As systemic anxiety eased, the US dollar got better traction. The dollar-bloc currencies managed to hold their own as cross positions were unwound.
The June Dollar closed slightly higher on Friday as it consolidates some of this month's decline. The low-range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month's decline, last August's low crossing at 93.50 is the next downside target. Closes above the 20-day moving average crossing at 95.94 are needed to confirm that a short-term low. First resistance is the 20-day moving average crossing at 95.94. Second resistance is the reaction high crossing at 96.42. First support is Thursday's low crossing at 94.29. Second support is last August's low crossing at 93.50.
The June Euro closed higher on Friday as it extended the rally off March's low. The high-range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off March's low, last October's high crossing at 115.36 is the next upside target. Closes below the 20-day moving average crossing at 112.19 are needed to confirm that a short-term top has been posted. First resistance is today's high crossing at 114.62. Second resistance is October's high crossing at 115.36. First support is the 20-day moving average crossing at 112.19. Second support is the reaction low crossing at 111.69.
The June British Pound closed lower on Friday. The low-range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing at 1.4058 would open the door for a possible test of February's low crossing at 1.3844. If June renew the rally off February's low, the reaction high crossing at 1.4566 is the next upside target. First resistance is the reaction high crossing at 1.4519. Second resistance is the reaction high crossing at 1.4566. First support is the reaction low crossing at 1.4058. Second support is February's low crossing at 1.3844.
The June Swiss Franc closed higher on Friday as it extends this month's rally. The mid-range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, October's high crossing at 1.0639 is the next upside target. Closes below the 20-day moving average crossing at 1.0267 are needed to confirm that a short-term top has been posted. First resistance is today's high crossing at 1.0498. Second resistance is the October 14th high crossing at 1.0639. First support is the 20-day moving average crossing at 1.0267. Second support is the reaction low crossing at 1.0127.
The June Canadian Dollar closed lower on Friday. The high-range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are diverging but are turning neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 75.95 are needed to confirm that a short-term top has been posted. If June extends the rally off January's low, the reaction high crossing at 78.65 is the next upside target. First resistance is Thursday's high crossing at 77.98. Second resistance is the reaction high crossing at 78.65. First support is the 20-day moving average crossing at 75.95. Second support is the reaction low crossing at 75.21.
The June Japanese Yen closed higher on Friday. The high-range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends today's rally, February's high crossing at .9043 is the next upside target. Closes below the reaction low crossing at 0.8737 are needed to confirm a downside breakout of the February-March-trading range. First resistance is February's high crossing at .9043. Second resistance is weekly resistance crossing at .9185. First support is the reaction low crossing at .8737. Second support is the 38% retracement level of the December-March-rally crossing at 0.8700.
Major bourses posted gains for the second consecutive week. With the recent advance, several markets, including the S&P 500, FTSE and Sweden, China, Korea, and Taiwan are now positive on the month.
The April light sweet oil futures had its highest weekly close this month. More broadly, the CRB Index is nearly 7% off its February 11 low and posted its highest close of the month before the weekend. In addition, the global capital markets appear to be less sensitive to the vagaries of the Chinese equities or the yuan as seemed to be the case a few weeks ago.
Technical considerations favor further US dollar gains in the week ahead.The RSI and MACDs for the Dollar Index are trending higher, and the five-day average crossed above the 20-day moving average. The Dollar Index is testing an important resistance near 98.00. A convincing break would immediately target the 98.75-99.00 area.
Support is seen a little ahead of 97.00. Encouraged by favorable economic data (upward revision to Q4 GDP, a larger than expected rise in the January core PCE deflator to three-year highs, and an uptick in consumer confidence), before the weekend, the Dollar Index recorded an outside up day by trading on both sides of the previous day's range and closed above the high.
Similarly, the euro finished poorly, posting an outside down day ahead of the weekend, and closing below the uptrend line drawn off the early December lows. Recall that low was set near $1.0525 before Draghi disappointed and/or sell the rumor, buy the fact type of activity. The weekly close below $1.0950 and the technical indicators suggest immediate potential for another cent lower. Although it had been penetrated before, the $1.0800 level still has technical significance. On the upside, the $1.10 area likely becomes resistance again.
The backing up in US yields and the lower volatility impulses from the equity market have helped the dollar carve out a potential double bottom near JPY111.00. However, it will not be confirmed unless the dollar moves through the neckline a little below JPY115.00. The measuring objective is near JPY119.00, which corresponds to the 61.8% retracement of the dollar's slide since last November. The 100-day moving average is near JPY119.50. The RSI bottomed earlier this month while the MACDs are only crossing now.
Sterling lost nearly 3.7% over the course of the week, and the selling does not appear to have exhausted itself. It recorded an outside down day before the weekend to record new multi-year lows and negate the two-day consolidation that had spurred some talk that market had gone too far. Even if it has gone too far, it surely does not mean that it can't go further. And that seems to be the most likely near-term technical scenario.
Since the end of Q1 1986, sterling has experienced only 3-4 periods below $1.40. However, this time is likely to be extended as the significance of the June referendum overwhelms whatever other supportive fundamentals may emerge. And if anything, the economic data is expected to show some moderation in economic activity.
It is difficult to talk about where chart-based support is if it is to denote where demand may be spurred, but the next set old lows were seen in the $1.3660-$1.3680 area. Below there is $1.35, which may be more psychological than real. The $1.4000-$1.4050 band may block counter-trend bounces.
The Aussie surrendered most of the gains for the week with Friday's dramatic reversal. The impulsive nature of the drop, the first close below the 20-day moving average in a month, coupled with the turn in the RSI and MACDs, suggests the upside correction begun last month is over. Initial support is seen near $0.7090, which corresponds to a 38.2% retracement of the correction and a trendline (drawn off the January 20 low). A break of $0.7000 is needed to confirm the significance of the price action.
The Canadian dollar defied our expectation and continued to recover against the greenback. Before the weekend, it was at its best level since early-December. We see three drivers: higher oil prices, backing up of Canadian rates and better risk appetites illustrated by higher equities
The measuring objective is near JPY119.00, which corresponds to the 61.8% retracement of the dollar's slide since last November. The 100-day moving average is near JPY119.50. The RSI bottomed earlier this month while the MACDs are only crossing now.
Sterling lost nearly 3.7% over the course of the week, and the selling does not appear to have exhausted itself. It recorded an outside down day before the weekend to record new multi-year lows and negate the two-day consolidation that had spurred some talk that market had gone too far. Even if it has gone too far, it surely does not mean that it can't go further. And that seems to be the most likely near-term technical scenario.
Since the end of Q1 1986, sterling has experienced only 3-4 periods below $1.40. However, this time is likely to be extended as the significance of the June referendum overwhelms whatever other supportive fundamentals may emerge. And if anything, the economic data is expected to show some moderation in economic activity.
It is difficult to talk about where chart-based support is if it is to denote where demand may be spurred, but the next set old lows were seen in the $1.3660-$1.3680 area. Below there is $1.35, which may be more psychological than real. The $1.4000-$1.4050 band may block counter-trend bounces.
The Aussie surrendered most of the gains for the week with Friday's dramatic reversal. The impulsive nature of the drop, the first close below the 20-day moving average in a month, coupled with the turn in the RSI and MACDs, suggests the upside correction begun last month is over. Initial support is seen near $0.7090, which corresponds to a 38.2% retracement of the correction and a trendline (drawn off the January 20 low). A break of $0.7000 is needed to confirm the significance of the price action.
The Canadian dollar defied our expectation and continued to recover against the greenback. Before the weThe measuring objective is near JPY119.00, which corresponds to the 61.8% retracement of the dollar's slide since last November. The 100-day moving average is near JPY119.50. The RSI bottomed earlier this month while the MACDs are only crossing now.
Sterling lost nearly 3.7% over the course of the week, and the selling does not appear to have exhausted itself. It recorded an outside down day before the weekend to record new multi-year lows and negate the two-day consolidation that had spurred some talk that market had gone too far. Even if it has gone too far, it surely does not mean that it can't go further. And that seems to be the most likely near-term technical scenario.
Since the end of Q1 1986, sterling has experienced only 3-4 periods below $1.40. However, this time is likely to be extended as the significance of the June referendum overwhelms whatever other supportive fundamentals may emerge. And if anything, the economic data is expected to show some moderation in economic activity.
It is difficult to talk about where chart-based support is if it is to denote where demand may be spurred, but the next set old lows were seen in the $1.3660-$1.3680 area. Below there is $1.35, which may be more psychological than real. The $1.4000-$1.4050 band may block counter-trend bounces.
The Aussie surrendered most of the gains for the week with Friday's dramatic reversal. The impulsive nature of the drop, the first close below the 20-day moving average in a month, coupled with the turn in the RSI and MACDs, suggests the upside correction begun last month is over. Initial support is seen near $0.7090, which corresponds to a 38.2% retracement of the correction and a trendline (drawn off the January 20 low). A break of $0.7000 is needed to confirm the significance of the price action.
The Canadian dollar defied our expectation and continued to recover against the greenback. Before the weekend, it was at its best level since early-December. We see three drivers: higher oil prices, backing up of Canadian rates and better risk appetites illustrated by higher equitiesekend, it was at its best level since early-December. We see three drivers: higher oil prices, backing up of Canadian rates and better risk appetites illustrated by higher equities
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