Morning Report: Aso Hits JPY Pause Button

KEY DATA RELEASES TODAY:

0930GMT GBP Public Sector Net Borrowing exp 7.0B v 11.1B
1330GMT CAD Bank Canada Consumer Price Index exp 2.1% v 2.1%

OVERNIGHT:

JPY retreated from new year to date highs as Japanese Finance Minister Aso commented on recent JPY moves that he suggests have been too fast this sparked a rather swift pull back from 118.00 to 117.45 but market positioning perhaps not as long as it would like and dips still finding buyers. Japan PM Abe will hold a press conference at 6pm local time with Parliament dissolved today ahead of Dec 14th election (watch for any further JPY comment although unlikely).

The USD traded marginally lower on Thursday as US economic data was mixed. Manufacturing industry expanded at a slower pace than expected in November but existing home sales rose to the highest level this year. US equities hit all-time highs but failed to support the USD. There are no major data points due in US today.

This morning the focus will be on Frankfurt with the European Banking Congress on “Restoring Europe” ECB President Draghi speaking with Schaeuble and Weidmann at 10.15.

OVERNIGHT PRICE ACTION:

EUR: Range continues to contract at overhead trendline
GBP: Downside momentum fades, double bottom supports for now
JPY: Retreats from new year to date highs
CAD: Supported near trendline support
AUD: Rejected from trendline resistance

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBullish Buy / 19 Nov 1.2590 Open 1.2440
GBPUSDNeutral Await new signal
USDJPYBullishAwait new signal
USDCADBullish  Buy / 19 Nov 1.1350 Open 1.12
AUDUSDBearish Sell / 17Nov8690Open.8690Risk Free

ANALYSIS:

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

  • Price continues to test trendline resistance, range contracting
  • Order Flow indicators; OBV bearish but ticking up form low levels, Linear Regression retesting midpoint from above and Psychology bullish
  • Counter trend longs in play, see key trades

EU2111

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

  • Price has broken descending trendline support but range continues to contract downside momentum fading no follow through
  • Order Flow indicators; OBV bearish, Linear Regression and Psychology attempting midpoint test from below
  • Potential double bottom acting as support for now

gu2111

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

  • Price pulls back from new year to date highs
  • Order Flow indicators; OBV bullish, Linear Regression and Psychology bullish, retreating from elevated levels
  • Monitoring trendline resistance now as support for new long positions, watching today’s close

UJ2111

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

  • Price supported near trendline support
  • Daily Order Flow indicators; OBV bullish but retreating form extreme levels, Linear Regression and Psychology testing midpoints from below
  • Longs in play, see key trades

UC2111

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

  • Rejected on trendline test, downside follow through pausing
  • Order Flow indicators; OBV turning lower, Linear Regression and Psychology re-testing midpoint from above
  • Rejection candle at trendline test, shorts in play, see key trades

au2111

 

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