Morning Report: Better AUD Jobs Data Delays 0.80 Test

KEY DATA RELEASES TODAY (GMT) :

1330 USD Core PPI m/m exp 0.2% v 0.0%
1330 USD Empire State Manufacturing Index exp 5.3 v -3.6
1330 USD Unemployment Claims exp 299K v 294K
1330 USD PPI m/m exp -0.3% v -0.2%
1500 USD Philly Fed Manufacturing Index exp 20.3 v 24.5

OVERNIGHT:

Calmer session in G10 FX this morning as the USD regains a mild bid tone against most of the majors. Interesting to see that DXY support at 91.75 held well yesterday, as equities and US yields recovered earlier session losses. DXY now comfortably above 92 and within 20 pips of the highs

USDJPY and the JPY complex saw more bounce in Asia following moves down yesterday. Paring of positions by weak longs fuelled the move down with some specs jumping on the bandwagon, especially after weak US retail sales data and easier still US yields. A wholesale reversal was seen after USDJPY traded down to 116.07 with reported market talk rife of fresh GPIF and other Japanese institutional investor buys. Already having bounced quite a bit into New York’s close, it traded up more from 117.14 to 117.85 alongside the Nikkei index and almost matching yesterday’s pre-plunge 117.95 high. Offers remain at 118.00.

EURUSD opened in Asia at 1.1789 after whipsaw trading in the NY session. Asia proved much calmer with the focus more on AUD and JPY. EURUSD saw a tight 1.1772-92 range. The ECJ ruling to allow the ECB to buy sovereign bonds has kept alive expectations of full blown ECB QE at the January 22 meeting, and looks to continue to weigh despite falling US yields on the doveish turn in Fed expectations. Market becoming wary that EURUSD could rally post ECB and Greek elections in classic sell-the-rumor/buy-the-fact fashion.

GBPUSD remained modestly bid following whipsaw action overnight, trading 1.5230-45 in Asia. Marketing making tracks away from the 1.5077 spike low on Tuesday.

Elsewhere, AUDUSD opened in Asia at 0.8148. The writing should have been on the wall for AUD bears after Wednesday’s sharp short covering rally from the late Asia/early London low of 0.8068 to 0.8180 in New York – despite the horrendous slide in copper. Aussie jobs data pulled another rabbit out of the hat, sending AUDUSD flying up from its early low of 0.8134 to 0.8222. The data seems to have killed off any chance of a February rate cut and paring of CPI forecasts despite recently shifting expectations.

Looking ahead German GDP data on the slate in the London session , while Continuing Claims are eyed during the New York session.

OVERNIGHT PRICE ACTION:

EUR: 1.1750 support spiked, 1.1850 contains, channel resistance at 1.19 keeping bias down
GBP: Short term upside to find resistance at 1.53 ahead of 3 month range lows at 1.54
JPY: 116 next support holds on first test, 118 resistance maintains downside pressure
CAD: Crude Oil stabilises USDCAD rejected on primary 1.20 probe
AUD: 0.83 trendline resistance to be tested, should contain on first test.

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearishShort  13 Jan 1.1761OPEN 1.1761Intraday Signal
GBPUSDNeutralAwait new signal
USDJPYNeutral Await new signal
USDCADBullishAwait new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • 1.1750 support breached, low of 1.1726 before short covering on weaker US data offers ahead of 1.1850 arrest the advance, 1.19 trend channel resistance keeps focus on the downside
  • Order Flow indicators; OBV consolidates at lows, Linear Regression and Psychology struggling to recapture midpoints
  • Shorts in play, please see key trades for details

eu2015-01-15 07_00_47-

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

  • 1.50 first downside objective while resistance 1.54 holds. Shorter term resistance at 1.5250/1.53 cap the post US data miss rally
  • Order Flow indicators; OBV consolidating at lows, Linear Regression and Psychology ticking up pierce midpoints from below but seem to be stalling
  • Monitoring price action to reset shorts towards 1.53 against 1.54 targeting 1.50 test and break

gu2015-01-15 07_10_50-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish

  • Support at 116 holds to maintain the potential for boarder bullshit consolidation pattern, shorter term 118 needs to be reclaimed to reduce downside pressure
  • Order Flow indicators; OBV consolidating at highs, Linear Regression attempting to retest midpoint from below and Psychology holds recent support levels
  • Monitoring potential support at 116/17 to reset longs and align with weekly bullish trend

uj2015-01-15 07_17_47-

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

  • 1.20 resistance probed but holds on primary test as Crude Oil attempts to stabilise at depressed levels.Potential for short term correction against yesterdays pin bar.
  • Daily Order Flow indicators; OBV yet to confirm new highs in price, Linear Regression and Psychology pulling back to test midpoints from above
  • Watching for retest of 1.19/18 support from above to set longs targeting 1.22/23

uc2015-01-15 07_27_53-

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

  • Psychological 0.80 remains downside objective while descending trendline resistance at 0.83 remains intact. 
  • Order Flow indicators; OBV consolidating at lows, Linear Regression and Psychology recapture midpoints from below but are stalling and rolling back over
  • Monitoring resistance at 0.83 to set short positions initially targeting break of 0.80

au2015-01-15 07_29_05-

To access Intraday Morning Report trade set ups visit LFX Trader Forum . To find out more or access the forum, click here 

Posted in Forex Analysis, tagged with on