Currency Report

by on May 21, 2013 10:10 am BST

Currency Report: Tuesday, May 21

EURUSD: The Euro-dollar reached the previous target last week of 1.2845, but stopped short of the second target of 1.275 after bouncing back from 1.2795 to currently 1.2868 (at the time of writing). EUR/USD is moving downward unable to break 1.29. Currently, the 50-day exponential moving average (EMA) is on the verge of  crossing the 20-day EMA, which can signal further selling. Furthermore, a potential head and shoulders pattern can be seen on the weekly chart with the right should completing down near the neckline. A break of the neckline will keep targets 1.275 and 1.265 in play.

With no major news today, on the 4H chart, EURUSD may stay range bound with a potential upside daily target of 1.29 at key resistance and a downside target of 1.284.

GBPUSD: After poor CPI and PPI data this morning, the Pound Sterling is down against the dollar at 1.5177,  -78 pips. On the 4H intraday chart, the GBPUSD is reaching overextension with a 28 exponential-RSI, but further down side can extend down to 1.516 with a potential retrace of 1.5226. The FTSE index has reached it’s highest point in 13 years this week.

USDJPY: In last week’s article Abe’s Second Tier May Prove Bullish for USDJPY, I laid out a bullish case for this pair with with an upside short-term target of 103.14 from 102.29. USDJPY reached a high on the 4H chart at 103.29 before retracing, currently at 102.67. This pair has been using the 20 EMA as support during the last week, so 102.46 is our intraday target with 103 to the upside. If the 20 EMA breaks down, we can see support at the 50 EMA at 101.76.

USD/CHF: This pair has had a nice run given the dollar’s new found strength this year, currently at .9679, +13. The weekly chart gives a clear picture of resistance at the 200 EMA, .9735. Still being relatively bullish on the dollar, USDCHF still may stay range bound. On the 4H intraday chart, USDCHF is sitting on a rising trend line. Upon a break, it is possible USDCHF can reach .965 with support near the 50 EMA.

AUD/USD: The Aussie-dollar has been virtually a free-fall after hitting a recent high on 1.0582 on April 11th. Now with a mere 900 pip decline, AUDUSD found support at .971 and has currently rebounded to .98; however, I do think this move up is a single move in a larger move downwards – the exponential-RSI at one point was 4! Intraday range for Aussie has a potential upside to.979 and to the downside at .975. I currently have a mid-year target for Aussie at .9665

Today’s economic reports are rather slim with the bulk being poor UK data. Although, we could see moves in the dollar with a gambit of speeches today by Treasury Secretary Lew, FOMC Member Bullard and Dudley. Tonight, Japan reports their trade balance, and Australia reports it’s Westpac Consumer Sentiment, so watch for moves in yen and the Australian dollar, respectively.