With Chairman Bernanke putting to close speculations of another quantitative easing program this early the Greenback managed to see a sharp turned out across board with Cable and its own QE issues coming to fore now looking the most vulnerable of the majors. With yesterdays MPC minutes and comments from the bodies members it is clear that we now have increased risk of an expansion in the APF. For traders this suggests that any weak results that we get for UK data should be seen as an immediate excuse to go Cable bashing. For those still looking for US QE3 hints you will have to wait for August (26-28) at the Kansas Fed’s annual economic symposium in Jackson Hole Wyoming.
Cable turned out the weakest of the majors Wednesday as markets begin to talk of QE2 for the UK. At the close we had GBPUSD under the previous swing lows just around the 50 Fib retracement level of its rally from late December, daily indicators are bearish. Intraday we have a confluence of bears in the 4H and hourly macd and stochastic the immediate objective a sell-off to the 1.5974 region. We prefer looking for shorts from just under the 1.0666 region for 1.5974 with stops at 1.6095, use an macd-stochastic entry setup to justify taking action.
Attempts to push past the bear channels resistance line ultimately failed with talk of slower growth in the US forcing commodities down and with them a reversal for Aussy. At the close we have a long wick in the daily charts while indicators see a new bear cross in the stochastic as macd continues to head lower. From the 4H picture we have stochastic going oversold while macd has just crossed lower. Hourly macd’s are bearish while stochastic has come out of oversold levels. For now we are looking for a close under the 1.0541 region to start our next down leg, a push to the 1.0447 swing lows strong support area.
We are currently seeing the combined effects of an earthquake and a stronger dollar in USDJPY with prices managing to push past the weeks congestion resistance at 80.37. Daily indicators show candles pushing into the EMA lines while macd rises and stochastic pushes higher. In intraday charts we have macd’s rising across multiple time frames while stochastic is overbought in both the hourly and 4H level. Considering typical daily ranges USDJPY at this point may be too expensive consider buys only from just above the 80.37 or on a close above 80.67 in the daily charts.
After Tuesday’s high wave spinning top suggesting lost bullish momentum we have Wednesday closing with a black body and prices under the flat daily EMA lines. Indicators now have stochastic crossing lower along with a bearish macd in the daily charts. In 4H charts we have stochastic pushing oversold while macd has crossed lower. Hourly macd’s are bearish while stochastic is coming out of oversold levels. For now we are looking for a push under the 1.4290 region to signal the start of the next down leg to 1.4191.
Given the broad based bounce for the greenback kiwi closed with a long wick in the daily chart yet still with a decent body to argue a bullish close. Daily indicators see macd’s technically bearish while stochastic is headed for overbought levels. Intraday we have 4H macd topping off while stochastic is heading for oversold levels. Hourly indicators are mixed as stochastic come-off oversold levels while macd heads lower. Look for buys from the 0.8061 area for a test of 0.8193, alternatively consider shorts from just under 0.8193.
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