Morning Report: Aussie Retests Range Lows

Key Data Releases Today

1000GMT – EUR European Commission Economic Forecasts
1330GMT – USD Trade Balance exp 0.40B v -0.61B
1500GMT – USD Factory Orders exp 0.6% v -10.1%
2145GMT – NZD Employment Change exp 3.0% v 3.7%
2145GMT – NZD Unemployment Rate exp 5.5% v 5.6%


Overview:

First of the raft of Central Bank Decisions came in overnight with the RBA who kept guidance: labour market data revised weaker while retail sales jumped. Aussie briefly dipped below 8650 but bounced on the better than expected domestic data. The Financial Times has reported that Eurozone leaders are weighing a plan to allow Greece to exit its four year old bailout at the end of the year by converting nearly 11B Euros of unused rescue funds into a backstop for Greece for when it raises cash from the markets on it own. This news saw the Euro stabilize overnight and we likely move to range trade ahead of ECB later this week.

  • EUR still weak but found some support from Greek bailout rumours. Likely range bound ahead of ECB later this week. About 5B Euros worth of 1.25 option expiries for the New York cut today.
  • CAD testing year to date highs, watching for a break and follow through confirmation.
  • GBP like the Euro taking a breather before the Central Bank meeting on Thursday.
  • JPY still very weak anticipate a pause in the move but pull backs likely shallow as market chases move higher.
  • AUD RBA on hold but better than expected domestic data give pause to the decline.

Key Trades

  • EURUSD: Neutral to Bearish – Revised (looking for spec longs)
  • USDCAD: Neutral to Bullish – Revised ( looking for spec longs)
  • GBPUSD: Neutral to Bullish – Revised (short stops to risk free)                        
  • USDJPY: Bullish – No Change                                                                                              
  • AUDUSD: Neutral – Revised (looking for spec longs)

Analysis

EURUSD: Neutral to Bearish – No Change 

  • Another Pin Bar yesterday, at the year to date double bottom
  • Order Flow indicators remain negative and heavy, although Linear Regression is ticking up off deflated bearish levels due to a pick up in supportive orders
  • Looking for follow through on yesterdays Pin Bar to set spec longs

EURO

USDCAD: Neutral to Bullish – Revised

  • Price retesting year to date highs
  • Daily Order Flow indicators are firmly to the upside here with OBV making new highs
  • Recent corrective price action looks set to act as base for a move higher 
  • Await break and close above previous highs to set new longs

loonie

GBPUSD: Neutral to Bullish – Revised 

  • Pin bars and neutral bars continue to print in contracting range
  • Have moved stops on shorts to break even will try spec longs on break higher from pin bars targeting last week highs initially and then on to the major trend line
  • Order Flow indicators remain negative, although Linear regression is starting to tick up from deflated levels

CABLE

USDJPY: Bullish – No Change

  • Price action continues to be very bullish
  • Order Flow indicators retreating from bullish elevated levels
  • Long positions intact with stops trailed up to below yesterdays low to lock in significant gains

yen

AUDUSD: Neutral – No Change

  • Range retest from above, finds support initially 
  • Better than expected domestic data gives a bid tone
  • Order Flow indicators are stabilizing as price tests lower end of the range
  • Will attempt spec longs on a bullish rejection of range lows today

aussie

 

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