Odd day yesterday, with light volumes we had Retail Traders really setting the directions in some crosses.
Major risk event markets have been building up to today is the FOMC meeting, although the market isn’t expecting any real news or changes out of this meeting, or the central bank meetings tomorrow notes on further forward guidance and whether tapering will start in September as expected could move the markets especially in light volumes.
Remember we also have central bank meetings on Thursday and Non Farm Payroll on Friday leading into what is typically a quiet August period. We therefore expect this week to really set the tone for Holiday trading. With better data out of the Eurozone lately and Bernanke stalling on tapering will we get the reversals we have been expecting or are we on our way to test recent highs in US Dollar crosses on further Dollar weakness?
EURUSD
RTAS Order Book systems remain long this pair at the 1.3000 level. Pair has remained relatively static at these levels ahead of the key risk events this week.
The daily chart is now sat at key resistance with the 1.3300 mark currently containing the pair. If we break this level we could easily see a push to June highs at 1.3400, a hold below opens the door for a push lower and really at this point the chart seems to suggest lower is more likely.
GBPUSD
RTAS Order Book systems hold long this pair as the Retail Order Book has remained relatively static lately with Retail Traders not really budging in either direction. However a sharp push lower yesterday which broke a key trend line found the pair falling rapidly with Retail Traders selling.
Typically this would point to further longs but in holiday trade Retail Traders do have more of a say on moves. System still remains long for the time being, just in the money but has obviously lost a lot of ground which some good trailing stops could have covered if you were trading this manually.
Daily continues to look pretty Bearish with the pair struggling to close above the 1.5400 level. Our marked up chart from last week seems to have played out well so far although risk events this week will really have their say on the pair. If we find support around the 1.5200/1.5180 mark we could push higher to test the 200 day SMA.
AUDUSD
We highlighted the need to watch for RBA Stevens and given his comments about the Aussie could go lower still, well the pair duly obliged. Order Book systems remain on short time frames but are holding this short for the time being but look close to closing in favour of longs towards the 0.9000 mark.
We maintain our outlook on the AUDUSD that the pair is forming a bottom here, whilst we remain above the key 0.9000 support level. If this breaks then we are eyeing the 0.8500 level otherwise we would expect the pair to test the upper end of this lower range around the 0.9300 mark.
USDCHF
Order Book systems now holding short this pair as Retailers have been buying it up, however this feels like it could be short lived with the pair really struggling to break recent lows. A lot could hinge on the key risk events this week.
Daily chart has essentially stalled for the time being, with the pair holding fire on ahead of FOMC statement.
EURAUD
With the RTAS Order Book system switched to shorts at the 1.4410 mark and held through the Aussie spike causing it to be massively out of the money at the moment but entirely hedged by AUDUSD positions.
Interestingly Retailers were buying in this pair on the way up and this could point to a reversal at these levels. We talked in our live trading room about a final push higher to switch orders for the move lower and we could be seeing the first signs of this. If we get a EURUSD reversal and AUDUSD finds support this could be a really nice pair for shorts as it is likely to move fast.
Daily chart looking far more positive again, but we could be about to set an almighty RSI divergence. Really is a pair to watch and a lot will depend on the US Dollar moves and Euro moves.
