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Technical Analysis (2014-12-18)

EUR/USD
Previous Day Range High: 1.2516 Low: 1.2321 Close: 1.2336
Technical Chart Resistance
R-2:1.2586
R-1:1.2461






Support
S-1:1.2266
S-2:1.2196



Forecast
High:1.2461
Low:1.2266









EUR/USD retreated ahead of 1.2599 resistance and intraday bias is turned neutral first. With 1.2414 minor support intact, further rise is in favor. Considering bullish convergence condition in daily MACD, break of 1.2599 will be the first sign of medium term bottoming and bring stronger rebound to 1.2886 key resistance next. On the downside, below 1.2414 minor support will turn bias to the downside for retesting 1.2246. But break there is needed to confirm fall resumption. Otherwise, we'd expect more corrective trading ahead.
USD/JPY
Previous Day Range High: 118.90 Low: 116.30 Close: 118.67
Technical Chart Resistance
R-2:120.56
R-1:119.62








Support
S-1:117.02
S-2:115.36




Forecast
High:119.62
Low:117.02









Recovery from 115.55 temporary low is expected to extend higher as consolidation continues. But break of 121.84 is needed to confirm rally resumption. Otherwise, we'd expect more corrective trading in near term first. At this point, we'd still expect strong support from 38.2% retracement of 105.19 to 121.84 at 115.47 to bring rebound. However, sustained break of 115.47 will pave the way to 61.8% retracement at 111.55.
GBP/USD
Previous Day Range High: 1.5754 Low: 1.5542 Close: 1.5569
Technical Chart Resistance
R-2:1.5834
R-1:1.5701






Support
S-1:1.5489
S-2:1.5410




Forecast
High:1.5701
Low:1.5489





Intraday bias in GBP/USD remains neutral for the moment. A short term bottom should be in place at 1.5540 on bullish convergence condition in 4 hours MACD. Break of 1.5825 will confirm this case. Also, considering bullish convergence condition in daily MACD, break of 1.5825 will be an early sign of medium term bottoming and would bring stronger rebound back to 1.6051 support turned resistance. On the downside, break of 1.5540 is needed to confirm fall resumption. Otherwise, we'd expect more corrective trading ahead.
USD/CHF
Previous Day Range High: 0.9746 Low: 0.9595 Close: 0.9732
Technical Chart Resistance
R-2:0.9842
R-1:0.9787







Support
S-1:0.9636
S-2:0.9540




Forecast
High:0.9787
Low:0.9636







USD/CHF recovered ahead of 0.9529 near term support and intraday bias is turned neutral first. Another fall could still be seen with 0.9673 minor resistance intact. As noted before, considering bearish divergence condition in daily MACD, break of 0.9529 would raise the chance of medium term topping and bring further fall back to 0.9359 key support level. On the upside, above 0.9673 minor resistance will turn bias to the upside for retesting 0.9817. But break there is needed confirm rally resumption. Otherwise, we'd expect more corrective trading ahead.
AUD/USD
Previous Day Range High: 0.8236 Low: 0.8108 Close: 0.8123
Technical Chart Resistance
R-2:0.8283
R-1:0.8203










Support
S-1:0.8076
S-2:0.8028




Forecast
High:0.8203
Low:0.8076





The Australian dollar continued through the majority of Wednesday’s Asian trade drifting sideways barely moving from the daily open of 0.8214. As the day progressed the higher yielding currency was hit with heavy selling pressure falling as low as 0.8138 with riskier assets being sold off across the board. Overnight the Aussie marginally recovered after poor US CPI inflation data however once the US Federal Reserve indicated the time frame to an interest rate increase could be as early as mid-next year the AUD dropped to 0.8110. The AUD opens this morning nearly a cent weaker in a territory not seen in over 4 years. Today’s RBA bulletin should have a fairly light impact however overnight US numbers will provide the majority of direction for investors.

We expect a range today of 0.8100 – 0.8180.
USD/CAD
Previous Day Range High: 1.1672 Low: 1.1561 Close: 1.1650
Technical Chart Resistance
R-2:1.1738
R-1:1.1694






Support
S-1:1.1583
S-2:1.1516




Forecast
High:1.1694
Low:1.1583





Today’s FOMC announcement and press conference should prove interesting. It appears the market has priced in an 80% chance that “considerable time” will be removed along with growth forecasts being revised higher. If this is the case we will see the US drive higher and challenge 1.1700. My hunch is that the FOMC will choose to punt the turn from neutral to hawkish out to the New Year as they do not feel the pressure of inflation and will justify holding neutral with the risk of contagion from other struggling economies affecting the US economic recovery. Canadian Wholesale Sales disappointed as they dropped further than anticipated to 0.1% from 1.8%. Headline US CPI dropped from 0.0% to -0.3% while the Core figure dropped from 0.2% to 0.1%. The Loonie continues to be under pressure as soft domestic data and downward oil prices give little reason to take a long position.

We expect a range today of 1.1585 to 1.1710.