Morning Report: GBP Inflated By Carney Comments

KEY DATA RELEASES TODAY (GMT) :

1000 EUR Flash GDP q/q exp 0.2% v0.2%
1330 USD Import Prices m/m exp -3.1% v -2.5%
1500 USD Prelim UoM Consumer Sentiment exp 98.2 v 98.2

OVERNIGHT:

Wire reports that the ECB have increased Greece’s ELA allowance buy 5.5bln Euros to 65bln Euros and that Russia and the Ukraine have announced a cease-fires were enough to spark a recovery in the EURUSD as it traded with a bid tone printing one week highs against the USD fo 1.1439, traders will be wary of taking on to much risk into the weekend especially ahead of the EU summit Monday when many market participants are hoping there will be some more meaningful resolution to the Greek debt situation.

GBPUSD also traded with a strong bid yesterday reversing sharply after the BOE’s inflation report demonstrated a strongly optimistic view towards perceived improvements in the UK economy. BOE’s Carney said the central bank would look past recent declines inflation and he believed they were still on course to achieve the 2% objective as such this prompted a market repricing in rate expectations and supported GBP.

Along with EUR & GBP, JPY also saw a reversal in tone after breaching the much lauded 120 level wire reports yesterday morning regarding source comments suggesting that BOJ policy makes believed further stimulus measures to sustain inflation were likely to be perceived as counter productive and the decline in the JPY could start to impact domestic confidence saw the USDJPY reverse early gains to finish down 1.1% on the session

Looking ahead we get Eurozone GDP as the main focus this morning before UoM Confidence readings in the US session

PRICE ACTION OVERVIEW:

EUR: While 1.1300/1.1250 supports focus on 1.17 upside corrective equality target, below 1.12 targets 1.10
GBP: 1.5350  failure at trendline suggests broader correction targeting 1.54/55 before lower
JPY:  120.50 key resistance while this holds scope for one more corrective leg in broader bullish consolidation pattern
CAD: Bullish consolidation continues to develop while 1.2350 supports 1.28 next upside objective ahead of 1.30 key resistance
AUD:  Potential double bottom as base for .8050 corrective target before lower

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBullishAwait new signal
GBPUSDBullishAwait new signal
USDJPYNeutral Await new signal
USDCADBullishAwait new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • As suggested scope for one final corrective swing to test equality target at 1.16 appears to be under way, while 1.1450 may stall price action 1.1350 should now act as support for further upside. Loss of 1.12 suggest downside trend resumption.
  • Order Flow indicators; OBV ticking up from lows, Linear Regression and Psychology bullish
  • Monitor price action at 1.16/17 or a break of 1.12 to reset short positions to target 1.10

eu2015-02-13 07_07_09-

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

  • Break of 1.5350 opens 1.5450/1.5550 in broader corrective move, 1.5330 should now act as support for another corrective upside.
  • Order Flow indicators; OBV consolidating at lows, Linear Regression and Psychology bullish
  • Monitoring price action at 1.53 for longs to 1.54/55 corrective target

gu2015-02-13 07_12_52-

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

  • Price reclaims 119.50 to support the view of a final corrective leg before higher, 117.50/118 should act as base now for resumption of uptrend
  • Order Flow indicators; OBV still consolidating below recent highs, Linear Regression pulling back to test midpoint from above, Psychology bearish
  • Monitoring price action at 117.50/118 to set longs to target 2014 highs

uj2015-02-13 07_17_57-

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

  • 1.2350 support holds and 1.26 resistance removed path is clear for 1.28 test, with near term potential for 1.25 – 1.28 range trade before higher.
  • Daily Order Flow indicators; OBV retreating from recent new highs, Linear Regression bullish but stalling, Psychology pierce midpoints from below
  • Monitoring price action to set long positions targeting 1.30

uc2015-02-13 08_50_18-

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

  • .7620 potential for double bottom and broader correction targeting .8050, below .7620 targets .75 next.
  • Order Flow indicators; OBV at new lows, Linear Regression and Psychology bearish
  • Monitoring price action to rest short positions with beneficial risk reward

au2015-02-13 08_53_58-

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