Bullards comments yesterday went slightly unnoticed towards the end of the day but he did highlight a couple of important points. One that Taper talk needed more data before a decision was made but more critically that they were unlikely to see major policy action in October as there is now press conference. This tends to point towards tapering in September again but today’s US data didn’t really spark the revival talk pretty much coming in in-line with expectations.
Elsewhere on the data front we saw German and European GDP data, although the EURUSD didn’t really push higher. We also saw the UK MPC minutes which caused the GBPUSD to rise slightly but low volume and the drop through stops in EURGBP also helped push it higher.
Today’s key data points tomorrow are the UK Retail Sales and US Jobless claims.
Bullard’s comments highlight the challenge with August trade. Although we suspect we will see further talk of tapering in September the real impact in the US Dollar is not currently being fulfilled simply due tot eh data out of the US and the light holiday trade. If we start to see some really good US data, especially jobs data that is likely to have more of an impact than poor US data driving crosses higher. The challenge in return with the crosses like EURUSD are that they are at key highs and with traders not really wanting to breach critical levels and highs in the August holiday trade we could continue to see more chop.
EURUSD
Short: 1.3300
RTAS Order Book systems holding short and the pair struggled to really push higher today.
Some further signs of Retail Buying today although it was limited and the order book remained relatively flat for the time being, pair now needs to test a break of the 1.3250/40 mark to see if it can find a few more Retail Buyers. If it can we could easily see a push today’s the 1.3200 mark as stops are taken out.
EURUSD today stayed exactly at the key level we highlighted yesterday. Critical the pair now either finds its feet or pushes lower. So far it has looked relatively heavy and US Jobless data tomorrow could be keep.
GBPUSD
Long: 15180
RTAS Order Book systems are still holding long this pair however recent up tick in Retail Traders buying this pair has the systems heading back towards reversal territory, we could see this happen tomorrow especially given the final spike higher today. We now really like the idea of shorts from around the 1.5500 mark.
GBPUSD failed to hold above the 200 day SMA, and has again today rejected the critical level. Whilst we remain below the 1.5580 mark we prefer to look for reversal patterns whilst we hold long, continuation of Retail Buyers could offer some good short confirmations with the rejection today adding to the weight of this pair. Retail Sales could be another catalyst for this pair.
AUDUSD
Short: 0.9090
System switched to shorts at the 0.9090 level today the same level it was long yesterday. Pair did push higher with Retail Traders buying in the pair towards the end of the day. Will still overall like this pair for a push higher but in the light trade it seems to still need to find its feet. If we can hold about the 0.9100 level there is a good chance we push higher, otherwise we need to find some good support above 0.9000.
This pair has found some further interim support around the 0.9100 level and continues to look higher from here, however we expect trading to be relatively choppy especially if there is further US Dollar strength. Ideally a continuation of Retail Sellers would offer a further push to the 0.9320 mark.
USDCHF
Long: 0.9360
Order Book systems switched long this pair tonight and given the recent chop we have in the interim switched to a shorter timeframe outlook on the pair.
Feels like this pair has carved out a nice bottom and is now looking to push higher.
Daily chart reacted well to the blue support zone we highlighted. Pair now approaches the key 200 day SMA at 0.9355 and we now need to see a good push past this to move higher. Additionally we need to see further Retail Sellers on the push higher for this pair to really gain some traction.
EURAUD
Short: 1.4800
The RTAS Order Book system currently holding shorts this pair as it continues to find Retail Buyers but we did find a fair few Retail Sellers towards the end of the day. Pair has managed to hold above the 1.4500 level which it really needs to push past to stand a chance of moving lower.
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, pair does look heavy but the pair seems to have found good support around the 1.4500 mark. If we continue to hold above this level we would expect to see the pair push higher again.
