The Forex world seemed a bit distracted today. The London Olympic Games combined with the data slew later in the week kept many traders on the sideline. The path of least resistance seems to be higher at the moment. Most of the excitement begins later in the week with the FOMC on Wednesday, followed by the ECB and GBP rate decisions Thursday, capped off by the USD NFP report on Friday. In Asian and European trading all eyes will be on the daily lows for the GBPUSD and EURUSD. A hold above these levels and the move higher should continue. I will also be watching the AUDUSD and USDCAD approaching channel resistance and support respectively. These levels should prove difficult to break. As always remember to keep your trades KEANE and play it safe.
The EURUSD consolidated below resistance at 1.2330 to start the week. The cross briefly broke below Friday’s low but didn’t find much traction lower. Last week’s blitz of hints and suggestions of a massive coordinated action between the ECB and the European financial Stability Facility by Mario Draghi, French President Francois Holland and German Chancellor Angela Merkel appear to have the strength to hold the pair at the moment. This week’s meeting between Draghi and Deutsche Bundesbank President Jens Weidman, at which Draghi will urge the Bundesbank to drop resistance to bond market intervention, could be the catalyst for a move higher once again.
From a price action standpoint. Support begins at the daily lows around 1.2220. A break below that level exposes 1.2180. The first level of resistance begins at 1.2330 followed by 1.24.
Sup 1.2220 1.2180
Keane Insight: Market may drift higher heading into the data release near the end of the week. Any move towards the day lows or 1.2180 could find buyers.
GBPUSD PLAYING THE FIBS
The GBPUSD looks comfortable at these levels ahead of the fireworks at the end of the week. Since popping higher last Thursday the cross has consolidated above the .382 fib from the May lows at 1.5660 and the .50 fib from the May lows at 1.5782. The cross could consolidate for a bit in this zone to start the week. But of course if a risk on or off scenario pushes the market one way or the other the cross would follow.
Keane Insight: Consolidation between the .50 and .382 fib levels could be the cards to start the week.
AUDUSD LIKE HOT AIR, IT WANT"S TO RISE
Not much has changed in this pair since Friday. The cross is still drifting near the top of its channel. Ascending channel resistance is around 1.5440 backed by daily price resistance at 1.0550. Sellers may be found at this level. Resistance can be found at Fridays lows around 1.5450. A break of this level could open the pair up to a push towards 1.0320.
Sup 1.0450 1.0320
Keane Insight: Looking for a push towards the channel top. Will watch the price action at that level.
NZDUSD MOVE ON THERE IS NOTHING TO SEE HERE
The NZDUSD consolidated in a narrow range Monday. As long as the pair remains above .8060 the path of least resistance is higher. Resistance begins at .8235.
Keane Insight: Above .8060 the bias is higher
USDCAD NEAR CHANNEL SUPPORT
The USDCAD briefly attempted pushing higher on Monday. The cross tested the 1.0050 barriers before drifting back lower. The pair looks determined to test channel support at parity. Buyers may emerge at this level. Resistance begins at 1.050 followed by 1.01.
Keane Insight: Looking for a test of parity.
USDJPY IN RANGE HEAVEN
The USDJPY appear to be very comfortable in its current range. Support is still at 78.60 and resistance is at .78. Until the range breaks play the inside.
Keane Insight: Play the range