The fireworks began Friday after a slow week of trading. The BoE and ECB both delivered interest rate decisions in early New York Trading. The BoE and ECB remained sidelined, But in the press conference that followed the ECB rate decision, Draghi suggested that further rate cuts could be in the cards. This caused the Euro to fall across the board and most of the majors followed its lead.
In North American trading Friday the NFP report will be delivered. Estimates are for a reading of +90 K and for the employment rate to stabilize at 7.9%. It will be interesting to watch the reaction of the EURUSD and GBPUSD at these levels. The GBPUSD is resting at channel support at 1.6050 and the EURUSD doesn't find serious support until 1.2820. In North American trading Friday the CAD Employment report ( Ext 7.4%) and University of Michigan report are also due. As always remember to keep your trades KEANE and play it safe.
EURUSD DRAGHI SPEAKS THE EURO DROPS
The ECB left rates unchanged but Draghi suggested further easing could be in the cards at the press conference that followed. The move lower pushed the pair below significant support between 1.3020/.3000. As long as the cross remains below this level a continued move lower is favored. Support now begins at 1.2885 followed bu 1.2820.
Sup 1.2885 1.2820
Keane Plan…Favoring a continued move lower…Looking for pullback to short.
GBPUSD BREAK CONGESTION....CHANNEL NEXT
The Bank of England remained sidelined in early New York trading and left rates unchanged. The BoE also refrained from issuing a policy statement. These actions could indicate that the BoE is finished with its current easing cycle. Yet the GBPUSD snapped below its consolidation range between 1.6130 and 1.6185 in New York Trading. Negative sentiment from the ECB appears to have pulled the pair lower. The pair runs into channel and daily support at 1.6050. A break or hold of this level will be key. A push below could signal the beginning of a trend change lower, initially targeting 1.5960. A push back above 1.6085 could favor a run at the 1.6180/1.62 resistance zone.
Sup 1.6085 1.6180
Keane Plan…Watching channel action at support at 1.6050
AUDUSD REVERSES AT TREND LINE TOP
The AUDUSD has it’s mind-set on moving higher. The pair broke above range resistance at 1.0485 in New York trading and managed to spike higher to touch the past trend line support now turned resistance at 1.0513. A close above 1.05 would be favorable for a continued advance. Headwinds could slow this pair down. Resistance is scattered just above with yearly Trend Line resistance extending back to July 2011 crossing the pairs path at 1.0535. Followed by daily resistance levels at 1.0550 and 1.0630. A break back below past resistance now turned support at 1.0485 could push momentum lower.
NZDUSD TESTING THE RANGE TOP AT .84
The NZDUSD has made a nice run higher and is now testing the range top at .83. This level has capped price action since August and should find interested sellers. If the pair breaks above this level a test of the yearly highs at 84.70 could be in the cards. Support now begins at past resistance at .83.
Keane Plan….Watching price action at the .8350 level…
USDCAD HIBERNATING FOR THE WINTER
The temperatures are dropping in and the USDCAD may have settled in for the winter. The pair has slowed to a crawl in a narrow 50 pip range between 99.50 and .99. The daring could play the range but I will remain sidelined until the pair breaks free. A break to the downside targets support at .9870 and push above the top of the range targets yet another run at parity.
Range .99 – .9950
Keane Plan….Sidelined until the range between 99.50 and .99 it go.
USDJPY LOWER HIGHS...STEADY LOWS...A WEDGE ITIS
The USDJPY could, should and may be forming a wedge with 81.70 as it’s base. The pair has made lower highs since pushing above the 81.70 level. A downward sloping trend line from 82.80 has capped the price action over the last week or so. A break above the top of the wedge exposes resistance at 83.20. A push below the 81.70 level could lead to a test of the 81/80.60 resistance zone. The NFP report in early North American trading could be the catalyst to set the pair free.
Keane Plan….Looks to be in a wedge. NFP could set free. If the pair remains in the wedge post NFP playing Wedge is the plan.
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