Morning Report: BOE & FOMC Minutes Eyed

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
08:00 USD FOMC Member Evans Speaks
09:30 GBP MPC Official Bank Rate Votes 0-0-9 v 0-0-9
09:30 GBP MPC Asset Purchase Facility Votes 0-0-9 v 0-0-9
15:30 USD Crude Oil Inventories -1.3M v -2.2M
19:00 USD FOMC Meeting Minutes

OVERNIGHT:

EURUSD an extremely active market over the previous sessions which started off with dovish comments from ECB board member Coeure catching short term players off guard saying that the ECB would be front loading its asset purchases under its QE programme ahead of the summer months. This was followed by stronger housing starts out of the US which provided the next leg lower resulting in an eventual break of 1.11

GBPUSD is on the back foot after a weak CPI print yesterday. Given the market was in bullish mode, the re-emergence of the USD has led to a swift exit for cable bulls. Traders don’t see the BoE hiking any time soon on this and with the market now more balanced expect rallies to be faded up to the 1.5600/50 area if seen.

USDJPY has been the main mover in Asia after solid gains over the last few days awoke the market after a decent US Housing Starts print past night. A lift and close above 120.85/121.00 should see further gains traders remain bullish on dips down to 120.50 on the day. 122.05 is the big level still topside and that should start to come into focus.

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearish Await new signal
GBPUSDNeutralAwait new signal
USDJPYBullishAwait new signal
USDCADBullish Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • Failure at 1.12 confirms impulsive decline, now to test pivotal 1.1030/60 breakout levels if bids fail to support here 1.08 is the next downside objective.
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology pierce midpoints from above
  • Monitoring price action and Order Flow indicators to set shorts against 1.1550

eu2015-05-20 07_55_25-

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

  • Testing ascending trendline support at the 1.5450 level while bids support this area potential to set base for 1.60 attempt, failure here opens 1.5350
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology testing midpoints from above
  • Monitoring price action and Order Flow for long positions targeting 1.60

gu2015-05-20 07_54_47-

USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 WeeksBullish
  • Price extends upwards from range compression and targets an initial triple top pattern, upward bias remain on play as 119.50 supports intraday pullbacks
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow indicators to set longs against 118 targeting 124

uj2015-05-20 07_59_03-

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

  • Triple bottom prompts upside advance to test descending trendline resistance at 123 with former shelf support at 124 now potential pivotal resistance.
  • Daily Order Flow indicators; OBV ticking up, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow indicators at 123/24

uc2015-05-20 08_29_06-

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

  • While .7850 supports downside reactions expect a break of .82 en route to test offers at .83, below .78 invalidates bullish bias
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8350

au2015-05-20 08_31_23-

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