Current Positions:
- Flat
Typical Time Frame: 1-day to 1-week
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The new week starts with the US Dollar finding increasingly firm technical footing, despite the lack of positive data the past several weeks. The US Dollar's resilience can be attributed to exogenous concerns elsewhere, mainy soft Chinese growth, continued dovish rhetoric out of Japan, and political tension in Cyprus and Italy. I like the US Dollar this week given the expected rebound in American economic data, in particular the 1Q'13 GDP reading due on Friday (annualized +3.1% expected from +0.4% in 4Q'12).
We might be seeing a shift in the broad fundamentals supporting the commodity currency bloc (Aussie, Kiwi, and Loonie) now that Chinese policymakers are directly talking down economic growth expectations. People's Bank of China Governor Zhou said that “China is undergoing economic restructuring, which sometimes is not in lockstep with growth...We need to sacrifice short-term growth for the purposes of reforms and structural adjustments.” This should weigh on base metals' prices and accordingly, dent bullish prospects in the Aussie and Kiwi.
AUDUSD
Daily: (8-EMA < 21-EMA) < 200-DMA = BEARISH
4H: 8-EMA < 21-EMA = BEARISH
1H: 8-EMA < 21-EMA = BEARISH
Position: Flat, waiting on 1H crossover for a sell signal
EURUSD
Daily: (8-EMA > 21-EMA) > 200-DMA = BULLISH
4H: 8-EMA < 21-EMA = BEARISH
1H: 8-EMA < 21-EMA = BEARISH
Position: Flat
GBPUSD
Daily: (8-EMA > 21-EMA) < 200-DMA = NEUTRAL
4H: 8-EMA > 21-EMA = BEARISH
1H: 8-EMA < 21-EMA = BEARISH (close to flipping)
Position: FLAT, waiting on 1H crossover for a sell signal
USDJPY
Daily: (8-EMA > 21-EMA) > 200-DMA = BULLISH
4H: 8-EMA > 21-EMA = BULLISH
1H: 8-EMA < 21-EMA = BEARISH
Position: Flat, waiting on 1H crossover for a buy signal
As always, any other trade ideas and general macroeconomic musings can be found in the DailyFX Real Time News feed, or by following me on Stocktwits/Twitter @CVecchioFX.
I also host a weekly Live Trading Q&A in DailyFX Plus, on Tuesdays at 07:15 EST / 12:15 GMT, in which I delve deeper into my positions and thought processes behind my analyses.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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