Morning Report: USD Up, Wires Watched For Greek Tape Bombs

KEY DATA RELEASES TODAY (BST) :

09:30 GBP Public Sector Net Borrowing 6.6B v 6.2B
09:30 GBP Retail Sales m/m 0.4% v 0.7%
13:30 USD Unemployment Claims 288K v 294K
14:45 USD Flash Manufacturing PMI 55.6 v 55.3
15:00 USD New Home Sales 514K v 539K

OVERNIGHT:

EURUSD remained relatively heavy over the course of the Asian session when factoring in the move by SNB yesterday to expand number of groups subject to negative rates and the NZD weakness on back of RBNZ McDermott’s speech which have lead to general correlated USD strength against the EUR .The key 1.0640/20 support level continues to remain in place and any breach will open up confirmation for further downside momentum with 1.0740 and 1.0820 providing notable resistance levels for now. Favour bearish views but remain nimble for any Greek headlines hitting the wires.

The trek higher continues in USDJPY, with the move by the SNB and the spike in yields post US ­data helping the cause… It’s still a low ­vol currency pair, so not anticipating any sharp moves in the pair… anticipate selling interest to reside above 120, ahead of the daily cloud top of 120.37. Bulls don’t want to see the pair print below yesterday’s low of 119.34.

It was a good day for the GBP yesterday, as a hawkish tilt in the BOE MPC minutes sent the currency through some resistance levels (in the crosses most especially). Cable prints a high of 1.5080 last night, and a close above 1.5000 should continue to encourage a GBP bullish view. Retail sales data today, which can help push further the trend of good domestic data. While being well aware of election risks, market is acting as if it is well­ positioned for these uncertainties.

PRICE ACTION OVERVIEW:

EUR: 1.0620 key support for further corrective upside failure here suggest downside trend resumption targeting year to date lows
GBP: 1.5130/60 key resistance for trend resumption
JPY:  While 118.30 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: 123/24.50 former support now becomes key resistance
AUD:  While .7860/80 contains upside anticipate third test of key .7550 failure here opens the  bearish target of .72, above .7880 alleviates downside pressure

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDNeutral Short/22 Apr 1.0760 Open1.0760 IntraDay Signal
GBPUSDNeutralAwait new signal
USDJPYNeutralAwait new signal
USDCADNeutral Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • Focus remains on the pivotal 1.0620/40 area a failure here suggests resumption of down trend and a retest of year to date lows.Intraday 1.0840/60 key resistance a break here would likely target a fourth attempt at 1.10 offers
  • Order Flow indicators; OBV consolidating above lows, Linear Regression and Psychology bearish
  • Risk free shorts in play

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

  • 1.5130/60  is the key resistance a failure here should see resumption of trend only a close above 1.5150 negates medium term bearish bias
  • Order Flow indicators; OBV consolidates recent gains, Linear Regression and Psychology bullish but lack momentum
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension

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USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • As 120 offers stand firm the potential is for another run at 1118.30 bids as range trade persists
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology pierce midpoints from below
  • Monitoring price action and Order Flow indicators to set longs against 118 targeting 124

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

  • 124.50 is near term resistance while this area caps upside reaction expect a retest of 120 from above, below 120 opens 117.50 and forewarns a more significant top in place.
  • Daily Order Flow indicators; OBV consolidates off highs, Linear Regression and Psychology attempting midpoint tests form below
  • Monitoring price action and Order Flow indicators to reset long positions targeting 1.30

uc2015-04-23 08_02_32-

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

  •  .77 to .7850 range trade persists, while .77 contains downside reactions intraday expect further upside pressure, failure at .77 opens fourth test of key .7550
  • Order Flow indicators; OBV consolidating recent gains, Linear Regression  attempting to retest midpoint from below, Psychology breaks midpoint from above.
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8050

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