Market Commentary
The USD remained generally bearish overnight after poor equities performance led by China as shares plunge resulting in continued unwinding of EUR funded carry trades with EURUSD and euro crosses higher given the risk off sentiment. Given some temporary relief in the equities market and no major Eurozone data, EURUSD enters consolidation mode this morning with 1.1050 providing the key support level. As volatility pricing creeps higher, expect choppy price action as traders look for Fed clarity on September rate hike from tomorrows FOMC statement.
Given the absence of any data in the overnight Asian session, focus has been on domestic and regional equity performance as well as month end related operations. Interbank flow profiles over last night’s sell off towards 123.00 saw good demand from fast and real money accounts, a testament to a call for further range trading ahead of the FOMC. This morning saw an early push at the lows again as equities gap lower in the red, but a subsequent recovery in Chinese stocks from the lows triggered a healthy dose of short covering in bearish cross JPY positions.
GBPUSD was back above 1.5500 yesterday, but dropped to 1.5489 low on weaker CBI trends orders, then the pair gradually grinded higher to 1.5594 against a broadly weaker dollar. GBP Q2 GDP release will be the focus in today’s session, market is anticipating strength especially after hawkish comments from the BOE.
Technical Commentary
EURUSD Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
Rejected at initial test 1.1140/60 resistance a loss of 1.0960/40 would concern near term bullish bias. While 1.1030/50 supports intraday downside expect test of 1.12 next.
Daily Order Flow bullish; OBV sideways to down, Linear Regression and Psychology bullish but lack momentum
Monitoring intraday price and Order Flow indicators on a test of 1.12 or 1.08
GBPUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
Third attempt to regain 1.57 fails, a sustained break and close below 1.55 would suggest bearish symmetry target at 1.5285 remains in play a close above 1.57 negates near term bearishness.
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology rotate around midpoints
Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750
USDJPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish
Bulls target 125.85 and 128 in extension, expect intraday downside reactions to be supported towards 123 only a failure at pivotal 122.50 concerns medium term bullish view, failure here opens 120 in retest of ascending triangle trend line.
Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology pierce midpoints from above.but lack downside momentum
Monitoring intraday price action and Order Flow indicators on a test of 128 or 122.50
EURJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
133/34 range support continues to hold and price erodes near term trendline resistance this break suggest a retest of 138, advance above here opens 143.
Daily Order Flow bullish; OBV sideways, Linear Regression supported at midpoint, Psychology pierce midpoints from above
Monitoring intraday price action and Order Flow indicators at 138 and 133
All comments, charts and analysis on this website are purely provided to demonstrate our own personal thoughts and views of the market and should in no way be treated as recommendations or advice. Please do not trade based solely on any information provided within this site, always do your own analysis.
Recommended Content
Editors’ Picks
AUD/USD post moderate gains on solid US data, weak Aussie PMI
The Australian Dollar registered solid gains of 0.65% against the US Dollar on Thursday, courtesy of an upbeat market mood amid solid economic data from the United States. However, the Federal Reserve’s latest monetary policy decision is still weighing on the Greenback. The AUD/USD trades at 0.6567.
USD/JPY: Japanese Yen advances to nearly three-week high against USD ahead of US NFP
The Japanese Yen continues to draw support from speculated government intervention. The post-FOMC USD selling turns out to be another factor weighing on the USD/JPY pair. Investors now look forward to the crucial US NFP report for a fresh directional impetus.
Gold recoils on hawkish Fed moves, unfazed by dropping yields and softer US Dollar
Gold price clings to the $2,300 figure in the mid-North American session on Thursday amid an upbeat market sentiment, falling US Treasury yields, and a softer US Dollar. Traders are still digesting Wednesday’s Federal Reserve decision to hold rates unchanged.
High hopes rouse for TON coin with Pantera as its latest investor
Ton blockchain could see more growth in the coming months after investment firm Pantera Capital announced a recent investment in the Layer-one blockchain, as disclosed in a blog post on Thursday.
NFP: The ultimate litmus test for doves vs. hawks
US Nonfarm Payrolls will undoubtedly be the focal point of upcoming data releases. The estimated figure stands at 241k, notably lower than the robust 303k reported in the previous release and below all other readings recorded this year.