FX Daily: Markets Carve Out Room For Next Key Trend

Today

Today saw some US Dollar weakness creep into the market on talk of the US Debt ceiling and rumours of potential rating agency outlook changes for the US.

With lots of offers serious offers in GBP/USD and EUR/USD touted above current levels markets seemed keen to test these.

For the moment today’s price action seems somewhat out of place, but data tomorrow could be interesting with UK GDP in the morning and US GDP and Jobless figures in the afternoon.

Retail Traders in general started selling the moves higher in most pairs today which rather annoyingly goes against our overall outlook for US Dollar strength. If this trend continues we could see another bout of US Dollar weakness around the corner.

At the moment though markets seem to be testing the water and carving out room for another move.

EUR/USD

Short: 1.3470

RTAS Order Book systems finally closed longs and enter short in EURUSD only for the pair to pop higher today. Overall today we saw minor Retail Selling in the pair but the Order Book is at extremes and therefore any push higher will require the market to clear out some of these shorts before pushing higher. Resistance comes in at the 1.3560 / 13600 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.
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The pair put in a rather strong day today on very little. 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.
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GBPUSD

Short: 1.5970

Similar to the EURUSD this pair had a rather good day today, some good CBI data in the morning helped push the par higher followed by further US Dollar weakness. Systems remain short but it is relatively close with Retail Traders using the push higher to sell strength in the pair, if this trend continues we could easily see this pair push past recent highs at 1.6150. 1.6050 / 1.6020 now provides key support levels.
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GDP figure tomorrow could be key for this pair with a good number likely to see the pair push back above the 1.6150 mark. That said Retail Order Book is at 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.
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AUDUSD

Long: 0.9340

Systems switched to shorts today booking a small profit on longs, then flipped back to longs. 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.
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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/picf14b2adad285ed7ac8721b8083b7cdfe.jpg" height="919" width="1024">
EURAUD

Short: 1.4360

The RTAS Order Book systems remained short on this pair although we did see it spike higher today . Whilst the pair remains below the 1.4460 mark we prefer shorts, however we have seen Retail Traders selling in the pair recently and if support holds at the 1.4325 mark we could see another push higher in this pair.
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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.
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EURGBP

Long: 0.8415

Order Book systems have chopped around at current levels with an almost perfectly flat Retail Order Book, however selling initial buying by Retail Traders saw then selling saw the system switch short at the 0.8440 mark then book profit and jump long at the 0,8415 mark. There is a now a nice Bullish 4hr pin bar on the 4hr chart, if we continue to see further Retail Selling in the pair we could easily see this pair push higher.
EUR/GBP " title="EUR/GBP " src="https://d1-invdn-com.akamaized.net/content/picb0af2f65277bcca4dc6303724cc7c1ca.jpg" height="919" width="1024">
Another Bearish formation today following on from yesterday Bearish pin bar on the daily chart. Pair seems to now be testing levels before deciding on its next move and the break of recent lows today only to retrace means we could test to the upside again before pushing lower.
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