Focus again today was on the pound with the Claimant Count Change and the BoE inflation report.
It was rather unsurprising to see the pair bounce so hard today from yesterday the relatively light volume moves of the day before and the test of support offered more potential to the upside and we continued to hold longs.
Today the key was that the BoE brought forward their forecasts for when the UK economy was likely to hit its 7% unemployment threshold and things were better, there was however a lot of emphasis that actually still a long way to go and the BoE remains flexible and is unlikely to raise rates any time soon. Let’s be honest with a bit of a debt spiral in the UK we seem to be getting back into a challenging position and if they did raise interest rates before real wage growth kicked in most people wouldn’t be able to afford their debts, so frankly there is little choice at the moment.
Tomorrow sees more UK data with the Retail Sales and we could easily end up back where we were yesterday, we also have US Initial Jobless Claims.
With taper talk not only boring but back on for December, expect the jobless figures to have a wild impact yet again.
EUR/USD
Long: 1.3425
RTAS Order Book systems held longs today and the pair bounced later in the afternoon again, closing above the 1.3400 / 1.3425 support level. Retail Traders continued to sell the pair on pushes higher and it looked relatively well supported, almost a repeat of yesterday and a growing theme of early weakness.German GDP tomorrow like to be key as well as the ECB monthly report. The 1.3300 support level is now critical for this pair, if the longer term up trend is to resume this needs to hold up well, initial support does come in at the 1.3400 mark. Resistance comes in at the 1.3510 mark and a break above this could open the door into the 1.36 region.
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1.3510 is critical in this pair if it stands a chance of pushing higher. really need to break and hold above this level to test recent highs, might be a tall order though.
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GBP/USD
Long: 1.6000
Order Book systems held longs today as Retail Traders were selling in the pair on its push higher. Tomorrow will be critical again however, breaks past the 1.6060 and 1.6120 mark can really open the door to much larger moves higher. A complete reversal of todays moves could see us test the 1.5900 mark again. This is yet again likely to come down to the key data points and whether they beat or come in worse than expectations.
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Rather impressive push higher in the Pound today and it affected all crosses as we suggested. Pair is now back in a bit of a resistance zone, if it can push above this the path is clear for a triple top. Given the various tests of levels we suspect the 1.6235 resistance and 1.5860 support levels are both much weaker than they were.
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EUR/AUD
Short: 1.4330
The RTAS Order Book held short today although we saw Retail Traders really selling in the pair. It did attempt a move lower but really struggled and we are likely going to book a loss and look for long entries on this one. 1.4570 is a key resistance level with initial resistance not far below at 1.4525, a break of these levels could see this pair push daily highs.
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Pair sitting near the top of its range in a resistance zone, pushes lower if still met with relative Retail selling could offer nice areas to jump long on this pair. that said if we get strong rejections at or slightly above these levels might be nice plays into the range.
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