Risk sentiment has rolled over this morning. US Index futures are all in the red after taking their lead from the Nikkei’s shaky start to trading post holidays. The Nikkei ended its first session of the week closing just shy of 3% in the red. Central banks back in focus as we head into the US session with FED Chair Yellen speaking later today. Traders will be watching for any dial back on last weeks dovishness.
EURUSD continues to benefit from Draghi’s walk back from confirming QE extension in yesterdays speech. EUR is rotating above the 1.12 handle, printing 1.1240 highs at the time of writing. EUR was boosted by better than expected IFO data out of Germany which also sited improving expectations ahead. It is noteworthy this data doesn’t reflect recent developments with respect to Volkswagen scandal, which has hampered progress of the DAX this morning.
GBPUSD remains on the back foot testing the low 1.52’s. BOE’s Broadbent did little to add support to the pair stating that he wasn’t surprised that markets were repricing rate expectation moves in the UK based on global growth concerns.
USDJPY prints new lows weeks for the week. The pair has been weighed down by the reversal in risk sentiment.PM Abe’s comments this morning regarding the Third Arrow of economic development did little to inspire a lackluster post holiday market. Traders will eye Yelllen speech for some inspiration in the US session.
EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
Testing 1.1250 offers into the NY open, while 1.1250/70 resistance is respected expect rotation back to retest stops below 1.11 en route to pivotal 1.1050 support. A close above 1.1250 opens 1.1350 symmetry objective as the next upside hurdle.
Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology bearish but lacking downside momentum attempting retest of midpoints from below
Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.1250/70
GBPUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
Continues to trade sub 1.53 support while 1.5350 acts as resistance expect a move back to test bids towards September lows in the 1.5150’s
Daily Order Flow bearish; OBV down, Linear Regression and Psychology rejected at midpoint test from below
Monitoring intraday price action and Order Flow indicators on a test of 1.5150 or 1.5350
USDJPY Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish
Testing lower end of recent range a failure of support at 119.50 open a test of broader range support with bids towards 118.50. A loos of 118 would confirm the bearish tone and open a retest of 116
Daily Order Flow bearish; OBV sideways to down, Linear Regression and Psychology rotating around midpoints
Monitoring intraday price action and Order Flow indicators on a test of 119 or 122
EURJPY Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
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 bullish; OBV sideways to up, Linear Regression testing midpoint from below, Psychology bearish but lack downside momentum
Monitoring intraday price action and Order Flow indicators at 135 or 132