01 February, AtoZForex.com, Amsterdam — Kicking off the new Forex trading week, the Swiss global financial services company has provided its latest intraday setups. A significant tool that traders need to acknowledge. The upcoming ECB Draghi speech, UBS is set to short EURUSD. The other major pairs included in the analysis are EURUSD, EURJPY, AUDUSD, NZDUSD and USDCAD.
Commencing the analysis with EURUSD, the bank also notes that there is still no clear direction of the currency pair for the moment, as today ECB Draghi is due to testify on the 2015 ECB Annual Report before the European Parliament. The Swiss bank prefers to short EURUSD.
USDJPY & EURJPY
Last week JPY ended as the largest currency mover on Friday after the Bank of Japan unleashed new methods to fight growing economic worries. Governor Kuroda deployed negative interest rates. Hence, UBS is set to long USDJPY ahead 121.00, while for EURJPY it is looking to long at 131.30/40 with a stop below 130.80.
Building further the bank indicates that the support of USDJPY lies at 120.90, 120.61 and 120.31; while the resistance is at 121.50, 121.70/80 and 122.30: “The big level on the topside for EURJPY is 132.25.”
As the Reserve Bank of Australia (RBA) meets tomorrow and is expected to leave the OCR unchanged at 2%. There is a risk for a dovish tone from the RBA in line with recent comments from other central banks, and this seems to be the reason why AUDUSD hasn’t benefited more from the BoJ’s move on Friday.
Nevertheless, Aussie is marked with a correction back to the 0.7200 levels, after hitting 0.7150 last week. Considering that central banks remain accommodative, UBS prefers to Long AUDUSD on dips between 0.7000 and 0.7050, while having a stop below 0.6950 and targeting 0.7200.
Moving next to Kiwi, the pair is currently in the midst of its range between 0.6350-0.6600. UBS is looking to long NZDUSD on dips, while having a stop through: “The 0.6340 area and targeting a test of the upper end of the range.”
Lastly, we have the Loonie which price action is still whippy, considering that liquidity remains thin. Under the current market it’s vital to select levels instead of going after breakouts. In general, the sentiment is still to the downside, hence the bank prefers to: “Fade USDCAD rallies towards 1.4150, with a stop through 1.4225, targeting a test of 1.3950. Unemployment data on Friday is the main data highlight this week.”
Let us know down in the comments section what you think of 01/02 UBS intraday analysis!