Morning Report: USD “May Day, May Day!”

KEY DATA RELEASES TODAY (BST) :                                                                                                                                                                   
09:30 GBP Net Lending to Individuals m/m 2.6B 2.5B
09:30 GBP Manufacturing PMI 54.6 54.4
15:00 USD ISM Manufacturing PMI 52.1 51.5
15:00 USD Revised UoM Consumer Sentiment 96.1 95.9

OVERNIGHT:

Trading is likely to be thin with participation reduced for May Day holidays in Europe today and the UK on Monday, lowered participation may give some short term relief to the USD decline, as USD bulls will start to look towards seasonal support for the reserve currency.

Overnight the USDJPY has maintained the bid that emerged during the NY session yesterday after printing an 118.47 low we now trade 119.75 as solid real money bids helped support the lower end of the range. Likely we see action get a little sticky around the 120 handle again as there is decent sized options at this level due to expire at today’s NY cut, with sops building above the 120 level, a run of the stops could inject some upward momentum for a run back to test offers at April highs.

EURUSD has been quiet overnight as we continue to consolidate this weeks gains, likely we see some position adjustment heading into the close with traders reluctant to take to much risk home over the weekend especially with the potential for further Greek headlines over the weekend with Mondays holidays in the UK we could witness some nasty gaps. 1.12 should act as the magnet today with more than a yards worth of options due to expire at this level during the NY session.

GBPUSD has made a profit taking pullback from the 1.55 handle trading back to 1.53 bulls will be looking for this level to hold as they make another assault on the 1.55 offers with eyes on the 1.5550 pivotal peak where decent size stops are reported. As referenced caution is advised as we head into next weeks General Election as seasonally this period has been volatile, especially factoring the close nature of the race at present

PRICE ACTION OVERVIEW:

EUR: While 1.1050 supports expect test of 1.1350
GBP: Pivotal 1.55 test underway expect test of offers above 1.5550, below 1.53 refocuses bears
JPY:  While 118.60/80 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: 120 test underway failure here opens  pivotal 118
AUD:  While .8050 holds potential for medium term down trend resumption

KEY TRADES:

FX PairShort TermPosition/DateEntry LevelTargetStopComments
EURUSDBullish Await new signal
GBPUSDBullishBuy/1 May1.5345 Open 1.5345Intraday Signal
USDJPYNeutralAwait new signal
USDCADNeutral Await new signal
AUDUSDNeutralAwait new signal

ANALYSIS:

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

  • While 1.1050 stems intraday downside reactions expect a retest of and break of 1.1260 enr oute to 1.1350 where we can expect some congestion on first test.
  • Order Flow indicators; OBV ticking up, Linear Regression and Psychology bullish but pulling back from elevated levels
  • Monitoring price action and Order Flow indicators to set shorts against 1.1350

eu2015-05-01 07_27_15-

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

  • While 1.5250 supports the advance expect a retest and break of 1.55 en route to 1.5560
  • Order Flow indicators; OBV ticks down from recent highs, Linear Regression and Psychology bullish but stalling at elevated levels
  • Monitoring price action and Order Flow for shorts targeting 1.45 initially and 1.42 in extension against 1.5560

gu2015-05-01 07_30_07-

USDJPY: Short Term (1-3 Days): Neutral  – Medium Term (1-3 WeeksBullish
  • 118.60/80 produces anticipated upside reaction, now testing the 120 descending trendline resistance a break here opens April highs, failure suggests sterner test of 118.30 bids
  • Order Flow indicators; OBV ticking up from recent lows, Linear Regression and Psychology bullish
  • 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 at 120 continue to support on a closing basis, while this level survives anticipate a retest of 123/24 from below. A break of 120 target 118 next
  • Daily Order Flow indicators; OBV ticking up, Linear Regression and Psychology attempting midpoint tests form below
  • Monitoring price action and Order Flow indicators on retest of 123/124

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

  •  Offers at .8050 reject on the first attempt while .7860/40 support potential for another run at .8050, below .78 concern near term bullish bias
  • Order Flow indicators; OBV ticking down, Linear Regression and Psychology pierce midpoints from above
  • Monitoring price action and Order Flow indicators to set shorts targeting .72 against .8050

au2015-05-01 08_24_20-

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