Week Ahead: Correctional Moves And Chop Ahead Of More USD Strength

Expecting a quiet Monday, potentially with some pull back moves followed by some big chop this week.

Could be a really big week for the Pound as well, lots of data and with the GBP/USD pushing lower in May we could see this accelerate back towards the 1.5000 handle.

Also as usual a fair amount of European data out this week especially key German data on Friday.

Overall our strategy remains to hold US Dollar long but we have to highlight that we could be nearing an inflection point here with our order book systems setting up to close their shorts from beginning of May in favour of a short term reversal or bounce (this could easily turn into a sideways chop as well).

EUR/USD
Nice move lower in the Euro last week.
Ichi line cross on the Daily gave a nice clue to the potential for the push lower and our order book systems have been capitalising well on this run lower.
Like most pairs today, Euro also showing signs that it could take a short term correction before deciding whether to continue lower or bounce a little.
Key data could play heavily into this along with the rapidly approaching 1.2780 support level, if this breaks we could see a further rapid move lower.

Beyond the longer term positions the EUR/USD has been respecting the technicals well recently, using daily to set trend and the 4hr charts and stochastic crosses has proved a fruitful way to capitalise on the moves lower.

Interestingly the weekly COT report in the Euro also highlighting the potential for a move lower. Typically an Index value above 70 would suggest a push lower in the pair.


GBP/USD
Lots of UK data this week and some interesting price action and developments in the order book.
Short term, 4hr chart is highlighting potential for a bounce or some sideways chop before the next key move.
Order book system though is tending towards long positions and therefore we could either be seeing the start of an interim bottom forming again or we are clearing out orders for a move lower; think key to this will be data this week, continued poor data out of the UK could see this pair pick up its pace on a move lower and we expect to see the order book reflect this pretty quickly.

Daily chart is still showing potential for shorts, although these levels are now key for the pairs as 1.51 offers good support.



AUD/USD
4hr Aussie chart is also showing potential for a correctional move after its aggressive moves last week; however given the weakness and strength in USD this could also be a move sideways to clear out orders before dropping lower again; 0.9700 and 0.9800 range a good indication for next short term move.