Morning Report: Sideways In Summer Ranges

Market Commentary  

US rates down hard, dollar broadly lower as Employment Cost Index crashes to 33 year low; argument for wage pressure from full time jobs market hurt; September rate hike odds lengthen again.

EURUSD has traded largely sideways at 1.0980 sideways after dropping to an intraday low of 1.0940 on upbeat US PCE price index data. Eurozone PMI was slightly revised down from 52.5 to 52.4, but there was no impact on the euro. EUR vulnerable but unlikely to break too low pre-Friday US jobs data.

GBPUSD traded heavily during European session despite the better UK manufacturing PMI, the pair continued to dip to 1.5562 low when US session started. The BoE rate decision and inflation report are due on the same day for the first time this Thursday, expecting there might be at least one policy committee members voting in favour of a rate hike.

USDJPY weakened overnight post little worse-than-expected US data. Greenback was rising during Asian session but lost strength after US income and personal consumption data and then dropped further after the ISM showed a decline from 53.5 to 52.7, while construction spending rose 0.1% in June, below the 0.6% expected

Technical  Commentary 

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

  • Range trade persists within support at 1.0880/60 and resistance at 1.1140/60. A downside break targets stops below 1.08 an upside break targets stops above 1.12.
  • Daily Order Flow bullish; OBV sideways to down, Linear Regression attempting midpoint test from below and Psychology bearish
  • Monitoring intraday price and Order Flow indicators on a test of 1.1140/60 or 1.0880/60

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

  • A close below 1.55 would suggest bearish symmetry target at 1.5285 remains in play. While intraday downside reactions are contained by pivotal 1.5550 another assault on 1.57 is possible.
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology continue to rotate around midpoints with bullish bias
  • 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): Bearish  – 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, failure here opens 120 in retest of ascending triangle trend line.
  • Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology pierce midpoints from below but lack upside 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 while intraday downside reaction remain supported at the 1.35 trendline this suggests a retest of 138, advance above here opens 143. Failure at 135 sees retest of range lows at 133
  • Daily Order Flow bullish; OBV down, Linear Regression and Psychology attempting midpoint tests from below.
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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