Shocker NFP has again messed up many calculations. Unpredictability and possibility of huge reaction afterwards makes it really difficult to trade such data points before the release. That's the reason we keep the strategy on hand but never place orders until picture is clear, unless it is far end of extreme price action. Short dollar trade, which was very obvious before Friday is now not that easy. Of course Fed will still keep on chanting the data dependent mantra and won't divulge anything and that will keep markets on tenterhooks. There is no easy solution for that and looking at the dollar index chart it is clear that US dollar is not in any rush to break the boundaries. A broad 94 - 100 range is here to stay for longer.
Those currencies which are still not budging are usual suspects. Australian dollar and New Zealand Dollar. NZD/USD is down 100 pips since NFP but it looks like more about RBNZ decision later this week than pure USD strength. Most vulnerable currency against USD is GBP followed by Euro. We believe following trades can shape up in coming sessions.
EUR/USD - If 1.1080 is not broken soon then 1.1140 is next. Rather than having any strong bias, we like to ply the range of 1.10 / 1.12.
GBP/USD - Let's leave it alone for a while and let it figure out whether it likes to go below 1.30 or not. But now because of renewed dollar strength, pressure will be there.
AUD/USD - UP ! Buy the dips until proven wrong. Also like to add AUD/JPY long in arsenal.
NZD/USD - Probably RBNZ will give us better lower entry like RBA !
USD/JPY - likelihood of BOJ intervention near 100 and post NFP USD strength will keep it buoyant.
USD/CHF - It had been punished hard last week so, a cheap trade would be buying USD/CHF against 0.9780 support for 0.9850 at least.
Those currencies which are still not budging are usual suspects. Australian dollar and New Zealand Dollar. NZD/USD is down 100 pips since NFP but it looks like more about RBNZ decision later this week than pure USD strength. Most vulnerable currency against USD is GBP followed by Euro. We believe following trades can shape up in coming sessions.
EUR/USD - If 1.1080 is not broken soon then 1.1140 is next. Rather than having any strong bias, we like to ply the range of 1.10 / 1.12.
GBP/USD - Let's leave it alone for a while and let it figure out whether it likes to go below 1.30 or not. But now because of renewed dollar strength, pressure will be there.
AUD/USD - UP ! Buy the dips until proven wrong. Also like to add AUD/JPY long in arsenal.
NZD/USD - Probably RBNZ will give us better lower entry like RBA !
USD/JPY - likelihood of BOJ intervention near 100 and post NFP USD strength will keep it buoyant.
USD/CHF - It had been punished hard last week so, a cheap trade would be buying USD/CHF against 0.9780 support for 0.9850 at least.
