Euro Breaks Key 1.30 Level Before NFP - Retailers Buy the Dip

TODAY
Another quiet day as we head into the July 4 holiday.
Key action on Tuesday, as the euro broke the key 1.3000 low. In Monday night's analysis, we mentioned that the stochastic crosses that were higher on most of the pairs could play out to the downside and on Tuesday they all bagged some nice profit.
The U.S. ADP and Initial Jobless reports were released Tuesday, one day early due to the holiday; both are worth watching, given the recent USD strength.

EUR/USD
The Order Book recently highlighted a potential for a move back towards longs with Retail Traders selling the pair during chop. However the move lower on Tueday found more Retail Buyers, and the pair is starting to look good for a much lower run.
Some good news: flows this week could increase the Retail buying, putting us firmly short with this pair as Retail Traders turn net long.

The daily chart is starting to look heavy again. Nice Pin Bar off of the key 200 day SMA gave a nice daily short entry option on Tuesday (marked on our chart) and with Ichi lines also crossing lower, we could see a continuation of shorts.
The pair is likely to chop around this week on light volumes and the NFP news flows. However if we see more short confirmation, we would like this pair to make a move down towards the 1.2700 mark.

Intraday Tuesday we liked using the higher stochastic crosses to look for shorts, which played out well. We are unlikely to see one on Wednesday, but could be interesting as we head to the NFP report.
Don't underestimate the important of the psychological 1.3000 level as well in the euro, a notorious level in the past.

GBP/USD
The pound dropped slightly although more in sympathy of other crosses and some USD strength.
Similar to the euro, we continue to hold this pair short as Retail Traders continue to buy dips in this pair.

The daily chart showed an Ichi cross lower, with the pair heading towards the key 1.500 level.
The steady move lower felt relatively overdone, so we could see some form of bounce before continuing lower. It will be key to watch for support. If this pair trends higher in a wide range, we could see some interesting reversal patterns.



AUD/USD
The RBA talked the currency down. It found support, bounced and then reversed the bounce.
The pair is continuing its choppy move lower. As we mentioned, there is no reason why this pair couldn't touch the 0.8500 mark in July but we suspect it will be a choppy ride, so we are still playing short term moves in the order book and swings.

The daily chart still shows the extremes in the order book which create these choppy swing environments. For the time being, the downtrend remains in tact.

USD/CHF
We'll continue to hold this pair long as Retail Traders close their Long positions and enter this pair short.
We would like to see the order book continue its current trend to add further momentum to the push higher, although we could see some light reversals before a push higher.

Tuesday's daily chart still looks rather heavy. This week's news could be key to maintaining upward momentum in the pair.



EUR/AUD
We continue to hold this pair long from the 1.4000 mark, but it was very close to switching and a dip lower (further Retail Buyers in the pair) could see us revert to shorts.

The chart seems to be forming a top as the pair struggled to break the 1.4300 level on Tuesday despite the RBA down talking the Aussie down.
If we are unable to break higher this week, we could easily see this pair start a reversal. That said, the pair is sitting at a nice level in the RSI and could easily be catching its breath before pushing higher.
We are therefore focused on looking for reactions in the order book consequential to this week's news flows to really confirm the top and move lower.