End of day Thursday:
A rather dull day of trading today given the Central Bank meetings but little was expected from them and they dully delivered nothing.
This means Non Farm Payroll will be in even more focus tomorrow. Current estimate is for a figure around the 185k mark but many banks and analysts have now been providing higher estimates of 200k plus. The ADP number would suggest a number of around 175k but with last month’s 195k still fresh in the minds and data released so far looking more positive, then we could be on for a good number.
If we get something in the 200k plus expect aggressive US Dollar strength, with Retail Traders selling the US Dollar slightly today and many of our Order Book systems turning this could lead to a significant push lower. If the number comes in below 180k we could see some further EURUSD strength, however this could still be short lived with the US Dollar looking to recover.
RTAS Order Book systems switching short over night tonight, although they remain net long at the moment the key 1.3200 level looks good for shorts and therefore we expect the systems to close longs, booking profit from 1.3010 and looking for shorts.
The daily chart shows a rather Bearish candle today despite very little on the new wires. This is the most Bearish Candle we have seen for a while and although we could see a pop higher tomorrow on a poor NFP number this pair still looks good now for shorts.
RTAS Order Book systems still holding long this pair but with Retail Buyers stepping in today it could switch to shorts soon. GBPUSD seems to have dropped rather rapidly from resistance level on very little. Although we expected support to hold up better than this, this pair seems destined to move lower.
Daily chart didn’t manage to find any real support and the pair moved lower today, seems destined for a drop to lows now as key support struggles to hold. Given this pair has already moved lower, any sustained move lower in EURUSD could be more aggressive and we could easily see this impact on the EURGBP.
RTAS Order Book system switched to longs on AUDUSD last night, but with relatively little movement overnight and support failing to really hold, the systems quickly switched back to shorts on this pair. Main issue with this pair is the extreme levels of the Order Book with Retailers so aggressively net Long, this pair is likely to remain choppy as it clears out orders to make room for further downside.
Key support around the 0.9000 level has now broken and this pair looks destined to head towards the 0.8500 mark. US Dollar strength could even push this pair lower and we suspect the RBA would be pleased with that.
Order Book systems holding short but looking to get Long as this pair pushed back to the 200 day SMA level today. We would need to see some Retail traders selling in this pair for a sustained move higher.
Daily chart has found good support at that key 0.9250 pivot. A good NFP number tomorrow could push this pair higher; but with a bad number we would expect to struggle to break the 0.9250 level again with that now acting as major support. We see limited downside risk in this pair though.
The RTAS Order Book system switched to longs today closing out the losses on the short hedge that was running. We suspect this pair could do with a move lower before another push higher as similarly to the AUDUSD this pair has overly aggressive positioning from Retail Traders and will need to clear some of the Order Book to find room to push higher.
Daily chart looking far more positive again but does look overdone. We continue to get large RSI divergences which are normally a warning sign but as of yet the pair has held up well. We suspect the Retail Traders selling in this pair may be short lived and expect our Order Book systems to look for shorts again soon.