Forex for the Week of August 4, 2014

The Forex markets got the Non-Farm Payroll numbers on Friday, with them being just a bit lower than anticipated – meaning that the last gasp of real volatility has probably just been sucked out of the market. The month of August tends to be very slow to begin with, and as the NFP numbers weren't overly impressive or shocking – there simply isn't much to get concerned over at this point in time.

The EUR/USD pair did bounce, but quite frankly, it needed to. The oversold conditions almost promised bullishness after the number, and that is what we got. However, as you can see on the chart below, the 1.35 level is still looming large. We believe that this market could head there, but getting above it is a totally different idea altogether. We like selling rallies, as the EUR/USD doesn't see “real support” until 1.33 in our opinion.

EUR/USD daily

Ultimately, we feel that the market is going to be sideways overall. There is no place that this is more obvious than the USD/JPY pair, where we tried to break above 103, but simply couldn't this past week. Also, the jobs numbers coming in at 209,000 added, when 231,000 was the expected number won't do much for the upward momentum. We expect to see this market flounder between 103 and 102…

USD/JPY daily

All things being equal – stick to short term trades overall. Range trading is about to take over. (Again.)

This week –

Mon – AUD Retail Sales

Tues – AUD RBA Rate Statement, NZD Employment

Weds – EUR Interest Rate

Thurs – JPY Monetary Policy Statement

Fri – JPY BoJ Press Conference, CAD Employment