Morning Report: Markets Marking Time Ahead Of NFP’s

Market Commentary  

USD little changed against EUR and JPY; markets are waiting to take directional bets post US jobs data; Yen retests breakout at 124.60 and holds; Cable down on dovish MPC vote count (8-1).

EURUSD remain in the lower end of its recent range and the pair got a lift to session high of 1.0942 by the upbeat German industrial orders. German industrial orders were much better than expected, jumped to 2% MoM from the previous -0.2%, against the market consensus of 0.2%.

GBPUSD fell sharply over 130 pips to 1.5466 low after the BoE minutes were not as hawkish as expected, serving a blow to the expectations of rate hike this year. The minutes showed that the vote for a rate hike was 8:1 while market consensus was for 7:2. BoE said its forecasts were based on bets in financial markets that interest rates would only start to rise in the second quarter of next year.

USDJPY held steady yesterday as BoJ’s monetary policy and US nonfarm payrolls hit the wires today. The BoJ’s monetary policy meeting statement as forecasted kept policy unchanged and maintain the unprecedented monetary stimulus. BoJ Governor Kuroda holds his press conference this morning, players unlikely to add to risk ahead of the NFP release this afternoon.

Technical  Commentary 

EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish

  • While support towards 1.08 remains in tact a break back above 1.0950 would suggest a return to consolidation and the familiar 1.1050 level. While 1.0950 contains upside reactions bears target stops sub 1.08
  • Daily Order Flow bearish; OBV sideways, Linear Regression pierces midpoint from below, Psychology rejected at midpoint test from below
  • Monitoring intraday price and Order Flow indicators on a test of 1.0950 or 1.08

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GBPUSD: Short Term (1-3 Days): Bullish  – Medium Term (1-3 Weeks) Bearish

  • 1.55  bids continue to support and sustain the range trade between 1.55 and 1.57, a close below 1.55 would suggest bearish symmetry target at 1.5285 is in play. A break and close above 1.57 opens a retest of 1.5830
  • Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology continue to rotate around midpoints with a bearish bias as Linear Regression breaks lower
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750

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USDJPY: Short Term (1-3 Days): Bullish  – Medium Term (1-3 Weeks) Bullish

  • Bulls target 125.85 and 128 in extension, intraday downside reactions remain supported towards 123 only a failure at pivotal 122.50 concerns medium term bullish view
  • Daily Order Flow bearish; OBV sideways to up, Linear Regression retesting midpoint from above, Psychology bullish
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 122.50

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EURJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

  • Bids at 1.35 trendline support for now, a close below 135.50 suggests retest of 133 range support failure here opens a retest of 2015 lows. While 135 caps downside expect retest of 138
  • Daily Order Flow bullish; OBV up, Linear Regression pierces midpoint from below, Psychology rejected at midpoint test from below.
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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