Littlefish FX | Oct 25, 2013 03:11AM ET
Today
We highlighted yesterday the potential for a US dollar reversal and that we were waiting for confirmation, well today Retail Traders continued selling US dollars and our main systems switched to longs in the US dollar booking circa 400 pips in the EUR/USD long and GBP/USD longs.
Most USD crosses are in a similar state now with Retail Order Books into extremes and the overall trend into overbought territory thus suggesting we could be due a correctional move if only minor to clear out some of the orders before a large push higher.
Tomorrow see the advanced reading of the Q3 UK GDP which is likely to have a significant impact on the pair. We also have the German IFO slightly before this.
EUR/USD
Short: 1.3790
RTAS Order Book systems switched to shorts today as we saw some further Retail Buying in the cross as it made several attempts to get past the 1.3800 mark. Key resistance comes in around the 1.3850 and we would not be surprised to see it test this level before any potential reversal. Support comes in around the 1.3765 mark followed by the 1.3700 mark.
The Pair fought to get above the 1.3800 handle today with little real follow through. Pair now sits in a relatively overbought region with extremes in the Retail Order Book, we therefore like this for a correction back towards the 1.3620 level, if it can push past here then potentially the 1.3550 further retracement would suggest an overall trend turn.
GBP/USD
Short: 1.6150
Order Book systems booked profits on longs and switched short only for this pair to have a minor spike. So far the 1.6250 mark has capped this pair well and if we can stay below that then we could be on for a correctional move lower. UK GDP figures out tomorrow morning will be key.
AUD/USD
Long: 0.9625
Order book systems booked profit on shorts and jumped long this pair as it found some support around the 0.9600 level. Retail Sellers started selling in this pair causing the switched. Strong support occurs around the 0.9580 to 0.9600 level, if we can hold above this then we could easily see a move higher.
EUR/AUD
Short: 1.4270
The RTAS Order Book systems held short positions despite the push higher in this pair as we started to see a pick up in Retail Buyers in the cross. We suspect this pair is now actually far more reliant on the next move in EURUSD than in the Aussie crosses. Key resistance comes in at the 1.4460 mark with support at the 1.4300 level.
EUR/GBP
Short: 0.8540
Order Book systems switched to shorts today as the pair tested a break of the 0.8530 level and quickly retraced back below. Resistance in the pair now sits at the 0.8530 mark, with interim support at 0.8510 followed by 0.8495.
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