London Forex Report: US private sector added 173k jobs last month as expected, a report from ADP Research Institute showed. The figure was higher than the revised 166k in April. Attention now shifts towards today’s pivotal Non Farm Payroll release, Bloomberg Consensus is for a 160,000 headline,150,000 private sector jobs added in May. USD Index crept higher in European session to close higher by 0.11% to 95.56, erasing all losses in Asian session, further supported by positive US data that reinforced the US growth outlook.
FX Majors: EUR ECB paused as expected, leaving main refinancing rate unchanged at 0.0% and deposit rate at -0.4%. President Mario Draghi left the door open for extension of the stimulus program if needed and commented that “UK should remain in the European Union, because the European Union would benefit from its permanence”, joining BOE in highlighting downside risks of Brexit.
June’s macroeconomic projection foresee real GDP to increase 1.6% this year and 1.7% in the next two years, with this year’s forecast revised slightly higher from March forecast. CPI was also revised higher for this year to 0.2% in 2016 (previous 0.1%), but unchanged at 1.3% in 2017 and 1.6% in 2018 GBP UK construction PMI decelerated again despite the imbalance in housing demand and supply. P
MI slipped to 51.2 in May (April: 52.0), signalling a slowdown in building activities and may dampen the impact of new cooling measures on investment properties as demand continues to outpace supply JPY USD fell to its lowest against the JPY in more than two weeks at around 108.49, overloaded by uncertainty on the impact of policy divergence between the US Federal Reserve and the Bank of Japan.
Japanese Prime Minister Shinzo Abe announced a 2-1/2-year postponement in a sales tax increase, kick started the concerns among investors that Japan could be less likely to deliver additional monetary stimulus and that current efforts may have failed.
EUR/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Technical: Bears target symmetry support at 1.1065, 1.1240 remains pivotal for near term bearish bias. A breach of 1.1250 opens a move to 1.1350 as the next upside objective.
Retail Sentiment: Neutral
Trading Take-away: Neutral
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Technical: While 1.4580/1.46 contains upside reactions expect a retest of 1.4330 bids in a pre Brexit referendum range of 1.4770/1.4330
Retail Sentiment: Neutral
Trading Take-away: Neutral
USD/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: Anticipated trend resistance at 111.30 attracts sellers as this area contains expect a rotation back towards 108.40. Intraday resistance is sited at 109.35.
Retail Sentiment: Bullish
Trading Take-away: Short
EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: Bears now target weekly symmetry objective at 120.60. Intraday resistance at 122.35 only a close above 124.70 eases immediate downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Short
Commodities FX: Gold ended lower for the second straight session on the back of the broadly stronger US dollar and increasing concerns about the likelihood of a Fed rate hike in the next few months. The gold price closed lower by US$2.10 to US$1209.80 on Thursday. Oil prices initially edged lower on Thursday (2 Jun) after the OPEC ordinary meeting failed to agree on any freeze in output but when the latest weekly data on US crude inventories showed that US crude inventories fell by 1.4 million barrels, that helped lift prices. The US Nymex WTI futures increased by US$0.16 to US$49.17.
AUD dampened by a softer-than-expected retail sales data, which grew 0.2% MoM against 0.3% expected. The poor retail sales print prompted increased speculation that the RBA would cut rates again soon. With looming speculation that the Fed is nearing its second rate hike. CAD weakened to a one-week low against the USD on Thursday as traders steadied for today’s economic figures from the United States and Canada, while the $50 threshold continued to cap crude oil prices. Canadian trade figures due today, expected to show narrowing in the trade deficit.
AUD/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Technical: While symmetry swing resistance at .7310 contains the upside reaction bears target .7050 as the next downside objective. Only a close over .7400 eases immediate downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Short
USD/CAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: While 1.2940 symmetry swing supports bulls target offers at 1.3210 as the next upside extension target. Only a close below 1.2760 eases immediate bullish pressure.
Retail Sentiment: Bearish
Trading Take-away: Sidelines
XAU/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Technical: The medium term bullish bias is under assault While 1230 acts as intraday resistance expect a test of 1190.
Retail Sentiment: Bullish
Trading Take-away: Short
USOIL
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Technical: Second rejection above 50.00 concerns bulls near term although as 46.70 continues to support expect a test of the larger AB=CD swing objective at 51.07, only a close below 43.00 threatens bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Sidelines
