THIS WEEK: Busy week ahead of us this week with the standard month beginning risk events such as Non Farm Payroll and Central Bank Rate Decisions.
Although we aren’t expecting any major releases this week with the expectation of ‘On Hold’ for the majority, no doubt there will be a continuation of the Taper talk ahead of the FOMC meeting this week (Wednesday), although the markets aren’t really expecting any tapering until September the sheer mention of non tapering for August meeting by Hilsenrath last week sent the US Dollar lower and in these low liquidity environments of summer trading this could well continue to be choppy. Lots of patience and clever stop placement required.
RTAS Order Book systems remain long this pair at the 1.3000 level as we saw further Retail Trader selling into the Close on Friday.
Retail Order Book is now at extreme levels and we could easily to start to see a reversal here on any moves lower. With the risk events this week and the recent trends in the pair we could see this weeks risk events pose a real threat to this pair moving lower. However whilst we remain at extremes and the pair continues to find Retail Sellers we will hold our long position.
Continue to hold our view on the Daily Chart that this pair is due a reversal although our upper bound for this reversal was capped at current levels. Risk events this week will be key for the outcome in this pair.
COT report shows the momentum in Non Commercial to the downside at the moment, however last week that really started to flatten out. it will be key to see where they now position themselves and this week’s risk events could be crucial for this. Although speculators remain net short they have been buying in this pair, continuation of this move could point to a contrarian move lower.
RTAS Order Book systems hold long this pair but the Retail Order Book has remained relatively static lately. Any buying on moves lower could push our systems towards shorts and point towards a more sustained push lower.
Daily chart has struggled to close above the key 15400 level and whilst this remains the case the risk is to the downside in this pair. We wait for confirmation of reversals whilst holding long for the time being.
COT report highlights the Non Commercial momentum to the downside with more Non Commercial sellers in this pair. We therefore like this pair for good short options and wait for confirmation in the Retail Order Book. That said, shorts around 1.5400 could offer good risk reward for a test of the 1.4800 handle.
AUDUSD remains choppy as the pair carves out a bottom. Although there is still risk to the downside, recent Retail Buying in the pair has cleared some of the extremes in the Retail Order Book allowing for more sustained moves in either direction.
Key to a reversal in this pair will be a close above the 0.9400 level and Retail Traders selling into resistance. If the pair finds further Retail Buying on the break higher we could easily see this pair form a small ledge here before a push tot eh 0.8500 level.
Non Commercials keep their Net Short positions and continue to point to further moves lower in the pair.
Order Book systems jumped long last week on Retail Traders selling in this pair, however the light volume caused the pair to drop through support, as it has further Retail Buying then pushed the pair lower. System currently hold Longs in this pair out of the money but are starting to look for additional short opportunities.
Our call from last week failed to hold support and on a daily basis this pair now looks like it is ready to push lower again. Pair is extremely well supported around the 0.9200 level and we would not expect it to break this level.
Non Commercials still slightly long in this pair and saw some buying last week suggesting we are nearing a bottom in the pair however, Non Commercial are only just long and are far from their recent net long positions.
With the RTAS Order Book system continue to hold longs from last week, but the system is heading back to shorts as we remain at extremes in the Retail Order Book.
We maintain our outlook on the daily chart, with the view this pair is setting an interim top. A nice RSI divergence on the Daily Charts and the extremes in the Order Books gave initial clues, we now need to see some follow through in the Order Book with further Retail buying in this pair to ensure this isn’t just an initial pull back.