Morning Report: Markets Muted Ahead OF FOMC

Market Commentary  

Yesterday’s US Consumer confidence data was a big miss to the downside and contributed to some dollar weakness. Profit taking overnight sees the EURUSD break the 1.1050 pivot. FOMC statement is key today and market will be looking for Fed clarity on a September rate hike expect some choppy price action as players pare positions into the risk event.

USDJPY still stuck on a 123 handle, and we’ll need the FOMC to nudge the pair out off it. Players appear to prefer going into this potentially pivotal event with bullish USD positions against the JPY, hence giving the pair support today. The pair has been  trading with a softer tone, month ­end flows and equities off the highs put pressure on the pair in recent days but the selloff in Chinese stocks and commodities has slowed, reducing the demand for the safe-haven currency.

GBP Q2 GDP release yesterday confirmed the UK economy is chugging along, and this was enough for cable to retake the 1.56 handle. All about the FOMC today, GBP will benefit if we do get a dovish tilt to the statement.

Technical  Commentary 

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

  • Rejected at initial test 1.1140/60 resistance a loss of 1.0960/40 would concern near term bullish bias. While 1.10 supports intraday downside expect test of 1.12 next.
  • Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology bullish but lack momentum and are rolling over to retest midpoints from above
  • Monitoring intraday price and Order Flow indicators on a test of 1.12 or 1.08

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

  • While 1.5675 contains upside reaction a close below 1.55 would suggest bearish symmetry target at 1.5285 remains in play a close above 1.57 negates medium term bearishness.
  • Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology rotate around midpoints
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750

gu2015-07-29 07_29_32-

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

  • Bulls target 125.85 and 128 in extension, expect intraday downside reactions to be supported towards 123 only a failure at pivotal 122.50 concerns medium term bullish view, failure here opens 120 in retest of ascending triangle trend line.
  • Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology pierce midpoints from above.but lack downside momentum
  • 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

  • 133/34 range support continues to hold and price erodes near term trendline resistance this break suggests a retest of 138, advance above here opens 143.
  • Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology pierce midpoints from above
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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