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FX Daily Hotline 
19 August 2014     By C Dichio, Analyst

Chart of the day: Recovery hopes for Euro v Swissie

 

The Swiss Franc gave up some of its recent gains on Monday.

The decline by the Euro had become oversold (note the low level of the RSI).  Also, the August fall had gathered speed.  Acceleration can be a trend-ending feature.

Yesterday's counter bounce, from SF1.2086, took the single European currency back over prior support around SF1.2100.  This gives rise to 'bear trap' recovery hopes over the near term, possibly towards the SF1.2150 region.

The Australian Dollar versus Swiss Franc was the subject of yesterday's Chart of the Day section.  The Aussie went on to gain 0.5% on Monday, with uptrend support at the 50-day moving average remaining intact.

 

Daily Comment:

 

The Australian Dollar recently encountered support at the 200-day moving average versus the Japanese Yen.  The Aussie's rally has approached the upper side of the multi-month trading band/base at Y96.515.  We will consider buying a breakout for the upside potential towards the psychological Y100 area (see also hotlines for 5 and 14 August). 

The British Pound has recorded a 0.6% gain versus the Norwegian Krone.  The decline from the short-term top had become oversold.  Still, there is not much strength attached to the bounce, which would have confirmed new support at NK10.2349.  Therefore, in the absence of an upward dynamic, there remains the risk of renewed slippage for Sterling after it has corrected the oversold condition.

The 'bull trap' reaction by the Euro versus the Mexican Peso, which followed the failed break over the late-June/early-July highs, is approaching sideways support at the October-July floor at MP17.3376.  Should that area fail to provide a lift, the next important chart support is around MP17.  We would consider selling the European unit in the event of a breach (of MP17.3376) for that potential.

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
GBPNOKGBP/Norwegian Krone10.3004+0.6%
GBPCHFGBP/Swiss Franc1.5164+0.6%
AUDCHFAustralian Dollar/Swiss Franc0.8453+0.5%
GBPDKKGBP/Danish Krone9.3324+0.5%
GBPEURGBP/Euro1.2518+0.5%
Top 5 Losses.
SymbolStockClose% Change
EURMXNEuro/Mexican Peso17.4352-0.5%
EURPLNEuro/Polish Zloty4.1847-0.5%
EURGBPEuro/Pounds Sterling0.7989-0.5%
EURCADEuro/Canadian Dollar1.455-0.4%
RUBRussian Ruble per 1 US Dollar36.0546-0.4%
    
The FX Model Portfolio
Date Stock Code Type Open Price Current Price % P&L Stop Comment
8 Aug 2014 Euro/Canadian Dollar EURCAD Long 1.4715 1.455 -1.12% 1.4375
  • We watch to buy A$ v Yen and sell Euro v Mexican Peso.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexOverbought rally pauses at 81.717.81.576+0.2% 79.976/81.18882.671/81.717
EUREuro/US DollarOversold decline pauses above the November floor.1.3364-0.3% 1.3296/1.33331.37/1.3445?
GBPUSDBritish Pound/US DollarOversold s-t fall slows near the 200-day MA.1.6728-0.1% 1.646/1.65561.7192/1.6889
CADUS$/Canadian DollarOverbought rally towards the late-Apr barrier (1.1055) slows.1.0887-0.1% 1.0561/1.06211.1279/1.1055
JPYUS$/Japanese YenExtends the multi-month range forming above the 200-day MA; between 101-104, approx.102.57+0.2% 100.76104.13/103.09
ZARUS$/South African RandSupport at the June-Aug range lows; near the 200-day MA, holds.10.6036+0.1% 10.2728/10.465810.9779/10.8626
KRWSouth Korean Won per 1 US DollarRanging recovery falters. Points back to the early-July floor.1017.8+0.1% 1008.551044.66/1041.25
CHFUS$/Swiss FrancOverbought rally has paused beneath the January high.0.9065+0.4% 0.8898/0.9041?0.9156/0.9115
EURGBPEuro/Pounds SterlingRecovery pauses by the late-June high. Potential base extension.0.7989-0.5% 0.7813/0.78740.8153/0.8034
EURJPYEuro/Japanese YenFailed break under the Feb low (136.23). Edges up to downtrend resistance at the 50-day MA.137.07-0.1% 134.11/135.73139.28/138.03
EURCHFEuro/Swiss FrancCounter move from oversold. Did not maintain the break under the Mar floor at 1.21044 (bear trap).1.2115+0.2% 1.20302/1.20625/1.20861.22975/1.22607
GBPJPYGBP/Japanese YenThe 'bull trap' reaction (following the failed nudge over the Jan high) slows near the Apr/May floor.171.578+0.4% 167.78/169.506181.4/175.37
GBPCHFGBP/Swiss FrancS-t fall slows on the way to the early-June low.1.5164+0.6% 1.4766/1.49691.5692/1.5488
CHFJPYSfr/Japanese YenEdges up from prior support at the Feb floor. Passes downtrend resistance at the 50-day MA and the early-Aug high (113.475).113.146-0.2% 108.883/111.7114.959/114.69
AUDJPYAustralian Dollar/Japanese YenFinds support near the 200-day MA. Points back to resistance at the top of the Apr-Aug range (base?).95.645+0.2% 93.043/93.929102.94/96.515
AUDNZDAustralian Dollar/New Zealand DollarOverbought July rally yields to ranging around the June ceiling.1.0997+0.1% 1.0624/1.09251.123/1.1054
AUDAustralian Dollar/US DollarRangebound between 0.95-0.92, approx. Edges up from the lower boundary to question top theory.0.9339+0.2% 0.92030.9543/0.9505


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