Morning Report: USD Supported By Robust NFP’s

KEY DATA RELEASES TODAY:

1315GMT CAD Housing Starts exp 195.0k v 183.6k
1330GMT CAD Building Permits exp 3.0% v 12.7%

OVERNIGHT:

USDJPY printed new highs of 121.85 in the early part of the Asian session ahead of Q3 GDP release which was revised lower to -0.5% qoq, down from prior estimate of -0.4% qoq and compared to expectation of 0.1% qoq. Corporate Capex was again the culprit, contracting -0.4% vs -0.2% preliminary estimate and 0.9% consensus. This brought about a 50pip pull-back in USDJPY to a low of 121.34, with the $2 billion of 121.50 strikes expiring today helping steady the market.

Elsewhere, China trade figures were mixed – November surplus hit a record high, but imports fell y/y for the first time in three months. Iron ore imports were particularly soft at 67.4M tons v 79.4M prior. Export growth was also unimpressive, as shipments to US slowed to 2.6% from 10.9% and exports to Japan continued to contract y/y.

Looking ahead, a light data calendar with Eurozone Sentix investor confidence this morning . The highlight of the afternoon session is Canadian housing starts and permits

OVERNIGHT PRICE ACTION:

EUR: Breaks lows 1.22 eyed
GBP: Breaking range lows monitoring potential snap back
JPY: Pressuring ascending trendline resistance
CAD: Retesting double top resistance
AUD: Breaks lows, psychological .80 eyed

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBearishAwait new signal
GBPUSDBearishAwait new signal
USDJPYBullishAwait new signal
USDCADBullishAwait new signal
AUDUSDBearishAwait new signal

ANALYSIS:

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

  • Price pressuring lows retesting descending trendline, levels not seen since August 2012
  • Order Flow indicators; OBV consolidating at lower levels, Linear Regression and Psychology rotating below midpoints.
  • Watching for a break and retest of 1.2270 from below for new shorts

eu2014-12-08 07_29_31-

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

  • Breaking range lows, watching for potential snap back as with previous topside range break
  • Order Flow indicators; OBV consolidating at lower levels, Linear Regression and Psychology struggling to recapture midpoints
  • Watching for range break and retest to enter shorts

gu2014-12-08 07_30_15-

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

  • Price pressuring ascending trendline resistance
  • Order Flow indicators; OBV bullish new highs, Linear Regression and Psychology bullish
  • Watching for rejection of previous resistance to set new long positions

uj2014-12-08 07_33_18-

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

  • Price retesting potential double top resistance again, range contracting
  • Daily Order Flow indicators; OBV bullish no new highs, but ticking back up, Linear Regression and Psychology rotating at midpoints
  • Monitoring double top resistance break and retest to set new longs 

uc2014-12-08 07_53_02-

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

  • Trend continuation, targeting lower end of projected channel
  • Order Flow indicators; OBV ticking lower confirming price action, Linear Regression and Psychology bearish, testing lower level support areas
  • Monitoring trendline resistance and previous spike lows to set new shorts

au2014-12-08 07_56_02-

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