Lighter Volumes But Levels Holding Well

Monday's morning session focused on reviewing the article in Der Spiegel (released over the weekend) talking about ECB operations targeting a yield cap (and therefore almost being unlimited stimulus), however this was rebuffed by the ECB later in the European morning session (although they didn't directly deny it); that said the Spanish yield still dropped on the news and we saw some risk-on trading shortly after.

Markets were relatively quiet, the lack of data and the participants starting to come back from holiday meant little movement as many look towards the week ahead and any further news we may have out of the ECB/FOMC Minutes due out Wednesday. That said our levels continued to hold well and therefore we are currently looking to play breakout trades on the euro and pound with yen pairs providing some opportunities to jump on some potential trend trading.

Watch out for the Aussie Monetary Policy Meeting minutes overnight, otherwise tomorrow could be another light trading day with thin volumes in prep for more action towards the end of the week.

EUR/USD
Well confined to current levels, a break of these would change our current directional bias from a sideways chop.
GBP/USD
With little movement in the pound today, this week could provide a retest of the recent highs and strong resistance levels. We have two potential strategies in this case, either level holds and we break lower or level breaks and we push higher; we favour the initial strategy but will wait to see what the market brings.
AUD/USD
Pop higher in the aussie fuelled by very little. Current bias is Bullish but we need tripple A set ups to confirm entry into this market. We wouldn't be surprised to see a pull back to test close to the Fibonacci levels before a continuation; drop close to the 38% line would put is Bearish this pair.

USD/JPY
There was a slight drop today but given the recent break we are now looking for entry signals to position ourselves long this pair. Entry signals on a pull back towards the EMA cross and previous resistance now turned support would be ideal.
Some other interesting set ups we have been watching:

USD/CHF
Rather small pin but it is off some previously strong resistance, might offer the potential to trade the range between the support and resistance lines.

USD/SEK
Offered a small bounce to allow a good entry point for us, we want to see a break the support line close below (pink line) to offer up the potential targets.

USD/NOK
Our USD/NOK trade is currently sat above the initial target but has put in another pin bar formation today. We are moving stops down and locking in some profit whilst updating profit targets to the new levels.