Is Swiss Franc ready to turn higher?
With year end on the horizon, now perhaps is a good time to see what the Swiss franc has been up in an effort to determine what the currency is likely to be doing in the run up to the 15th January 2015 anniversary when the SNB (Swiss National Bank) removed the floor of support for the currency, unleashing a wave of volatility on the markets not seen since the dark days of the financial crisis back in 2008.
From a technical standpoint the Swiss Franc is now heavily oversold on the hourly and daily currency strength indicator, against most of its counterparts, with the exception of the where the picture is very different, with the pair firmly range bound albeit well below the 1.20 price point, which triggered the January volatility.
With regard to the other CHF pairs, and in particular the USD/CHF the current move higher that started in mid October is now reaching an exhaustion point, as the pair...
Majors wait for the FED
Ahead of today's release of the FOMC minutes it has been the commodity dollars that have reacted most strongly to a stronger USD, whilst eurodollar and cable have been contained to a very narrow trading range. It will be interesting to see whether these two laggards will play catch up once the minutes hit the news wires.
USD/JPY too has been contained with the pair cautiously approaching the 124 price point, but finding the 123.60 price level so far difficult to breach. For the USD/JPY it will be a case of the reaction in equities which will determine whether we see any further upwards momentum in this pair, as the market waits for clues as to the FED's intentions towards interest rates.
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Cable waits on PMI
New trading month sees the usual crop of PMI releases. China has already reported today we have the numbers from Italy, Spain and France as well as the UK.
Although UK economy is predominantly services based, the manufacturing number has been managing to hold above the key 50 level. From a technical perspective so far best move for GBP has been against the AUD with cable confined to a relatively tight range. However, we should start to see some movement once the PMI number has been released, and the new week gets under way.
Interestingly cable on the daily chart is sitting neatly between the 200 & 100 mas....
No sparkle for gold
The daily chart for gold on the MT4 platform is as bleak for gold bugs as it is in the traditional futures market. Bearish sentiment has taken hold once again driving the price lower and down towards the $1140 per ounce region, which in addition takes the metal below the 100 day ma on the daily chart.
What is perhaps most interesting at present is that this is against the context of US dollar weakness intra day where we would expect to see gold rise as a consequence.
Key levels for the precious metal include $1132 and any move through here will then open the way for a deeper move to test further support in the $1108 region. Overhead we now have deep and sustained resistance from $1180 up to $1225 per ounce and for any recovery to take place we will need to see a buying climax on sustained and rising volumes....
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Bearish sentiment continues for euro
Despite finding support at 1.0996 following last week's mauling eurodollar is struggling to hold onto the weak overnight gains. 15 min chart for the pair is particuarly revealing with a series of volatility candles triggered as the combination of the resistance at 1.1056 and the 100ma have been taken by traders as an excuse to sell.
Other euro pairs also taking a tumble include the EUR/GBP and EUR/CAD, the former sitting neatly on the VPOC on the 15 min timeframe which sits at the 0.7180 region, and any move through here could see the pair test support at 0.7168. Any move lower for the EUR/GBP cross is also benefiting from a move higher in cable.
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Euro tumbles on Draghi comments
Mario Draghi's comments at the ECB conference regarding further stimulus has led to a dramatic fall in the euro across the board, and the eurodollar in particular. This weakness, however, was first signaled last week, and has been developing since the start of the trading week, and is a follow through from the two bar reversal posted on the daily chart.
Today's price action on the eurodollar daily chart has resulted in a volatility candle being triggered given the extreme move, and if there is no follow through, then it should be surprise to see the price action simply retreat to within the spread of today's candle.
In addition today's price move has seen the eurodollar move back through the volume point of control.
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