With FED Chair Yellen keeping hopes of a 2015 rate hike alive, USD bulls emerged overnight and have supported the USD in Asian/European trade. The focus now shifts towards University of Michigan sentiment and the final read on Q2 GDP for the U.S.
Currently we are witnessing some position paring ahead of the headline events which has seen USD drift off recent highs as we head into the North American crossover.
EURUSD traded lower in early European action taking its lead from Asian desks which had the pair offered overnight. London traders have taken profits on overnight shorts and are moving to the sidelines ahead of the U.S GDP release.
GBPUSD remains under pressure breaking overnight lows as we head into the US open. Sterling cant catch a bid right now with most desks reluctant to try and catch a falling knife heading into the weekend.
USDJPY testing the upper end of its recent range after catching a Yellen inspired bid overnight, the recovery in the spot price occurred in unison with the Nikkei finally finding its feet on its second day of trade this week.
OPTIONS: Expiries for today’s New York cut 10:00 ET :
EURUSD: $1.1100 (E1.2BLN), $1.1200 (E700M), $1.1250 (E832M), $1.1300 (E317M)
USDJPY: Y119.00 ($250M), Y120.00 ($430M), Y120.20 ($230M)
EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
Buyers and profit takers emerge ahead of the 1.11 handle as suggested. While 1.1150 caps intraday upside look for a test of stops below the figure and ultimately a test of pivotal support at 1.1050
Daily Order Flow bearish; OBV sideways to down, Linear Regression pierces midpoint from below, Psychology bearish but lacking downside momentum attempting to recapture midpoints from below
Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.13
GBPUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
1.52 bids give way as we now explore stops below the figure. Without a headline risk reversal Cable looks set to test key 1.5150 support failure here opens psychological 1.50 support next
Daily Order Flow bearish; OBV down , Linear Regression and Psychology bearish
Monitoring intraday price action and Order Flow indicators on a test of 1.5150 or 1.5350
Bids towards 119 hold strong and a sharp 150 pip bounce refocuses attention on 121.50 range resistance. A close above 121.50 today cements bullish sentiment and target 122.50 next.
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology rotating around midpoints, Psychology pierces midpoint from below
Monitoring intraday price action and Order Flow indicators on a test of 119 or 122
Retesting 135 offers, while these contain the upside reaction expect a rotation back to 132. A close above 135 opens a retest of offers at 137 next
Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology pierce midpoints from below
Monitoring intraday price action and Order Flow indicators at 135 or 132