In a surprise move today the People’s Republic of China, raised its USD/CNY rate by almost 2% while also indicating that greater volatility ahead could be expected. This was the biggest one day drop in its currency ever since China adopted market exchange rates in 1994.
Most major currencies and especially AUD and NZD were hit the hardest as the USD strengthened across the board. This is yet another measure to spur the economic slump that hit the country over the past few months. AUDUSD dropped because Chinese companies purchasing products from Australia or New Zealand have now less purchasing power with a weaker Chinese Currency.
NZDUSD also dropped 100 points to 0.6540 while USDJPY also jumped to 124.89. This move is widely expected to support USD versus Asian currencies.
EUR/CHF is continuing with its up-trend, trading at its highest level since the CHF de-pegged from the EUR in January in a move that can be explained by a reversal of safe-haven flows as Grexit risks have been reduced.
The economic calendar, offers little data yet again today, with the biggest news being the ZEW Economic Sentiment Index to be released at 09:00 GMT.
Trading Quote of the Day: “If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time”.
USDCAD
Pivot: 1.31
Likely Scenario: Short positions below 1.31 with targets @ 1.304 & 1.299 in extension.
Alternative scenario: Above 1.31 look for further upside with 1.315 & 1.318 as targets.
Comment: Intraday technical indicators are mixed and call for caution.
USDCHF
Pivot: 0.979
Likely Scenario: Long positions above 0.979 with targets @ 0.989 & 0.994 in extension.
Alternative scenario: Below 0.979 look for further downside with 0.9755 & 0.9715 as targets.
Comment: A support base at 0.979 has formed and has allowed for a temporary stabilisation.
OIL
Pivot: 43.9
Likely Scenario: Long positions above 43.9 with targets @ 45.4 & 46.55 in extension.
Alternative scenario: Below 43.9 look for further downside with 43.3 & 42.5 as targets.
Comment: The RSI is mixed to bullish.
DAX
Pivot: 10600
Likely Scenario: Long positions above 10600 with targets @ 11800 & 12390 in extension.
Alternative scenario: Below 10600 look for further downside with 10000 & 9245 as targets.
Comment: The RSI is mixed.
Important note: These technical and research reports are provided to easy-forex® as a subscriber of third party providers. They are provided for informative purposes only and in no way can they be considered as a recommendation by easy-forex® to you to engage in any trade. Hence, easy-forex® shall not be held responsible for any outcome of trading decisions, in regards with these reports or similar reports. You hereby acknowledge that using the information entailed in these reports is at your sole responsibility and you will have no claims with regards to these reports against easy-forex®. If you do not agree to this, you are strongly advised not to use these reports.
Easy Forex Pty Ltd (AFSL 246566 ABN 73107184510) makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Easy-Forex recommends that you read the Regulation Page, The Product Disclosure Statement, the Terms and Conditions and the Financial Services Guide before making any decision concerning Easy-Forex’s products.