Littlefish FX | Mar 04, 2015 05:36AM ET
KEY DATA RELEASES TODAY (GMT) :
0930 GBP Services PMI exp 57.6 v 57.2
1000 EUR Retail Sales m/m exp 0.2% v 0.3%
1315 USD ADP Non-Farm Employment Change exp 219Kv 213K
1500 USD ISM Non-Manufacturing PMI exp 56.5 v 56.7
OVERNIGHT:
The EUR Asian session produced a low of 1.1167 so far as we look to test the recent support level at 1.1150 which should provide increased volatility if broken and potentially a test of the 1.1098 years low. To the topside look towards 1.1260/80 as key resistance. Traders await the ECB policy meeting on Thursday and the implementation of its government bond buying programme.
FX Momentum trader are getting punished by choppy markets USD/JPY’s drop from 120.27 yesterday is a testament to this,it seems pretty intentional that certain BOJ officials do not want USD/JPY sitting above 120 handle for various reasons most important of which is the local elections in April. USD/JPY traded down to 119.495 where macro bids were reported. Stops are reported building below 119.40 and 119.20. In the options space, there are several strikes at 120.00 maturing today and next few days as well.
GBP suffering from reported real money selling GBP in crosses, this is likely to continue along with corporate hedging as we approach the election in May. We have services PMI out this morning, and believe the near term path of least resistance is to the downside. 1.5400 and 1.5430 are the resistance levels, while key support comes in at 1.5330.
AUD: GDP came in only slightly weaker at 0.5% QoQ vs. 0.6% expected with the last quarter being revised higher to 0.4% from 0.3%. Aussie’s initial reaction was to move lower but the dip was shallow and the 0.7795 support held once again to propel the pair higher towards the 0.7840 resistance once again, since drifting back.
Looking ahead we get UK Services PMI and Eurozone Retails sales this morning, with US ISM Non Manufacturing the highlight of the US session this afternoon.
PRICE ACTION OVERVIEW:
EUR: While 1.1270 caps upside targets year to date lows and 1.09 beyond
GBP: While 1.5480 contains upside reaction, down trend to resume targeting 1.49
JPY: While 118.50 supports expect break of 120.50 and target 2014 highs beyond
CAD: While 1.2350 trendline supports 1.28 next upside objective ahead of key 1.30
AUD: While .7860/80 contains, downtrend to resume targeting .75
KEY TRADES:
FX Pair | Short Term | Position/Date | Entry Level | Target | Stop | Comments |
EUR/USD | Bearish | Sell/02 Mar | 1.1165 | Open | 1.1285 | |
GBP/USD | Bearish | Sell/03 Mar | 1.5362 | Open | 1.5562 | |
USD/JPY | Neutral | Await new signal | ||||
USD/CAD | Neutral | Await new signal | ||||
AUD/USD | Neutral | Sell/02 Mar | .7760 | Open | .7860 |
ANALYSIS:
EUR/USD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
GBP/USD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
USD/JPY: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bullish
USD/CAD: Short Term (1-3 Days): Neutral - Medium Term (1-3 Weeks) Bullish
AUD/USD: Short Term (1-3 Days): Neutral - Medium Term (1-3 Weeks) Bearish
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