Morning Report: Ranges Rule As Headline Risk Persists

KEY DATA RELEASES TODAY (BST) :

09:30 GBP MPC Official Bank Rate Votes 0-0-9 v 0-0-9
09:30 GBP MPC Asset Purchase Facility Votes 0-0-9 v 0-0-9
15:00 USD Existing Home Sales 5.04M v 4.88M
15:30 USD Crude Oil Inventories 2.7M v 1.3M

OVERNIGHT:

EURUSD weakened across the board and hit 1.0658 low, pressured by deepening concerns that Greece could default on its debt and eventually exit the Eurozone. German Zew current situation index in April printed at 70.2 against the forecast 56.5, while economic sentiment was 53.3 against the forecast 55.3. Interbank reports suggest participation in EUURSD trading has thinned as participants remain on alert regarding Greek headline risk.

GBPUSD continues to consolidate last weeks gains although it did pull back in unison with the EUR to trade a 1.4853 low before attempting another push higher, Current price action suggests GBP might have built up resilience to doubts about the result of the UK general election although as we get closer to outcome trading may become more volatile in the near term. Today’s focus will be the BoE meeting minutes due by today

USDJPY has traded up for two consecutive days as the Nikkei trades above 20,000.Japanese merchandise trade balance printed at ¥229.3B in March, which was far above the forecast of ¥50B, ended 48 months of trade deficits; imports (YoY) printed at -14.5%, below the expectation of -12.8%; while exports (YoY) met the forecast of 8.5%.

PRICE ACTION OVERVIEW:

EUR: 1.0620 key support for further corrective upside failure here suggest downside trend resumption targeting year to date lows
GBP: Below 1.4840 revives bearish bias
JPY:  While 118.30 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: 123/24.50 former support now becomes key resistance
AUD:  While .7860/80 contains upside anticipate third test of key .7550 failure here opens the  bearish target of .72, above .7880 alleviates downside pressure

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutral Await new signal
GBPUSDNeutralAwait 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

  • Focus shifts towards a test of bids at the pivotal 1.0620/40 area a failure here suggests resumption of downtrend and a retest of year to date lows.Intraday 1.0840/60 key resistance a break here would likely target a fourth attempt at 1.10 offers
  • Order Flow indicators; OBV consolidating above lows, Linear Regression pierces midpoint form above, Psychology bullish but stalling to retest midpoint from above
  • Monitor price action and Order Flow for shorts positions targeting 1.0460 initially and 1.0240

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

  • 1.4840/60 supports on first test, while this area contains there is a window to retest break last weeks highs but ultimately fail the key 1.5130 resistance before medium term down trend resumes. Only a close above 1.5150 negates medium term bearish bias
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology bullish but lack momentum
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension

gu2015-04-22 07_31_27-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • As anticipated 120 offers prove tricky to hurdle, while 120 stands firm the potential is for another run at 1118.30 bids as range trade persists..
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology bearish but attempting midpoint test from below
  • 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

  • 124.50 is near term resistance while this area caps upside reaction expect a retest of 120 from above, below 120 opens 117.50 and forewarns a more significant top in place.
  • Daily Order Flow indicators; OBV consolidates off highs, Linear Regression pierces midpoint form below, Psychology bearish but attempting midpoint test form below
  • Monitoring price action and Order Flow indicators to reset long positions targeting 1.30

uc2015-04-22 07_46_10-

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

  •  .77 survives refocuses attention back to .7860 offers as range trade persists.
  • Order Flow indicators; OBV consolidating recent gains, Linear Regression and Psychology break midpoints from above.
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8050

au2015-04-22 07_51_27-

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