Talking Points:
– GBPUSD responds to July-March uptrend, needs 1.6750.
– AUDUSD bull flag engaged, calls for move above 0.9500.
– North American forex economic calendar light on Tuesday.
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The disappointing US Nonfarm Payrolls report for March has stoked a more violent than expected reaction in assets across the globe, though there may be few places more obvious than in FX markets.
With US economic data sputtering, there has not only been an unwind in correlated risk assets (NASDAQ) and drive to relative safe havens (Yen, US Treasuries), there has also been a noticable calm in two currencies as their respective economic data has proved resilient: the Aussie and the Sterling.
Between these two pairs, the bullish AUDUSD move may be more viable; we’ve been following the developing bull flag for several days and Aussie strength has been noted elsewhere, in particular, EURAUD. For GBPUSD, another run at the yearly highs could represent a selling opportunity for a covering move lower as net-positioning is at a bullish extreme for the British Pound and at a bearish extreme for the US Dollar, per Senior Technical Strategist Jamie Saettele’s recent COT analysis.
Read more: ECB Sets Table for Lower Euro Prices – Here’s How
— Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
Source: Daily fx
