Walking into Friday, traders in general were expecting NFP to beat expectations. Thursday's better than expected ADP and ISM reports had set the tone. NFP could not live up to the billings and in fact disappointed. Payroll grew by 96K well south of the 130K estimated. This lead to a continued slid lower for the dollar against the majors. As QE expectations increase heading into next Thursday's FOMC meeting. Now the question remains is if the fed will act or not. In my humble opinion, I believe the fed will remain sidelined due to the questions regarding Europe, and the USD presidential election.
Ahead of the FOMC meeting next week the German High Court will rule regarding the constitutionality of the zone's bailout vehicles. The Temporary European Financial Stability Facility and the Permanent European Stability Mechanism. If either plan is considered illegal Draghis' plan would suffer. So next week trading should be action packed.
Heading into next week, the USDJPY and USDCAD crosses could lead the way. The USDJPY dropped to test the bottom of its range at 78 following the NFP report. The pair could not muster up the momentum to break lower. If the pair can break below this level a marked move towards the yearly lows at 76 could be in the cards. The USDCAD is another story. The par broke below support at .98 and created new yearly lows on Friday. A hold below this level could indicate a trend shift lower. All right, that is it, the week is in the books. Everyone have a good weekend and remember to keep your trades KEANE.
EURUSD ENDS THE WEEK WITH A SMASH
The EURUSD pushed higher to end the week after disappointing NFP data. The question now is where does the pair go from here. The trend is up at this point and pullbacks could be considered buying opportunities. The cross could consolidate it gains to start the week ahead of the FOMC on Thursday and the German constitutional court ruling Wednesday. At the moment resistance is at 1.2820. A break of that level exposes the pair to a move higher towards the 1.30-32 region. Resistance begins at 1.2750 followed by 1.2690.
Keane Plan.... Looking at pullbacks as buying opportunities.
GBPUSD CLIMBING THE STEPS HIGHER
The GBPUSD has been 7 of the last 9 trading days. The pair appears to be focusing on a move up towards resistance at 1.6050. If additional QE becomes a reality in the USA the pair could easily push higher to test the descending trend line that has capped price action for a little over a year and a half around 1.6130. At this point a pullback towards the .618 fib at 1.5905 could find buyers.
Sup 1.5905 .618 Fib
Keane Plan... Looking for pullback to start the week.
AUDUSD RUBBER MAN
The AUDUSD like rubber man can bounce back from any situation. The pair drifted lower for the majority of the week only to catch a bid to finish near its highs. The cross bounced nearly 225 pips after briefly consolidating around support at 1.0175. Heading into the new week a pullback would be healthy. The cross has a tough batch of resistance just above in the 1.0398/0410 region. Comprised by the .618 fib from the recent decline at 1.0398 and daily price resistance at 1.0410. Support begins at past resistance at 1.0280.
Keane Plan...Could consolidate below resistance between 1.0410/1.398
NZDUSD BACK IN THE CONSOLIDATION ZONE
The NZDUSD bounced higher on Friday after a disappointing NFP. The cross is now firmly back in its consolidation zone between .8185 and .8130. I would expect the pair to drift around this range until the fireworks begin once again next Wednesday.
Keane Plan...Consolidation to start the week.
USDCAD NEW YEAR TO DATE LOWS
The USDCAD pushed below yearly support at .9840/00 on Friday. the pair appears to be ready to close for the week below this level. A hold below this price opens the pair up to a move back down towards .9725. At the moment the cross appears to want to push lower. Any pullback towards .9840 could find sellers.
Keane Plan....Looking for pullback to start the week
USDJPY TEST SUPPORT
NFP pushed the USDJPY around on Friday. The cross had drifted higher after better than expected ADP and ISM numbers on Thursday. the pair appeared to be positioning for a move higher. Then the floor fell out after disappointing NFP numbers. The cross tested resistance at .7824 before bouncing a bit into the New York close. Heading into next week I would expect the cross to hibernate ahead of the FOMC.
Keane Plan...Other JPY pairs offer better RR.
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