Morning Report: Greece Back In The Spotlight

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
09:30 GBP Manufacturing Production m/m 0.3% v 0.4%
15:00 USD JOLTS Job Openings 5.16M v 5.13M
15:00 GBP NIESR GDP Estimate 0.6%
17:45 USD FOMC Member Williams Speaks

OVERNIGHT:

EURUSD continued to decline against the dollar to 1.1130 low on renewed worries over a Greek exit from the Eurozone. Greece calmed immediate fears of a default by making a crucial 750 million euro payment to the International Monetary Fund a day early. Last weeks market dynamic of rising Bund yields and softer DAX failing to support the Euro as Greek headlines continue to weigh.

BOE kept rates unchanged at 0.5% as unanimously expected and made no statement. GBPUSD rallied almost 200 pips against the dollar after the BOE decision and hit four-month high at 1.5611, the pair was buoyed by the victory of a Conservative majority in UK election. All eyes will be on Governor Mark Carney who is due to give a quarterly update on UK growth and inflation forecasts tomorrow.

USDfJPY climbed above 120 handle on Monday, as the dollar gained support overnight. The Ministry of Finance said today that Japan’s foreign reserves rose to US$ 1.25trillian at the end of April. Interbank reports suggest importers have raised bids to just below 120 area from yesterdays 119.50 levels

PRICE ACTION OVERVIEW:

EUR: Bids towards 1.11 support on first test, while intraday upside reaction are capped by the 1.1230/60 area expect further pullback to test the 1.10 base
GBP: Expect offers on first test of 1.56 only below 1.5350/30 concerns immediate bullish bias
JPY:  Eroding 120 resistance offers a break and close above 120.50 opens April highs, failure at near term 119.50 support suggests another retreat back to range lows.
CAD: While 120.50 supports on an intraday basis expect test of 122 enroute to 123/124
AUD:  8050 offers cap upside for a second time while .78 supports potential for another run at .8050, below .78 concerns near term bullish bias

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutral Await new signal
GBPUSDBullishAwait new signal
USDJPYNeutralAwait new signal
USDCADNeutral Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • Bids towards 1.11 support on first test, while intraday upside reaction are capped by the 1.1230/60 area expect further pullback to test the 1.10 base
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators to set shorts against last weeks highs.

eu2015-05-12 07_33_29-

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

  • Expect offers on first test of 1.56 only below 1.5350/30 concerns immediate bullish bias, while 1.56 caps expect reaction lower to retest 1.51/1.50 base, a close above 1.56 targets 1.58 next
  • Order Flow indicators; OBV ticking down, Linear Regression supported at midpoint test Psychology retesting midpoints from above
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension against 1.56

gu2015-05-12 07_36_40-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Eroding 120 resistance offers a break and close above 120.50 opens April highs, failure at near term 119.50 support suggests another retreat back to range lows.
  • 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

uj2015-05-12 07_38_53-

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

  • While 120.50 supports on an intraday basis expect test of 122 enroute to 123/124. A break of 120 pivotal support targets 118 next
  • Daily Order Flow indicators; OBV sideways, Linear Regression pierces midpoint from below, Psychology bearish but ticking up to attempt midpoint test form below
  • Monitoring price action and Order Flow indicators on retest of 123/124

uc2015-05-12 08_02_54-

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

  • 8050  offers cap upside for a second time while .78 supports potential for another run at .8050, below .78 concerns near term bullish bias, opening .77 en route back to year to date lows.
  • Order Flow indicators; OBV sideways, Linear Regression pierces midpoint from above, Psychology pierces midpoint from below but lacks upside momentum
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8050

au2015-05-12 08_07_31-

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