Morning Report: Quiet Start Within Recent Ranges, NFP’s Eyed

KEY DATA RELEASES TODAY (BST) :

13:30 USD Core PCE Price Index m/m 0.1% v 0.1%
13:30 USD Personal Spending m/m 0.3% v -0.2%
15:00 USD Pending Home Sales m/m 0.5% v 1.7%
00:15 USD FOMC Member Fischer Speaks

OVERNIGHT:

EURUSD opens the week close to the middle this new short term range 1.0780‐1.1050 as the market starts to look at the all important Non Farm payrolls this Friday. European data leads with consumer confidence and CPI prints out over the next couple of days. Not to much to change the short term range ahead of Friday’s data, overall bias is to stay core short while we stay below 1.12. Eurozone consumer confidence, German CPI and US personal income due today.

The USD had a run on Friday and has pushed USDJPY back towards the mid 119.50’s. USDJPY managed to end the week above 119.00 level marginally, despite the US GDP data in fourth quarter last year read at 2.2%, missed the market forecasts. Quiet start to the week so far. 118 remains the key support for the near term bullish bias.

Similar to EUR, GBP has opened the week pretty much in the middle of its short term range (1.48‐1.50) . UK GDP headlining this week along with UK party leaders taking part in full scale debate. Bias is still to fade any move towards 1.5000 and try to trade the ranges until the Non Farm payroll on Friday. UK Mortgage approvals due today.

PRICE ACTION OVERVIEW:

EUR: While 1.06 supports target 1.1190/1.1210 equality corrective target
GBP: While 1.5030/50  contains upside target 1.4630
JPY:  While 118 contains downside target 124.00
CAD: While 123.50/124 contains downside target 130
AUD:  While .7940/6- contains upside target .72

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutral Await new signal
GBPUSDBearishAwait new signal
USDJPYNeutral Await new signal
USDCADBullishAwait new signal
AUDUSDBearishAwait new signal

ANALYSIS:

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

  • 1.1060 the near term bearish line in the sand while this area caps upside likely range trade to test 1.0760/40 but while this level supports there is potential for a broader corrective phase which has an equality target at 1.1180/1.12. Only below 1.06 suggests trend resumption
  • Order Flow indicators; OBV consolidates at lows, Linear Regression supported at midpoint, Psychology bearish
  • Monitoring price action and Order Flow below 1.12 to reset short positions targeting 1.03

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

  • While 1.5030/50 caps upside expect a break of 1.47 to confirm trend resumption, above 1.51 suggests a test of 1.52 in broader corrective pattern
  • Order Flow indicators; OBV ticking up from lows, Linear Regression supported at midpoint and Psychology bearish
  • Monitoring price and Order Flow against 1.5030/50 targeting 1.46/45

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

  • Below 118 concern bullish bias and would suggest a retest of 117, while 118 supports potential for continued consolidation before trend resumption.
  • Order Flow indicators; OBV ticking up from recent lows, Linear Regression and Psychology bearish but ticking up from recent lows
  • Monitoring price action and Order Flow indicators for longs targeting 124

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

  • While 1.2350/1.24 supports a close above 1.28 will target key 1.30 only below 1.2350 concerns bullish bias
  • Daily Order Flow indicators; OBV retreats from highs, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow indicators to set longs targeting 1.30

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

  • Rejected at .79 a break below .7760 suggests false break from bearish channel and early return to trend. Watching today’s close for potential throwback support at the broken trendline resistance to act as support
  • Order Flow indicators; OBV  at lows, Linear Regression and Psychology berish
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

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