Month end muddied waters to drive FX today
With the Americans out, stuffing their faces full of Turkey and all the trimmings, the Asian session proved to be yet another quiet one.
Data out of Japan and Australia was mixed but interestingly pointed to signs of inflation in the former, however movement in the respective currencies was muted as was general flow across the board.
On the day here in Europe we have had CPI and employment prints and both have done little to really sway the market overall. Talk of stops in the EURUSD above 1.3625 abound in the market for now and with the way things are going they look like they’re going to be toast by the time whatever skeleton crew they have in New York today comes into the office. The US session is devoid of any real data save for Canadian GDP prints. And as mentioned thanks to the fact that most Americans are making a 4 day weekend of it, it’s not unreasonable to expect a very quiet afternoon. Month end flows will be interesting to watch at the fixes and for what it’s worth, I’m looking for a general USD buying bias.
As far as the crosses;
EURUSD: As mentioned above I think the path of least resistance is higher, if for nothing else than to pick the low hanging fruit of stops sat above 1.3625. Sellers will come back into play around the 1.3650 area looking for quick retracements. These are intraday guys with deep pockets and size to swing around, so if they get them out up there, they’ll be buying them back sub the 1.3600/1.3590 area.
GBPUSD: Betty still wants another look at this year’s highs and we weren’t far off overnight. On the day though look for range trading with an upside bias. 1.6280 should hold the downside, while sellers aren’t noted just yet.
AUDUSD: More range trading with a downward bias. Sellers line up into overnight highs around 0.9120, small stops above and more sellers joining into 0.9135/50. On the downside, I still look for a bottoming out to be underway and the 0.9050 barrier will however prove to be too tempting. Once done, well…
GBPAUD: Not a day trade, but… 1.8100 is key and with Cable set to go to 1.6380/6400 and the AUDUSD to 0.9000/30 we should get there. However once we do… get short folks.
On a messy month end Friday adorning helmets is the best way forward.