Morning Report: Jobs Data In Line But USD Reverses Gains

Market Commentary  

US jobs data broadly as expected but rate hike chances upped after Fed’s Lockhart comments earlier in week seen having lowered bar for move. USD can’t hold initial gains, ends lower; blow to dollar bulls as according to CFTC data speculators now net USD longs at the highest level since early June. Yield curve flattens as oil and stocks fall, causing yet another re-think on the trajectory of the Fed.

EURUSD traded largely at 1.0920 level and plummeted to a session low of 1.0854 on US non farm payrolls before the pair jumped back to 1.0965 level and closed at the highs for the week. The Greek government is trying their best to reach a deal before 20 August to secure the disbursement of the first tranche of the new bailout program.

GBPUSD traded around 1.5500 level before then the pair dropped to a three-week low of 1.5422 as expectations of a rate hike by BoE were pushed back to next year. Britain’s trade deficit in June was slightly widened to 9.184 billion pounds from 8.419 billion pounds, but still less than the expected.

USDJPY remained steady at 124.70/80 and hit 125.06 high before dived to an intraday low of 124.08 post non farm payrolls release. Bank of Japan Governor Haruhiko Kuroda warned that the timing for hitting his 2 percent inflation target may be delayed further if oil price continued to fall.

Technical  Commentary 

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

  • While support towards 1.08 remains in tact the subsequent break back above 1.0950 would suggest a return to consolidation and the familiar 1.1050 level is the next upside objective.
  • Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology bullish
  • Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.08

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GBPUSD: Short Term (1-3 Days): Bearish  – Medium Term (1-3 Weeks) Bearish

  • 1.55  bids eroded, a second sustained close below 1.55 would suggest bearish symmetry target at 1.5285 is in play. Only a break and close above 1.57 would negate the bearish target.
  • Daily Order Flow bearish; OBV down, Linear Regression and Psychology break bearish from midpoint rotation
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750

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

  • Bulls target 125.85 and 128 in extension, intraday downside reactions remain supported towards 123 only a failure at pivotal 122.50 concerns medium term bullish view
  • Daily Order Flow bearish; OBV sideways to up, Linear Regression pierces midpoint from above, Psychology bullish but stalling
  • Monitoring intraday price action and Order Flow indicators on a test of 125.85 or 123

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EURJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

  • Bids at 1.35 trendline support for now, a close below 135.50 suggests retest of 133 range support failure here opens a retest of 2015 lows. While 135 caps downside expect retest of 138
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology pierce midpoints from below.
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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