FX Daily: Market Consolidation Offers Breakout Potential

Today

So far a rather quiet week with little substantial price action continued today despite a couple of good risk events. Feels like we are back into August trading again.

At the moment most pairs seem to be consolidating prior to their next move. Some of these setups make for really good breakout plays using the highs and lows as entry points for further moves, however we suspect the choppy price action is now likely to continue into the weekend and even potentially towards the end of September with no real risk events on the cards.

Key with breakout plays is to look for clear breaks of the support and resistance lines, after the clear break look for the retracement back to the line before entering the market.

EUR/USD

Short: 1.3470

RTAS Order Book systems held shorts today in EURUSD today as we continued to find some Retail Buyers. Price Action this week has been choppy, but with no real direction and I suspect this will continue into tomorrow with little on the Calendar and although Draghi is speaking he has so far kept religiously to his script. Resistance comes in at the 1.3560 / level with support around the 1.3470 mark, the region the pair bounced off today. Whilst we remain below the key resistance point we still prefer shorts.
EUR/USD " title="EUR/USD " src="https://d1-invdn-com.akamaized.net/content/pic12f278233da5adecf302f8124a8a4b98.jpg" height="919" width="1024">
The pair retraced all of yesterdays push higher today and remains in a tight range. Potentially a nice one for breakout plays. Whilst we remain below the key resistance at 1.3560 we prefer a correctional move towards the 1.3390 mark, however concede the weakness in the US Dollar is hard to get away from at the moment and a break of resistance could see this pair push higher.
EUR/USD " title="EUR/USD " src="https://d1-invdn-com.akamaized.net/content/pic5e436ddae0808227e7b98b8ef089dc7f.jpg" height="919" width="1024">
GBP/USD

Long: 1.6040

Similar to the EUR/USD this pair had a retraced yesterdays gains with a worse than expected GDP number. Retail Traders continued to sell this pair today making our Retail Order Book systems jump long this pair. This pair has been relatively well supported but like the EURUSD remains in a tight range.
GBP/USD " title="GBP/USD " src="https://d1-invdn-com.akamaized.net/content/pic610b762ab865d604f7a8cff7914255ac.jpg" height="919" width="1024">
The Retail Order Book is still at relative extremes meaning it will again need to be chopped around to find some space for additional sellers. Pair remains in slightly overbought territory and we still like this for a correctional move lower, key question is whether it has another push higher in it before this happens.
GBP/USD " title="GBP/USD " src="https://d1-invdn-com.akamaized.net/content/pic82e57f4e33284bc0973c0221ecb16c7d.jpg" height="919" width="1024">
AUD/USD

Short: 0.9370

Systems switched to shorts today booking a small profit on longs. Like most pairs this week, we have remained in relative chop. Reality of the movements is simply due to the flat Retail Order Book although we are starting to see some signs of life again today. This pair is really consolidating ahead of its next move, resistance comes in at the 0.9520 mark and support just below at 0.9340.
AUD/USD" title="AUD/USD" src="https://d1-invdn-com.akamaized.net/content/pic91462ca387f23c73f246f06b3fade3f1.jpg" height="919" width="1024">
Pair remained pretty static today not really moving. The pair has retraced recently back to a support area and has cleared out some room in the Order Book and pulled back from its Over Bought levels. We could now see the pair make another attempt at a push higher and we would expect to see Retail Traders selling the pair on a move higher.
AUD/USD " title="AUD/USD " src="https://d1-invdn-com.akamaized.net/content/pic733e3abd05db522fbf10aabec75049e7.jpg" height="919" width="1024">
EUR/AUD

Short: 1.4440
The RTAS Order Book systems jumped long this pair on minor Retail selling although frankly this was merely due to consolidation in the Order Books and the markets continuing to grind. If we see further grinding in the markets vs the US Dollar we could see this pair make a pop above the 1.4460 mark, however realistically it is more likely to continue trading between the 1.4460 and 1.4325 levels.
EUR/AUD " title="EUR/AUD " src="https://d1-invdn-com.akamaized.net/content/pic49dba908ab73e5defcfc6d9511a2a96f.jpg" height="919" width="1024">
Pair has now managed to chop sideways whilst pushing itself out of the oversold territory and has come back off extremes in the Order Book, it is now primed for its next major move higher or lower, if we see further Retail Buying we could easily see a push lower, especially if we see Retail Buying in the EURUSD cross. Whilst we remain below the 1.4520 mark we still prefer shorts.
EUR/AUD " title="EUR/AUD " src="https://d1-invdn-com.akamaized.net/content/picd7cefca26138a00f1ebbbfd7824313be.jpg" height="919" width="1024">
EUR/GBP

Short: 0.8420

Order Book systems have chopped around at current levels with an almost perfectly flat Retail Order Book. Systems jumped short today on minor movements late in the day and although systems continue to book small profits we are yet to see any real movements in this pair.
EUR/GBP " title="EUR/GBP " src="https://d1-invdn-com.akamaized.net/content/pic18e697b25645e413fb9f1f9039df6ae0.jpg" height="919" width="1024">
Daily chart continues to point to further EURGBP weakness but with no real follow through there does become a risk of the pair pushing higher back towards the key resistance point at 0.8490 and the 200 day SMA at 0.8500. Pair is still primed for breakout plays but has been rather choppy and there is better breakout potential in other crosses.
EUR/GBP" title="EUR/GBP" src="https://d1-invdn-com.akamaized.net/content/pic195d57672c599b05baf005c3783478d7.jpg" height="919" width="1024">