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FX Daily Hotline 
19 June 2015     By C Dichio, Analyst

Chart of the day: Bullish key reversal by US$ v NOK...

 

There is a generally steadier tone noted in the US Dollar.  Against the Norwegian Krone, for instance, a 1.8% gain was noted.  Also, a 'Trough' Key Day Reversal was noted from NK7.6050.  This feature could signal an end to the correction from the month's early overbought high near NK8.0000.

However, the chart pattern on the right is not very convincing from a longer-term bullish point of view.  What is more, it may yet turn out to be a large top formation.

 

 

Daily Comment:

 

The pullback from the overbought early-June, and all-time, high by the US Dollar versus Mexican Peso encountered intraday support at MP15.1687.  This is close to the 100-day Moving Average, which has offered support on a couple of occasions in recent months.  We remain long the pair.

The Australian Dollar did try to extend its recovery against its US cousin yesterday, edging over initial resistance at US$0.7819; near the 50-day MA.  A clean breakout would have had the May high at US$0.8164; close to the 200-day MA, as a target.  Instead, currently trading at US$0.7763 and thus failing to maintain the breakout, the Aussie risks further 'bull trap' slippage towards support at the floor area along US$0.7600.

The fact that the general rally in the British Pound was becoming overbought was touched upon in yesterday's report.  This is why we ignore the 'Bull' P&F Breakout signals generated by Sterling versus the US and Singapore Dollars.  In the case of the latter shown here, there is also sturdy looking resistance nearby, from the 2014 barrier at S$2.1426.

The UK currency appears in the 'Losers' list versus the Australian Dollar, with -0.4%.  The surging, and overbought, rally displays a slight loss of momentum, though this could signal the start of a corrective phase.  The profitable stop was hit on the long trade, making 1.50%.

We continue to hold a long trade in the Australian unit versus Japanese Yen.  The graph shows the rate to be developing further support near the top side of the previous base; close to both the long and short-term MAs.  A sustained break over Y97 is required to signal a renewal of the advance.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
NOKUS$/Norwegian Krone7.7959+1.8%
GBPNZDGBP/New Zealand Dollar2.2924+1.2%
EURMXNEuro/Mexican Peso17.431+0.8%
AUDAustralian Dollar/US Dollar0.78+0.7%
MXNUS$/Mexican Peso15.3425+0.6%
Top 5 Losses.
SymbolStockClose% Change
NZDNew Zealand Dollar/US Dollar0.6927-0.9%
KRWSouth Korean Won per 1 US Dollar1107.12-0.9%
BRLGBPBrazilian Real/Pound Sterling0.2058-0.4%
EURAUDEuro/Australian Dollar1.4566-0.4%
GBPAUDGBP/Australian Dollar2.0361-0.4%
    
The FX Model Portfolio
Foreign Exchange Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Target Stop
2 Jun 2015 Australian Dollar/Japanese Yen AUDJPY Long 96.467 95.916 -0.57% 92.5
5 Jun 2015 US$/Mexican Peso MXN Long 15.6679 15.3425 -2.08% 14.7
Foreign Exchange Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Target Stop
17 Jun 2015 US$/Swedish Krona SEK Short 8.15 8.1207 +0.36% 8.65
  • The profitable stop is hit on long Sterling v A$.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexFalls to the lower boundary of the m-t top; near the 200-day MA.94.022-0.3% 91.514/93.133100.39/97.775
EUREuro/US DollarExtends the m-t range/base forming under sideways resistance near 1.15.1.1359+0.2% 1.1066/1.08191.1679/1.1534
GBPUSDBritish Pound/US DollarExtends the overbought to (minor) resistance at the 11 Nov high (1.5945).1.588+0.3% 1.5089/1.51711.6227/1.5945
CADUS$/Canadian DollarTop heavy, but intraday support is noted at 1.2128.1.2222-0.0% 1.1803/1.1921.2835/1.2563
JPYUS$/Japanese YenCorrection from overbought slows near the broad range/base.122.96-0.4% 113.86/115.57135.15/125.86
ZARUS$/South African RandPullback from overbought finds intraday support at 12.14. Holds the l-t uptrend towards the late-2001 peak.12.2469-0.1% 11.3626/11.66913.8401/12.7105
KRWSouth Korean Won per 1 US DollarPauses the s-t uptrend towards the mid-Mar peak.1107.12-0.9% 1083.86/1103.671137.46/1124.3
CHFUS$/Swiss FrancRetraces back to the oversold May floor.0.9217-0.0% 0.8501/0.90720.9863/0.9537
EURGBPEuro/Pounds SterlingEases from the highs of the Mar-Jun range (base?) towards the lower boundary.0.7154-0.1% 0.70140.7592/0.7483
EURJPYEuro/Japanese YenPauses the overbought rally from the base.139.69-0.2% 126.1/133.1149.78/141.06?
EURCHFEuro/Swiss FrancRanging beneath the Feb high.1.0472+0.2% 0.9776/1.02341.2097/1.0812
GBPJPYGBP/Japanese YenOverbought and accelerated (trend-ending feature) advance shows a minor loss of momentum.195.264-0.1% 185.97/188.983197.453
GBPCHFGBP/Swiss FrancRally probes sideways resistance at the 200-day MA.1.4634+0.2% 1.3817/1.41411.5195/1.4711
CHFJPYSfr/Japanese YenReasserts the uptrend after a brief pullback from overbought.133.434-0.3% 119.917/127.793138.938/134.62
AUDJPYAustralian Dollar/Japanese YenDevelops support at the prior base highs; near the 50 and 200-day MAs following the reaction to the May high.95.916+0.3% 93.58498.415/97.396
AUDAustralian Dollar/US DollarHolds the recovery from the Mar/Apr floor. Edges over initial resistance at 0.7819; near the 50-day MA.0.78+0.7% 0.7451/0.75330.8164


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