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FX Daily Hotline 
30 June 2014     By C Dichio, Analyst

Chart of the day: US$ drifts to support v Yen

 

Since establishing the peak area in December/January against the Japanese Yen, the US Dollar has been trapped in a multi-month trading band beneath that region, which stretches up to Y105.44.  Up until now, the rate has stayed above the 200-day moving average, though support at that line was challenged in May.  More recently, the US currency has drifted back to that platform, near Y101.  Should it yield, the psychological Y100 level will be the next target for bears.

 

 

Daily Comment:

 

Against Indonesia's Rupiah, the US Dollar has recorded a 0.9% loss for Friday's session.  What is more, an engulfing candlestick was drawn after intraday resistance was encountered at IR12110; near the lower side of the top area evident on the chart.  This could mark the start of a corrective period, which would be in line with the recently overbought RSI.
 

We continue to hold a short position in the Greenback versus South Korean Won.  The rate has extended the downtrend towards the next important chart resistance; at the mid-2008 floor at W995.85 (see long-term graphs available on the II website).  The stop is lowered to W1028, keeping this just over the descending 50-day moving average.
 

We remain long the British Pound against the US unit.  Cable is potentially developing support around the US$1.70 region, though a sustained breach of the 100-day MA would be required to interrupt the uptrend from the mid-2013 base area.  The stoploss is at US$1.66.
 

The Canadian Dollar has continued to strengthen and this is reflected in the 0.2% gain registered for the C$ Trade Weighted Index.  However, the advance from this year's earlier base formation is becoming increasingly overbought.  Note the elevated level of the RSI to this effect.  Also, valuations have reached the December/early-January trading area, which could also hamper the rally.  Therefore, a correction in the C$ before long would not be surprising.
 
 
Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
EURHUFEuro/Hungarian Forint309.79+0.4%
LACILatin America Dollar Index94.52+0.3%
EUREuro/US Dollar1.3649+0.3%
ADXYAsia Dollar Index115.94+0.2%
TWI CDSPCanadian Dollar Index143.11+0.2%
Top 5 Losses.
SymbolStockClose% Change
IDRIndonesian Rupiah per 1 US Dollar11995-0.9%
NZDCHFNew Zealand Dollar/Swiss Franc0.7819-0.4%
GBPZARGBP/South African Rand18.0384-0.4%
MXNUS$/Mexican Peso12.9625-0.4%
ZARUS$/South African Rand10.588-0.4%
    
The FX Model Portfolio
Foreign Exchange Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
7 May 2014 Australian Dollar/US Dollar AUD Long 0.934 0.9422 +0.88% 0.915
19 Jun 2014 British Pound/US Dollar GBPUSD Long 1.7039 1.7033 -0.04% 1.66
Foreign Exchange Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
28 Feb 2014 Euro/Swiss Franc EURCHF Short 1.21671 1.2158 +0.07% 1.2275
21 May 2014 New Turkish Lira per 1 US Dollar TRY Short 2.0949 2.1228 -1.33% 2.155
29 May 2014 South Korean Won per 1 US Dollar KRW Short 1020.6 1013.6 +0.69% 1028
    • The stop is lowered on short US$ v Won.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexRetreats from the Jan ceiling.80.039-0.2% 79.881/80.2481.388/81.02
EUREuro/US DollarRecovery from support at the early-2014 floor (1.3477). Edges up to the 50-day MA.1.3649+0.3% 1.34/1.34771.3734?/1.3677
GBPUSDBritish Pound/US DollarHolds the uptrend from the 2013 floor. Potentially developing support around 1.7.1.7033+0.1% 1.646/1.66931.7631/1.7063?
CADUS$/Canadian DollarExtends the retreat from resistance near the 50-day MA. RSI oversold.1.0666-0.2% 1.05611.1279/1.0961
JPYUS$/Japanese YenRanging between the Dec/Jan peak area and support near the 200-day MA. Trades near the lower boundary.101.42-0.3% 100?/100.76105.44/104.13/103.02
ZARUS$/South African RandHolds the fall from the 'Peak' KDR of 18 June.10.588-0.4% 10.272810.9779/10.8626
KRWSouth Korean Won per 1 US DollarExtends the downtrend towards the mid-2008 floor.1013.6-0.3% 995.851028.51/1023.78
CHFUS$/Swiss FrancPauses the s-t rally.0.8908-0.3% 0.8568/0.86990.9156/0.9037
EURGBPEuro/Pounds SterlingPauses the oversold fall at 1.7959 (near the Nov 2012 low).0.8011+0.2% 0.7924/0.79610.8259/0.8153
EURJPYEuro/Japanese YenSupport near the 200-day MA holds for now.138.41-0.0% 136.23/137.71142.47/140.09
EURCHFEuro/Swiss FrancExtends the m-t range forming below resistance at the 200-day MA.1.2158-0.0% 1.20625/1.210441.22975/1.22607
GBPJPYGBP/Japanese YenExtends the trading band forming beneath the Jan high. Drifts from the upper boundary.172.768-0.3% 167.78/169.506174.85
GBPCHFGBP/Swiss FrancPauses the overbought rally.1.5176-0.3% 1.4905/1.49691.5488/1.5373
CHFJPYSfr/Japanese YenSmall recovery struggles near resistance from the 50-day MA.113.838-0.0% 111.7/113.021117.864/114.959
AUDJPYAustralian Dollar/Japanese YenS-t rally yields to ranging near the Apr/mid-May ceiling.95.615-0.2% 93.043/95.201?102.94/96.515
AUDNZDAustralian Dollar/New Zealand DollarHolds the correction from overbought and 200-day MA within the multi-month base.1.0742+0.2% 1.0493/1.06491.1036/1.0825
AUDAustralian Dollar/US DollarThe 2014 uptrend probes the Apr high.0.9422-0.1% 0.9203/0.93220.9543/0.9461


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