Big week for US Dollar during holiday trade however it is a relatively light data week with little data on Monday except the Japanese GDP over night.
At the end of last week we started to find some buyers in EURUSD, will be interesting to see if that trend continues early week or whether we start to see a repeat of the Retail Shorts.
Our RTAS Order Book Systems are generally heading back towards US Dollar longs with recent price movements pushing the US Dollar lower again on Retail buying, however we now suspect a minor reversal could find further Retail Selling which would result in a larger reversal across the currencies.
Interestingly we finally had the Speculators in COT report start to de-couple from the Non Commercials.
Everything at or towards key levels now it is really make or break time for the US Dollar, if it holds current levels we could see some reversal patterns, otherwise we may need to wait for further jobs data to help spark some taper talk.
EURUSD
Long: 1.3285
RTAS Order Book systems currently long the pair, however we started to see some Retail buyers enter the market towards the end of last week, pushing the RTAS system back towards shorts.
Order Books remain stretched at these levels and a push higher will require correctional moves as it progresses in order to clear out orders. Sustained Retail Buying in the pair is likely to see it move lower.
Daily chart shows how close EURUSD is now to recent highs in June having retraced all the way back up to the 1.3400 level. The 1.3400 level will remain a key level in this cross and a break could signal a large move higher if price is able to hold above it. A strong rejection could point to a further move lower.
COT Report still points towards EURUSD longs with Non Commercials increasing their net long exposure.
GBPUSD
Long: 15180
RTAS Order Book systems are still holding long this pair as Retail Traders continue to sell it. Carney’s boost last week provided a strong move to the upside, which held the 1.5490 mark.
Towards the end of the week we started to see some Retail Traders buying this pair but the current momentum still stands with Retail shorts, we therefore prefer to hold longs for the time being until we see more Retail buying in this pair.
Extremely critical levels in GBPUSD with the pair closing towards the 200 day SMA, but as of yet has failed to hold above this key level. Whilst we remain below the 1.5580 mark we prefer to look for reversal patterns whilst we hold long.
Pair looks to be setting a nice lower range between the 1.5600 mark and the 1.4800 mark on the weekly chart. although recent momentum in Non Commercials in this pair has been to the downside we are yet to see any real follow through, the recent cross in the Momentum Index could point to a push lower soon if Non Commercial orders take hold.
AUDUSD
Long: 0.9090
RTAS Order Book system currently holding longs in this pair as it continues to attempt to carve out a bottom. Retail Traders selling strength in the pair has helped it push back past the 0.9000 level with the 0.9100 / 0.9080 levels now key for this pair holding support. If it can hold above these key levels and we start to see further Retail Selling on any strength we could see this pair start to form its correctional move higher.
This pair has found some interim support around the 0.8900 level. Although we maintain the outlook that this pair is carving out a bottom, we still suspect further chop and could easily see a push lower before further strength, that said with a few more Retail Sellers creeping in we like the idea that this is now on its way to a correctional move.
Despite the recent push higher in the Aussie the COT remains as it was with extreme lows in the Non Commercial net positioning. This could to the fact that further chop is on its way as these moves are primarily low volume.
USDCHF
Short: 0.9275
Order Book systems holding short this pair and have recently done well with the push lower. Pair broke the 0.9215 pivot last week but bounced back above to close the week pretty much on the mark. If we see a move lower early in the week we would expect the 0.9140 pivot level to act as key support in the pair, however if we find support at these levels we could easily start to see a push higher.
Daily chart looking relatively supported but extremely close to critical closes like many of the pairs. If we see a close below the blue box marked on our daily chart we could easily be opening the door to further moves lower, if we maintain closes above or into the blue box we stand a chance of bouncing again for form a rather wide range.
COT Report Momentum Index pointing to a recent push higher in Non Commercial orders, this could highlight the turning point in the pair, however, we would like to see the Index cross to the upside before confirming this.
EURAUD
Short: 1.4800
The RTAS Order Book system currently holding shorts this pair, with current Chinese data playing well on the pair despite the RBA attempts to talk the Aussie down.
Pair now sits at key support at 1.45000.
Some real tell tale signs on the daily charts with extreme RSI divergence suggested the pair could drop rapidly and it has from initial highs. Ideally we will now see this pair retrace back towards the 1.4000 mark with further Retail Buying in the cross. Recent moves have allowed it to creep back from super extreme territory, where we have seen Retail Traders aggressively short this pair since the 1.2400 mark (not a typo I generally mean they have lost a silly amount).
