With the US still in lockdown next week we could see further delays to key data releases, but if we do get to a resolution we could see us play catch up with data like NFP, which will be key.
Friday last week saw very light volumes and a turn to some US Dollar strength contrary to current trends, if this continues to pick up we could easily see this extend next week with further US Dollar strength. However if the moves were due to light volume then we could easily see further US Dollar weakness as support comes in, in major crosses.
COT report shows the slowdown in Non Commercials Buying in US Dollar crosses, potentially pointing to some indecision over the current situation. Although it now looks like a Fed taper could be off the cards until later in the year or early next year and increasing political stability in the Euro area there is still some potential for the US Dollar strength although it will need to find strong support. Interestingly Europe is starting to offer some potential for a better recovery itself, although a lot still hangs on Germany, a third bailout for Greece could provide the additional support, that said the environment still remains very fragile.
EURUSD
Long: 1.3575
RTAS Order Book systems remain long this pair, and although there has been a retracement the potential for support still remains, that said in the longer term we still prefer US Dollar strength and are looking for a turn in this pair, potentially Friday saw the first of the major moves for a reversal but this was not reflected in the Retail Order Book with Retail Traders refusing to buy the dip and until that is confirmed then for the moment we will continue to hold longs.
Pair retraced from the initial highs in the pair. 1.3650 acting as key resistance. We have seen a slight uptick in REtail Buying but not enough yet to confirm a reversal lower in the pair. 1.3500 remains a key support level with 1.3466 below a secondary support level.
COT report shows the Non Commercial momentum for longs really slowing last week, however Non Commercials still remain net long in this pair suggesting there could still be further upside momentum possible. The weekly chart has put in a rather small Bearish pin bar. A few conflicting signals so positioning which week will be key, we could look for further confirmation of of a reversal or a continuation move higher on support.
GBPUSD
Short: 1.6170
Order Book systems held short as this pair lost ground on Friday. 1.6000 followed by 1.5960 are key support levels in this pair now and it will be key to see if these hold. Ideally further dips will produce more Retail Buying in this cross otherwise we could see this pair push highs again in the medium term.
Pair aggressively retraced on a relatively light volume day, we now need to hold below key resistance to ensure this move sticks and we are looking at a reversal and not just a correctional move.
COT report has now seen Non Commercials cross into positive territory but like in the EURUSD cross last week saw a real dip in momentum for purchases. If we see Non Commercials selling in this cross next week it could confirm the reversal if we see further buying then we are likely in an initial correctional move.
AUDUSD
Long: 0.9420
Order book systems switched to longs on Friday but the pair barely moved given the light trading volumes. We had seen further Retail Buying in the AUDUSD but some minor selling occurred on Friday and we could see the systems switch back to shorts.
Pair continued to find support around the 0.9350 level and could be on for another push higher soon, however so far it has started to struggle as it grinds higher and if the pair continues to struggle we could easily see another test of the support level. The 0.9515 resistance level could therefore be critical again, holding below suggesting another push lower.
COT report shows momentum slowing in Non Commercials reducing their net short positions and last week actually started to see an increase in the selling suggesting the correctional move higher could be over and we could now see another push for the lows in the cross.
EURAUD
Long: 1.4390
The RTAS Order Book systems continues to hold longs but we don’t suspect this will last that long unless we can break above the 1.4550 level in the cross. Fridays push lower driven by the low volume and US Dollar strength in EURUSD cross has allowed the pair to test support at the 1.4350 level, the pair now trading in a 200 pip range, break from this range could confirm the next major move in the pair.
Pair continues to push the key resistance level at the 1.4550 mark, if this breaks we are likely to push higher but whilst we remain below there is still potential for the downside reversal to retest recent lows around the 1.4160 mark. The range in this pair could offer some nice breakout plays.
EURGBP
Long: 0.8430
Order Book systems holding long in this pair as we saw further Retail Selling on Friday and weakness in the GBPUSD cross. Now sits below the initial resistance at 0.8470 followed by key resistance further above at the 0.8500 level.
200 day SMa also comes in at the 0.8515 level and we therefore like this area for potential short opportunities, look for key price action signals around these levels pointing to a move lower and a second test of the previous lows. A break of this key resistance zone could offer the 0.8600 level.
