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The Big 3 FX Crosses
It would appear that the Bank of England and ECB want to make life just that little more easy for borrowers to start 2014, as the former has an inevitable date with rising interest rates to cool off the housing bubble and the so London “economic miracle” – another almighty bubble. Cynics such as myself always thought that the “Forward Guidance” policy was about as useful as waving a tatty bit of paper and proclaiming “peace in our time”, and it does not require much imagination to see this panning out badly as the General Election approaches….
In contrast, the ECB are starting to realise that interest rates would have to be -5%, rather than 0% currently to even begin to get many of the Eurozone countries out of the economic hole they are currently in!
Away from Europe, there would appear to be a pause in the Dollar / Yen as we await Prime Minister Abe’s next Yen weakening rabbit to be pulled out of the economic policy hat.
Sterling / Dollar: Fresh Impetus On Long Awaited Journey Towards $1.70
Initial February bear trap from below former January floor at $1.6310 and the 50 day moving average at $1.6422.
Modest RSI level near 60 suggests that it is early days for latest rebound, backed by triple tested RSI uptrend line.
Rising June price channel has its resistance line projection target towards $1.70 – a possible 1-2 month target.
Euro / Dollar: 50 Day Moving Average Resistance Through $1.3650
Overall uptrend line from July remains in place at $1.35
Struggle towards 50 day moving average and two failures through $1.3650 so far this month.
Risk of 200 day moving average test towards $1.34 if 50 day line not recovered over the next couple of weeks.
Dollar / Yen: Support Well Above 100 Yen
February support so far above former September 100.61 resistance / 200 day moving average at 100.19, and of course key 100 level.
Rising trend channel from July with 101.40 support line to buy dips towards currently.
Upside seen at 106 – top of 2013 price channel, especially on a break of 20 day moving average at 102.75