Yesterday saw further significant strengthening in the US dollar, and weakening in GBP and EUR – thanks to the BOE and ECB interest rate announcement commentaries. This afternoon are the NFP figures so I expect some major price fluctuations.
In summary from the decisions yesterday – GBP suffered the most, EUR and CHF suffered a lot too but gained against GBP – USD destroyed all three of them and rallied a little against the Yen.
GBPUSD & EURUSD – it’s very likely that both of these pairs will change to S1S at the end of today. The momentum on the weekly chart has already turned to bearish for both, but things may change yet again with the NFP figures. Observe this pair closely on Monday morning as there may well be a setup. We probably still want to stay away from shorting EUR as it is the 2nd strongest currency, however we should short the f**k out of Sterling.
EURJPY – could change to S2S next week – it seems like Yen is starting to gain in strength a little – maybe the Agonomics-based depreciation of Yen over the winter will start to reverse. Depends on where the daily candles close, but price is getting close to the threshold level. Momentum is already bearish.
USDCHF – on the Weekly chart, this pair is now touching the 200MA thanks to the rallying yesterday – exciting – it touched here in mid 2012, and before that in mid 2010. It broke through in April of this year but then retraced again, will it now make a clean break-through and head for the heavens? However for now the momentum is still bearish, so we cannot go long on this pair!
CHFJPY – this is now very close to being a S2S setup – does it mark an event of Yen overtaking and surpassing CHF in terms of strength? Interesting!
AUDUSD and AUDJPY – depending on the Jobs report this afternoon, the momentum on this pair could also change from bearish to bullish.
GBPCHF – S1S – not a valid setup – see yesterday’s comments.
GBPJPY – S2S – not clear bearish PA, few hours to NFP, and although JPY is clearly gaining on GBP in the bigger picture of things, both pairs are on the weaker end of the scale, and are thus not ideal to be trading against each other.
No new orders entered into the market.