EUR/USD recovers further to test 1.0600 amid negative equities
The EUR/USD regains poise and now extends the upside in a bid to reclaim 1.06 handle, in wake of broad based US dollar correction and poor sentiment around the European stocks.Currently, EUR/USD jumps +0.37% to trade near fresh daily highs of 1.0597, now looking to regain 5-DMA barrier located at 1.0614. The main currency pair is seen on a steady recovery path so far this session, with the EUR bulls gaining further momentum post-European open, after uncertainty over the Italian banking sector rescue plan crept into markets and weighed negatively on the European stocks, triggering a fresh risk-off wave and boosting the funding currency status of the EUR.Moreover, extension of the downside correction in the US dollar against its main peers, after last week’s rally on an imminent Fed rate hike this month, also added to the renewed uptick in EUR/USD.Attention now turns towards tomorrow’s German ZEW sentiment and Wednesday’sUS retail sales and PPI data before a typical calm set into the market before the Fed decision.In terms of technicals, the pair finds the immediate resistance 1.0614 (5-DMA). A break beyond the last, doors will open for a test of 1.0623 (20-DMA) and from there to 1.0646 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested.
GBP/USD offered above 1.26, hits fresh lows near 1.2570
The GBP/USD pair ran through fresh offers above 1.26 handle over the last hours, now dropping to fresh session lows of 1.2571, down -0.14% on the day.The cable stalled its recovery mode and fell back in negative territory, after a renewed bout of risk-aversion gripped the European markets and dampened the sentiment around the higher-yielding currencies such as the GBP.The major witnessed fresh buying interest earlier today and rallied as high as 1.2612, mainly driven by cross-driven strength, helped by fresh selling in EUR/GBP and at the same time GBP/JPY demand.Amid a data-empty fundamental calendar for today, focus shifts towards Tuesday’s China data dump and UK CPI report for further momentum on the major.In terms of technical levels, upside barriers are lined up at 1.2635 (10-DMA), 1.2650 (psychological levels) and 1.2704 (100-DMA). While supports are seen at 1.2548/45/42 (Dec 9 & 8 low/ 20-DMA) and 1.2498 (Dec low) and below that at 1.2421 (50-DMA).
USD/JPY retreats from highs, back to 115.80
The greenback remains on a firm footing vs. the Japanese currency on Monday, with USD/JPY briefly testing fresh tops above 116.00 the figure.The pair is extending its rally for the sixth week in a row today, piercing the 116.00 handle for the first time since January although slipping back towards the 115.80 area soon afterwards.Spot keeps it upside unabated for the time being, as the solid performance from yields in the US money markets stay as the almost exclusive driver for the underlying bullish sentiment.Furthermore, the rally in crude oil prices has been boosted further after non-OPEC producers have agreed on Saturday in Vienna to cut the oil output, adding to the previous OPEC deal. The recent deal fuelled the risk-on trade, adding further selling pressure to the safe have JPY.In the data space, JPY speculative net shorts have climbed further during the week ended on December 6, reaching the highest level since early-August 2015 according to the latest CFTC report.As of writing the pair is advancing 0.47% at 115.91 facing the next resistance at 116.12 (high Dec.12) ahead of 116.86 (78.6% Fibo of the 2016 drop) and finally 117.53 (high Feb.8). On the other hand, a breach of 112.99 (620-day sma) would aim for 112.84 (low Dec.5) and then 111.32 (low Nov.28).
NZD/USD clings to gains beyond 50-DMA
Having posted a session low at 0.7115, the NZD/USD pair managed to recover early losses and is now seen building on to its momentum back above 50-day SMA.Currently trading at fresh session peak near 0.7160 region, the pair gained fresh traction after Bill English was sworn in as New-Zealand's new Prime Minister, which receded fears of political uncertainty following last week's surprise exit of his predecessor John Key. Moreover, weekend oil output deal between OPEC and non-OPEC producers, provided an additional boost to investor sentiment and extended further support to the bid tone surrounding higher-yielding currencies - like the Kiwi.The pair is also benefiting from an upbeat report on the NZ government by the US-based ratings agency, Moody’s Investors Service that showed government forecasts average annual GDP growth of 3.5% over 2017 and 2018 and lifted the pair back above 50-day SMA. This week's major focus, however, would remain on two-day Fed monetary policy meeting starting Tuesday and the outcome would help investors to determine the pair's near-term trajectory. The Fed is scheduled to announce its monetary policy decision later during NY session on Wednesday. In the meantime, Tuesday's Chinese economic data might provide some trading opportunities for short-term traders. From current levels, 0.7175 level is likely to act as immediate resistance above which the pair seems to retake 0.7200 handle (100-day SMA) and head towards testing its next resistance near 0.7228-30 region (Nov. 11 high). On the downside, weakness back below 50-day SMA support near 0.7145 region now seems to drag the pair back towards session low support near 0.7115 before eventually dropping to 0.7100 handle.
AUD/JPY overextended but making higher highs
AUD/JPY has been building up a bearish case of late, and traders may be looking to take some profit off the table.On a 4-hour chart, the 50-period is well distanced above the 200-period SMA and the Relative Strength Index has been, on average, above the 50% mark over the last three weeks. The recent attack on highs, coupled with the acceleration of the rally has caused this indicator to enter the overbought zone above 75%. This is a less frequent event in this time frame and is often associated with 5th waves. AUD/JPY spot would have to gravitate towards the 50 SMA at a minimum to alleviate immediate upside pressures.
EUR/JPY reverses ECB-led slide, fast approaching 123.00 handle
The EUR/JPY cross maintained strong bid tone for the second consecutive session and has now moved within striking distance of 123.00 handle. Currently trading around 122.90 region, the cross is benefiting from a sharp recovery staged by the shared currency as investors digested last week's dovish ECB tapering. Adding to this, the prevalent risk-on mood, in wake of weekend oil output deal between OPEC & non-OPEC member, is further weighing on the Japanese Yen's safe-haven demand and providing an additional boost to the pair's strong up-move on the first trading day of the week. Looking at the broader picture, last week's price-action could be categorized as consolidation phase following Monday's sharp recovery from the very important 200-day SMA touched in the aftermath of a 'NO' vote to Italian referendum. Hence, sustained momentum back 123.00 handle would reaffirm continuation of the pair's upward trajectory in the near-term. Momentum above 123.00 handle now seems to get extended beyond last week's multi-month peak resistance near 123.35 region, towards its next hurdle near 123.75 region. On the downside, 122.00 round figure mark now becomes immediate strong support to defend, which if broken is likely to accelerate the slide towards 121.25 intermediate support before the cross eventually aims towards testing its next major support near 120.15-10 region.
USD/CHF turns lower, upside remains capped at 1.0200 level
Having once again failing to decisively move above 1.0200 handle, the USD/CHF pair ran through fresh offers on Monday and has drifted into negative territory.Currently trading around 1.0165-60 region, testing session lows, the pair witnessed a profit taking slide on Monday after struggling to build on last week's strong up-move from 3-week low to the highest level since early Feb. Ahead of the much-awaited FOMC meeting on Wednesday, investors seem to position themselves cautiously and prefer to take some profits off the table.With a 25 bps interest-rate hike fully priced-in, investors will now look for clues over the possibilities and timing of next Fed rate-hike action in 2017 from the updated interest-rate and economic projections (dot-plots), accompanying the monetary policy statement. Weakness below 1.0150 level is likely to accelerate the slide back towards 1.0100 round figure mark with some intermediate support near 1.0130 level. Alternatively, on a sustained move above 1.0175 immediate resistance the pair is likely to make a fresh attempt towards conquering 1.0200 handle above which the pair seems to aim towards yearly highs resistance near 1.0255-60 region.
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