Morning Report: Negative Greek News Sours Sentiment

KEY DATA RELEASES TODAY (GMT) :

1200 GBP Official Bank Rate exp 0.50% v 0.50%
1200 GBP Asset Purchase Facility exp 375B v 375B
1203 GBP MPC Rate Statement
1330 USD Prelim Nonfarm Productivity q/q exp 0.3% v 2.0%
1330 USD Prelim Unit Labor Costs q/q exp 1.3% v 0.3%
1330 USD Unemployment Claims exp 287K v 265K
1330 USD Trade Balance exp -38.2B v -39.0B

OVERNIGHT:

Yesterdays optimistic shift in sentiment was sharply reversed in late New York trading as EURUSD was hit hard as the ECB appeared to toughen its stance on Greece with headlines hitting the wires,” ECB lifts waiver on Greek Government debt, ECB says bank liquidity can be met by Greek Central bank, ECB says it cant assume successful conclusion of Greek review” Greece Finance Ministry  responded by highlighting the banking system remains fully protected through access to ELA funding. Market is left questioning does the ECB move merely highlight the irreconcilable divide between Greek-EU authorities or will it provide the catalyst to speed up an agreement?

The EURUSD traded from 1.1420 down to 1.1315 before stabilising. GBPUSD retreated from high prints of 1.5248 as the EURUSD traded off. GPBUSD hasn’t experienced the same breath of decline as the EURUSD as the market positions for the BOE meeting later this morning.

USDJPY 118.00 remains the key resistance for now, with the pair trading heavy overnight as the Nikkei sold off in tandem with the move lower in US yields. The negative developments with the Greek debt situation was the catalyst for selling in the EURJPY which has continued to pressure USDJPY with bids at 117 now being pressured. The key catalyst for this range break is likely to come from tomorrows non farm payrolls data.

Looking ahead Eurozone retail PMI and German factory orders. In the US we get Challenger job cuts, non-farm productivity, jobless claims and trade balance

PRICE ACTION OVERVIEW:

EUR: 1.1300/1.1250 supports focus on 1.1590 upside corrective equality target
GBP: 1.5225 upper end of range pressured, 1.5325 trendline resistance eyed
JPY:  119 – 117 range lows continue to be pressured but hold on a closing basis for now
CAD: 1.28 caps advance for now, 1.2350 support holds on first test
AUD: Sharp reversal from trend channel support  at .7650, stalls ahead of 0.79 resistance

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutralAwait new signal
GBPUSDNeutralAwait new signal
USDJPYNeutral Await new signal
USDCADBullishAwait new signal
AUDUSDBearishShort Jan 29.7878 OPEN.7878Intraday Signal

ANALYSIS:

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

  • 1.15 test sees sellers emerge while 1.1250/1.13 supports expect one more push higher to the equality corrective target of 1.1590. Loss of 1.12 suggest correction is over and bears will target a retest break of year to date lows
  • Order Flow indicators; OBV consolidating at lows, Linear Regression and Psychology continue rotating at midpoints.
  • Monitor price action at 1.1590 retest from below to set short positions to target 1.10

eu2015-02-05 07_11_38-

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

  • Price pierces the upper end of range at 1.5225 but held on a closing basis, 1.5150 near term support, while this holds expect trendline test at 1.5325 while this caps to the upside expect bearish trend resumption.
  • Order Flow indicators; OBV ticking up from lows, Linear Regression and Psychology pierce midpoints from below.
  • Monitoring price action to reset short positions to target retest of year to date lows

gu2015-02-05 07_14_58-

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

  • Pressure continues to build on the lower end of the well defined range, 116.65 supports for now with 118.00 as resistance.
  • Order Flow indicators; OBV starting to tick down, Linear Regression and Psychology bearish.
  • Monitoring price action for a range break and retest to reset positions

uj2015-02-05 07_17_28-

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

  • 1.2350 support holds on first test,  price currently stalling at 1.2550 resistance, while this caps potential for at least another leg of corrective action before higher
  • Daily Order Flow indicators; OBV consolidating at highs, Linear Regression and Psychology pierce  midpoints from above.
  • Monitoring price action to set long positions targeting 1.30

uc2015-02-05 08_12_55-

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

  • Projected trend channel support prompts sharp reversal, price action stalls ahead of primary resistance at 0.79 while /7750 scope for another corrective leg to 0.80 area before lower
  • Order Flow indicators; OBV ticking up form recent lows, Linear Regression rolling over pierces midpont from above, Psychology pierces midpoint from below
  • Risk free shorts in play, see key trades for details

au2015-02-05 08_15_54-

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

Posted in Forex Analysis, tagged with on