USD may continue to fall vs JPY, consolidate overall to end the week


The US Dollar has had a choppy session vs the JPY and is down vs most other pairs today. The Japanese Nikkei is currently trading about flat (NKY up +0.05% 4:51 GMT). US futures are slightly down while EZ futures are mixed (4:51 GMT). JPY CPI ex fresh food came in as expected at 1.3% vs 1.4% expected with 1.3% prior while CPI came in at 1.6% vs 1.6% expected and 1.5% prior.  Gold is struggling to press above $1300.

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Today is more quiet than yesterday when it comes to event risk and with it being a Friday it is unlikely to see major market moves today.

Entire calendar here from dailyfx.com

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AUD/USD has had limited downside movement after putting in a bearish engulfing candle, we could see more movement to downside next week.

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GBP/USD has not done a whole lot so far today, GBP/USD top still seems to be a possibility but the outlook is clouded for now with GBP rate hike speculation high with last weeks GBP unemployment data coming in very strong and the Federal Reserve coming off as dovish. The trend has been up since August 2013 but it may start to stall since it is coming into major resistance at 1.70. For now we continue to hold a small short (this is a speculative counter-trend trade).

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More on GBP/USD here

NZD/USD is has fallen even after the RBNZ hiked rates 25bps from 2.75% to 3.00%. There is always the possibility for further downside until we break out of this downward RSI trend. Major support is market by the long term 0.236 fib at around 0.85. Look for a bullish RSI break for possible NZD/USD continuation higher. For now we are holding a small long.

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More on NZD/USD here

USD/JPY is facing some near term trend line resistance dating back to the beginning of 2014. RSI has now turned from neutral to bearish under 50 and is opening up the potential for further declines. The fact the it put in doji candle shows some market indecision. Look for 102.2 and 101.9 for possible support. We are currently holding a small size short after taking profit on our long trade that was placed a week ago.

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More on USD/JPY here

USD is facing some resistance near term, reaction low resistance and down trend resistance may prevent further USD strength for the time being.  Longer term we expect the USD to rise overall as the FOMC continues to Taper, for now some consolidation should be expected.

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Gold remains in a downtrend in the longer term since mid 2012 and is currently facing trend line resistance as well as $1300 resistance. Gold is currently trading around $1291.

SPX500 has been up 7 days in a row, a pullback has occurred in the CFD but the index itself closed a little higher. While we are unable to press above all time highs there is a risk of steeper declines.

I have added an overlay of Gold to the SPX500 to prove a point that the two are not always inversely correlated. Last month Gold has been pretty correlated vs the SPX500, maybe on possible bubble or market top fears but has dropped off recently…

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