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FX Daily Hotline 
8 May 2013     By C Dichio, Analyst

    
    
    
    
Chart of the day: Upside failure by £ v Swissie, but...

 

The Swiss Franc clawed back some of its earlier weakness during Tuesday's session.  The British Pound, for instance, had managed to break above the April high at SF1.4646, and the 200-day moving average.  However, intraday resistance arrived at SF1.4661 with the rate closing near the lower side of the daily range.  This action potentially has near-term 'bull trap' scope towards SF1.4400, which is near the shorter-term MA line.  Nonetheless, we hold onto the long trade in Sterling, as the multi-month base evident on the chart should cushion risk and ultimately lead to higher levels.

 

Daily Comment:

 

The US Dollar has violated support at the 200-day moving average against the Canadian Dollar.  The fall through C$1.0050 activates the stoploss (1.71%) on the long trade held in the pairing.  That positioned is reversed for the initial scope towards parity and possibly the earlier February low at C$0.9933 thereafter (see yesterday's hotline).  The stop is placed at C$1.0200.

Weakness in the Australian Dollar continued throughout Tuesday.  The Aussie appears in the 'Losers' table again versus its Canadian counterpart, as support at the December-February floor crumbled.

However, the oversold (see RSI) decline is accelerating.  This is a trend-ending feature, though the turning point is difficult to predict.  There is some support nearby, at C$1.0162; the 23 October low.  Otherwise, the stronger platform is at that month's earlier trough evident between C$1.0100-0.9925, approx.

The Australian unit extended its decline versus the New Zealand Dollar.  A bounce did occur at the daily low, NZ$1.1958, which is close to the October 2009 floor at NZ$1.1934.  Still, a more forceful move would be required to reaffirm support in that region.

The Antipodean currencies both appear in the 'Losers' column versus the Japanese Yen.  The Aussie's pattern is worth commenting upon because uptrend support at the 50-day MA is under scrutiny again.  Note that that line is currently situated close to the sideways trading at the psychological Y100 number.  Should that support fail, bears will try to force further weakness towards the April low at Y96.917. 

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
EURISKEuro/Iceland Krona153.24+0.8%
EURAUDEuro/Australian Dollar1.28412+0.7%
EURCZKEuro/Czech Krona25.842+0.7%
BRLGBPBrazilian Real/Pound Sterling0.3216+0.6%
EURGBPEuro/Pounds Sterling0.84469+0.4%
Top 5 Losses.
SymbolStockClose% Change
AUDJPYAustralian Dollar/Japanese Yen100.829-1.0%
NZDJPYNew Zealand Dollar/Japanese Yen83.728-1.0%
AUDCADAustralian Dollar/Canadian Dollar1.0228-0.9%
AUDBRLAustralian Dollar/Brazilian Real2.045-0.8%
TWI ADSPAustralian Dollar Index150.71-0.7%
    
Signals

P&F Breakouts: May 7, 2013.
Symbol Name Signal Signal
Price
Price
Objective
Stoploss Latest
Close
LACI Latin America Dollar Index Bull106.80108.90105.60106.83
TWI SFSP Swiss Franc Index Bear130.80129.15132.10131.02

P&F breakouts identify medium-term trend changes. "Bull" breakouts occur when a stock reverses its downtrend by posting a "higher high". "Bear" breakouts are the inverse.
 

Key Day Reversals : May 07, 2013
None found

Key day reversals are technical signals formed by stocks posting an "outside day" of a higher high and a lower close. Sells/Peaks occur on countertrend reversals from a bullish trend and buys/Troughs occur on countertrend reversals from bearish trends. Signals are particularly powerful when occurring after a period of overextension.
 
 

MA Crossovers : May 07, 2013
CodeNameSignalLatestClose Change
AUDBRLAustralian Dollar/Brazilian RealDead2.04-0.02

Moving Average (MA) crossovers identify longer-term changes of trend. We scan for "Golden" (bullish) and "Dead" (bearish) signals occurring when an instrument’s 50-day MA crosses its 200-day MA.

 

The FX Model Portfolio
Foreign Exchange Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
24 Apr 2013 New Zealand Dollar/Swiss Franc NZDCHF Long 0.8027 0.7952 -0.93% 0.785
2 May 2013 GBP/Swiss Franc GBPCHF Long 1.4523 1.456 +0.25% 1.4225
6 May 2013 GBP/Japanese Yen GBPJPY Long 154.344 153.286 -0.69% 144
Foreign Exchange Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
27 Mar 2013 Euro/Pounds Sterling EURGBP Short 0.84448 0.84469 -0.02% 0.865
7 May 2013 US$/Canadian Dollar CAD Short 1.005 1.0042 +0.08% 1.02
  • The stoploss is hit on long US$ v C$; and that trade is reversed.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
DXYUS Dollar IndexJumps back into the s-t range (bear trap).82.253-0.1% 80.271/81.33184.1/83.508
EUREuro/US DollarApril recovery yields to ranging between 1.295 and 1.325, approx.1.3079+0.0% 1.2746/1.29551.3319/1.3243
GBPUSDBritish Pound/US DollarS-t uptrend slows by potential resistance from the 200-day MA.1.5484-0.4% 1.5034/1.51971.5892
CADUS$/Canadian DollarBreaks support at the 200-day MA. Develops downtrend towards parity.1.0042-0.3% 0.9933/11.0294/1.0132
JPYUS$/Japanese YenHolds the advance. Trades beneath resistance at the psychological 100 level.99-0.3% 92.57/95.8101.45/99.95
ZARUS$/South African RandUptrend flattens beneath the Mar high.9.0305+0.4% 8.7717/8.85829.811/9.3666
KRWSouth Korean Won per 1 US DollarS-t downtrend continues.1091.45-0.3% 1076.231144.82/1125.48
CHFUS$/Swiss FrancRallies towards this year's earlier highs.0.9403+0.2% 0.9207/0.92470.9636/0.9567
EURGBPEuro/Pounds SterlingPauses the downtrend from the Feb/Mar ceiling.0.84469+0.4% 0.82662/0.8398?0.86369/0.84978
EURJPYEuro/Japanese YenRetests resistance at the early-Apr overbought high.129.48-0.3% 118.73/124.94134.57/131.12
EURCHFEuro/Swiss FrancRallies back to the Apr high.1.22984+0.2% 1.21196/1.219621.23908/1.2349
GBPJPYGBP/Japanese YenHolds the uptrend towards the 2009 ceiling.153.286-0.7% 146.456/149.975163.09
GBPCHFGBP/Swiss FrancDid not maintain the break over the Apr high, at 1.4646 (and the 200-day MA). Potential 'bull trap' towards 1.44 (and the 50-day MA).1.456-0.1% 1.4074/1.4412?1.5005/1.4661?
CHFJPYSfr/Japanese YenAdvance yields to ranging beneath the early-Apr overbought high (107.446).105.276-0.5% 97.426/102.9108.75/107.446
AUDJPYAustralian Dollar/Japanese YenDrifts back to uptrend support at the 50-day MA.100.829-1.0% 98.754/99.291107.873/105.433
AUDNZDAustralian Dollar/New Zealand DollarOversold decline to the Oct 2009 low (1.1934). Intraday support arrives at 1.1958.1.20420.00% 1.1756/1.19341.27/1.2312
AUDAustralian Dollar/US DollarDeclines from sideways resistance along 1.06 to the lower boundary of the huge trading band (top?).1.0186+0.0% 0.9969/1.01151.0599/1.0398



 
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