Towards the Turning Point

Markets have really continued the grind we previously mentioned, however we started to see the order books clear out some of the heavily short positions and potentially look at turning their over bias.

This could have provided a nice entry point on Thursday for a potential bottom in U.S. Dollar, however, at the close of the session orders started to ping back to the familiar U.S. Dollar long.

On the data front the Continuing and Initial Jobless figures in the U.S. came in better than expected, providing some short term relief in the USDbut this was unfortunately short term, and quickly reversed.


EUR/USD
We still held on to our long position from around the 1.2910 level, and continued to hunt out this illusive short position

We saw an initial spike higher in the order book on Thursday, as some shorts were ditched in favour of longs, but towards the close this reversed.

Our order book systems have been on a steady run towards a short entry. They continued to head that way, but with the book reversing most nights, it could still take a while to reach. Until we clear the key twist in the order book and start to see more longs enter the market, we are unlikely to see fundamentally different price action.

The euro broke above the resistance key zone we pointed out, and at that infamous 1.3300 level this pair could continue higher. We hoped that breaking and holding above this would encourage speculator longs in the pair, thus leading us towards our short entry quicker.


GBP/USD
The pound continued to be highly correlated to the euro, similar to most pairs as most currencies are currently trading trends in the U.S. Dollar.

The pair sat at the top end of its resistance zone, but a break and hold above the 1.5700 and 200 day SMA could have put this pair back up towards the 1.6000 level to create a new range.


However the psychological level of 1.5700 with the 200 day SMA means that we could have seen speculators jump long this pair from their overall short positions, this could have offered the range top in the pair and a subsequent move lower.
The order book did have room either side, although unlike the euro and Aussie which were at or near extremes.


AUD/USD
The aussie finally moved out of its aggressive chop zone; we switched to longer term plays and kept our initial long entries.

The nice price rejection on the daily chart, coupled by the change in order book and closure of long positions by some speculators continued and we moved higher.


The order book came off of extreme levels though, and had a lot of long entries to clear and switch to shorts on its way up.


USD/CHF
The daily chart gave a nice price rejection in this pair, and the order book looked very close to switching.

A push towards the 0.9300 level could have started the ball rolling for the unwinding of some long positions and spurring the move higher. This could have come after some further chop, initially clearing some orders.