Market Watch: Risk Off Or Corrective Action?

Markets have been a little lifeless this week, but on occasions when there has been life the push has been largely to the downside. Therefore, the question for the moment is whether this is risk off trading or corrective action?

For the moment I still believe this is relatively corrective action, but that is not to say that I don't think we can still push lower before a move higher again.

Aussie Employment figures and UK Retail Sales on Friday may provide some action for those pairs respectively. Otherwise I suspect we end the week with a general risk off, with some minor profit taking on Friday.

EUR/USD
I still remain bullish on this pair despite its recent move lower, still classifying them currently as corrective. Small rejection of lower prices today but I suspect we could push lower again before the close of the week. I am currently looking for support around the 13.240 and 1.3170 mark. If we break though these levels I suspect we are looking to test weekly lows again.

The 4 hr chart is pointing to further weakness and therefore I believe we could still see a move lower from these levels before pushing higher again.


GBP/USD
Pound dropped again today this time testing the 1.60 handle and managing to break through. I suspect a test of the 200 day moving average is now in the cards. Small shorts from the 1.6040 mark could offer a good return down to the 1.59120 / 15900 mark.


AUD/USD
Aussie is again rejecting lower prices today. This pair has been chopping all week to little or no effect. This pair could actually be stalling now waiting for a broader risk on theme in order to push through the upper resistance. With Aussie unemployment figures over night this could provide a bit of a catalyst for a move in either direction. Strong numbers might offer a good buying option for the test of resistance.


USD/JPY
Dollar actually rejected lower prices against the yen today. I suggest that with a broader risk off this pair could continue to drop but given its recent strength I am not keen on shorting it. Instead I prefer to wait for a pull back before entering long.


EUR/AUD
Retraced slightly again today, but I still see this as corrective. Weekly support comes in around the 12550 mark and with Retail Traders still heavily short this pair but I like this as a potential area for long opportunities for a push higher.


USD/CAD
A double rejection of higher prices offers an interesting set-up for a move lower, despite the push higher today. Hold below the weekly resistance at 0.9880 could open the door up to a move towards 0.9750.


USD/NOK
Interesting with-trend set-up on the Dollar vs Norwegian Krona. Stops above weekly resistance and swing highs offer good risk reward with weekly support coming in around the 5.40 mark. Further dollar strength as projected across the board could cause further chop in this pair though.


Potential Alternative to the USD/NOK, could be the EUR/NOK with a strong rejection off of the 200 day moving average. Again broad based weakness or strength in the euro could play on this pair.


NZD/CHF
Interesting play on the Kiwi Swissy. The pair has been pushing higher and chopping round the 200 day moving average, but continued weakness shown in the Swiss Frank means this pair could be ready to make a break for it. Nice rejection of lower prices today means a strong break of resistance could result in a push initially to the weekly swing high at 0.800 and beyond.