We highlighted last Thursday that NFP could get messy and we talked about a weaker than expected number given the high estimates being touted around given the ISM data. In the end the number came in at 169k, below the 180k average estimate.
Crucially the market saw a figure of 150k or more still resulting in September tapering by the Fed but by a much smaller amount. However the weak number does spark a debate on how much of a taper was already priced in and therefore where we currently stand in US Dollar. If the market was expecting a bigger taper we could see some further US Dollar weakness after its recent strength.
We also saw at the G20 meeting the stand off between Putin and Obama and although it looks like support for Syria action is growing there still remains questions on what the strike might look like and when it may occur, also impacting the US Dollar and Oil prices.
Given the above risks we therefore saw many participants take profit towards the end of last week and some rather mixed messages in the markets, this week could provide further chop, key support and resistance levels come in close on most crosses.
EURUSD
Short: 1.3265
RTAS Order Book systems remain short in this pair however we booked profit towards the lows given the mixed messages. If we see a push lower in the pair we will pick up the shorts on a break of the lows, otherwise this pair could chop around this week. Towards the end of the week we saw Retail Traders shorting this pair which does suggest we could see this pair hold support and push higher, positioning early week and the risk events could make this pair rather interesting.
Pair bounced higher towards the close off of the key support level. The 1.3110 level and 200 day SMA at 1.3140 will remain key support levels. If we break these we could see a push towards the 1.3000 level, if we remain above then we would suspect a test of 1.3280.
COT Report looking extremely interesting with Non Commercials still long, however they flattened significantly last week stalling the momentum. Technically we would still see the COT report pointing towards further EURUSD longs but a lot could depend on this week.
GBPUSD
Short: 1.5520
RTAS Order Book systems continue to hold short this pair despite being out of the money, however with Retail Sellers kicking in again towards the end of last week we suspect our systems to book the losses and switch to longs as this pair has remained extremely well supported.
Although this pair has found good support at the 1.5510 and 1.5430 levels its has been slowly grinding higher without any real momentum behind it, trying to find its next move. Although Retail Traders selling point towards our systems switching to longs we still prefer the downside in this pair whilst it remains below the 1.5700 level. If systems do switch we would suspect this to be relatively short lived longs.
COT report looking towards longs in GPBUSD however we still see Non Commercials net short in this pair and the recent push towards net longs haven’t gained as much tractions as previously and so we could see net shorts increase soon. Only the weekly chart we now sit at the key resistance point again, the 1.5700 level acting as a critical level. Break and hold above the 1.5700 mark could open the door to a further move higher.
AUDUSD
Short: 0.9140
Systems switched short on the Friday as we saw Retail Traders buying in the cross, however towards the end of the day we continued to find Retail Sellers and therefore this current short might not last long, if the pair continues to find some support.
Pair still looks to be carving out the bottom in a rather choppy manner, for it to push higher though it really needs to hold onto the current levels and so far it hasn’t been that convincing about it, maintaining some momentum to escape the current range will be key otherwise we are more likely to push lower again.
COT Report continues to point towards shorts with Non Commercials still pointing towards a move with the little momentum higher from last week stalling.
The weekly chart does look well supported but the 0.9200 level has provided resistance in the past and could cap the pair. A break and hold above this level would open the door towards the 0.9400 mark.
EURAUD
Short: 1.4690
The RTAS Order Book system holding shorts this pair. We did see the pair break the recent support level but creep back above it at the close. Although we had some minor Retail selling in the pair we found some buyers towards the close and we could see a move lower start to gather a little more momentum.
Pair had formed a nice double top formation with an extremely large RSI divergence. Break of the 1.4340 level could open the door towards the 1.4180 mark, bounce here could see a move back towards 1.4510 or 1.4600 level.
EURGBP
Short 0.8400
Order Book systems have chopped around at current levels as the pair has tried to break lower but found support. Retail Traders have switched back to buying in the pair and although this provided some support towards the close we could see this pair make another attempt at the 0.8400 support level. If this level breaks we would expect to see a push lower and further Retail Buying.
Having broken the 200 day SMA pair now does have the potential to push even lower, however we could see a push higher if the current support levels hold to test the 200 day SMA and 0.8475 resistance levels. That said this pair has traded within a wide range over the past year and if it can creep back above the 0.8430 mark and hold this level we would expect to see it push higher again, a lot will depend on the GBPUSD reaction to the 1.5700 level and the EURUSD reaction to the 1.3100 level.
