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FX Daily Hotline 
13 January 2015     By C Dichio, Analyst

Chart of the day: Ł top heavy v Yen

 

A number of currencies have experienced only a minor bounce in response to oversold conditions, against the Japanese Yen, recently.  The British Pound is one such unit.  The short-term chart pattern is looking rather top heavy, as Sterling renews its decline from the December ceiling near Y190.  Next important chart support is not until the October low at Y171.077.  A short trade is opened, with the stop placed at Y188.5 for now.

 

Daily Comment:

 

The British Pound is generally weak, though not so much against the Norwegian Krone.  Gaining 1.2% yesterday, to follow Friday's +0.9%, Sterling has bounced from short-term range support near NK11.50.  Still, the pattern in force since the spiked peak plotted last month may yet turn out to be a top.

The Euro has a similar pattern versus the Norwegian unit; while the US Dollar points back towards the late-2014/early-2015 ceiling at NK7.8745.  Here, the RSI is overbought again (see 'Gainers' for these charts).

The Greenback is one of the currencies taking advantage of the Canadian Dollar's weakness.  This is in spite of the overbought RSI.  The seven-year graph reprinted here displays the rate reaching the 2008/2009 top, which stretches up to approximately C$1.3000. 

On a shorter-term basis, the uptrend from last summer has established support at the 50-day moving average.  That line is currently situated near C$1.1540. 

The US currency appears to be developing uptrend support above the 50-day MA versus the Brazilian Real.  A long trade is opened (see yesterday's report).  The stop is placed at BR2.47 for the time being.

One notes the 'Peak' Key Day Reversal plotted by the New Zealand Dollar against its US counterpart.  Although not very dramatic looking, the feature is drawn near prior resistance from the 11 December high (US0.7871); close to the shorter-term MA.  A break over that level is required to offset scope for a further retracement of the latest small recovery from the floor area near US$0.7600.

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
RUBRussian Ruble per 1 US Dollar63.1411+1.8%
BRLUS$/Brazilian Real2.6737+1.5%
GBPNOKGBP/Norwegian Krone11.7527+1.2%
NOKUS$/Norwegian Krone7.745+1.2%
EURNOKEuro/Norwegian Krone9.1659+1.1%
Top 5 Losses.
SymbolStockClose% Change
BRLGBPBrazilian Real/Pound Sterling0.247-1.2%
CADJPYCanadian Dollar/Japanese Yen98.833-1.0%
CADUSDCanadian Dollar/US Dollar0.8352-0.9%
TWI CDSPCanadian Dollar Index130.92-0.8%
CADEURCanadian Dollar/Euro0.7057-0.8%
    
The FX Model Portfolio
Foreign Exchange Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
12 Jan 2015 US$/Brazilian Real BRL Long 2.6737 2.6737 0.00% 2.47
Foreign Exchange Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
12 Jan 2015 GBP/Japanese Yen GBPJPY Short 179.556 179.556 0.00% 188.5
  • The above positions are opened.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexOverbought rally from uptrend support at the 50-day MA slows by the 2005 peak.91.983+0.1% 84.472/87.18294.35/92.63
EUREuro/US DollarOversold fall from downtrend resistance at the 50-day MA slows near the late-2005 floor.1.1834-0.1% 1.1641.2886/1.26
GBPUSDBritish Pound/US DollarOversold fall from downtrend resistance at the 50-day MA slows near the lows of the Feb-Sept 2013 base.1.5171+0.1% 1.48141.5945/1.5826
CADUS$/Canadian DollarExtends the overbought rally from uptrend support at the 50-day MA to the 2008/2009 top.1.1974+0.9% 1.1192/1.15611.3065/1.2715/1.2506
JPYUS$/Japanese YenRally from the 50-day MA yields to ranging beneath the Dec high.118.35-0.1% 113.86/115.57124.14/121.85
ZARUS$/South African RandOverbought rally gives way to ranging beneath the 2008 peak.11.5261+0.3% 11.166/10.827411.8723
KRWSouth Korean Won per 1 US DollarRetreats from the Dec high. Dips under the yearend low (1080.83) during Mon.1081.49-0.8% 1045.581152.7/1127.65/1122.2
CHFUS$/Swiss FrancOverbought rally from uptrend support at the 50-day MA slows.1.0148+0.0% 0.9531/0.95541.0676
EURGBPEuro/Pounds SterlingFailed break under the 2012 and 2014 lows near 0.775 revives the base theory. However, small recovery stalls at the 50-day MA.0.7799-0.2% 0.7694/0.77420.8066/0.7875
EURJPYEuro/Japanese YenFall from the late-2006/late-2008 top is oversold.140.05-0.2% 135.21156.84/149.78
EURCHFEuro/Swiss FrancEases to the 2012 floor. Holds downtrend resistance at the 200-day MA.1.201-0.0% 1.1002/1.21.214/1.2097
GBPJPYGBP/Japanese YenReasserts the fall from the Dec high after a minor bounce from oversold.179.556-0.1% 171.077189.714/180.941
GBPCHFGBP/Swiss FrancFailed break over the Oct high revives top theory. However, some steadying is noted at 1.5252.1.5397+0.1% 1.4943/1.51841.5692/1.5589
CHFJPYSfr/Japanese YenFall from the Dec high is oversold.116.618-0.2% 112.123126.38/124.526
AUDJPYAustralian Dollar/Japanese YenBounce from oversold stalls. Still finding resistance near the 50-day MA.96.54-0.7% 91.764/95.224102.848/98.415
AUDNZDAustralian Dollar/New Zealand DollarPauses the oversold decline at multi-year lows.1.048+0.1% 1.0285/1.03551.1304/1.0624
AUDAustralian Dollar/US DollarCounter move from oversold. Points to potential resistance from the 50-day MA.0.8153-0.0% 0.7704/0.80330.8796/0.8216


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