Morning Forex Briefing
The USD is firmer to start New York this morning after gaining some ground against the GBP and remaining steady against the other major pairs. Traders note that UK data was lukewarm this morning and a sharp sell-off in the GBP was not expected but stops were elected close-in from apparently nervous longs triggering a decline into the next level of technical support. Low print in Cable at 1.9455 was bought quickly by shorts and traders note that 1.9480 area is pivotal on the day; cross traders have been active and likely have oversold GBP a bit as all the GBP cross-rates are under pressure. Analysts note that the rate is extended on the hourlies outside the lower Bollinger-Band suggesting that a bounce near-term is likely. Aggressive traders can BUY GBP/USD 1.9480 or better today with a stop out of range; look for this break to be short-lived. EURO remains firm after a brief dip under the 1.3000 handle but that would be expected with the drag from GBP in sympathy.
Traders say the G7 meeting is less of an impact for EURO this time around and “buy the dip†strategy is proffered heading into the March General Council meeting; rate hike is likely then analysts say. USD/JPY is a bit better from Thursday’s New York close with a high print also at technical resistance; 121.65 was capped ahead of 121.80 which traders expect to be sold heavily. Currently the pair is trading 121.50 area where I feel strongly is a solid short. In my view the USD is at the top of it’s consolidation range and remains inside established ranges although today is the absolute top of that range and a breakout to the upside cannot be ruled out of course; I don’t think the economic calendar or the G7 communiqué will be enough to shake the USD out of this range. Next week is thick with US data and if the USD gets another round of bad news I think a fall back from this area is in order. Look for the USD to top today or Monday; aggressive traders should make their move within the next 24-48 hours in my view.
GBP/USD Daily
|
R3: 1.9580
|
|
R2: 1.9550/60
|
|
R1: 1.9520
|
|
Current Price : 1.9474
|
|
S1: 1.9450
|
|
S2: 1.9400
|
|
S3: 1.9350
|
Now that cable has dropped through stops reported at 1.9550 area and again at 1.9480 area I think the bounce is due. Potential support at 1.9450 area has provided buyers before so I would look for a repeat of a short-covering rally from this area. 94.80 is also 74.6% retracement from recent high and 92.80 area, look for technical buys near-term. BUY under 1.9480 the next 24 hours.
USD/JPY Daily
|
R3: 122.20
|
|
R2: 122.00
|
|
R1: 121.80
|
|
Current Price : 121.48
|
|
S1: 121.20
|
|
S2: 121.00
|
|
S3: 120.80
|
Rate higher on rumor and thinner conditions suggesting this rally is a head-fake and a bull trap. If long, look to liquidate on a retest of 121.80 area but don’t go home long over the weekend on a close back below the 121.00 area; volatility could get larger the next 48 hours after the G7 meeting; Yen focus is huge on this one. Stops above 121.80 said to have mixed offers, stops also under 120.80.
Please see www. ProEdgeFX.com for details
Jason Jankovsky
Trading Futures, Options on Futures, and off-exchange Foreign Currency transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. The information contained on this email does not constitute a solicitation to buy or sell by Infinity Futures, Inc., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law.