Forex Morning Report: Looking For Higher USD

Key Data Releases Today:

1100GMT – GBP CBI Reported Sales
1345GMT – USD Markit Services PMI prev 58.9
1400GMT – USD Pending Home Sales prev -4.1%


Overview:

  • Having seen renewed bullishness last week, USD softened somewhat on Friday on reports that Ebola had arrived in New York.
  • While the risk environment appears to have stabilized this week, this has come with a significant repricing of Fed expectations and loss of yield support for the USD. While real activity data has yet to show signs of meaningful slowing, renewed global growth concerns, higher asset market volatility, and individual FOMC members’ commentary about the strength of the USD have raised concern that the Fed will change its tone about risks to the outlook and future monetary tightening.
  • The October FOMC meeting this week will indicate how the FOMC consensus view has changed, if at all.

Key Trades

  • USDCAD: Short Term Bullish – No Change  
  • EURUSD: Bearish – No Change 
  • GBPUSD: Bearish – No Change 
  • USDJPY: Bullish – No Change 
  • AUDUSD: Bearish – No Change 

Analysis

USDCAD: Short Term Bullish – No Change

  • Still holding long positions against bullish trendline. Daily pin bar encouraging bullish case here
  • Order Flow indicators still positive

00c

EURUSD: Bearish – No Change

  • Still short from H1 trendline break. Stop moved to breakeven. 
  • Order Flow indicators are still to the downside here but look like they may cross higher.
  • NFP lows remain initial objective

00e

GBPUSD: Bearish – No Change

  • Still short currently with Order Flow Indicators still to the downside
  • Stops above last week’s highs
  • Potential inverse head & shoulders formation suggests price may be basing here

00G

USDJPY: Bullish – No Change

  • Still holding longs which were added to on last week’s break higher
  • Order Book Regression close to crossing lower – will be looking for last weeks breakout level to act as support on a retest for continued bullishness this week

00j

AUDUSD: Bearish – No Change

  • Still holding short positions – Although Friday’s action was bullish price failed to close above the contracting triangle trendline
  • Order Flow indicators are still to the downside here and On Balance Volume continues lower.

00a

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