London Forex Report: Global crude oil prices rebounded from intraday lows on news of an oil industry strike in Kuwait, somewhat reviving market sentiments. This overshadowed scant economic releases that were limited to NAHB housing market index from the US, which turned out flat indicating a lack of upward trajectory in the housing market. USD weakened as refuge demand was dampened by firmer equities and rebound in oil from its intraday low. The USD Index slipped 0.21% to 94.49 as bids retreated in favour of other majors as markets turned risk-on.
EUR/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: Although USD was broadly weaker against other currencies on Monday, the EUR was unable to break out 1.1330 handle because of the backdrop of Brexit issue. The euro touched 1.1332 level and retreated to its current level of 1.1305 as traders were not willing to open position of euro ahead of ECB meeting due this Thursday. Some analysts beleive that ECB may have run out of ammunition to weaken the Euro.
Technical: 1.1220 support survives on the initial test as 1.1330 now becomes resistance. A breach of 1.1220 opens 1.1140 as the next downside objective. A breach of 1.1330 opens 1.1460’s again.
Interbank Flows: Bids 1.12 stops below. Offers 1.1350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines
GBP/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP posted a minor recovery on Monday as global stock markets rose and increased demand for higher-yield currencies including the Pound. Sterling surged from 1.4129 to 1.4289 against USD to start its Tuesday session while it may meet the resistance at 1.4300 later. However, the upside of Sterling is limited under the backdrop of Brexit issue
Technical: Price continues to finds bids at 1.4050 pivotal support within the broader 1.45/1.40 range, While 1.4140 supports 1.44 symmetry swing objective is the upside target. A failure to hold 1.40 opens a retest of year to date lows at 1.38 ahead of 1.37 weekly swing objective.
Interbank Flows: Bids 1.41 stops below. Offers 1.44 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines
USD/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: Classic risk on with equities and yielders all higher as the JPY reversed its Doha and G20 commentary weakness. USD dropped to 107.81 against the perceived safe-haven JPY during the early Asian trading session amid the key producers failed to reach an agreement to curb global supply, however, the pair edged up to intraday highs of 108.98 due to the recovery in risk appetite.
Technical: The downside ratchet now targets 105.50 as the next major downside objective.Trend resistance is sited at symmetry and structure confluence at 110.70 which should attract fresh selling for renewed weakness.
Interbank Flows: Bids 107.50 offers below. Offers 110.50 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
EUR/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: Bank of Japan Governor Haruhiko Kuroda said inflation could be affected if the yen continued to rise excessively, leading to further easing measures to meet the central bank’s price target
Technical: Bears now target weekly symmetry objective at 120.60, resistance is sited at 124.50. Only a close over 126.80 eases immediate downside pressure.
Interbank Flows: Bids 120.50 stops below. Offers 124.50 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: AUD gapped down to yesterday low of 0.7588 following the failure of oil producers to freeze production, but rebounded and touched fresh nine month high in the US session. Combined with the appreciation of the exchange rate and the low level of inflation globally, this suggested that inflation in Australia was likely to remain low over the next year or two, according to RBA Minutes.
Technical: .7770 upside objective achieved. While .7500 supports the advance bulls target .7880 as the next upside objective
Interbank Flows: Bids .7500 stops below. Offers .7800 stops above
Retail Sentiment: Bearish
Trading Take-away: Long
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: CAD strengthened against the USD, gaining back all the ground it lost after the abolishing of a plan by major oil producers to freeze production. The USD/CAD remains offered related to the recent weaker US economic figures leading to a possible delay of Federal Reserve hike of US interest rates, while stronger Canadian statistics and comments from the Bank of Canada point to a more robust domestic outlook.
Technical: Bids just below below 1.2750 potential double bottom test underway, failure here opens 1.2560 as the next downside objective. Only over 1.3250 eases immediate downside bias.
Interbank Flows: Bids 1.27 stops below. Offers 1.3250 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
