Earnings Season To Set Short-Term Risk Tone

Little data in the markets today.

As a consequence, many of the currency pairs did very little. Earning season starts tomorrow and therefore it is key to watch for general risk on/risk off themes.

Up tomorrow we have earnings for Ebay, JP Morgan, Goldman Sachs, Bank of New York Mellon. If we get good results we could see a higher push across all equities leading into a risk on push in currencies.

Today markets generally dropped slightly lower although they paused for thought on US Retail Sales data was coupled with poor Empire Manufacturing data.

EUR/USD
The euro dropped a little today to test the 1.33 handle.

If you are currently long this pair I like trailing stops and looking for a move towards the 1.34 then 1.35 handle.

Retracements may offer an opportunity to get long on a rejection off of support within the blue box. If the 1.33 handle fails to hold, look for the 1.3170 to offer further support.

GBP/USD
The pound dropped again today to test the 1.6040 mark (sound familiar). The 1.60 mark is proving a key level. I now like the idea of longs towards the 1.6040 mark with stops below the 1.600.

Retail traders are still net short this pair adding to my preference for longs. A break below the 1.60 handle opens the door for a test of the 200-day moving average.

AUD/USD
The aussie has put in another rejection of lower prices (again sound familiar to yesterday?).

With a strong resistance level not far above Longs don't offer value for money from these levels.

We can watch the 1.06250 level for rejection pointing to a move lower, or alternatively a break of this level could see a larger push higher.

With Retail Traders still net short, a push higher is still on the cards here.

Weekly resistance above 1.06250 comes in around the 1.0855 mark.

USD/JPY
The dollar actually retraced slightly against the yen today. If we get a good earning season starting tomorrow this pair could push higher on wider risk on trading.

Strategy remains the same to look for buying opportunities on a retracement.

EUR/AUD
EUR/AUD retraced slightly today, I look for 1.2550 to offer support. If we hold above this level I like this pair for further gains.

USD/HUF
The Hungarian forint lost pace against the boarder dollar gains today.

That said this pair still looks like it is on its way lower, therefore I continue to hold short.

GBPCAD
I still like the GBP/CAD for a break higher hear having found some strong support but we look destined to test lower prices with a failure to move higher.

USD/CAD
The dollar has struggled to push higher against the CAD lately. A double rejection of higher prices offers an interesting set-up for a move lower.