Morning Report: AUD Under Pressure As China Data Disappoints

KEY DATA RELEASES TODAY (BST) :

No Key Data Releases Today

OVERNIGHT:

Following the EURUSD’s swift sell off at the back end of last week we have remained at the lows but feels more of a consolidation phase play this morning with price action remaining relatively sticky with European corporate demand underpinning pair for now. Market remains bearish with medium resistance now coming in at 1.0710/30. To the downside we now have 1.0500 on traders radars and the key double bottom support coming in at the 1.0460 lows. No data of note today so expect immediate flows to determine price action.

USDJPY trades in a relatively tight range as two­ way option interest looks to keep the pair contained. Local elections over the weekend have reinforced LDP’s political stature, with all incumbent posts were re-elected, and this has helped the sentiment of JPY bears who have been wary of further political dissension over a weak JPY.

Real money remains on top of sterling, and given the renewed USD strength across the board, we anticipate this trend to continue. A close below 1.46 should increase the conviction of bears to target the psychological 1.45 next.

Commodity currencies have come under pressure this morning in following on from the Asian session. The move started on the back of the China Trade Data. Exports dropped 15% YoY with imports also falling 12.7% YoY. The surplus shrank from 60bln to 3bln in March. Whilst this series is generally volatile and could be down to seasonality, the market has chosen to focus strongly on the negative backdrop in China. AUDUSD was hit relatively swiftly from 0.7650 to 0.7585 lows.

PRICE ACTION OVERVIEW:

EUR: While 1.0730/60 contains upside expect 1.05 test en rout to 1.0460, above 1.0810 refocuses on fourth 1.10 test
GBP: While 1.4730/60 contains upside reactions target 1.45 en route to 1.43/42
JPY:  While 119.30/50 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: While 124.50 contains downside target retest of year to date highs en route to 130.00
AUD:  While .7760/80 contains upside anticipate third test of key .7550 failure here opens the  bearish target of .72, above .7880 alleviates immediate downside pressure

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearish Await new signal
GBPUSDBearishAwait new signal
USDJPYNeutral Await new signal
USDCADBullishBuy/Apr 09 1.2585Open1.2585 Await new signal
AUDUSDBearishAwait new signal

ANALYSIS:

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

  • 1.0710/30 is the initial resistance zone in play expect intrday upside reactions to stall there and while this area contains corrective moves target 1.05 ahead of year to date lows
  • Order Flow indicators; OBV at lows, Linear Regression and Psychology bearish
  • Monitor price action and Order Flow for shorts positions targeting 1.0460 initially and 1.0240 in extension

eur2015-04-13 07_40_30-

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

  • New year to date lows registered as anticipated, while 1.4730/60 caps upside intraday reactions if short stay short for 1.44.
  • Order Flow indicators; OBV ticking down to test lows, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension

gbp2015-04-13 07_41_15-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Intraday look for 119.30/50 support to maintain near term upside pressure targeting a 121 initially with bulls firmly focused on retesting offers towards 122, only below 118.30 concerns immediate bullish bias
  • Order Flow indicators; OBV continues to consolidate below recent highs, Linear Regression and Psychology rotating at midpoints
  • Monitoring price action and Order Flow indicators for longs targeting 124

jpy2015-04-13 07_42_41-

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

  • 1.2640/60 next upside objective en route to retesting offers at 1.28 only below 1.2380 concerns immediate bullish bias 
  • Daily Order Flow indicators; OBV at highs, Linear Regression bullish bit pulling back to test midpoint from above, Psychology bullish
  • Risk free longs in play

cad2015-04-13 08_40_49-

AUDUSDShort Term (1-3 Days): Bearish  – Medium Term (1-3 WeeksBearish

  • While .7740/60 caps upside reaction anticipate retest and breach of key .7550 pivot en route to .72
  • Order Flow indicators; OBV consolidates off lows, Linear Regression and Psychology bullish but stalling to retest midpoints from above
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

aud2015-04-13 08_44_13-

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