Market Overview – A look at the Order Flow

In a choppy August, an interesting week is underway in the Forex market following the BOE and Fed releases on Wednesday.

Unsurprisingly, the Forex market was strongly influenced by the Central Banks’ decision: Cable made a higher spike in the morning since hawkish consensus is getting stronger and stronger, but it lost all gains in the afternoon following very hawkish minutes, supported by good labour data from the Fed. Furthermore, rumours of new stimulus by the Bank of Japan moved all currencies paired with YEN, all above the USDJPY.

With all this in mind, I am about to show you the technical situation of the major currency pairs in order to see how the banks are positioned. Below you’ll see the daily chart with our basic order flow settings.

To begin with, EURUSD continues to go down as the Fed’s minutes strengthened further hawkish policy. Our system is short with entry price at 1.3620-10, as you can see in the chart below.

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We can see the same situation for GBPUSD. Order Flow is pointing downwards as OBV’s trend clearly suggests. Again, our system is short from area 1.7130-20. We are waiting for an exit signal.

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Furthermore, USDJPY is moving upwards breaking its previous trading range. Our order flow system suggests opening a long position. The Fed’s minutes and rumors from the BOJ have pushed the pair up. We are long with opening price at 102.45. An interesting setup to monitor.

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To conclude, let’s finish with a glimpse of the AUDUSD, where further confirmation is necessary in order to take a trading decision. I think we need to wait on development of the future flow, so keep an eye on the chart below.

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For any questions or information about our Order Flow trading approach tweet me at @LFXGabriele.

— Find out more about the Metastock platform used by Gabriele in this article —