Morning Report: RBA On Hold AUD Outperforms

KEY DATA RELEASES TODAY (BST) :

09:30 GBP Services PMI 57.1 v 56.7
15:00 USD JOLTS Job Openings 5.01M v 5.00M

OVERNIGHT:

The poor NFP surprise in the US last week has resulted in near term upside pressure in the EUR although the pair ran into offers above 1.10 for the third time yesterday. Overnight traded back to 1.0918 low after New York closed. Japanese accounts were buyers of EURJPY which stabilised the ERUUSD overnight. Prime broker names were buyers of EURUSD through 1.0950 and touched 1.0955. Good bids reported towards 1.0900 with sell orders above 1.1040. Noteworthy is the Telegraph’s article that financial markets are under-pricing the risk of Greece unwillingly falling out of the Eurozone.

USDJPY firmer on both higher UST yields and positive equity markets. Japanese players see USDJPY stuck in this 119-120 and will only break up side if BOJ does something. Meanwhile there are decent bids reported below 119. Participants are’t expecting much with Japanese local elections this weekend. Keep an eye on possible remarks from politicians on the excessive JPY weakness.

GBPUSD The April BOE meeting is likely to be a non-event with unchanged policy at this stage..Market remains bearish on GBP, expecting low inflation and election risk to increasingly weigh on the currency as we head into the beginning of May.

AUDUSD outperforms overnight after the RBA opted to keep its benchmark rates unchanged, and although maintained a doveish view, has shifted to a more neutral stance in terms of the currency (in line with recent rhetoric). AUDUSD rallies from 0.7610 to a high of 0.7711 so far, but the currency’s rise should be more pronounced in the crosses

PRICE ACTION OVERVIEW:

EUR: A break of 1.10 targets 1.12 equality corrective target
GBP: While 1.5030/50  contains upside target 1.4630
JPY:  While 118.30 contains downside target 124.00
CAD: While 123.50 contains downside target 130
AUD:  While .7940/6- contains upside target .72

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutral Await new signal
GBPUSDNeutralAwait new signal
USDJPYNeutral Await new signal
USDCADNeutralBuy/7 Apr 1.25181.301.2409
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • Offers above 1.10 cap upside attempts for the third time, while 1.08 supports there si the potential for a fourth assault on the 1.10 offers, a break and close above targets 1.12 corrective equality objective. Below 1.08 suggests the termination of a rising wedge and trend resumption will be confirmed through 1.06
  • Order Flow indicators; OBV ticking up from lows, Linear Regression pulling back to test midpoint form above, Psychology bullish
  • Monitor price action and Order Flow to reset shorts against 1.12

eur2015-04-07 07_25_52-

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

  • While 1.5030/50 caps upside expect a break of 1.47 to confirm trend resumption en route to 1.45, above 1.51 suggests a test of 1.52 in broader corrective pattern
  • Order Flow indicators; OBV consolidating recent gains form lows, Linear Regression pulling back to test midpoint form above, Psychology bullish
  • Monitoring price action and Order Flow against 1.5030/50 targeting 1.46/45

gbp2015-04-07 07_30_44-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Continued bullish consolidation below year to date highs while 118.30 supports expect retest and break of highs, below 118 negates pattern and suggests broader range trade towards 117
  • Order Flow indicators; OBV ticks up, Linear Regression retesting midpoint from below, Psychology ticking up to test midpoints from below
  • Monitoring price action and Order Flow indicators for longs targeting 124

uj2015-04-07 07_34_17-

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

  • Third rejection a the 1.28 attempt, below 1.2350 concerns bullish bias, potential for further range trade in bullish consolidation pattern break of 1.28 targets 1.30.
  • Daily Order Flow indicators; OBV retesting consolidation support below recent highs, Linear Regression and Psychology bearish
  • Long orders in play

uc2015-04-07 08_31_58-

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

  • Potential double bottom in play while 7550 holds on a closing basis potential for broader corrective price action towards .79 initially with 8050 upside objective beyond, a breach of 7550 on a closing basis targets .72
  • Order Flow indicators; OBV consolidating at lows, Linear Regression and Psychology attempting midpoint test from below
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

au2015-04-07 08_40_25-

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