Morning Forex Briefing
The USD is trading firmer overnight
after starting about unchanged in Asia; worse-than-expected Japanese GDP
estimates pressured Yen lower taking the rest of the majors with it.
Solid two-sided trade kept the USD/JPY inside established ranges but once weaker
machinery orders also were released the pair had enough bids to trigger reported
thick stops resting above the 115.50 area; high prints at 115.69. The
Yen-crosses also had pressure to the upside as general Yen weakness allowed most
Yen pairs to climb.
Cable is lower in early US trade but still holding the 1.9580
area in quiet pre-report trade. Most traders are waiting for today’s US NFP data
before committing to larger positions but moving to the sidelines has cost GBP
longs quite a bit this week; cable has made a new low for the week every night
this week and the 1.9580 area appears pivotal for a correction. Should stops
resting under the 1.9580 area get triggered today, some analysts are suggesting
a sharp liquidating break and lower prices into next week.
EURO is also a bit weaker but mostly steady overnight and is
not tracking GBP lower as it tends to do. Low prints are still above the 1.3250
area at 1.3270; analysts remind that EURO has potential for additional upside
technically as it appears to the least “overbought†but stops are said to be
heavy under the 1.3250 area. In my view, today is a typical pre-report day;
volumes are lighter and the current trend is in play while technical factors
remain neutral. Speculation that the NFP data will come in as a surprise to the
markets and create a rush of USD optimism will most likely drive USD bears to
the sidelines during early New York trade. Give the markets 45 minutes to an
hour to settle down before taking your position; volatility will likely be very
high after the NFP release. I look for the USD to strengthen into the end of the
week and aggressive traders can stay long USD over the weekend.
USD/JPY Daily
R3: 116.60
R2: 116.20
R1: 115.70/80
Current Price : 115.57
S1: 115.10/20
S2: 114.80
S3: 114.40
Pair completes first level retracement and holds firm above
the 115.10/20 area after large stops triggered on the rise through 115.50.
Traders note large names on the bid; a UK clearer easily absorbing offers from a
US investment bank some desks report. Stops also said to be at the 116.00 area
and offers ahead layered from 115.80 or so; look for solid two-way trade.
GBP/USD Daily
R3: 1.9720
R2: 1.9670/80
R1: 1.9620/30
Current Price : 1.9591
S1: 1.9570/80
S2: 1.9550
S3: 1.9480
Pair making another low for the week overnight and attracting
more offers on each rally, a correction will be considered in play on action
below 1.9580. Close under there likely to draw larger long-liquidation next
week. 36.2% Fib defense at 1.9350 area likely to draw support while a close
above the 1.9720 area likely to discourage aggressive bears. Look for additional
lower prices today.
Join us for the ProEdgeFX Morning FOREX Briefing at 7:45 am
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Please see www. ProEdgeFX.com for details
Jason Alan Jankovsky
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