This Is Why There Will Likely Be Some Decent Activity In The Days To Come
After the slow Monday, which of course came as no surprise, traders
are now back at the helm and are likely to see if some new levels can be had in
this market. Between the payroll data and comments from McTeer, there will
likely be some decent activity in the days to come.
Most notable was the
current release of the IMM Commitment of Traders Report, which showed a
large increase in the number of speculative longs in EUR/USD.
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As mentioned in
yesterday’s commentary, 1.2444 will be the level that EUR/USD bulls remain fixed
on going forward while 1.2350 will remain as solid support. Continued demand
from Asia should allow for 1.2350 to be the line in the sand for now.
USD/JPY:Â rumors of both
Chinese yuan devaluation and BoJ intervention will likely act as opposing forces
in the days to come, the former being the one rumor that is least believable.Â
Any moves towards 108 USD/JPY should be greeted with skepticism. BoJ also
rumored to be bidders at 109 and 109.30
EUR/JPY:Â missed
opportunity here. I mentioned yesterday that 135.50-70 would allow for a decent
short entry if price action stalled, however, I did not pull the trigger, nor
send out an alert. Naturally that was a mistake in retrospect. A break of the
135.40 was the entry signal. Perhaps some of you, based on my comment
yesterday, took the trade, if so, 134.90 is next support level and a good place
to take some money off the table.
USD/CHF:Â no clear
patterns emerging here, although 1.2680 still remains the elusive break-out
level. Short-term models suggest possible long entries around 1.2540.
GBP/USD:Â the strength
that the GBP had demonstrated during yesterday’s US session was quickly negated
overnight with a sharp sell-off back through the 200 day ema. However, support
was found at 1.7880. The key now will be whether or not this was a one-off
break-down or the resumption of the trend that is slowing grinding lower.Â
A break of 1.7660 will clearly be a negative.
AUD/USD:Â recent move
higher is taking a breather on both intra-day and daily charts. However, this
pull-back will likely be a good opportunity to establish longs if price action
consolidates in the .7170-80 level.
NZD/USD:Â similar pattern
here, pull-backs toward .6715-.6730 should be viewed as buying opportunities.Â
One caveat:Â weekly stochastics are now rolling over and will need to be
monitored.