A relatively quiet day in the FX markets, but overnight Chinese data managed to really weigh on Risk on Pairs.
Biggest movers were the high yielding and commodity block related pairs; Gold and WTI took a hammering, hence their related pairs (AUD/USD and USD/CAD).
Tuesday sees a slurry of U.K. data (CPI and PPI), followed by Eurozome and German ZEW and CPI figures; US data will be released early in the afternoon, with two FOMC speakers in the evening.
We could see some further movements in pairs on Wednesday on the data and following Tuesday's aggressive moves.
EUR/USD
The pair moved lower today but chopped around during the day. It is sitting just below the key 1.3050 level. If it fails to break above, we could see a move towards the 1.3000 level.
We remain Bearish under the 1.3220 level, but would not be surprised to see a push higher to test this level.
Personal Bias: Short term Bullish / Long Term Bearish
Support: 1.3050 / 1.3000
Resistance: 1.3100 / 1.3150
Strategy: Wait for clear signals of price rejections off of key levels.
GBP/USD
The pound dropped lower, having rejected the 1.5400 levels on Friday. We continue to like this pair for a move lower from here. The next key level comes in at the
1.5250/45
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Key this week could be the MPC minutes and the timing of the further QE vote.Personal Bias: Neutral to Bearish
Support: 1.5245
Resistance: 1.5365 / 1.5460
Strategy: Looking for short entries on breaks or rejections of resistance.
AUD/USD
We highlighted the short off of the weekly range last week, and again the potential for a further break down in our Week Ahead analysis. This more than paid off with the pair falling to the 1.0300 level in a day.
We remain Bearish this pair looking for the 1.0200 level again, but suspect it is due a correction prior to a move lower.
Personal Bias: Bearish
Support: 1.0300 / 1.0245
Resistance: 1.0375
Strategy: Lock in profits if you are short, otherwise look for a correction bounce higher to play short entries towards the 1.0200 level.
USD/JPY
The USD/JPY dropped; we had highlighted its potential to close the gap. We like the idea of long entries from the 95.50 to 94.50 level if we get there, however longs from current levels (96.00) also offer relatively good value.
Personal Bias: Bullish
Support: 96.30 / 95.00 / 94.45
Resistance: 97.66 / 98.80
Strategy: Look for long entries off of support
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