Morning Report: Retail Sales Disappoint, Dollar Dumped

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
13:30 USD PPI m/m 0.1% v 0.2%
13:30 USD Core PPI m/m 0.1% v 0.2%
13:30 USD Unemployment Claims 272K v 265K

OVERNIGHT:

EURUSD surged higher against the dollar from 1.1200 area to 1.1382 high after a spike in German Bund yields rattled markets and soft US Retail sales data added to the USD dumping, The Eurozone GDP in Q1 rose 0.4% QoQ which is in line with consensus, while industrial production in March rose 1.8% YoY, slightly weaker than the forecasted 1.9%

GBPUSD continued to soar printing above the 1.5700 level due to the dollar weakness and UK employment data, but then the pair slightly slipped on the latest quarterly inflation report. BOE revised down the GDP forecast from 2.9% to 2.5% for 2015 and Carney claimed that the policy makers saw a risk that Cable could strengthen further and leave inflation below target for longer.

USDJPY approached to 119 handle after disappointing US April retail sales data. Japan’s Economic Surprise Index rose to 21-month high, printed at 54.3. BOJ Governor Haruhiko Kuroda said that Japan’s economy has improved considerably after QE policy and there is no doubt that real incomes will rise from now Sizeable options due to expire during todays NY session will likely anchor action with a slew of vanilla expiries slated between 118.50-119.50.

PRICE ACTION OVERVIEW:

EUR: Bulls now target descending trendline resistance at 1.1550
GBP: Bulls target 1.58 and the equality target at the the psych 1.60 level
JPY:  Failure at near term 119.50 support suggests another retreat back to range lows.
CAD: Bears target 118 next
AUD:  Former resistance at .8050 to act as support for next leg higher targeting .8250 offers

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBullish Await new signal
GBPUSDBullishAwait new signal
USDJPYNeutralAwait new signal
USDCADBearish Await new signal
AUDUSDBullishAwait new signal

ANALYSIS:

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

  • Bulls now target descending trendline resistance at 1.1550, expect intraday bids to emerge around 1.1240/60, initial upside hurdle is year to date double top.
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology pierce midpoints from below
  • Monitoring price action and Order Flow indicators to set shorts against 1.1550

eu2015-05-14 07_36_02-

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

  • 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

gu2015-05-14 07_39_04-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Another failure above 120 sees price action retreat back to mid range in a tight compression, likely retest bids at 118.50
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology pierce midpoints from above
  • Monitoring price action and Order Flow indicators to set longs against 118 targeting 124

uj2015-05-14 07_46_19-

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

  • Erosion of bids at the pivotal 120 support targets 118 next
  • Daily Order Flow indicators; OBV ticking down, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators at 118 test

uc2015-05-14 08_43_21-

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

  • 8050 offers give way and we not test .8150 where price has stalled on the initial, expect former resistance at .8050 to act as support for next leg higher targeting .8250 offers below .79 concerns near term bullish bias
  • 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

au2015-05-14 08_58_45-

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