[I]Talking Points:[/I][ul][li][B]EUR/USD[/B] snaps uptrend, heads to former resistance near $1.1050.
[/li][li][B]GBP/USD[/B] holding April 13 uptrend after BoE minutes earlier.
[/li][*]See the May forex seasonality report.[/ul]
The Euro underperformed in overnight trade, falling as much as 0.2 percent on average against its leading counterparts. The selloff followed the emergence of results from Spanish local and regional elections. Exit polls suggested the establishment PP and Socialist parties took just 53 percent of the vote compared with 65 percent in 2011.
DailyFX currency strategist Ilya Spivak said in a note that the outcome of the Spanish elections has underscored a growing influence from Podemos, “an antiausterity party in the mold of Greece’s now-ruling Syriza.” source: Euro Drops on Spain Election Outcome, Yen Down After Trade Data | DailyFX
Talking Points:
[ul][li]USD/JPY RSI Pushes Into Overbought Territory; Retail Crowd Turns Net-Short.
[/li][li]EUR/USD Bearish Formation Continues to Take Shape Ahead of G-7 Meeting.
[/li][li]USDOLLAR Rallies to Fresh Monthly High- Preliminary 1Q GDP Report in Focus.[/ul]
[/li]
For more updates, sign up for DailyFX currency analyst David Song’s e-mail distribution list.
In today’s scalping report, DailyFX currency strategist Michael Boutros discusses the Aussie.
[B]AUD/USD 30min[/B]
[B]Technical Outlook[/B]
[ul]
[li]AUD/USD decline approaching key confluence support at [B]7680[/B]
[/li][li]Break below targets objectives at [B]7590[/B] & [B]7532[/B]
[/li][li]Resistance eyed at the May opening range low / the ML at [B]7800[/B]- bearish invalidation
[/li][li]Daily momentum coming into 40 support- break below to keep short bias in play
[/li][li]Event Risk Ahead: [B]U.S. 1Q GDP[/B] on Friday and [B]RBA Interest Rate Decision[/B] on Monday night
[/li][/ul]
Talking Points
[ul]
[li]USD/JPY breakout coming into first zone of resistance / 2007 highs
[/li][li]Updated targets & invalidation levels heading into June trade
[/li][li]Event risk on tap this week: Forex Economic Calendar – DailyFX
[/li][/ul]
Talking Points:
[ul]
[li]Significant Euro-Zone and US event risk dots the calendar this week.
[/li][li]European currencies among weakest performers versus greenback.
[/li][li]See the DailyFX economic calendar for Monday, June 1, 2015.
[/li][/ul]
The Euro recently bounced off of important volume-based support versus the US Dollar near the $1.0850 mark, and a continued hold above leaves focus on near-term resistance starting at $1.1200.
EUR/USD
[ul][li]Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)
[/li][li]Length of bar indicates the sum of Buy and Sell volume[/ul]
[/li]
Chart source: Prepared by David Rodriguez, Data source: FXCM Directional Real Volume Indicator
Technical Outlook
[ul]
[li]USDOLLAR reversal at initial support- 11880/98
[/li][li]Near-term bias remains bearish while below highlighted region into 11960- bearish invalidation
[/li][li]Break below targets support objectives at the ML / 11839, backed by 11790
[/li][li]Daily RSI reversal at 60- (bearish) – now testing support at 50- break would be bearish
[/li][li]Key Event Risk Ahead: Non-Farm Payrolls on Friday
[/li][/ul]
USDOLLAR 30min
Our retail forex trader data shows many have bought aggressively into the US Dollar pullback. We view this as contrarian signal the Euro may continue higher.
- Dow Jones FXCM Dollar Index (ticker: USDOLLAR) stands at the cusp of an important move
- Japanese Yen remains a sell until this changes
- Our focus remains on our volatility-friendly Breakout2 trading strategy
[I]Talking Points:[/I]
• Global government bond yields have marked a significant rebound (bond prices have declined)
• For benchmark 10-year US Treasury and UK Gilt yields, we could attribute this to rate speculation
• However, European, Japanese and Chinese yields (QE laden) suggests something else is being signaled
[I]Technical Outlook[/I]
[ul]
[li]USD/CAD holds resistance at the 2015 high-day close at [B]1.2559[/B]
[/li][li]Break of June ORL at 1.2384 & April/May ML shifts bias lower
[/li][li]Resistance & bearish invalidation into [B]1.24[/B] (bearish invalidation)
[/li][li]Support-break targets objectives at [B]1.2165[/B], the February ML & [B]1.20[/B]
[/li][li]RSI reversal sub-60 , break below 50 - bearish
[/li][li]Key Event Risk Ahead: [B]US Advanced Retail Sales[/B] on tomorrow
[/li][/ul]
[I]USD/CAD Daily[/I]
One-sided retail forex sentiment points to continued Euro gains versus the US Dollar, while the New Zealand and Australian Dollars are likely to fall further.
Click here to receive the Speculative Sentiment Index (SSI) and other reports by DailyFX quantitative strategist David Rodriguez via e-mail.
Hi Everyone,
I would like to tell you about our new FXCM High Frequency Market Insights. Unlike most indicators out there, many of which are lagging and repetitive, this new trading tool uses institutional level data to help determine whether the current market move will continue.
The FXCM High Frequency Trading Market Insights contain our GridSight Index (Gix[SUP]TM[/SUP]), which identifies the strength of market moves and the historical likelihood of continuation of the move. It does this through a highly advanced system that monitors over 30 high-frequency market signals centered around:
[ul]
[li]Institutional Liquidity
[/li][li]Professional Supply and Demand
[/li][li]Trader Positioning and Volume
[/li][/ul]
This information is summarized and updated in real time on the website to give you an extra edge in your trading. Any feedback you provide here about the FXCM High Frequency Market Insights will be greatly appreciated. Click here for a guide to this trading tool.
Thanks,
Jason
Fears of a Grexit are growing as the politicians continue their hardline negotiations. On top of that, we have the FOMC rate decision coming. Between these two events, there is plenty of event risk for the EUR/USD over the next few days which DailyFX head forex trading instructor Jeremy Wagner discusses in today’s video.
The updated forecasts coming out of the Federal Open Market Committee (FOMC) meeting may generate a bullish reaction in the greenback and spur downside pressures for EUR/USD should the central bank show a greater disposition to remove the zero-interest rate policy (ZIRP) in 2015.
[B]What’s Expected:[/B]
[B]Expectations: Bullish Argument/Scenario[/B]
The Fed may continue to highlight an upbeat outlook for the U.S. economy as the central bank anticipates a stronger recovery to emerge in the second-half of the year, and the fresh forecasts may help the greenback resume the bullish trend from earlier this year should the dot-plot remain centered around 0.50% to 0.75% for 2015.
[B]Risk: Bearish Argument/Scenario[/B]
Nevertheless, we may see a growing number of Fed officials show a greater willingness to retain the ZIRP for an extended period of time, and the central bank may sound more dovish this time around as the ongoing slack in the real economy limits the committee’s scope to achieve the 2% inflation target over the policy horizon.
[B]How To Trade This Event Risk[/B]
Join DailyFX on Demand for live coverage of the entire event.
The COT (Commitments of Traders) Index is the difference between net speculative positioning and net commercial positioning measured. The latest data show extreme positioning in the Japanese yen as well as positioning in the Swiss franc and Mexican peso that is close to extremes.
Use of the index is covered by senior technical strategist Jamie Saettele is his article on DailyFX.com
The US Dollar has bounced at important support versus the Euro and Japanese Yen. Here are the important levels quantitative strategist David Rodriguez is watching next:
EUR/USD
[ul][li]Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)
[/li][li]Length of bar indicates the sum of Buy and Sell volume[/ul]
[/li]
Chart source: The Weekly Volume at Price Report on DailyFX.com
The Euro has failed at significant resistance starting near $1.14 and has broken through important support near $1.12. Support now turns to resistance at $1.12, while further price targets include monthly lows near $1.1050.
Retail Sentiment
As you see from the picture below, since Mid-March trader have been aggressively short EUR/USD. This has taken place as EUR/USD bounced off a decade plus low at 1.0462 retracing as high as 1.1460 so far.
Overlay of Trader Positioning at FXCM on EUR/USD via the Speculative Sentiment Index (SSI)
(Screen capture from DailyFXplus.com)
Sentiment favors further upside as you can see when the client positioning is heavily leaning one direction, it often aligns with a strong trend that they’re hoping is about to reverse. Additionally, you can see that Retail Open Short Positions are at their greatest exposure since the market peaked in spring of 2014.
_
Retail Volume
Volume is shown at FXCM via blue bars on the bottom of the chart. The higher the bar, the greater the volume transacted. The lower the bar, the lower the volume transacted and the less trustworthy a move is treated.
(Real Volume indicators from Trading Station Desktop)
You can see below that the recent move into the May high is done on a sharp drop in volume meaning that price is moving higher with less and less support. Without a lot of support or multitude of buyers, a reversal could be quickly joined as a lot of money is likely on the sidelines ready to make their move.