Data Light Calendar Results In Directionless Trade

GBPUSD – technical overview

The broader downtrend remains firmly intact, with the market taking out recent trend lows at 1.4635, trading down to 1.4565 thus far. This confirms a fresh lower top at 1.5165 and opens the door for the next major downside extension towards a measured move objective at 1.4100 in the weeks ahead. Still, with weekly studies looking stretched, the market has deferred to a period of corrective activity. But ultimately, only back above 1.5165 would take the immediate pressure off the downside.

• R2 1.5054 – 17Apr high – Strong
• R1 1.4984 – 20Apr high – Medium
• S1 1.4856 – 21Apr low  – Strong
• S2 1.4700 – 15Apr low  – Medium

GBPUSD – fundamental overview

It has been a story of consolidation thus far this week, with the Pound consolidating recent gains off key lows against the Buck. Ongoing UK election risk and a real threat of deflation have kept the UK currency from running too far, while an expectation for a Fed rate hike in the coming months is also keeping the Buck well supported on dips. For today, the big event is unquestionably the latest BOE Minutes, which could inspire intraday volatility. The Minutes are expected to show a unanimous 9-0 vote to keep rates and the APF unchanged, though market participants will be more focused on the tone to see if the central bank adopts a slightly more dovish stance.

USDJPY – technical overview

Although the market remains locked within a very well defined uptrend, lack of upside follow through has been discouraging of late, with the pair more content on deferring to a period of consolidation. Still, overall, the broader trend remains highly constructive and any setbacks should continue to be very well supported in favour of the next major upside extension through 122.03 and towards key psychological barriers at 125.00 further up. At this point, only a close below 118.00 would delay, while a break below 115.55 would be required to negate the constructive outlook.

• R2 120.85 – 13Apr high – Strong
• R1 120.17 – 14Apr high – Medium
• S1 119.17 – 21Apr low – Medium
• S2 118.23 – 17Feb low – Strong

USDJPY – fundamental overview

Japan’s outsized trade surplus numbers won’t do anything to increase the likelihood for additional BOJ stimulus and this has kept a bit of a lid on USDJPY in recent trade. Still, it is more of a game of sideways trade for this market at the moment, with participants just as happy to buy the major pair on any dips towards 118.00. The Fed, BOJ monetary policy divergence theme has cooled off a bit, but is still expected to drive this market higher over the medium-term.

EURCHF – technical overview

The recent daily close below 1.0400 has put the pressure back on the downside exposing an immediate retest of support in the 1.0250 area. At this point daily studies are tracking in oversold and a bounce should be around the corner. Though the market will initially need to hold above 1.0250 on a daily close basis to encourage the recovery prospect. However, a daily close below 1.0250 will keep the pressure on the downside and open the door for deeper setbacks towards parity.

• R2 1.0495 – 6Apr high – Strong
• R1 1.0330 – 17Apr high – Medium
• S1 1.0235 – 20Apr low – Strong
• S2 1.0200 – Figure – Medium

EURCHF – fundamental overview

EURCHF has been under consistent pressure since the SNB decided to leave policy unchanged at its last meeting, with setbacks extending well below what had been a much talked about SNB 1.0500 corridor base. The SNB has reiterated it remains ready to act to curb excessive overvaluation in the Franc, and with the market recently dipping below 1.0300, to its lowest levels since January, participants will be on the lookout for any signs of movement from the central bank.

AUDUSD – technical overview

Despite the latest minor bounce, the bearish structure remains firmly intact with the market positioning for the next major downside extension. A daily close below 0.7533 will now be required to confirm the onset of a bearish continuation, with setbacks then projected towards major psychological barriers at 0.7000. For now, corrective rallies should be well capped below 0.7900, while ultimately, only a daily close back above 0.7938 would delay and give reason for pause.

• R2 0.7938 – 24Mar high – Strong
• R1 0.7842 – 17Apr high – Medium
• S1 0.7683 – 21Apr low – Medium
• S2 0.7533 – 2Apr/2015 low – Strong

AUDUSD – fundamental overview

Though Tuesday’s RBA Stevens comments and RBA Minutes were on the dovish side, things may be looking up for the Australian Dollar a bit. Economic data out of the country has been showing some encouraging signs, highlighted by last week’s solid employment data, while today’s hotter than expected CPI print could now force the central bank to reconsider its policy stance. Aussie stands out as a relative outperformer on the day, and has been finding some welcome bids off recent record lows against its Kiwi cousin. Looking ahead, the focus for this pair will be on the early Thursday release of China PMIs.

USDCAD – technical overview

An extended period of multi-week consolidation has been broken to the downside, with the market taking out key support at 1.2350. While the broader uptrend is still firmly intact, the break below 1.2350 now opens the door to the possibility of a deeper correction into the 1.1900 area before the market looks to carve the next meaningful higher low and resume its uptrend. At this point, a daily close back above 1.2350 would be required to once again solidify bullish structure.

• R2 1.2352 – Previous Support – Strong
• R1 1.2328 – 16Apr high – Medium
• S1 1.2180 – 20Apr low – Medium
• S2 1.2088 – 17Apr low – Strong

USDCAD – fundamental overview

Bank of Canada Governor Poloz backed up last week’s less dovish rate decision, reaffirming the likelihood the central bank was done cutting rates after saying January’s policy ease looked to be enough to deal with Q1’s front-loaded oil shock. Poloz also sounded rather upbeat on the outlook for growth in the economy. Still, with the Loonie already rallying quite a bit in recent trade, with the broader fundamentals supporting an ongoing monetary policy divergence with the Fed, and with OIL coming back under pressure over the past couple of sessions, fresh USDCAD demand from medium-term players has resurfaced. OIL has been selling on news Saudi Arabia has ended its bombing operation in Yemen.

NZDUSD – technical overview

Though we have seen some strength over the past several sessions, the market remains locked within a broader, well defined downtrend. As such, look for a bearish reversal in the sessions ahead back towards the key low of 0.7176, below which opens the next major downside extension towards psychological barriers at 0.6500. Ultimately, only back above 0.7890 would compromise and give reason for pause.

• R2 0.7800 – Figure – Medium
• R1 0.7741 – 17Apr high – Strong
• S1 0.7579 – 16Apr low – Strong
• S2 0.7487 – 15Apr low – Medium

NZDUSD – fundamental overview

Though we have seen the New Zealand Dollar pull back from recent highs on a resurgence in broad US Dollar demand and softer New Zealand inflation readings, the higher yielding currency is still finding support on dips as risk assets remain elevated at record highs. China’s weekend RRR cut has been the latest source of incentive into risk assets. Still, any additional upside is seen limited with sizable medium-term players stepping in to sell the market on the monetary divergence theme and risk the higher yielding currency will be exposed in the event of a capitulation in global equity markets. Looking ahead, RBNZ Assistant Governor McDermott is slated to speak on Thursday.

US SPX 500 – technical overview

The most recent rally is stalling ahead of critical resistance in the form of the record high from February at 2120. This suggests we could be in the process of carving out a more meaningful top. Still, while the market holds above 2040, the uptrend remains firmly intact, with risk for a push to fresh highs beyond 2120 and towards a measured move objective at 2200 further up. At this point, a break below 2040 will be required to confirm a topping structure and accelerate declines.

• R2 2150.00 – Psychological – Medium
• R1 2120.00 – 25Feb/Record – Strong
• S1 2040.00 – 18Mar low – Strong
• S2 2000.00 – Psychological – Medium

US SPX 500 – fundamental overview

There is a growing sense that with equities so elevated and the Fed still on course to move towards a sooner than later rate hike in 2015, any additional upside should be limited with a potential capitulation in the works. At this point, the market has yet to relent, but if the Fed continues to move towards a liftoff in the months ahead, this could be the final straw that breaks this artificially supported market’s back.

GOLD (SPOT) – technical overview

The market has been in recovery mode over the past several days after stalling shy of the 2014 base. The bounce suggests the market could now be poised for additional upside in the sessions ahead in an attempt to carve out a more meaningful longer-term base. Still, a daily close above 1223 will be required to strengthen the constructive prospect. Meanwhile, back below 1178 delays the recovery and puts pressure back on the downside.

• R2 1246.00 – 10Feb high – Medium
• R1 1224.00 – 6Apr high – Strong
• S1 1178.00 – 31Mar low – Medium
• S2 1143.00 – 17Mar low – Strong

GOLD (SPOT) – fundamental overview

The gold market continues to show signs of broader recovery since stalling out several days back ahead of the 2014 base. Many investors already feel that with currencies across the board in a downward spiral, and global equities at risk for major capitulation, there is no better place to be invested than in the yellow metal. Gold has since pulled back a bit since rallying above $1220, but there is healthy demand reported into dips, with no real sell-stops seen until below $1175.

Feature – technical overview

USDTRY is in the process off consolidating just off recently established fresh record highs. Technical studies are looking a little stretched overall, and there is risk for additional consolidation and correction in the sessions ahead to allow for these studies to unwind. But ultimately, the broader uptrend remains firmly intact and a medium-term higher low is sought out ahead in favour of the next major upside extension beyond 2.7310.

• R2 2.7310 – 15Apr/Record high – Strong
• R1 2.7150 – 21Apr high – Medium
• S1 2.6640 – 20Apr high – Strong
• S2 2.6120 – 10Apr low – Medium

Feature – fundamental overview

The CBRT is widely expected to hold all three policy rates steady today and it will be interesting to see how the record low Lira responds. Turkey’s latest CBRT survey of expectations produced some raised inflation forecasts which could make things even more challenging for a central banking contending with rising inflation, a declining currency and struggling economy. Forecasts show no change on rates in the coming months, and market participants will be anxious to hear from Governor Basci, with the central banker expected to introduce alternative macroprudential measures as a means to keep the central bank from needing to push higher on rates.