree on all points

Crucial Update :US Dollar Index ,Euro ,Yen ,INR ,GBP ,AUD ,SPX 500 ,Nasdaq Composite ,DJIA ,Shanghai Composite -Anirudh Sethi

  
Analysis, Crude, Forex, US Market
The US dollar fell against most of the major currencies over the past week. The yen and the Swiss franc were the exceptions.  The technical correction, we anticipated last week, may have some more room to run.  However, we do view it as a counter-trend move and expect the data to show the US economy picked up some momentum going into the end of Q1.  If recession fears are exaggerated so too are expectations that the Federal Reserve will cut rates.  An adjustment of such expectations can be the fuel of the next leg up for the dollar.
Dollar Index:  The Dollar Index tried one more time to push through the 97.50 area at the start of last week and gave up and retreated to about 96.75, where the 50-day moving average is found, ahead of the weekend.  It traded below its 20-day moving average (~96.90) for the first time this month but managed to close just above it.  The move that we think is being corrected began ironically with the low on March 20 when the FOMC last met and the Dollar Index posted an outside down day.  But there was no follow-through, and before the past week, it had risen in the nine of the 12 sessions after the FOMC meeting.  It had retraced 38.2% of the move by the middle of last week (~96.85) but before the weekend, made a push lower toward the 50% retracement (~96.65).  The 61.8% retracement is found about 20 ticks lower.  The five-day moving average (~97.02) is poised to fall below the 20-day moving average (~96.90), which may be a useful proxy for some models.  The technical indicators we look at also suggest scope for more declines.  Waiting for some sign of a reversal may be preferable to trying to catch the falling knife. That said, on a risk-reward basis dip below 96.50 would look attractive.
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CFTC Commitment of traders: EUR short pushes over 100K short

  
Analysis, Forex

Weekly forex futures non-commercial positioning data from the CFTC

Weekly forex futures non-commercial positioning data from the CFTC
  • Prior report
  • EUR short 102K vs 99K short last week.  Shorts increased by 3K
  • GBP short 7K vs 10K short last week. Shorts trimmed by 3K
  • JPY short 72K vs 63K short last week. Shorts increased by 9K
  • CHF short 28k vs 26k short last week. Shorts increased by 2K
  • AUD short 54k vs 56k short last week. Shorts trimmed by 2K
  • NZD short 1K vs 0K short last week. Shorts increased by 1K
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