Currency snapshot (major pairs)

Dollar index trading at 96.16 (+0.20%)

Strength meter (today so far) – Euro -0.21%, Franc -0.26%, Yen -0.56%, GBP +0.02%

Strength meter (since last week) – Euro -0.60%, Franc -0.77%, Yen -1.63%, GBP -0.27%

EUR/USD –

Trading at 1.113

Trend meter –

• Long term – Sell, Medium term – Sell, Short term – Sell

Support                      

• Long term – 1.06, Medium term – 1.08, Short term – 1.09            

Resistance –

• Long term – 1.16, Medium term – 1.143, Short term – 1.132

Economic release today –

• Unemployment rate for the month of July came at 10.1 percent.
• CPI rose by 0.2 percent y/y in August and core CPI  is up just 0.8 percent y/y.

Commentary –

• The Euro is down as weaker inflation weighs along with a stronger dollar. Active call – Sell EUR/USD at 1.116 with stop loss at 1.15 and target at 1.01. However, in the short run, Euro might ride higher.

GBP/USD –

Trading at 1.309

Trend meter –

• Long term – Sell, Medium term – Sell, Short term – Sell

Support –

• Long term – 1.2, Medium term – 1.27, Short term – 1.29

Resistance –

• Long term – 1.39, Medium term – 1.35, Short term – 1.34

Economic release today –

• Nationwide house prices rose by 0.6 percent in August, up 5.6 percent from a year ago.

Commentary –

• The pound is the best performer this week among majors but down against the dollar. We expect the pound to reach parity.

USD/JPY –                      

Trading at 103.5

Trend meter –

• Long term – Sell, Medium term – Range/ Sell, Short term – Sell

Support –

• Long term – 91, Medium term – 98, Short term – 98

Resistance –

• Long term – 111, Medium term – 107, Short term – 107

Economic release today –

• Housing starts up 8.9 percent in July from a year ago.
• Construction orders declined 10.9 percent from a year ago.

Commentary –

• The yen is the worst performer this week. Active call – Buy Yen @119.5 with stop loss around 123.8 and target at 114 and 110, 108.9 and 98.5. All targets reached, new target 90 added. Yen may retrace to 111 per dollar if BOJ intervenes.

USD/CHF –        

Trading at 0.985

Trend meter –

• Long term – Buy, Medium term – Range, Short term – Range/Sell

Support –

• Long term – 0.9, Medium term – 0.927, Short term – 0.95

Resistance –

• Long term – 1.037, Medium term – 1.01, Short term – 0.994

Economic release today –

• UBS consumption indicator rose to 1.32 in July.

Commentary –

• Franc is moving in line with Euro again. We expect Franc to strengthen against Dollar to as high as 0.86 area in the medium term.