Morning Report: Kuroda Taps The JPY Breaks

Market Commentary  

EURUSD surged to 1.1345 high when London session started but then the pair slipped to 1.1220s as the dollar edged higher on rise in US bond yields and expectations of US rate hike this year. Eurozone GDP in Q1 was unrevised, growing 0.4% QoQ in the second reading.

GBPUSD slipped against the dollar and hit 1.5256 low despite the narrowed trade deficit data, growing concerns over the strength of Britain’s economy. UK trade deficit narrowed to 1.202 bln pounds in April from an upwardly revised 3.093 bln pounds in March, as export volumes rose and imports weakened. GBPUSD found its feet into the NY session and traded through 1.54 overnight ahead of tonight’s Mansion House speech by Governor Carney.

The yen is near the edge of a “tolerable range” and is unlikely to further weaken to 130 per dollar this year, said Hiroshi Watanabe, a former currency chief at Japan’s finance ministry. Reuters reported BoJ Gov Kuroda in PM Diet testimony – Real effective exchange rate shows JPY weak, JPY may not weaken much further on this basis as such USDJPY has registered its largest two day decline since August 2013

Technical  Commentary 

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

While 1.12 contains downside reactions expect retest of 1.1466 and 1.15 above and 1.18 as an equality corrective target, below 1.1050 on a closing basis concerns near term bullish bias opening a retest of last weeks lows at 1.08

Daily Order Flow bullish ; OBV sideways to down, Linear Regression bearish but attempting midpoint test from below, Psychology pierces midpoint from above

Monitoring intraday price and Order Flow indicators on a test of 1.15 or 1.1050

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GBPUSD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish                      
While 1.5450 caps upside potential to test 1.5050 support before a more sustained corrective phase, a break of the descending trendline resistance targets 1.5550 ahead of May highs
.
Daily Order Flow bullish; OBV sideways to up , Linear Regression and Psychology bearish but attempting midpoint test from below

Monitoring intraday price action and Order Flow indicators on a test of 1.5050 or 1.54/5550

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

Breach of 123.50 opens pivotal 122, while this area supports expect a retest of 124 from below, failure at 122 opens 119.50

Daily Order Flow bullish ; OBV sideways to down, Linear Regression and Psychology rolling over to pierce midpoints from above

Monitoring intraday price action and Order Flow indicators on a test of 128 or 122

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

Retesting last weeks highs en route to a symmetry target of 141.75 while this area caps the advance look for a retest of 137

Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology bearish

Monitoring intraday price action and Order Flow indicators at 141.75 or 137

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