The equity markets ripped higher on Thursday after Draghi recycled the same information regarding the theoretical bond purchase program at the ECB press conference. The bigger catalyst for the move higher could have been the better than expected ADP and ISM reports. But you would assume that equity investors would realize that stronger ADP and ISM numbers could lead to a higher NFP which would diminish the possibility of additional QE. Needless to say the surging stock market pulled the majors higher against the dollar after initially dropping lower. Heading into Friday's trading all eyes will be on NFP. Expectations are for a print of 127K. A better than expected number would be positive for the dollar and the inverse would be true with a weak reading. Traders keep your head on a swivel and always keep your trades KEANE.
EURUSD DRAGHI DISAPPOINTS BUT STABLE RATES PLEASE
It was an interesting day to trade the EURUSD. The ECB kicked things off Thursday by leaving interest rates unchanged after it was widely expected that the central bank would lower rates 25bps. The pair moved up towards the 1.2650 area shortly after the data was released. The follow thru on this move was muted as traders waited for Draghi’s press conference at 8:30 ET. During the press conference Draghi did not reveal any substantial information about the possible future bond program that had not all ready been leaked on Wednesday. The pair then moved down to touch support at 1.2560 only to bounce back to about where the cross began the day. It was interesting to see the lack of follow through on what was essential a non event press conference when traders were expecting action.
Heading into Fridays trading ,data will be front and center once again with the release of NFP. A strong payroll number could push QE once again to the back burner. Is this is the case the EURUSD could decline from the declining trend line from last October, that is currently around 1.2630. Support begins once again at 1.2560 followed by 1.2480. If Non Farm Payroll disappoints the cross could firmly push above trend line resistance and establish an upward trend.
Keane Plan…Watching price action near the descending trend line near 1.2630
GBPUSD BREAKS THE .618 FIB
The GBPUSD continued its steady march higher. The cross has moved up over 450 pips since the beginning of August. NFP could add a bit of fireworks into the end of the week. A strong number could help the dollar catch bid erasing some of the gains from today’s push higher. Support currently rests at the .618 fib at 1.5904 and the ascending trend line at 1.5850. A weak to in line number could lead to a continued push higher towards 1.6050.
Sup 1.5904 1.5782
Res 1.5908 1.6050
Keane Plan…. A better than expected NFP could negate Thursdays Rise. Weaker or inline could lead to a push higher
AUDUSD THE 100 PIP KID
The AUDUSD awoke from its summer slumber Thursday to move over 100 pips following Wednesday’s Employment Report. The pair will be challenged once again by data in early trading Friday. The AUD trade balance report could paint some light onto trade flows with China. In the meantime the cross is resting at support at 1.0280. NFP will be the catalyst to spark Friday’s moves. A push higher could find resistance near 1.0350. A drop back lower could find support once again at 1.0175.
NZDUSD I CAN FLY
The NZDUSD followed its Australian counterpart higher on Thursday. the pair thought the time was right to lift higher after consolidating for around 30 hours. The pair is now resting at resistance at .8030 and support is lower around .7910. As with all the majors NFP will lead tomorrows price action. A weak number could lead to a push higher, while a stronger than expected number could erase today’s gains.
USDCAD SITTING ON THE EDGE WITHOUT A NET
The USDCAD broke down on Thursday to test the resistance zone between .9840/40. A break of this level opens up new yearly and could lead to a test of the .94 area. A better than expected NFP number could give the cross a bit of breathing room and lead to a test of the .9950 level.
USDJPY QE DOUGHTS SPARK BOUNCE
Strong ADP numbers combined with a strong ISM report pushed the USDJPY higher Thursday ahead of the ECB press conference. All eyes will now be firmly in the NFP report due out in early New York trading. A weak number could push the cross lower once again as expectations for additional QE would be in the forefront. If the number beats expectations the JPY crosses in general could continue their respective pushes higher.
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