Morning Report: ECB Hold The Line, EUR Pops & Drops

KEY DATA RELEASES TODAY (BST) :

13:30 USD Housing Starts 1.05M v 0.90M
13:30 USD Building Permits 1.08M v 1.09M
13:30 USD Unemployment Claims 284K v 281K
15:00 USD Philly Fed Manufacturing Index 6.5v  5.0
18:00 USD FOMC Member Lockhart Speaks
20:00 USD FOMC Member Fischer Speaks

OVERNIGHT:

The USDJPY has retreated for four consecutive days to 119.14. U.S. treasury notes gained for a fourth straight day on speculation recent weak U.S. data will delay the Federal Reserve from normalization of interest rates. Governor Kuroda said Japan is likely to achieve 2% inflation target in or around end of 2015

The ECB left interest rates unchanged at record low, widely inline with the markets. EURUSD hit1.0570 low during Asian time but the pair bounced back to 1.0740’s on soft US industrial data as the trend of sub par US data continues to hamper USD gains. ECB Draghi said that the speculation of the fledging 60 billion-euro-a-month scheme would be scaled back was “surprising”, and QE would last until September 2016 or until inflation was back up to target.

Amid uncertainty about parliamentary elections on 7 May, Cable hit 1.4699 low against the dollar,but then the pair rebounded to 1.4852 high on the weaker-than-expected US industrial data. Cable rose to a one-month high against Euro at 0.7162 after the ECB Draghi said that there was no plans to curb its 1.1 trillion-euro asset-purchase programme.

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 1.4850/70 contains upside reactions target 1.45 en route to 1.43/42
JPY:  While 118.70/90 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: While 123 contains downside target retest of year to date highs en route to 130.00
AUD:  While .7860/80 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
GBPUSDNeutralAwait new signal
USDJPYNeutral Await new signal
USDCADNeutral Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • 1.0730/60 arrests upside reaction on first test, while this area caps correction  expect retest of 1.0530 en route to year to date lows over 1.0770 targets 1.0810 in extension of corrective price action.
  • Order Flow indicators; OBV off lows, Linear Regression and Psychology pierce midpoints from below.
  • Monitor price action and Order Flow for shorts positions targeting 1.0460 initially and 1.0240 in extension

eu2015-04-16 07_21_06-

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

  • First resistance zone at 1.4850/70 holds advance on first test, while this area holds upside expect retest of bids below 1.4790 failure here will see price back testing 1.4730/10
  • Order Flow indicators; OBV consolidating above recent lows, Linear Regression and Psychology rotate at midpoint
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension

gbp2015-04-16 07_31_12-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • 118.70/90 holds to maintain near term upside pressure targeting a 121, only below 118.30 concerns immediate bullish bias.
  • Order Flow indicators; OBV continues to consolidate below recent highs, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators for longs targeting 124

uj2015-04-16 07_38_50-

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

  • Bids at 124.50 eroded and now a test of longer term players resolve at 123, while this remains intact on a closing basis the bias remains to the upside a breach here would point towards a more sustained corrective phase 
  • Daily Order Flow indicators; OBV consolidates off highs, Linear Regression and Psychology pierce midpoints from above
  • Monitoring price action and Order Flow indicators to reset long positions targeting 1.30

uc2015-04-16 08_34_33-

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

  • Third reversal as bulls defend the .7550 level once more, now retesting trendline resistance a close above .78 suggests further upside towards .8050 .
  • Order Flow indicators; OBV consolidates off lows, Linear Regression and Psychology bullish.
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

au2015-04-16 08_46_53-

Want exclusive access to Intraday Morning Report trade set-ups? Visit the LFX Trader Forum.

Posted in Forex Analysis, tagged with on