Morning Report: USD Whipsawed On Mixed Data

Market Commentary  

USD whipsawed on mixed data; weak ADP jobs data countered by big ISM (Non-manufacturing) beat.  Bund blowout sends yields up; Euro stocks climb to two week highs; US rate market sees September hike at just 50/50 chance.

EURUSD traded to a low of 1.0865 before surging to 1.0936 high on weak US ADP data, but then the pair went down again to original spot after the release of US manufacturing PMI. Eurozone retail sales in June was much worse than expected, printed -0.6% MoM against -0.3% expected.

GBPUSD dipped to a session low of 1.5524, but then quickly turned bid when European traders came to their desks and gradually grinded higher to 1.5650. Cable got sold off for 40 pips on the UK services PMI, which came in 57.4 in July against 58.0 expected. Traders will be watching today MPC decision and Governor Carney’s press conference for further clus regarding a rate move in the UK

USDJPY rose sharply during the US session underpinned by better than expected US ISM non manufacturing data, which offset disappointing ADP employment data released earlier and sent the pair to its highest level in two months, testing 125 handle. Japan Services PMI fell to a seasonally adjusted 51.2 in July from 51.8 in June, suggesting Japanese services sector activity expanded in July at a slightly slower pace than the previous month

Technical  Commentary 

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

  • While support towards 1.08 remains in tact a break back above 1.0950 would suggest a return to consolidation. While 1.0950 contains upside reactions bears target stops sub 1.08
  • Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology testing midpoints from below
  • Monitoring intraday price and Order Flow indicators on a test of 1.0950 or 1.08

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

  • 1.55  bids continue to support and sustain the range trade between 1.55 and 1.57, a close below 1.55 would suggest bearish symmetry target at 1.5285 is in play.
  • Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology continue to rotate around midpoints with bullish bias
  • 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 down, Linear Regression and Psychology bullish but stalling
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 122.50

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EURJPY: Short Term (1-3 Days): Bearish – 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
  • Daily Order Flow bearish; OBV up, Linear Regression and Psychology attempting midpoint tests from below.
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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