Morning Report: USD Roars On Data Optimism

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
13:30 USD Core Durable Goods Orders m/m 0.5% v -0.2%
13:30 USD Durable Goods Orders m/m -0.4% v 4.0%
15:00 USD New Home Sales 501K v 481K
15:00 USD CB Consumer Confidence 95.2 v 95.2
17:30 USD FOMC Member Fischer Speaks

OVERNIGHT:

EURUSD traded in a reasonably tight range overnight due to absence of any market moving events. However, we continue to trade with a bearish tone this morning post CPI data supported by the break below minor support initially coming in at 1.0890. This is attributable to the diverging Fed/­ECB expectations as well as the Greece saga which could potentially bring EURUSD down to next major support levels at 1.0890 and 1.0825 respectively.The Core Durable Goods Order, Consumer Confidence as well as any Greece debt developments are the key events to be closely watched today.

122.05 broken in USDJPY, market trades with a bullish bias. Greece issues and overall risk sentiment remain at the forefront of its momentum higher, with today’s US Durable Goods Orders release potentially being the catalyst to break this bullish triangle formation. Yesterday’s low of 121.45 should lend itself as the pair’s initial support to lean on, with a bigger level at the pre ­US CPI level of 120.80/90.

GBPUSD continues to soften in sympathy with the broad USD move, with the pair trading below the pivotal 200D SMA (1.5567) and the 1.55 handle. UK and NY out on holiday yesterday has dampened trading interest, but given the technical signals and the renewed USD strength, expect further weakness to be the path of least resistance. The second release of Q1 GDP (on Thurs) is the primary domestic data to watch out for this week

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearish Await new signal
GBPUSDBearishAwait new signal
USDJPYBullish Long/23May120.95OPEN 121.85Intraday signal
USDCADBullish Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • Decline extends while 1.1050/60 caps upside expect test of 1.08 equality corrective target
  • Order Flow indicators; OBV down, Linear Regression and Psychology bearish but attempting retest of midpoint from below
  • Monitoring price action and Order Flow indicators on a test of 1.08

eu2015-05-26 07_27_05-

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

  • Ascending trendline support at the 1.55 eroded. while this area now acts as resistance expect a test of 1.53 equality corrective target
  • Order Flow indicators; OBV sideways, Linear Regression and Psychology pulling back piercing midpoints from above
  • Monitoring price action and Order Flow indicators on a test of 1.53

gu2015-05-26 07_35_24-

USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 WeeksBullish
  • 122 offers have been filled and bulls now focus on 124 target. Below 121 concerns near term bullish bias.
  • Order Flow indicators; OBV ticks up, Linear Regression and Psychology bullish but lacking momentum
  • Risk free longs in play

uj2015-05-26 07_37_18-

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

  • Descending trendline resistance at 123 eroded focus shifts towards a retest of previous 124 support as potential resistance to stem the upside advance
  • Daily Order Flow indicators; OBV ticking up, Linear Regression and Psychology bullish but lack momentum
  • Monitoring price action and Order Flow indicators at 123/24

uc2015-05-26 08_30_05-

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

  • .7850 support being eroded a close below .78 invalidates bullish bias and bears target .77 initially en route to .7550
  • Order Flow indicators; OBV down, Linear Regression and Psychology bearish but stalling and rotating to test midpoints from below
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8350

au2015-05-26 08_31_48-

 

 

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