Morning Report: USD Reverses On Lockhart Comments

Market Commentary  

USD reverses losses and ends higher after Atlanta Fed’s Lockhart talks September rate hike; US short rates up but chances for a September move still below 50%; USD firm but still range bound.

EURUSD broke below 1.0900 level and retested the key support level of 1.0800 after Atlanta Fed’s Dennis Lockhart was surprisingly hawkish towards US rate hike which lifted the greenback.The Greek government will try to reach a new bailout deal in two weeks in order to pay 3.2 billion euros to ECB without further refinancing.

GBPUSD traded largely around 1.5600 before taking a dip to 1.5550 area on the weak construction PMI, which was down to 57.1 in July from the previous 58.1 in June. Traders are awaiting the quarterly inflation report and the minutes of the policy meeting due on Thursday, the market is tilting towards a hawkish BoE.

USDJPY reached a fresh daily high during the late American session at 124.40s and held at the same level this morning. Greenback rose sharply overnight across the board after Fed’s Lockhart commented that the US economy is ready for rate liftoff and a September rate hike may be appropriate

Technical  Commentary 

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

  • Downside break looks to test stops below 1.08 a snap back today over 1.0950 would suggest a return to consolidation
  • Daily Order Flow bearish; OBV sideways down, Linear Regression and Psychology bearish
  • 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): Bearish  – Medium Term (1-3 Weeks) Bearish

  • Testing 1.55  bids a close below here would suggest bearish symmetry target at 1.5285 is in play.
  • Daily Order Flow bearish; 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): 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 and 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): Bearish – Medium Term (1-3 Weeks) Bearish

  • Eroding bids at 1.35 trendline a close below 135.50 suggests retest of 133 range support failure here opens a retest of 2015 lows
  • Daily Order Flow bearish; 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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