In last weeks post I mentioned EURUSD finding a base near the 1.0500/20 area. This turned out to be the weeks low. Even a blockbuster ADP and fairly respectable NFP couldn’t dent it’s resilience. Wages were a touch weaker but the headline should have been enough to take this pair lower. The high on Friday was 1.0696 – just shy of a key DAILY level at 1.0710.
Silver tongued Mario Draghi helped by being mildly hawkish but price action, through technical analysis, showed strength before the risk events actually occurred. On that note we closed above 100DMA at 1.0660 – something we haven’t done since the end of January. This is significant so keep an eye on where we close in Asia Monday morning.
If EURUSD couldn’t weaken on bad news what will it do on good news? Be aware.
USDJPY: was being bought before the NFP rumour, then promptly sold off after the fact – again.
CABLE: Trying to find a base at 1.2140 and we closed at 1.2165 (Staying above 1.2150 is key) 1.2080/1.2130 are very good levels in a normal market. However, the imminent trigger of Article 50 may still yet unleash uncertainty. Follow price action and don’t stand in its way if breaking lower in Asia.
Oil fell off a cliff and NZDUSD followed. AUDUSD failed breaking .7505 (100DMA) and promptly shot up to .7555
WEEKLY wrap in short: USD had no legs
- EURUSD: SELL 1.0777 and 1.0830 LARGE but not before. If you are still long from our level last week at 1.0500 take half off. Look for support at 1.0650 (100DMA) and 1.0630 – but you are wrong if it breaks the big figure (1.0600)
See chart 1
- Big Wednesday – it’s all about the DOTS. A hike is priced in but look at DOTS on FOMC website. Look at the Federal Funds rate for December and if more than .2 out trade it. If it’s weak BUY EURUSD and if strong BUY USDJPY which could potentially smash 116.00
- Trigger 50 – It will be a chop fest so good luck. See what Asia does but if 1.2080/1.2130 holds buy it big and hold. Levels below
- Is the SNB up to cloak and dagger tricks again? Last Friday EURCHF was BID on the sly. Are those in the know are getting out prior to The SNB meeting Thursday? 1.0800 is a key level and I fancy stops above. If it breaks expect a cut from SNB. Yes that’s right twisted and cynical.
- UK Super Thursday – not so super and never really was. Stay out.
- BOJ – not interested
That’s it from AP towers. Catch Patrick Reid on Linked in for more updates. Feel free to ping me your views.
Enjoy and discuss!
Adam and Patrick