Morning Report: USD Bulls Back In The Drivers Seat

KEY DATA RELEASES TODAY (BST) :

09:30 GBP Manufacturing Production m/m 0.4% v -0.5%
13:30 USD FOMC Member Lacker Speaks
13:30 USD Import Prices m/m -0.4% v 0.4%
15:00 GBP NIESR GDP Estimate 0.6%

OVERNIGHT:

EURUSD  downtrend resumes due to the dollar strength and concerns in Greece, the pair fell from 1.0787 high to 1.0636 low. IMF managing Director Christine Lagarde confirmed that the Greece had made its 450mln repayment that was scheduled for Thursday. Interbank flow reports suggest many participants  flattened out their risk and taken an Easter break it  seems as though the pain trade has been and continues to be for a further slide. Real Mpney selling seemed to precipitate in the move and over the past 24 hours leverage and model accounts have needed to chase the move to get involved.

GBPUSD remained heavy and traded near the three-weak low at 1.4700s as the UK trade deficit was the widest in seven months in February. BOE kept its policy rate unchanged at 0.5% and did not issue a statement. The minutes will be published on April 22 while traders will increasingly focus on the UK General Election at the beginning of May

USDJPY climbed to day high at 120.70s post better than expected US jobless data. Supply in Japan’s economy continue to exceed demand in 4Q 2014; shortfall was equivalent to 0.1% of economy’s productive capacity. Inflationary pressures tend to increase when demand exceeds supply, according to the BOJ

PRICE ACTION OVERVIEW:

EUR: While 1.09 contains upside expect retest of 1.06, above 1.09 refocuses on fourth 1.10 test
GBP: While 1.4970/90 contains upside expect retest of year to date lows
JPY:  While 119.30/50 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: While 124.50 contains downside target retest of year to date highs en route to 130.00
AUD:  While .7760/80 contains upside anticipate third test of key .7550 failure here opens the  bearish target of .72, above .7880 alleviates immediate downside pressure

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearish Await new signal
GBPUSDBearishAwait new signal
USDJPYNeutral Await new signal
USDCADBullishBuy/Apr 09 1.2585Open1.2345 Await new signal
AUDUSDBearishAwait new signal

ANALYSIS:

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

  • Failure at 1.0740/60 sees anticipated bear assault on the pivotal 1.06, intraday 1.0790 should contain upside reactions only above 1.09 relieves immediate bearish pressure
  • Order Flow indicators; OBV consolidating above lows, Linear Regression and Psychology bearish
  • Monitor price action and Order Flow for shorts positions targeting 1.0460 initially and 1.0240 in extension

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

  • 1.4740 support eroded, year to date lows next downside objective en route to 1.4385 , intraday expect 1.4870 to cap upside reaction only above 14960/80 alleviates immediate downside pressure.
  • Order Flow indicators; OBV consolidating above lows, Linear Regression and Psychology piercing midpoints from above
  • Monitoring price action and Order Flow against 1.5030/50 targeting 1.46/45 initially and 1.42 in extension

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USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Intraday look for 119.30/50 support to maintain near term upside pressure targeting a 121 initially with bulls firmly focused on retesting offers towards 122, only below 118.30 concerns immediate bullish bias
  • Order Flow indicators; OBV continues to consolidate below recent highs, Linear Regression and Psychology pierce midpoints from below but lack momentum
  • 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

  • 1.2640/60 next upside objective en route to retesting offers at 1.28 only below 1.2380 concerns immediate bullish bias 
  • Daily Order Flow indicators; OBV at highs, Linear Regression and Psychology bullish
  • Longs in play

uc2015-04-10 08_07_25-

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

  • While .7740/60 caps upside reaction anticipate retest and breach of key .7550 pivot en route to .72
  • Order Flow indicators; OBV ticking consolidates off lows, Linear Regression and Psychology bullish but stalling
  • Monitoring price action and Order Flow indicators to set shorts targeting .72

au2015-04-10 08_09_47-

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