EURCHF Jumps From 1.2060 Level On Talk Of Superannuation Buying Interest

• JPY rises in Asian trade as commodity currencies fall despite equities largely positive and metals unchanged
• Gold drifts slightly lower from yesterday’s highs around $1730; currently at $1719 ahead of the European opening
• EURUSD said to have bids set around 1.3080 as price lifts from that level in early trade
• EURCHF jumps from 1.2060 level on talk of superannuation buying interest around that level
• GBPUSD lifts off early lows as EURGBP falls back under 0.8350
• US Q4 GDP data released at 1.30pm today

Yesterday the USD Index hit its 38.2% retracement target right on the button at 79.08; I think it traded as low as 79.07 before bouncing back to 79.53 overnight.

That was one reason why the EURUSD fell back. Yesterday it tried repeatedly to break above 1.3175 and when that break occurred the price jumped rapidly through 1.3150 and up to as high as 1.3184, where upon a very large seller smashed into the market.

That put paid to any further upside for the day. The rest of the US session after the European close was all about grinding out positions caught long on the day at the top end of the range. That ensured that the price fell harder once technical support at 1.3135 was broken.

Overnight the price fell back to the Gap level and previous years high at 1.3077 and Europe may well have a look at that level again today. Looking at the price action a mini head and shoulders looks to be forming on the hourly charts.

Elsewhere the pound outperformed the EUR once again yesterday. Retail offers above 1.5730 capped the upside yesterday afternoon but the market failed to get those rumoured stops out above 0.8420 and after many attempts to break above 0.8400 the price just fell away yesterday evening back to around buying interest at 0.8350.

Overall the price action on this one looks really sideways between 0.8310-0.8410 at the moment.

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As for cable, technically that looks a lot firmer to me. Its recent rise saw it close for the first time since November above its 90 day moving average.

That was at 1.5662 yesterday, but it’s rising and so is the 30 day. The 200 day is at 1.5968 and clearly the other two moving averages are trying to move up to meet the 200 day.

The EURCHF slipped again last night but unless the barrier at 1.2050 gives way it’s not going anywhere, and in any case there’s the small matter of the 1.2000 peg to hurdle. Clearly the more it edges lower, the shorter someone must be getting; or rather more stale longs will erode.

Today we have the release of US Q4 GDP at 1.30pm. That’s expected to come in significantly on an annualized basis at 3% from the previous 1.8% reading. By all accounts it should be a good number here today.

Gold has continued to remain firm following the Fed decision on Wednesday; its off its yesterday highs around $1730 but the pullback looks limited at this stage with the current price around $1719.

The EURUSD slipped back to around 1.3080 in early trade but buying interest said to lie around that level helped push the price back to 1.3115.

The current sideways price action between 1.3080-1.3120 could play out this morning as the market battles out the direction from here.

The EURCHF has lifted sharply from the 1.2060 region as talk of superannuation buying interest there helped the price lift sharply to 1.2085.

However the price action looks still sideways for the time being and we will simply have to wait for something more dramatic to take place. The more this goes on the more there is a need for the SNB to act more decisively.

The key to another move from them will probably come from Swiss buying interest and if we see that it may provide an early clue that something is about to happen.