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Sat, 22nd July 2017

Anirudh Sethi Report

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Archives of “Forex” Category

Moody’s say measures from China’s financial work conference are credit positive

US rating agency Moody’s out with a note on China 21 July

  • highest level endorsement by Xi and top policy makers of measures are credit positive for sovereign
  • scrutiny from highest levels of govt on financial stability, SOE leverage, pace of debt growth in economy, among SOEs is likely to slow
  • forecast debt will continue to rise, inc for govts, household and non-financial corps#

Meanwhile EURUSD 1.1630, AUDUSD 0.7896, GBPUSD 1.2970 USDJPY 111.96

EURUSD breaches 1.1600 level. Trades above topside trend line.

Racing higher

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The EURUSD has raced above the 2017 high at 1.15826, the natural 1.1600 level,  and also above the old trend line (that line was breached on Tuesday but failed).  The pair has also moved above the 2016 high price at 1.16156. The high just peaked at 1.1630.  We are quickly back to 1.1615 currently after the trigger of the stops.
Support will now be eyed at the 1.1600 area and then the old 2017 high at 1.15826.

EURJPY tumbles through trend line support

The move lower in the USDJPY has been mirrored (sort of) by a tumble in the EURJPY.  That pair has been getting bullish interest from analystsBAML and Soc Gen have been promoting the long side).  However, the technicals just did not support the upside in trading today.
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Looking at the hourly chart, the price could not extend above the 200 hour MA yesterday. That would be ok if the 100 hour MA could hold support. It did not.
Moreover, buyers gave up fully, on the break of the lower trend line at 128.86.  Buyers turned to sellers and the price has moved to test the lows from last week at 128.59 (from Friday). The low on Thursday comes in at 128.48.

USDJPY trades to new session lows. Trades below 100 and 200 day MAs

50% retracement and lower trend line now eyed

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The USDJPY is trading below the 100 and 200 day MAs at 111.756 and 111.807. The low traded to 111.677.  Stay below the 111.807 level now and the sellers are more in control.
Looking at the 4-hour chart above, the price is also traded below the 200 bar MA on the 4-hour chart at  111.735.   The next targets are at the 50% of the move up from the June 14th low. The 111.43 is the lower trend line. The 61.8% of the same move higher comes in at 110.963 (close enough to 111.00).
Key time for the pair.