Morning Report: Aussie Relief Rally Fades

KEY DATA RELEASES TODAY:

1330GMT USD Prelim GDP q/q exp 3.3% v 3.5%
1500GMT USD CB Consumer Confidence exp 95.9 v 94.5

OVERNIGHT:

The meeting minutes from the Oct 31st BOJ decision marked the key USDJPY risk event, as the pair first hit session highs above 118.50 during Tokyo fix demand before falling below 117.80. Reports suggested Japanese exporters were good sellers and were joined by longs looking to book profits. The minutes revealed some board members believed “the effects that could be brought by additional monetary easing wouldn’t be worth the accompanying costs and side effects” and that they expressed some doubt over the impact of such a move. Some worried that expansion of QE could risk raising the perception that the BoJ is financing the government deficit.

Elsewhere, AUD continues to trade with a heavy tone. China’s rate cut last Friday has spurred on expectations of more economic weakness, and commodities prices reflect this with iron ore down large again. As such, AUD longs established last week on the back of the rate cut have started to stop out ahead of the years lows as AUD printing an overnight low of 0.8570.

Looking ahead, US Q3 GDP revision are the main focus today – market is looking for US GDP to be revised lower, expecting consumer confidence to rise to a seven-year high.

OVERNIGHT PRICE ACTION:

EUR: Year To Date double bottom supports for now
GBP: Downside momentum fades, double bottom continues to support for now
JPY: Profit taking pull back from new year to date highs
CAD: Trendline snap back
AUD: Trendline resistance rejects for the third time

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutralAwait new signal
GBPUSDBullishBUY/ Nov 251.5745 OPEN1.5580
USDJPYBullish BUY / Nov 25 118.55 OPEN 117.40
USDCADNeutralAwait new signal
AUDUSDBearishAwait new signal

ANALYSIS:

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

  • Price broke to the downside from the contracting range, YTD supports for now
  • Order Flow indicators; OBV bearish, Linear Regression and Psychology retesting midpoints from above
  • Double bottom supports on first test

eu2511

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

  • Range continues to contract downside momentum fading no follow through
  • Order Flow indicators; OBV bearish, Linear Regression and Psychology ticking up testing midpoints from below
  • Potential double bottom acting as support for now, will set longs on upside break, please see key trades

gu2511

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

  • Profit taking pull back from YTD highs
  • Order Flow indicators; OBV bullish, Linear Regression and Psychology bullish, retreating from elevated levels to test mid points from above
  • Setting new longs on upside break of yesterdays high, please see key trades

uj2511

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

  • Price breaks trendline support Friday, snap back rally yesterday
  • Daily Order Flow indicators; OBV bullish but retreating form extreme levels, Linear Regression and Psychology testing midpoints from below
  • Watching minor trendline resistance rejection or break for new trade set up

uc2511

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

  • Rejected at trendline resistance again
  • Order Flow indicators; OBV rolling, Regression and Psychology breaking mid points from above
  • Waiting for better trade location for new set up

au2511

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