- Intraday Comment
-
29.11.2016, 1pm
• The dollar traded higher or unchanged against all but one of its G10 peers during the European morning Tuesday. The losers were JPY, AUD and CAD in that order, while the greenback remained virtually unchanged versus CHF, SEK, NOK, NZD and EUR. The sole winner was GBP.
• Germany’s regional CPI rates rose on average in November, hinting that the nation’s preliminary CPI rate, due out later today, may rise as well and meet its forecast. In such a scenario, we see a high likelihood for Eurozone’s preliminary CPI rate, due out tomorrow, to also edge higher. Something like that could reveal that the ECB’s prior easing measures have indeed started to filter into the real economy, and thereby it could be the trigger for a modest rebound in the euro, perhaps for EUR/USD to gradually test the 1.0660 zone again.
• EUR/JPY traded higher during the European morning Tuesday, after it triggered some buy orders near the support obstacle of 118.60 (S1). The short-term trend remains positive in my view and as such, I would expect the bulls to continue pushing the rate higher. A break above the 119.50 (R1) barrier is possible to aim for another test near the psychological zone of 120.00 (R2). Another break above that obstacle is likely to set the stage for more bullish extensions, perhaps near the 122.00 (R3) territory, marked by the peak of the 24th of June. Shifting my attention to our short-term momentum studies, I see that the RSI rebounded back above 50, while the MACD, although below its trigger line, appears ready to bottom within its positive territory. These indicators show that the momentum is turning positive again and they amplify the case for the pair to continue trading north for a while. As for the bigger picture, the break above the downside resistance line taken from back at the peak of the 29th of January may have turned the medium-term picture positive. However, I would like see a decisive close above 120.00 (R2) before I get confident on larger bullish extensions.
• Support: 118.60 (S1), 118.10 (S2), 117.70 (S3)
• Resistance: 119.50 (R1), 120.00 (R2), 122.00 (R3)
