Things are beginning to become interesting this week. Data flow picks up on Thursday and with the release of the ECB and BoE interest rate decisions. Both banks are expected to keep interest rates in check but any comments following the release could move the markets. The GBPUSD and USDCAD are the pairs traders will be watching heading into Asian and European trading. The GBPUSD broke below key trend line support in New York and momentum could take the pair lower. The USDCAD inversely broke above key resistance and a hold at current levels could propel the cross higher. As always remember to keep your trades KEANE and play it safe.
GBPUSD BREAKS SUPPORT...BoE At Bat
The GBPUSD broke below trend line and daily price support at 1.61 in New York trading. The cross has now firmly placed itself below the TL that it rode higher in September and back below descending TL that has capped price action for over a year. As long as the pair can remain below this level the focus shifts to the Fib levels further below. Starting with the .382 fib at 1.5999 and the .50 fib at 1.5903. Resistance is now past support at 1.61.
The BoE is expected to keep interest rate unchanged on Thursday. It may or may not release a statement following the decision. If everything remains square little reaction is expected.
.382 fib at 1.5999
.500 Fib at 1.5903
Keane Plan…As long as the pair remains below 1.61 the path of least resistance is lower.
EURUSD RANGE BOUND AHEAD OF THE ECB
The EURUSD is in the spotlight tomorrow morning with ECB rate decision and press conference on deck. The ECB is widely expected to keep rates unchanged. The press conference that follows and Mario Draghi tone is likely to dictate price action. If a dovish sentiment comes across the EURUSD could once again test the bottom of the range at 1.2820. A break of this level would place the cross below the 200 day MVA and could set the tone for a push lower towards the 50 fib at 1.2610.
Keane Plan…Watching the range for a test of the 1.30 or a break of 1.2820 to short.
USDCAD JAIL BREAK
The USDCAD did the unthinkable today and finally slipped above the consolidation range at .9810/.9850. A hold above this level opens the cross up to a move towards .9950 and 1.00. Support will now begin at past resistance at .9850.
Res .9950 1.00
Keane Plan…Looking for a move higher with a hold above .9850
USDJPY Testing the .618 Fib
The USDJPY continued its crawl higher today and is now challenging the top of its fib range at the .618 fib at 78.51. A break of this level opens the pair up to a test of the descending trend line currently at 78.85. This level will be key for a break or hold of the current trend. A break exposes 79.65. A hold push’s the pair back into the fibs.
Keane Plan…On the sideline waiting for a test of either 78.85 or 77.50.
NZDUSD TESTING THE RANGE
The NZDUSD has been a pair on a mission lower so far this week. Now the question is if the cross can continue the path lower. The pair is pushing up against the bottom of the range at .8185. This level will be critical in the short-term. A bounce here places the pair back in the range that has contained it over the last three weeks. A break of this level and move back down towards the .8050 level could play out in the short run.
Sup .8185 .8050
Keane Plan….Watching the price action around .8185 for clues..