We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #Coronavirus update on 2 U.S. companies just crossed the wires: United Airlines (-0.62% afterhours): - Withdraws 2020 forecast with 100% decline in near-term demand to China Mastercard (-2.94% afterhours): - Sees lower revenue growth in the first quarter
  • RT @KyleR_IG: * MASTERCARD SEES LOWER REVENUE GROWTH ON CORONAVIRUS IMPACT Corporate warnings coming in thick and fast today.
  • The iShares #Malaysia ETF closed at its lowest since Aug 2004 and the Malaysian #Ringgit weakened to August 2019 lows in the aftermath of Prime Minister Mahathir Mohamad resigning yesterday, adding further uncertainty amid a deteriorating outlook due to the #Coronavirius $USDMYR https://t.co/uFfxtlMDAo
  • Recession risk is back on the rise and largely attributable to expected economic impact from the #coronavirus outbreak. Get your market update from @RichDvorakFX here:https://t.co/NhzJHEqwj6 https://t.co/nWjrHlR6Ud
  • RT @russian_market: KUWAIT SUSPEND FLIGHTS TO SOUTH KOREA, THAILAND, ITALY: KUNA
  • Do you analyze different chart time frames before entering a trade? Multiple time frame analysis is a charting technique that professional traders use to reveal what may not have been noticed otherwise. Learn how you can utilize this technique here: https://t.co/mhPZ2IBK0V https://t.co/wbFbGPVgld
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.76% 🇪🇺EUR: 0.05% 🇨🇭CHF: -0.08% 🇬🇧GBP: -0.21% 🇦🇺AUD: -0.33% 🇨🇦CAD: -0.51% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Q6PiOGnZzO
  • Poll: Perhaps a little exploitative of the concern rippling through the market after such a severe single-day drop - compounded as it comes after such extended quiet - by $SPX and other risk assets; but do you think the markets just put in a top (via US indices):
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Gold: 1.09% Silver: 0.87% Oil - US Crude: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/HfGEb3JLmW
  • The speculative fireworks today seemed to add more weight to the US 10yr/3mth Treasury yield curve inversion. Reminds me of the sudden charge on August 1st. Search interest in 'recession' surged alongside that event https://t.co/prgRHd3ela
China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

2011-02-15 06:07:00
Joel Kruger, Technical Strategist
Share:

The broad based USD rally has stalled out for now, with most of the major currencies finding some support ahead of the latest minor bounce. At this point it is too early to tell whether we are seeing some consolidation ahead of the next upside extension in favor of the buck, or whether this is the start to a fresh round of USD selling. All has been very quiet since the North American close after Monday’s lackluster economic calendar produced the same kind of trade.

The main developments in recent hours come from Australia, China and Japan, although none of these developments has been a big market mover. In Australia, the RBA has come out with the Minutes to the latest policy meeting which are consistent with a less hawkish tone as the central bank is willing to wait a few months to assess the impact of the floods before deciding whether to continue with its tightening cycle. Meanwhile, in China, we have seen a batch of inflation data released with the main takeaway coming from a softer than expected CPI reading which has helped to bolster risk appetite and mitigate any weakness in the Australian Dollar resulting from the RBA Minutes (it is however worth noting that China PPI came in a good deal higher than expected). Finally, the Bank of Japan came out with an as expected unchanged policy decision that hardly factored into price action, although the central bank did manage to raise its economic assessment.

Looking ahead, German GDP (0.5% expected) is due at 7:00GMT, followed by UK CPI (0.1% expected), DCLG house prices (2.8% expected), and the retail price index (0.2% expected) due at 9:30GMT. Eurozone GDP (0.4% expected), ZEW (28.5 expected) and trade balance (1.1B expected) are all then due out at 10:00GMT, along with German ZEW (83.0 expected). US equity futures are tracking slightly lower, while commodities are moving in the opposite direction and are showing mildly bid.

TECHNICAL OUTLOOK

China_CPI_Comes_in_Softer_than_Expected_body_eur.png, China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

EUR/USD:The latest rallies have stalled out well ahead of 1.3860 with the market finding some resistance by an ideal right shoulder top in the mid-1.3700’s ahead of the latest sharp setbacks. From here, the risks are tilted to the downside, with Friday’s break and close back below 1.3570 triggering the H&S topping formation and opening the door for a fresh downside extension towards the 1.3200 area over the coming days. Any rallies should continue to be well capped ahead of 1.3700 with only a break back above the figure to give reason for concern.

China_CPI_Comes_in_Softer_than_Expected_body_jpy2.png, China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

USD/JPY: The market continues to remain extremely well bid on dips below 82.00, with the latest surge back above 83.00 really encouraging longer-term recovery prospects and opening the door for a potential break of key topside resistance by 84.50 over the coming days. Longer-term cyclical studies certainly suggest that the market could be poised for a major bullish reversal and we would look for a break and weekly close back above 84.50 to help confirm outlook. A break back below 82.00 would concern, while ultimately, only a back below 81.00 would negate.

China_CPI_Comes_in_Softer_than_Expected_body_gbp2.png, China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

GBP/USD: The market looks to have once again found a meaningful top by the 1.6300 barrier, with the latest setbacks resulting in a series of daily lower tops. From here we look for a break and close back below 1.6000 to confirm bias and accelerate declines back towards 1.5750 over the coming sessions. A daily close back above 1.6200 would give reason for concern, while ultimately only back above 1.6300 negates.

China_CPI_Comes_in_Softer_than_Expected_body_swiss1.png, China CPI Comes in Softer Than Expected; Helps to Prop Risk Sentiment

USD/CHF: Although the longer-term market remains under some intense pressure with the latest declines stalling just shy of the late 2010 record lows at 0.9300, inability to establish fresh record lows followed by a break back above 0.9500 leaves us constructive with our outlook from here. Next key topside barriers come in by 0.9785 and we now look for a weekly close above this level to accelerate gains and open a fresh upside extension back above parity and towards 1.0070 medium-term resistance from December 2010. Any setbacks from here are expected to be well supported ahead of 0.9500.

Written by Joel Kruger, Technical Currency Strategist

If you wish to receive Joel’s reports in a more timely fashion, email instructor@dailyfx.com and you will be added to the distribution list.

If you wish to discuss this or any other topic feel free to visit our Forum Page.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.