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Euro: The 4 hour chart just moved into long mode, and has put the pair into an overall long trend. That allows the regular number of lots to be used going long, and a reduced number of lots to be used if trading short. The pair is in the middle of a 200 pip channel, from 1.4100 to 1.4300. The long Target 1 is for 20 pips, however, things look to open up after that move. The market has shown for the last eight weeks that the initial moves need to have a percentage banked, and the stop moved tighter while currencies look to build the energy to break to Target 2.
In eight weeks there have been very few days that prices have broken their pivot point resistance 1 or 2 areas, and then held through to the next session. Until that pattern breaks we need to keep looking to sell 75% of the initial move, and look for runners with a smaller exposure. Moving into long mode overall may be the signal that things could be changing, although the daily chart momentum read is only just above the neutral 50% area. We will update as things unfold in each regional trading session, via the Market Outlook page.
Cable: The sentiment on cable has remained flat in recent trade, and left the pair in the same price range that has held steady for four weeks. The 1.6250 and 1.6650 areas are going to be hard to break, going either way. The mixed trend looks to be quite a way from changing, and as such a reduction in lot size is required when trading the pair at the moment. A light week of economic data is coming from the U.K. and leaves the pair to be driven by the Usd side of things.
The pound looks to have found fair value at these levels, and only U.S. based economics will now change that in the near-term it seems. Both long and short initial Targets (below) are tight, and need to have a large percentage sold to lock in green.
Aussie: The pair is holding fair value at 0.8200, and is locked in with 0.8100 and 0.8300 as the areas above and below that the market is happy to trade to. The range is tight, and will likely get broken, one way or the other, by large institutional block orders, rather than with a trend that slowly builds. We do know that the Reserve Bank of Australia sold A$'s at an average rate of 0.8000 over the course of the last two months, as they balanced their reserve holdings. Those moves, and the price action points that they created, will make breaking the near-term ranges quite difficult. The daily chart is printing overbought near-term reads, indicating that a quick test of support may be required to enable the pair to move higher.
Cad: The strongest pair in regards to the moves made against the Usd, and now looking for a reversal off oversold valuations before too much more can be taken off the short side of things. The Canadian economic and fundamental reads that have been recently absorbed instigated the moves lower, and were then helped by oil prices moving higher. Canada has extreme levels of tar sand reserves, and higher oil prices not only lead to lower Usd valuations, they help to increase the desirability of C$.
The pair is back to the swing point low areas that it reversed higher from at the beginning of June, and as such we need to be aware that a long test of resistance may be seen before the next sustained leg lower can be made.
Swissy: Holding the 4 hour channel that has gone absolutely nowhere since the beginning of June, give or take a few intervention plays by the powers that be. The Swiss National Bank will not be happy with the franc at these levels, it is way above their 'Intervention Play' valuations, that they have put into the public domain. he pair has dropped 150 pips in two weeks of trade, but that is 150 pips against the direction that the SNB are looking for the pair to go.
Yen: The global markets have separated the Usd/Jpy pair from the carry trade valuations as a consequence of rebuilding the new financial trading arena, and as such has left a pair that looks as though it has found fair value. These are tight channel trading ranges that are using the daily chart Simple Moving Average areas as the reversal points. The pair is trapped between the 200 and 20 day SMA areas at 95.20 and 94.60, with the 50 day SMA sitting just above at 95.50. The pair moved 60 pips in total last week.