Good morning traders. Trust you all had a good Easter break and are ready to step back in the ring.
Last Thursday saw the eurusd take a dive down and through support at 1.1250s on the back of poor PMIs. It did turn back from the 1.1220s I mentioned to look for as support but there was little to write home about.
From a model strategy pov we had a -13 loser for the day. For updated yearly performance click here. We are still trading well in the green for the month but it has been hard won – particularly last week.
We don’t have much of any note on the data slate for this week so from a macro perspective there is little that might spark any big push either way. With the UK parliament back from their hols Brexit might throw in a few headlines and we have US advance GDP reporting Friday. We also have some big US companies earnings in focus such as Amazon and Microsoft so we need to keep a close eye on the USD.
With the USDx trading back above the 97.00 level it could go to new highs for the year or back off. I have no feel for what might push it either way so the best plan is to watch for it to hit decent S & R levels in conjunction with the eurusd and trade accordingly. The 97 level itself and maybe just above around the 97.10s look like decent levels for a bounce if it trades down in which case look for a complementary short on the eurusd.
The 240m Chart
As we kick off the week I expect price is going to be bounded by S & R levels unless we get a significant break up or down. The levels are clearly marked up on the chart.
Divergence with US policy remains the main driver of price action in my opinion and as I have mentioned above the USDx is critical in this. If we start to get a push down in US equities and a significant risk off tone we could see some further USDx safe haven bids which would depress the eurusd and other other majors against the USD.
But we have not really seen this correlation in full force recently as the USD has been rising in lock step with US equities.I mentioned the difficulty that macro analysis poses in last weeks kick off piece.
The Hour Chart
Levels for today as per.
Pulling a Fib on the recent swing shows that we stalled at the 38.2 yesterday in subdued markets due to holidays. The 1.1280s remain a decent short entry and the 1.1205s a reasonable long entry at main S & R zones. There are a number of levels that could give us good scalp opportunities as noted.
Good luck for today.