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FX Daily Hotline 
19 April 2016     By C Dichio, Analyst

Chart of the day: Cable builds a base

 

The British Pound has posted a 0.5% gain versus the US Dollar.  The rate reverses up within the trading band forming beneath the February high at US$1.4668.  That pattern looks increasing like a base under construction and a push past that level would complete the formation.  We will consider buying such a breakout for the initial target around US$1.5000.

 

 

Daily Comment:

 

The Australian Dollar has extended its advance from the broad base against the US Dollar; climbing within the late-January to June 2015 trading band.  We continue to hold a long position and raise the stop to US$0.7450.

Currencies bounced from daily lows versus the Japanese Yen on Monday.  The Aussie, for instance, encountered firm intraday support at Y82.093 to reassert the rally towards the range highs at 86.706; near the 200-day Moving Average.  We watch to buy in the event of a breakout as a base would be in place (see also hotline for 15 April).

The Euro and Swiss Franc found intraday support at Y121.72 and Y111.499, respectively, and failed to maintain breaks under the March floor.  This gives rise to 'bear trap' hopes for a further recovery over the short term.

A 'Dead' MA Crossover has been drawn by the US Dollar against the Canadian Dollar.  The feature also marks resistance at the late-March high at C$1.3296.  The chart shows the downtrend reasserting after intraday resistance arrived at C$1.2990 yesterday.  We remain short and lower the stop to C$1.3340.

The Greenback shed 0.5% versus Turkey's Lira on Monday.  Near-term downtrend resistance appears to be developing near both the 50 and 200-day MAs, around TL2.8715.  The overall pattern since last September looks like a large top area.  We will consider selling a fall under the November spiked low, at TL2.7579, which would complete the formation.

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
BRLUS$/Brazilian Real3.6158+2.4%
MYRUS$/Malaysian Ringgit3.9295+0.7%
GBPJPYGBP/Japanese Yen155.373+0.6%
GBPUSDBritish Pound/US Dollar1.4278+0.5%
AUDJPYAustralian Dollar/Japanese Yen84.335+0.4%
Top 5 Losses.
SymbolStockClose% Change
BRLGBPBrazilian Real/Pound Sterling0.1937-2.9%
MXNUS$/Mexican Peso17.4355-0.7%
TRYNew Turkish Lira per 1 US Dollar2.8399-0.5%
USDGBPUS Dollar/British Pound0.7004-0.5%
SGDUS$/Singaporean Dollar1.3513-0.5%
    
The FX Model Portfolio
Foreign Exchange Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Target Stop
17 Mar 2016 Australian Dollar/US Dollar AUD Long 0.76 0.775 +1.97% 0.745
30 Mar 2016 New Zealand Dollar/US Dollar NZD Long 0.6897 0.695 +0.77% 0.67
Foreign Exchange Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Target Stop
31 Mar 2016 US$/South African Rand ZAR Short 14.8084 14.4925 +2.13% 15.75
11 Apr 2016 US$/Brazilian Real BRL Short 3.5327 3.6158 -2.35% 3.9
12 Apr 2016 US$/Canadian Dollar CAD Short 1.2832 1.2784 +0.37% 1.334
  • Stops are adjusted on long AUD and short CAD.
  • We watch to buy A$/Yen, sell US$ v Turkish Lira and buy Cable (Chart of the Day).

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexCounter move from oversold slows. Did not maintain the push over minor resistance around 95. Potentially reasserting the s-t downtrend.94.478-0.2% 92.621/93.62798.582/96.399
EUREuro/US DollarCorrection from overbought; and the Oct 2015 high (1.1495) slows. Potentially reasserting up.1.1313+0.3% 1.0822/1.11441.1714/1.1495/1.1465
GBPUSDBritish Pound/US DollarExtends s-t range forming beneath the Feb high. Potential base.1.4278+0.5% 1.3503/1.38361.4969/1.4668
CADUS$/Canadian DollarReasserts the downtrend.1.2784-0.3% 1.21281.3446/1.3296
JPYUS$/Japanese YenPotentially reasserting down. However, oversold earlier Apr low holds.108.82+0.1% 105.23/107.63114.87/109.73
ZARUS$/South African RandFinds resistance near the 50-day MA. Holds the downtrend from the top. Probes the 200-day MA.14.4925-0.4% 13.89116.4361/15.6257
KRWSouth Korean Won per 1 US DollarDowntrend levels out.1150.38+0.4% 1120.61/1141.321173.25/1162.7
CHFUS$/Swiss FrancCounter move from oversold; and the Oct low (0.9476), slows.0.9643-0.4% 0.9259/0.94761.0093/0.9788
EURGBPEuro/Pounds SterlingCorrects from overbought. Uptrend support is at the 50-day MA.0.7924-0.3% 0.7652/0.78310.8259/0.8153/0.8117
EURJPYEuro/Japanese YenIntraday support arrives at 121.72. Failed break under the early-Mar floor (122.09). Potential 'bear trap'.123.11+0.3% 118.73128.22/124.24
EURCHFEuro/Swiss FrancPauses the s-t retreat towards the late-Feb low (1.081).1.0911-0.1% 1.0713/1.0811.1023/1.0954
GBPJPYGBP/Japanese YenPauses the oversold fall from downtrend resistance at the 50-day MA. Next important chart support is at the Jun-Aug 2013 floor.155.373+0.6% 147.109/151.659164.107/162.581
GBPCHFGBP/Swiss FrancRecovery from oversold heads for downtrend resistance at the 50-day MA.1.3768+0.2% 1.2525/1.34151.4318/1.3952
CHFJPYSfr/Japanese YenFinds intraday support at 111.499. Failed break under the Mar floor (111.911). Potential 'bear trap'.112.859+0.4% 111.231117.42/114.138
AUDJPYAustralian Dollar/Japanese YenFinds firm intraday support at 82.093. Reasserting the rally towards the range/base highs near the 200-day MA.84.335+0.4% 77.592/79.61190.728/88.621/86.706
AUDAustralian Dollar/US DollarExtends the advance from the broad base.0.775+0.3% 0.7415/0.74770.8164/0.7849


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