Morning Report: Range Trade Ahead Of US Retail Sales

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
09:30 GBP Unemployment Rate 5.5% v 5.6%
09:30 GBP Claimant Count Change -20.5K v-20.7K
09:30 GBP Average Earnings Index 3m/y 1.7% v 1.7%
10:30 GBP BOE Inflation Letter
10:30 GBP BOE Gov Carney Speaks
10:30 GBP BOE Inflation Report
13:30 USD Import Prices m/m 0.3% v -0.3%
13:30 USD Retail Sales m/m 0.3% v 0.9%
13:30 USD Core Retail Sales m/m 0.4% v 0.4%
15:00 USD Business Inventories m/m 0.2% v 0.3%
15:30 USD Crude Oil Inventories -0.1M v-3.9M

OVERNIGHT:

EURUSD pushed above 1.1200 level as London traders got to their desks yesterday and rallied further to 1.1277 high 140 pips off the days low, the rally was prompted by the news from Fed’s Dudley saying that a rate hike would mark a regime shift. Eurozone GDP and industrial production on watch today.

GBPUSD printed above 1.5700 level and hit 2015 highs at 1.5710 after the release of better-than expected UK industrial output data. UK industrial production rose 0.7% YoY in March, better than the forecast 0.1%, while manufacturing production rose 1.1% YoY against 1.0% expected. Attention now shifts to today’s quarterly inflation report.

USDJPY continues consolidating in the range between 118.50 and 120.50 since April. Japan’s current-account surplus in March widened to the most since 2008, boosted by the improvement in trade balance and increased income from overseas

PRICE ACTION OVERVIEW:

EUR: While intraday upside reaction are capped by the 1.1290 area expect further pullback to test the 1.10 base, above 1.13 targets retest of last weeks highs
GBP: Bulls eye 1.58 and the equality target at the the psych 1.60 level only below 1.55 concerns immediate bullish bias
JPY:  Close above 120.50 opens April highs, failure at near term 119.50 support suggests another retreat back to range lows.
CAD: A break of 120 pivotal support targets 118 next
AUD:  8050 offers cap upside for now, while .78 supports potential for another run at .8050 a break here targets .8250

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, while intraday upside reaction are capped by the 1.1290 area expect further pullback to test the 1.10 base, above 1.13 targets retest of last weeks highs and 1.15 in extension
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology bearish but attempting to break midpoints from below
  • Monitoring price action and Order Flow indicators to set shorts against last weeks highs

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

  • Strong bid tone remains in play bulls target 1.58 and the equality target at the the psych 1.60 level only below 1.55 concerns immediate bullish bias.
  • Order Flow indicators; OBV ticking up, Linear Regression bullish supported at midpoint test Psychology retesting midpoints from above
  • Monitoring price action and Order Flow for long positions targeting 1.60

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USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • A 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 testing midpoint form above, Psychology bullish
  • Monitoring price action and Order Flow indicators to set longs against 118 targeting 124

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 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 ticking down, Linear Regression rejected at 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

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

  • 8050  offers cap upside for now, while .78 supports potential for another run at .8050 a break here targets .8250, below .78 concerns near term bullish bias, opening .77 en route back to year to date lows.
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology pierces midpoint from below, but lack upside momentum thus far
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8050

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