The EURUSD has rebounded moderately from the low of 1.2500 reached on Friday. Following a strong US NFP print the USD strengthened across the board and the EURUSD was no exception. The pair has picked up a little and is now trading at 1.2542. The strength of this rebound at this stage is not enough to call it a recovery or bounce back. The pair is still skimming along the bottom of Friday's red down candles, as seen on the M5. At present if the price sits at the lower end of the large red candles the bias is lower. If the price significantly crosses back up over half way of the declines it increases the potential for an upside breakout. This morning German Factory Orders were down below expectations at -5.7%. This did not push the Euro down as the EUR is already beaten down. The EURUSD is down 8 out of the last 11 trading days. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. Coming today Minimum Bid Rate and ECB Press Conference. Tomorrow is the US NFP and Unemployment Rate.
EURUSD Support areas include 1.2500, 1.2425, 1.2300 followed by 1.2200. Resistance levels above are at 1.2600, 1.2700, 1.2800, 1.2900 1.2959, 1.30 figure level, followed by 1.3165.
The USDJPY reached 109.90 during the USD rally that followed the NFP. The USDJPY had reached above 110 on Oct 1st and made a sharp pull back to 108. Once the good employment data was released the pair rose sharply but could not exceed previous higher, forming what appears to be a classic head and shoulder formations on the H1. The ominous sign in the chart shows that the right shoulder is lower than the left shoulder, and strengthening the case further is the fact that EURUSD, GBPUSD, AUDUSD, USDCHF and Gold all made new lows, but the YEN did not. If the pair goes below 109 and consequently 108.40 then this could signal a possible reversal pattern. The pair is around the 109.37 and the 108.40 support level remains key. As discussed in our previous analysis the pair remains volatile following an extreme two month 10% up move. Today is a bank holiday in China, reducing liquidity in Asian markets. Overnight data in Japan includes the Monetary Policy Statement, Leading Indicators and the BOJ Press Conference. This data is sure to affect the JPY and the Nikkei. The price of the USDJPY now is 109.40
Support levels for USDJPY can be seen at 109.00 108.39, 107.50. Resistance to the upside at 110, 111, 112, 113.
The GBPUSD plummeted below 1.60 on Friday to a low of 1.5950. The sterling pound has lost a lot of ground in recent days, with the pair shedding 570 pips in two weeks. Friday's decline sent the pound to an 11 month low against the US Dollar. The next support is at 1.5900 followed by 1.5850, below this there is a support at 1.5715 and then little support until 1.5415. The GBPUSD now trades at 1.5983 and needs to breach above 1.60 to temper the downside momentum, and a break above 1.6275 will signal an upside correction is in progress. Today there is no economic data for the GBP. Tomorrow will be announced the following reports: Halifax HPI (House Price Index), Manufacturing Production, Industrial Production and the 30-y Bond Auction as well as the NIESR GDP Estimate. There is a heavy data flow tomorrow and the data is the sort that moves the market. I anticipate volatility in the GBPUSD tomorrow and positioning for the news may begin from today.
Support levels for the GBPUSD can be seen at 1.5900, 1.5850, 1.5715, and 1.5400, Resistance to the upside at 1.6000, 1.6100, 1.6200, 1.6275, and 1.6350.