UBS FX Trader View:

EURUSD:

Levels EURUSD:

Support – 1.0520-30, 1.0490-00, 1.0455 (fib)
Resistance – 1.0580-90, 1.0600-10
Comment: Political risk was driving much of the overnight price action until the market got itself a little too giddy and short at the lows and the subsequent rebound to put the pair back at starting gate for the day. The rebound(s) were attributed to political developments in France and the Fed minutes. It takes very little for the market to pull back when it overextends itself and we should expect this kind of choppiness as we enter March. The market wants to be long USD, and justifiably so, but it also means that the pair will and cannot fall out of bed but rather we should see a steady trend lower with daily ranges in or about the range of the overnight option break-evens. In terms of the Fed minutes, there was some speculation about the timing of the next hike and also a disclaimer towards a too strong USD. I am convinced there will be no hike in March given the geo-political uncertainties overseas together with a wait-and-see approach of the actual implementation of the promised initiatives by the Trump Administration. Add to that a general worry how aggressive hikes will impact the housing market both demand wise and for the masses of people who currently finance with variable rates. It is prudent to wait. Come June however, barring a melt-down in Europe from a Le Pen win, then Fed will hike another 25 bp. Easy does it! As to the disclaimer about the USD, it is a bit odd, a stronger USD provides an indirect hike per se and that should really not be a problem given the current hawkish bias. Gives the Fed a reason to hold back until June as well. Intraday, expect rangy conditions and will trade 1.0530-80 with stop 20 pips north and south of those pivots. Support 1.0520-30, 1.0490-00, 1.0455 (fib). Resistance 1.0580-90, 1.0600-10.

GBP :

Levels GBPUSD:

Support – 1.2430, 1.2400, 1.2380
Resistance – 1.2470, 1.2510, 1.2585
Comment: As long as it is trading above that 1.2380-00 level which held several times I would prefer to trade GBP from the long side. Buy dips with a stop below 1.2375, targeting a move back to 1.2500. EURGBP, back to this level again where we were a couple of days ago. .8497 is the 50% retracement of the move since 17 Feb and I want to stay short with a stop above .8510, targeting move back to mid .8400s. Sell 1.0665-80, s/l 1.0690, target 1.0640.

JPY:

Levels USDJPY:

Support – 112.91 (yesterdays lows), 112.62 (Fridays lows), 111.60 (feb lows)
Resistance – 113.79 (fibo level), 114.06 (fibo level)
Comment: The Bayrou story on Wednesday seemed to scare off the short term EUR bears, but there was not really a follow through and EURJPY is already 60 points off the reaction highs again, there still seems to be pain in the rates market and this morning French yields are lower on the opening, but once that turns, pressure should be back on EUR crosses. The FED sounds confident, but maybe not confident enough for a march hike, so little impact from that side and hence focus can for now stay on the euro zone. Still playing EURJPY from the short side – 119.90 good resistance for now, but I keep my stop above 120.35 (Tuesdays highs) – 100dma right here 119.44, first support 118.55 38.2pct retracement june dec 16 rally.

CHF:

Levels USDCHF:

Support – 1.0080 (intraday), 1.0000/10 (base 16/feb)
Resistance – 1.0135 (intraday), 1.0170 (double top)
Levels EURCHF:
Support – 1.0630 (multiple base), 1.0530 (base 31/Jul/15)
Resistance – 1.0680 (top 22/feb), 1.0720 (top 3/feb)
Comment: CHF tested the topside on Wednesday Morning tough that move was driven by EURUSD. It eventually topped at 1.0165, the same level as on the 12th of Jan, and been drifting gradually back lower since the FOMC minutes. I would look to fade intraday rallies starting at 1.0120 with a tight s/l above the double top at 1.0170 targeting a move back towards parity. EUR/CHF bounced off the 1.0630/40 level on back of the latest French election headlines, dealing back to 1.0675. I favour selling intraday rallies from here as long as it stays below 1.0720.

AUD:

Levels AUDUSD:

Support – 0.7660-65, 0.7590-10 (*
Resistance – 0.7730-35 (*), 0.7550-60
Comment: A weaker Capex this morning didn’t put much of a dent in the bullish Aussie sentiment. The pair quickly tested the lower end of the channel in place since the start of the year, 0.7665, and promptly rebounded. Overall, geo-political concerns and natural demand for Aussie in the commodity space will keep Aussie firm for now. EURAUD tested a multi-year low of 1.3632 on Wednesday before rebounding. Expect continued demand to sell EURAUD (and EUR/JPY) as we approach event risks from European elections in the spring. The market is long Aussie and justifiably so but a correction is needed at some stage and. without it, it becomes too congested and the pair ends up in listless 30-40 pips daily ranges. Intraday, sell 0.7690-20, SL at 0.7735, test of break-out sub 0.7665 with trailing stop.

NZD :

Levels NZDUSD:

Support – .7125/35 (100 & 200 dma), .7045 (base 12/Jan), .6950 (base 9/Jan)
Resistance -.7215 (intraday), .7250 (top 16/Feb), .7380 (top 7/Feb)
Comment: NZD has been edging higher over night as the market took dovish read on the FOMC minutes. Little change to my view, I would stick to fading into the rally here keeping the s/l above .7250, targeting another test of the .7125 technical support level.

CAD :

Levels USDCAD:

Support – 1.3100 (bas 21/feb), 1.3025 (short-term trend line), 1.2970 (base 31/Jan)
Resistance – 1.3170 (intraday), 1.3210/15 (double top), 1.3285 (100 dma)
Comment: CAD had a test the upper end of the recent trading range on Wednesday on a combination of Oil trading in the red and disappointing Retail Sales numbers from Canada but it couldn’t hold above 1.3200 and drifted back off after the FOMC minutes. It remains stuck within 1.30 and 1.32 for now as we are awaiting Friday’s CPI numbers, another week number should see a break to the topside with the potential for a test back towards the highs in Jan (1.3400).

Scandies :

Levels EURNOK:

Support – 8.8000, 8.7500, 8.7000
Resistance – 8.8550, 8.9000, 8.9300
Levels EURSEK:
Support – 9.4350, 9.4000, 9.3800
Resistance -9.5000, 9.5560, 9.6000
Comment: EURNOK once again printed fresh lows for only to bounce back in the afternoon. Wednesday was as special case though with a hard rally in Euro and euro-crosses after the story of Macron and Bayrou joining forces. We are still to see a follow through but if the conviction that Le Pen losses ground takes on, the euro-cross selling we have witnessed will revert and include the Scandies as well. Currently I still favour NOK and SEK over the Euro but will keep a tight stop in both pairs, as a reversal could potentially be large if sentiment change (s/l 8.8500 and 9.5000 respectively).

ZAR :

Levels USDZAR:

Support – 12.90
Resistance – 13.20
Comment:. Two way interest our side according to the market price action in USDZAR. 12.90 to keep an eye on where bids were lined up last week interbank. topside 13.20 strong resistance.

TRY :

Levels USDTRY:

Support – 3.5500
Resistance – 3.6000
Comment:. USD traded heavily again on Wednesday with stops appearing to be triggered through 3.6000 . We were again net buyers of USD but in more significant size than we have seen lately . The next significant support is at 3.55 with resistance now 3.6000 . We will look to establish long positions towards the 3.5500 support.

XAU :

Levels XAUUSD:

Support – 1225, 1218, 1210
Resistance – 1245, 1252, 1260
Comment: Overnight price action in xau (dovish fomc minutes) again suggest quick buyers on any dips which makes perfect sense given that uncertainty is still lingering in the market. Despite EURUSD selling in the early Europe session, XAU hardly had any dips lower driven more by lower EURJPY price action within the market. Unless any of the political risk/ issues subside, we will still see this XAU test higher. Look to buy dips 1228/32 SL 1225 TP break of 1245 to 1252.

 

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