Market Commentary
USD tested both sides of 96 handle yesterday, bid up during Asia/Europe and subsequently track equities lower in the US session. A record of 5.753m job openings as measured by JOLTs (a key labour market indicator watched by Yellen) did little to inspire any dollar rally as odds for a rate hike by Fed next week remained under 30%.
EUR firmed as risk sentiment turned softer into the US close overnight. Inverse relationship between EUR and risk sentiment still holds. EUR last seen at 1.12 levels this morning.
GBP halted its two-day rally as industrial production, manufacturing production and trade deficit (widened) and domestic data generally disappointed. Focus today on BOE meeting and minutes. Previous meeting saw MPC members vote 8-1 in favor of keeping policy rate and asset purchase unchanged. BoE MPC statement and press conference were slightly less hawkish than expected.
USD/JPY move higher yesterday, but was cut short by dollar weakness, a drop in the Nikkei as well as by an exporter sales miss. The Abe-inspired rally was short lived, as traders began to mull the potential for further easing in Q4..
Technical Commentary
EUR/USD
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
- 1.11 range support 1.1250 range resistance for now, a close above 1.1250 will ease the immediate downside pressure, while a close below 1.11 would target 1.09 next.
- Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology bullish.
- Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.1250.
GBP/USD
Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
- Bulls still seeking a close above 1.54 to ease immediate downside pressure, while 1.5450 caps upside reaction expect drift back towards 1.52. A close above 1.54 targets pivotal 1.5550 again.
- Daily Order Flow bullish; OBV down, Linear Regression and Psychology bearish, but stalling.
- Monitoring intraday price action and Order Flow indicators on a test of 1.52 or 1.54.
USD/JPY
Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
- As 121.50 caps upside bears now target a retest of last spike lows towards 116. Only a close back above 122.50 relieves immediate downside pressure, intraday support moves to 120 failure here opens retest of 119.50 bids.
- Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish.
- Monitoring intraday price action and Order Flow indicators on a test of 119 or 122.
EUR/JPY
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
- 1.35 pivotal for renewed upside correction a second close above here would reduce immediate bearish pressure, intraday look for 134 to support, failure here would open a test of stops below 132 next.
- Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology bullish.
- Monitoring intraday price action and Order Flow indicators at 135 or 132.
