Retail Traders Short Euro As Pair Spikes Higher

Monday morning's European PMI was better than expected - and the U.S. ISM was slightly worse than expected. The key was weak U.S. data, which resulted in the U.S. Dollar dropping rapidly.
Although we have recently been looking for further longs in the USD, we have been waiting for the order book to switch sides in order to offer some momentum in the move higher again. We have remained long with the Euro since May 22 as we wait for the switch.
That switch has still not occurred. Retail Traders started shorting this pair heavily on Monday prior to the U.S. data, which allowed for an aggressive push higher on weaker than expected data.
Retail Traders now sit firmly on the short side in the EUR/USD, so we'll continue to hold long positions.
EUR/USD
Retail Traders were again shorting the pair aggressively before confirmation of the short.
We maintain our long position based on the chart (see bottom indicator), but we are looking for a switch to shorts with the weekly and Daily charts still pointing to more Bearish moves.
Our positions remain based on the order books as the primary indication, and despite the Bearish pointers we much remain long whilst the order book clears out the aggressive Retail Short positions.


The weekly chart with COT report remains Bearish in the euro. Once the order book has been cleared, the pair has the potential for new yearly lows.


GBP/USD
The Pound has been able to switch its order book and clear out some of the Retail orders. It is sitting in more neutral territory, but Retail Traders are starting to close longs in the pair, still remaining net long.
We highlighted that we liked shorts while remaining below the 1.5250 mark, but at the moment we have taken a short position following Monday's moves, on the idea that the pair could now be setting a lower range between the 1.5400 and 1.5000 mark.



Our position will change from Short to Long on a move lower in the Retail Order book, as more Retail Traders begin to Short this pair (Our bottom indicator in this chart moving below 0 would result in us entering a Long Position). We can watch the 1.5250 and 1.5400 levels as key for changes to the order book.


AUD/USD
The aussie order book switched quickly on Monday, and we positioned ourselves Long first thing Moonday morning as the order book was cleared.

If we are to see a larger move higher in this pair, we really need to see Retail Shorts closed and the downward positioning in the Order Book continue.
We continue to like this pair for a move higher on Daily and Weekly charts, having found some initial support around the 0.96 / 0.95 levels.

EUR/GBP
A while back, we highlighted the option for a Long in EUR/GBP on a breakout from its range, which took a while but happened eventually.
Given Monday's Price Action in the pair and relative order book commentary above on the GBP/USD and EUR/USD, there is an interesting Pin Bar setup looking for a Bullish move.
There is a nice tight stop in the middle of the previous range. Rejection off the previous resistance now turned support level could offer an interesting play.
The pair has two good options: one on the 4hr chart and one on the Daily.