Technical Research

21 March 2014

Daily FX Technical Strategy

Markets are stabilising, as todays Japanese holiday saw trading volumes tail off in Asia. Thursdays rally in US equities was a small positive for risk and AUDUSD posted a bullish daily candle that negated the prior bearish close. This suggests scope for room back towards the recent range highs. AUD also continued to outperform against crosses such as the EUR and NZD. AUDNZD is forming a potential base pattern and a move above recent highs near 1.0625 would confirm further profit taking. Elsewhere the USD has managed to retain bid, particularly against major currencies such as EURUSD and GBPUSD and in the absence of basing signs we expect the recent downtrends to continue.

Chart of the day: AUD outperforms

Tactical opportunities
AUDUSD has turned higher. We would buy against
the 0.8990 are for a test of the 0.9140 range highs.

USDCAD profit taking provides better levels to buy

against the 1.1155 area. Our targets are near 1.1350/60.

EURAUD is extending lower. Below 1.5150 would

signal a move towards the 1.4985 year-to-date lows. FIGURE 1 Daily Sentiment Index

Source: http://trade-futures.com

Barclays | Daily FX Technical Strategy

FX CHART FOCUS AND LEVELS

FIGURE 2 Profit taking in USDCAD signals room for a move back towards 1.1155. Overall we are bullish towards 1.1350/60.
Support 1.3750 EURUSD 1.3705 0.8800 USDCHF 0.8725 101.95 USDJPY 101.20 1.6425 1.6375 140.45 EURJPY 139.70 0.8325 EURGBP 0.8285 1.2160 EURCHF 1.2120 0.8990 AUDUSD 0.8925 0.8500 NZDUSD 0.8440 1.1190 1.1155 Resistance 1.3970 1.3850 0.8900 0.8870 103.15 102.70 1.6670 1.6585 142.25 142.00 0.8425 0.8405 1.2220 1.2205 0.9210 0.9140 0.8645 0.8570 1.1350 1.1280 Bearish Bearish Bullish Overbought Bearish Bullish Bullish Bearish Momentum

GBPUSD

Bearish

USDCAD

Bullish

Note: Momentum readings above are systematic and may differ from our view. Overnight changes signals are underlined. Click here to access additional systematic readings on TRENDS, a technical strategy cross-asset tool on Barclays Live.

21 March 2014

Barclays | Daily FX Technical Strategy

FX VOLUME FOCUS
FIGURE 3 Increased activity with the move lower in GBPUSD signals investor commitment to sell.

FIGURE 4 Daily Volume rankings and highlights

Source: All observations are based on VolT and not volumes in the entire FX market. VolT data includes Voice flows, Barclays FX trading platforms such as BARX, and third-party trading platforms, including FXAll and 360T.

21 March 2014

Barclays | Daily FX Technical Strategy

FX AT A GLANCE
FIGURE 5 FX Pair and bias View

EURUSD

The move below 1.3800 confirmed our suspicion of further EURUSD weakness. We are looking for a move towards the 1.3700 area and then targets in the 1.3660 area. Above the 1.3975/1.40 area is needed to resume the up-move off the 1.3475 lows towards 1.4220/50 and 1.4325. We are neutral within range. It would likely take a break above support in the 2.80% area for US 10s to signal further upside for USDJPY and a test of the 103.75 range highs. A move below support at 101.20 is needed to signal resumption of weakness towards the 200-day average near 100.40. The succession of lower closes confirms our bearish view for Cable. Our initial targets are towards the 1.6420 area (100-day average). A move below would signal room for an extension towards the final Fibo level near 1.6375. Having reached our initial target in the 0.8850 area and in an absence of topping signals, we are now looking for further upside towards targets toward 0.8900, the March highs. A move below 140.45 would encourage our bearish view towards initial targets near 140.00, the 100-day average. Below there would signal further downside towards the daily cloud base near the 138.80 lows. Resistance is at 142.00. A bullish daily candle on Thursday negated Wednesdays bearish engulfing pattern and keeps us neutral within a 0.8315/0.8420 range (100 and 20 day averages. Having rallied to within 10 tics of our 1.2215 bullish target, we are turning neutral as yesterdays low close warns of near-term buyer fatigue and risk of a range over 1.2120 for the next couple of sessions. A hammer like candle on the daily plot has encouraged us to re-instate our bullish view as it negates the prior key bearish day. While support in the 0.8990 area underpins, we are looking for a move higher towards the 0.9140 highs (near 200 day). We are staying neutral and would prefer to buy any dips within the overall raising trend. A move below the 0.8500 area would provide an opportunity to buy at better levels towards 0.8430. Our greater view is bullish towards targets near the 2013 peak at 0.8680. Medium-term targets on a close above 0.8680 are to 0.8845. We have turned neutral as Thursdays low close points to buyer capitulation and in the least a pause in the recent up-move. Risk is for a move back in range towards former range highs near 1.1155 where we would look for signs of a base. Overall we are bullish towards targets in the 1.1350/60 area.

USDJPY

GBPUSD

USDCHF

EURJPY

EURGBP

EURCHF

AUDUSD

NZDUSD

USDCAD

Note: Colour legend for short-term trend bias/arrows: Bullish, Bearish, Neutral.

21 March 2014