Matt Simpson, CFTe, MSTA
CityIndex
A snapshot view of last week's money flow and technical notes for the week ahead.
KEY EVENTS THIS WEEK:
AUD: Retail Sales; Building Approvals; Trade Balance
CAD: GDP; Trade Balance
CNY: Final PMI; Manufacturing PMI
EUR: GER PMI; EUR Flash Estimate; Minimum Bid Rate; ECB Press Conference
GBP: Current Account; Manufacturing PMI; Construction PMI; Services PMI
JPY: Retail Sales; Tenkan Non/Manufacturing
NZD: Business Confidence; GDT Price Index
USD: Core PCR; Consumer Confidnce; ISM Manufacturing; Trade Balance; Nonfarm Payroll
FOREX:
US Dollar
Continues to see heavy inflows with Net Longs at their highest levels on record. With NFP this Friday a decent jobs figure will be required to keep this many bulls happy.
USDCAD reached 1.16 target and continues to favour buy-the-dip strategies
USDJPY Spinning Top on W1 warns of sideways trading/correction. D1 has Bullish Engulfing
USDCNH building bullish momentum above support and suspect swing low is forming on D1
Australian Dollar
Further reduction of Net longs and now very close to becoming Net Short for the first time since April '14. AUD futures bearish move has been confirmed by steady volume, to suggest no threat to the trend.
AUDJPY is resting on bullish trendline form Feb '14 lows; Bears eyeing the break below
AUDUSD targeting 0.866 with resistance at 0.82 and 0.88
Kiwi Dollar
Continued to unwind with increasing momentum following comments from RBNZ and the Kiwi Dollar being "unsustainably high'. Breaking below key support levels across all majors the week starts off with a continued bearish sentiment, with traders likely to sell into any rallies.
British Pound
Saw a slight reduction of Net Short positions following the NO vote for Scotland and continued expectations off BoE to raise interest rates.
GBPAUD is on track to reach 2AUD within a few weeks,
GBPCHF on cusp of breaking to its highest since July 2012 to confirm a Double Bottom on W1
GBPNZD breaking to
GBPJPY targets are 184, 192 per coming weeks; D1 amid correction with support at 176, 175
EURGBP targeting 0.775 (July '12 lows)
GBPNZD broke to 2.5yr highs and formed an inverted H&S on W1
GBPUSD remains within 'referendum range' awaiting a directional catalyst for W1
Euro
Net Shorts continue to dominate with many questioning when the short-side will become overcrowded and end with the inevitable sharp reversal. For now however we have to assume trend continuation and not try to bottom pick with such bearish momentum.
EURUSD printed 2-year lows suffering heaviest weekly loss since Jan '13
EURJPY building potential base above 138.30 support
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Editors’ Picks
AUD/USD gains momentum above 0.6500 ahead of Australian Retail Sales data
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EUR/USD: Federal Reserve and Nonfarm Payrolls spell action this week
The EUR/USD pair temporarily reconquered the 1.0700 threshold last week, settling at around that round level. The US Dollar lost its appeal following discouraging United States macroeconomic data indicating tepid growth and persistent inflationary pressures.
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Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.