Morning Report: USD Steady Ahead Of This Week’s FOMC Minutes

Market Commentary  

USD holds above 96.50, underpinned by domestic data releases. PPI final demand eased less than expected to 0.2%m/m for July. Industrial production exceeded expectations with a 0.6%m/m rise. Oil prices fell 1% this morning amid increasing supply from the US. Japan 2Q GDP fell -0.4%q/q from previous 1.1%. Traders will watch the Minutes of the FOMC meeting in July, out on Wed night. Apart from US data, markets will continue to assess impact of the recent Yuan weakness on US Fed lift off.

EURUSD turned softer below the 1.11-handle this morning as risk sentiment improved following 3rd bailout to Greece has been approved by Greek parliament and Euro-area Finance ministers, European governments agreed on aa aid deal for Greece worth 86 billion euros, signaling a determination to keep the country in the euro and setting aside doubts about its ability to repay its debts. EURUSD posted a 1.2% gain last week.

GBPUSD continues to consolidate in 1.5595 – 1.5695 range in absence of fresh catalyst.  Week ahead brings Rightmove House Prices (Aug) on Monday; CPI (Jul); CPI Core (Jul); Retail Price Index (Jul); PPI Output (Jul) on Tuesday; Retail Sales Ex Auto Fuel (Jul) on Thursday.

USDJPY pull-backed below 124-figure last week as the lingering concerns about the yuan move weighed reignited safe-have plays. Pair has since rebounded back towards the 124.50-levels, helped by weak 2Q15 GDP, which fell by 1.6% annualized, though this was still better than market expectation of -1.8%. Growth was dragged lower by weak private consumption and exports.

Technical  Commentary 

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

  • While 1.1060/80 supports intraday downside reactions bulls target 1.1250 next, failure to hold primary support, suggests a run to 1.1010/30 to test buyers at the 50% retracement of the advance. loss of 1.10 threatens a return to range support at 1.08
  • Daily Order Flow bullish; OBV sideways, Linear Regression pierces midpoint from above and Psychology rolling over to test midpoints from above
  • Monitoring intraday price and Order Flow indicators on a test of 1.1250 or 1.10

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

  • Intraday support moves up to 1.56 while this area holds expect another assault of 1.57 offers, a break and close above 1.57 targets 1.58 next
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology testing midpoints from below
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5550 or 1.5750

gu2015-08-17 07_26_26-

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

  • Bulls target 125.85 and 128 in extension, intraday downside supported moves to 124 only a failure at pivotal 122.50 concerns medium term bullish view
  • Daily Order Flow bullish; OBV sideways, Linear Regression pierces midpoint from above, Psychology supported at midpoint
  • Monitoring intraday price action and Order Flow indicators on a test of 125.85 or 124

uj2015-08-17 07_27_48-

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

  • While 137.80/138.00 caps intraday downside reactions bulls now target symmetry objective at 141.70
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish but stalling
  • Monitoring intraday price action and Order Flow indicators at 141 and 137.80

ey2015-08-17 07_29_38-

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