Morning Report: USD Weighed By Weak Data

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
15:00 USD NAHB Housing Market Index 57 56

OVERNIGHT:

EURUSD boosted to a three-month high against the USD as disappointing figures on US domestic factory activity and consumer sentiment prompted further doubts about the recovery in the US. EURUSD rose 0.4 percent after hitting a three-month peak of 1.1466 and it was about 9 percent higher than a 12-year low of 1.0457 printed on March 16. Euro traders continue to track the Dax and Bund trade correlation with one eye on the wires for any Greek headlines.

GBPUSD soared to a five and a half month high, riding a post-election rally and broadly weak USD. The pound was also enhanced by data that showed British earnings growth which had picked up more than expected in the first quarter of the year. Some profit takers have emerged into late Friday’s trade and the Asian action overnight.

USDJPY gradually edged higher on the back of the broad dollar move; the pair surged to 119.93 high when was BOJ said to be viewing reserve rate cut as potential future option. The BOJ has been paying low interest rate of 0.1% on excess reserve since 2008. According to BOJ current policy aim, lowering the interest rate could hinder efforts to expand the monetary base. Worth noting 2Bln worth of option expiries roll off between 118.80/119.20 at today’s NY cut.

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 eye descending trendline resistance at 1.1550, potential for a bull trap type trade with offers just ahead of the trendline stalling the advance for quick move back to 1.1340/20 before a real test of the 1.1550’s,
  • Order Flow indicators; OBV sideways, Linear Regression and Psychology bullish but stalling
  • Monitoring price action and Order Flow indicators to set shorts against 1.1550

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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. Offers above 1.58 halt the advance expect bids at 1.57 to supports for the next leg higher.
  • Order Flow indicators; OBV sideways, Linear Regression and Psychology bullish but stalling
  • Monitoring price action and Order Flow for long positions targeting 1.60

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USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • Price continues to compress in constricted range as bids towards 119/118.80 support expect further upside pressure
  • Order Flow indicators; OBV ticking up, Linear Regression attempting to retest midpoint from below, 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

  • Bids below 120 continue to be filled and we are currently tracking a triple bottom on the daily chart, if stops below here are triggered expect a swift break to 118.
  • Daily Order Flow indicators; OBV sideways, Linear Regression and Psychology pierces midpoints from below
  • Monitoring price action and Order Flow indicators at 118 or 123/24

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

  • While .7950 supports downside reactions expect a break of .82 en route to test offers at .83, below .79 concerns near term bullish bias
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology bearish
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8350

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