Currencies are not all that active in the first half of the week, with some price actions deserve a little of attention, although not much really. As expected FX markets are kind sleepy on weekly start. On Monday, the USDJPY tested a strategic resistance around 109.90, the highs that were in play throughout January. Australian dollar also shows signs of volatility and trading activity. For these days this type of action has not been common for this market.
EUR / USD - correction is developing smoothly
European currency expected correction is developing somewhat harmoniously, the pair marked session lows in the area 1.1410, and then pulled back higher to the zone 1.1420. The tactical picture has not changed much - after growth to 1.1515, the market has adjusted to the closest support area - 1.1410-1.1430. But the strategic support line is a bit lower in the area 1.1395, so the corrective pullback may reach this zone. However, it seems that buyers are trying to seize the initiative at 1.1410, which will be a positive moment for the market.
Trading recommendations - cautious longs in area 1.1395-1.1410
GBP / USD - no significant changes in the market
Yesterday, the market spent a low-active trading day close to the strategic support zone around 1.3020-1.3000. The day did not provide any new signals of market intention — so all our Monday considerations remain valid. The market remains above the first support 1.3020-1.3000. The weakness of the dollar supported the British pound. Despite USD dollar growth, we maintain expectations of weaker USD dollar and on this background, we can open longs in the area of this support.
Trading recommendations - cautious longs in the area of 1.3050-1.3000.
Gold rebound from 1310 did not receive a development, now 1300 level eyed
There were no significant changes in the precious metal market for the session. Gold market is trading near the first tactical support level around 1310. Yesterday, buyers attempted to attack and were able to roll back the market quotes to the zone 1314, but further progress slowed down. In such conditions, we continue to look for entry points to open longs, but no hurry in the current situation a it is dangerous. The market may well test stops concentrated below the 1300 mark. Local support in the area of 1310 and further down to the strategic mark of 1300.
Trading recommendations- purchases in the area of 1300
US dollar index – is gaining
In essence, Friday's NON-FARM data was fully played by the market back on Monday, when the US dollar index broke through the support of 95.50 and rushed higher. It is not yet clear how to evaluate this market move, a breakthrough of this level may indicate that the market is heading to the strategic area 96 points. However, there is the nearest local resistance level around 95.70 ahead of the market, let's see how the market will go with this mark. We maintain medium-term negative expectations for the US dollar, but we can not exclude that the index will test zone 96 before turning lower.
Trading recommendations - today out of the market, waiting for developments