Morning Report: USD Decline Slows As Consumer Sentiment Eyed

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
13:30 USD Empire State Manufacturing Index 5.1 v -1.2
14:15 USD Industrial Production m/m 0.1% v -0.6%
14:15 USD Capacity Utilization Rate 78.4% v 78.4%
15:00 USD Preliminary UoM Consumer Sentiment 95.8 v 95.9

OVERNIGHT:

EURUSD edged higher and tested 1.1450 level during yesterdays European session, before slipping back to 1.1400 area on profit taking. Greek Finance Minister Varoufakis said Greece’s repayment to ECB after July/August should be postponed. Interbank reports suggest offers remain ahead of 1.1450 with stops building above 1.15.

GBPUSD rose for the fifth consecutive day against the dollar and hit a five-and-a-half month high buoyed by the Conservatives return to government. BOE said that interest rates were likely to be higher by this time next year, showing optimism for the recovery of the UK economy.

USDJPY held steady yesterday and moved slightly higher this morning after a report showed that corporate goods prices index (CGPI) dropped a year after a controversial sales tax was implemented CGPI in April printed at -2.1% YoY, the first drop in 25 months. Interbank reports suggest stops eyed above 119.60 with bids below 119.00

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, while 1.1430 caps upside intraday expect retracement to 1 .1250 where buyers should re-emerge for next leg higher. Below 1.12 concerns near term bullish bias
  • Order Flow indicators; OBV sideways, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow indicators to set shorts against 1.1550

eu2015-05-15 07_39_04-

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

  • 1.58 achieved now bulls focus on the equality target at the the psych 1.60 level, while 1.5790 caps intraday upside, expect corrective pullback to 1.57 to find support for the next leg higher, only below 1.56 concerns near term bullish bias
  • Order Flow indicators; OBV sideways, Linear Regression and Psychology bullish
  • Monitoring price action and Order Flow for long positions targeting 1.60

gu2015-05-15 07_42_27-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Bids below 119 support  while 119.60 caps intraday upside expect retest fo bids towards 118.40/60, range continues to compress and portends of likely trend development ahead
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators to set longs against 118 targeting 124

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

  • While 120.50 caps intraday upside attempts expect test of bids below 119 to offer intraday support on first test
  • Daily Order Flow indicators; OBV ticking up to sideways, Linear Regression attempting midpoints test form below and Psychology pierces midpoints from below
  • Monitoring price action and Order Flow indicators at 118 test

uc2015-05-15 08_07_29-

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

  • While .7950 supports intraday downside reactions expect a break of .8160 en route to test offers at .83, below .79 concerns near term bullish bias
  • Order Flow indicators; OBV ticking down, Linear Regression testing midpoint from above and Psychology pierces midpoint from above
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8350

au2015-05-15 08_33_38-

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