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FX Daily Hotline 
15 August 2014     By C Dichio, Analyst

Chart of the day: NZ$ lifts v US$ and Yen, but...

 

The New Zealand Dollar has tried to launch a recovery rally after becoming oversold against the US Dollar and Japanese Yen.  Posting a 0.4% gain versus both, the Kiwi possesses a similar picture for these rates. 

Against the US currency, the NZ$ has bounced from the June low near US$0.84, a sideways region spanning the chart.  Versus the Japanese unit, the May floor around Y86 has provided the lift (also a lateral region).

Still, Thursday's action is hardly dynamic.  In the absence of a more forceful up move, there remains the risk of a renewal of the decline from this year's highs near US$0.88 and Y90.  We will consider selling both rates in the event that support along US$0.84 and Y86 yields, as the patterns would look rather top heavy.

 

 

Daily Comment:

 

The Swiss Franc has continued to edge up from the February floor against the Japanese Yen.  The small recovery, from around Y112, has reached downtrend resistance at the 50-day moving average; at the prior recovery high at Y113.475.  In the event of a clearance, the next chart target is the June/July ceiling near Y115.

The Euro has also lost ground against the Swissie.  If this year's earlier low, around SF1.21 fails to hold up the single European currency, the pair could slide towards the 2012 floor, near SF1.20.

 

The Euro has recorded a 0.5% loss against the Mexican Peso.  The rate appears to be fulfilling the 'bull trap' scope (following the failed break over sideways trading near MP17.80) towards the floor near MP17.40.

The Brazilian Real has posted a 0.4% gain versus the British Pound.  The Real has lifted off the £0.2600 region once again.  However, as discussed on a number of occasions over the last few months, the 200-day MA has depressed the rate numerous times.  A sustained push over the April high at £0.2731 would be required to restart this year's earlier recovery by the Brazilian currency.

 

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
TWI NDSPNew Zealand Dollar Index156.26+0.4%
BRLGBPBrazilian Real/Pound Sterling0.2638+0.4%
NZDJPYNew Zealand Dollar/Japanese Yen87.007+0.4%
NZDNew Zealand Dollar/US Dollar0.8493+0.4%
TWI SKSPSwedish Krona Trade Weighted111.37+0.3%
Top 5 Losses.
SymbolStockClose% Change
KRWSouth Korean Won per 1 US Dollar1020.93-0.8%
BRLUS$/Brazilian Real2.2666-0.7%
INRIndian Rupee per 1 US Dollar60.77-0.7%
PHPPhilippines Peso per 1 US Dollar43.67-0.7%
EURMXNEuro/Mexican Peso17.4693-0.5%
    
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 1.4571 -0.98% 1.4375
  • We watch to sell NZ$ v US$ and/or NZ$ v Yen (see Chart of the Day section).

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexOverbought rally pauses at 81.717.81.588-0.0% 79.976/81.18882.671/81.717
EUREuro/US DollarOversold decline pauses above the November floor.1.3365+0.0% 1.3296/1.33331.37/1.3445?
GBPUSDBritish Pound/US DollarSharply renews the s-t fall, breaking the May floor (1.6693). RSI oversold again.1.6686-0.0% 1.646/1.65561.7192/1.6889
CADUS$/Canadian DollarOverbought rally towards the late-Apr barrier (1.1055) slows.1.0902-0.1% 1.0561/1.06211.1279/1.1055
JPYUS$/Japanese YenSteadies within the multi-month range forming above the 200-day MA; between 101-104, approx.102.45+0.0% 100.76104.13/103.09
ZARUS$/South African RandRetreats from resistance at the June-Aug range highs to the lower boundary; near the 200-day MA.10.5494-0.2% 10.2728/10.465810.9779/10.8626
KRWSouth Korean Won per 1 US DollarRanging recovery falters.1020.93-0.8% 1008.551044.66/1041.25
CHFUS$/Swiss FrancOverbought rally has paused beneath the January high.0.9065-0.1% 0.8898/0.9041?0.9156/0.9115
EURGBPEuro/Pounds SterlingRenews the recovery. Potential base.0.8009+0.0% 0.7813/0.78740.8153/0.8034
EURJPYEuro/Japanese YenTrades below downtrend resistance at the 50-day MA. However, intraday support is noted at 135.73. Potential failed break under the Feb low (136.23).136.92+0.0% 134.11139.28/138.03
EURCHFEuro/Swiss FrancEases to the lows of the m-t band.1.2116-0.1% 1.20625/1.210441.22975/1.22607
GBPJPYGBP/Japanese YenHolds the 'bull trap' reaction (following the failed nudge over the Jan high) towards the Apr/May floor.170.951+0.0% 167.78/169.506181.4/175.37
GBPCHFGBP/Swiss FrancFalls out of a s-t top.1.5127-0.1% 1.49691.5692/1.5488
CHFJPYSfr/Japanese YenEdges up from prior support at the Feb floor to downtrend resistance at the 50-day MA.113.011+0.1% 108.883/111.7114.959/113.475
AUDJPYAustralian Dollar/Japanese YenFinds support near the 200-day MA. Points back to resistance at the top of the Apr-Aug range (base?).95.472+0.2% 93.043/93.929102.94/96.515
AUDNZDAustralian Dollar/New Zealand DollarOverbought July rally yields to ranging around the June ceiling.1.0972-0.2% 1.0624/1.09251.123/1.1054
AUDAustralian Dollar/US DollarRangebound between 0.95-0.92, approx. Potential top.0.9325+0.1% 0.92030.9543/0.9505


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