The EUR/USD pair fell during the bulk of the session on Tuesday, but found enough support just above the 1.3325 level in order to bounce and form a nice-looking hammer. It appears that this market is starting find significant support in this general vicinity, and we do think that the 1.33 handle is probably about as low as this market can go right now. On a break of the top of the hammer, we think that a short-term buying opportunity certainly does exist, and that the market will probably head to the 1.3450 level, and then possibly the 1.35 level.
The GBP/USD pair fell initially during the session on Wednesday, but as you can see found support at the 1.68 handle yet again. Because of this, we ended up forming a hammer, and that of course is a very positive sign. Because of that, we feel that this market is ready to go higher, and on a break above the top of the hammer we are buyers, expecting to see this market head to the 1.70 level first, as it was the significant support holding up the market previously.
The AUD/USD pair rose during the course of the day on Wednesday, breaking above the 0.9350 handle. This is where we expect to see a bit of resistance though, as it was a previous consolidation area, and was support. If we can break the top of the range for the day, we believe that the Australian dollar will head to the 0.9450 level again, and then possibly make another attempt a break above the 0.95 handle, which would lead us into a more “buy-and-hold” type of market at that point. It is not until we break below the 0.92 level that we would be sellers.
The USD/JPY pair fell during the course of the day on Wednesday, but as you can see bounced back above the 102 level. Because of this, we feel that the market still has plenty of support below, so we are looking for supportive daily candle in order to start buying again, anticipating a move back to the 103 handle. It’s hard to imagine this market breaking above there though, as we are in the month of August so we think this is more or less going to be a short-term buying opportunity at the moment.
Data Update for 7th Aug 2014
|5:00am||AUD||AIG Construction Index||52.6||51.8|
|11:15am||CHF||SECO Consumer Climate||-1||4||1|
|11:30am||EUR||German Industrial Production m/m||0.30%||1.40%||-1.70%|
|12:15pm||EUR||French Trade Balance||-5.4B||-5.0B||-5.1B|
|12:30pm||CHF||Foreign Currency Reserves||453.4B||449.6B|
|Tentative||EUR||Spanish 10-y Bond Auction||2.09|2.3|
|4:30pm||GBP||High||Asset Purchase Facility||375B||375B|
|GBP||High||Official Bank Rate||0.50%||0.50%|
|Tentative||GBP||High||MPC Rate Statement|
|5:15pm||EUR||High||Minimum Bid Rate||0.15%||0.15%|
|6:00pm||CAD||High||Building Permits m/m||-1.80%||13.80%|
|EUR||High||ECB Press Conference|
|8:00pm||USD||Natural Gas Storage||89B||88B|