Daily Market Analysis: 19 December 2016

USD Daily Change

by Christala Parmaxi, CFTe

Overview

USD Daily Performance

As we approach the Holiday Season, market volatility weakens; short term traders prefer to keep it low for the end of the year while for the long-term traders, some positions are about to close. The US Dollar lost some of its strenght last Friday since it corrected a bit against the Euro, the Swiss Franc and the Japanese Yen while the biggest correction was recorded against the Great Britain Pound. The most interesting pairs these days are the commodity currencies which are losing strenght against the US Dollar due to the latest fundamentals. The Canadian Dollar remained unchanged on Friday while the Aussie and the Loonie managed to close the day higher.

USD Daily Change

Economic Calendar

Today at 18:30 GMT the Federal Reserve Chair Janet Yellen will deliver the 2016 Midyear Commencement speech in the University of Baltimore, titled “The State of the Job Market”. Like it usually happens with Yellen’s speeches, the event is expected to attract market attention. From Australia, we get the RBA Meeting minutes at 00:30 GMT while the bank of Japan will hold its monetary policy meeting and the interest rate decision at 03:00 GMT. The BoJ is widely expected to hold its monetary policy unchanged and the interest rates steady at -0.1%. The decision made by the Fed and Trump’s stimulus was enough to boost the US Dollar against the Japanese Yen and save the Bank of Japan from taking any steps to protect their currency’s value which was appreciating worryingly against the greenback. Since November 9th, the US Dollar appreciated by 17% against the Yen.

For the rest of the week, we are looking for US Existing Home Sales and New Zealand’s GDP for Q3 on Wednesday and UK’s GDP on Thursday. Moreover, there is the release of the US Core Durable Goods Orders and Canadian Core CPI. On Friday, the UK GDP for Q3 and US New Home Sales change for November will be released.

Technical View

EURUSD

The main currency corrected up to the resistance of 1.048, crossing upwards SMA50 but still trading below Bollinger’s upper band. The resistance holds since the 15th of the month and we believe that the price will test this resistance in the short term before breaking to the upside. MACD is neutral while ADX indicates an overextended positive direction. The sharp downtrend is still in place though and we consider the latest upwards move as a correction to the overall trend. The main supports are near the levels of 1.04, 1.04 and 1.0365 while the resistances are near 1.048, 1.05 and 1.052.

 

EURUSD

EURUSD

 

USDJPY

The Gopher is trading on a correction between Fibo 23.6% and 38.2% and also between SMA100 and SMA50. We see the pair testing the psychological support of 117 which coincides with SMA100 and Fibo 38.2% and upon penetration of it reaching the next valid support of 116.2 which coincides with Fibo 50%. On the upside, the pair is heading for 117.6 and 118.6. Despite the fact that the pair is on a sharp uptrend, we would keep a neutral stance until clear penetration of any of those levels given the BoJ policy meeting tomorrow.

USDJPY

USDJPY

USDCHF

The USDCHF tests the support of 1.2435 for the third time, coinciding with Fibo 38.2% level. All the indicators are on neutral levels since the USD is correcting to the downside. We see the pair trending between Fibo 38.2% and 23.6, 1.2435 and 1.28 respectively, and upon penetration of any of those levels we would target the support of 1.021 or the resistance of 1.0337.

USDCHF

USDCHF

AUDUSD

The commodity currencies are running on a strong and interesting trend since they did not correct against the USD on Friday and despite they lost further momentum reaching new session low levels. We see the Aussie testing the support of 0.726 for more times today while upon penetration of it the next bearish target would be the support of 0.722. On the flipside, the valid resistances are near 0.732 and 0.737.

AUDUSD

AUDUSD

 

 

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