Despite our expectations to continue short short, euro retraced higher and even ended up above 1.05765. The current chart set up and structure is pretty much bullish and will likely push the price further to the upper side towards 1.06717 but should not go beyond 1.07552. A break above 1.07552 will push the price further to the upper side towards 1.08717. This view can only be rendered futile in case the pair end up below 1.05765, if this case, then an acceleration to the lower side is inevitable. This pair should be traded alongside GBPUSD, NZDUSD, and GBPHKD. These pairs have a strong positive correlation of up to +89% and will have a similar price action during this intraday.
USD/JPY has been pushing high this week with strong NFP report also not pushing it. Now all eyes are on the upcoming rate hike, it can be a good opportunity goes for buy, but need to do it with confidence and experience as holding up will be necessary.
EUR/JPY really went big this week as the market closed a 122.51 level, it is unlikely that we will see any major turn-around. It might dip but the trend is clear on the buy, so any dip means good chance for buy especially with positive talks.
EUR/USD has really went high before the closing the week due to the comments by Draghi, but it is highly unlikely to be taken too far, so we could see the dip coming especially near the Rate Hike for Dollar, it is best time to go for short but important to close out before the major decision comes.
GBP/USD has been in very steady mode and it is likely to stay that way till 15th but it will turn after the decision on rate is revealed. It is highly likely that we will see the pair goes down to 1.20 level at some stage, but it is important to avoid guess work.
Euro still short but should retrace up to 1.06976
Wave Analysis:
Instead of going short as previously forecasted, euro continues to retrace to the upper side but should not go beyond 1.06976 from where we'll be looking to pick low risk sell opportunities. A break above 1.06979 will mean we're waiting for further bullish price movements towards 1.07373 from where we'll be expecting a possible rebound to go short. The anticipated sell positions should be the continuation of the impulsive wave (c) but should not go beyond 1.06194. The entire downward rally can only be invalidated in case the price end up above 1.07373, if this is the case, then an acceleration to the upper side will be inevitable. Expect a similar retracement in EURAUD, EURCAD and GBPUSD. These pairs will have a similar price action during this intraday.
Trump’s observation that US Dollar is very strong and wanting a low interest regime did not help the USD as the FED is into higher interest regime. Economic data did not matter much. Friday was a holiday in most part of the world with financial markets closed & coming Monday too would be similar. Investors would not want to take too many risks till some immediate threats to financial markets like the war is taken care of in a proper manner!
A 1.22% increase in this pair is quite impressive considering it was down the previous to previous week. This pair might hit around the wider resistance around 1.28 levels but if there is continued USD weakness then the range can further expand to the upside. Traders would be keeping a sharp eye on war as each side is threatening and upping the ante with words to start with and some actions on ground too which might turn into all-out attack if things go out of hand!
The last week was in contrast to the earlier to earlier week when this pair gained. But the ranges are still tight with uncertainty on many fronts weighing on this pair too. AUD also not getting much support from commodities and the RBA is trying to talk down AUD. On the other hand in USA, the USD fate is tied to the fiscal & monetary policies whereby if there are favorable bills passed and FED continues to hike, then USD should benefit!
The past week was kind of volatile too even though NZD outperformed USD as the latter was caught short on various fronts from geo-political to fiscal to effect from other financial markets, etc. So not a good week for USD but NZD could not hold on its gain either. With week and month end approaching and with many volatile events lined up together with positioning changes, one can expect lots of actions in the market and be prepared accordingly!
