Outlook for 9th – 13th Feb 2015

News summary:

AUD – Reverse Bank of Australia cut interest rate by 0.25% . Trade balance was about $400M better than forecast.

CAD – Job numbers improved and 0.1% drop in unemployment. Trade balance was $600M better than forecast.

GBP – Positive figures for Construction and Services PMI.

USD – NFP figure was 20k better than forecast. Unemployment increased by 0.1%

Upcoming news:

AUD – Chinese trade balance (Sunday). Chinese CPI yearly (Tuesday). Unemployment rate (Thursday).

GBP – Inflation report (Thursday)

AUDUSD

Fundamental:

The rate cut seemed to have no effect on AUD and it has closed the week 40 pips higher. USD produced mixed results with good NFP number but a slight increase in unemployment rate. Fundamentals remain bearish for this pair. Next week will be another news heavy week for the Aussie.

Technical:

Price has been ranging for most of the week with the exception of the spike down Tuesday when rate cut was announced. This pair has not been able to close above 0.7800 on daily chart. On the 4 hour, I can see intraday resistance around 0.7850 as price tested this level 3 times this week. If price tests this resistance level again then a possible short could be at 0.7850 with 30 pips stop and 50 pips target. I still have my stop at 0.7900 for the remainder 20% of my short from 2 weeks ago. If price gets to 0.8000 level again I will consider going short again.

GBPAUD

Fundamental:

Same as last week (slightly bullish) even though RBA has cut rates. Important news for this week will be the inflation report from Bank of England.

Technical:

My long trade at 1.9220 hit both targets as soon as RBA announced rate cut. It’s nice to be on the right side of the news sometimes. On 4 hour, I can see resistance around 1.9650 as price was rejected at this level 3 times this week. Interestingly, the 4 hourly is showing an ascending triangle pattern which suggests that a break above resistance is the more likely scenario. I will be looking for a daily close above 1.9700 as evidence of this break out. If so, I will look to go long if price retraces back to 1.9680

  

EURUSD

Fundamental:

Bearish with no sign of any change until the outcome of the Greek debt negotiation. Rallies are the preferred selling opportunities.

Technical:

My trailing stop at 1.1385 was hit from last week’s short. On 4 hour chart price has been ranging between 1.1330 and 1.1500 for most of the week. While the 1.1500 is not a historical support resistance level, I much prefer recent price action which suggests that it is. If price gets to this level again I will look for sign of strong selling to go short.

 

EURJPY

Fundamental:

I am not familiar with Japanese fundamentals so no comment from me.

Technical:

This pair is approaching the weekly resistance level 135.00 and this could present opportunities to go short on daily or smaller time frames.

 

GBPJPY

Fundamental:

I am not familiar with Japanese fundamentals so no comment from me.  

Technical:

This pair is approaching daily resistance level 181.40 and this could present opportunities to short once on the smaller time frames. Keep watch for signs of indecision and selling prior to the inflation report on Thursday.