Littlefish FX | Nov 24, 2014 05:38AM ET
KEY DATA RELEASES TODAY:
0900GMT EUR German IFO Business Climate exp 103 v 103.2
OVERNIGHT:
A very quiet start to the week in Asia as far as G10 FX is concerned. EURUSD, while some 40pips higher than Friday’s NY close, still trades with a bearish sentiment following Draghi’s pledge to boost inflation back to 2% target as quickly as possible and hinted that he’s open to additional easing. Near term, 1.2350 remains critical support, a break of which would suggests the long-term bear trend is close to resuming. For now, the market will likely look towards this morning’s IFO release for near term direction. The IFO business climate index is expected to drop to 103.0 in November, while the current situation gauge is expected to drop to 108.0 and the expectation is forecast to drop to 95.5. If data comes in in line with expectations, then all three gauges would have recorded the seventh straight month of decline.
Elsewhere, a survey showed 37% of the population to vote for Japan Prime Minister Abe’s LDP party during Parliament (lower house) election, and 11% to support DPJ, 5% to support Komeito coalition party. Meanwhile, Abenomics disapproval rate at 43%, exceeded approval rate of 38%. USDJPY was little changed by recent standards as the Tokyo holiday ensured activity was light with standing exporter offers capping the topside around 118.
Looking ahead, we have a number important data releases to watch this week, including GDP revision from US, UK and Germany. Also, US will release consumer confidence, durable goods and PCE while CPI from Japan, Germany and Eurozone will also be closely watched.
OVERNIGHT PRICE ACTION:
EUR: Sharp decline Friday, testing YTD double bottom
GBP: Downside momentum fades, double bottom supports for now
JPY: Retreats from new year to date highs
CAD: Erodes trendline support
AUD: Retesting trendline resistance
KEY TRADES:
FX Pair | Short Term | Position/Date | Entry Level | Target | Stop | Comments |
EURUSD | Neutral | Await new signal | ||||
GBPUSD | Neutral | Await new signal | ||||
USDJPY | Bullish | Await new signal | ||||
USDCAD | Neutral | Await new signal | ||||
AUDUSD | Neutral | Await new signal |
ANALYSIS:
EURUSD Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
GBPUSD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
USDCAD: Short Term (1-3 Days): Neutral - Medium Term (1-3 Weeks) Bullish
AUDUSD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
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