EUR/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR weakened against US dollar ahead of the European Central Bank meeting on Thursday, which some investors expect additional stimulus later this year. Lower oil prices helped push eurozone consumer prices into negative territory, which may prompt the ECB to eventually expand or extend its asset purchase programme.
Technical: Expected further weakness and retest of 1.13 bids is playing out as anticipated. A breach of stops sub 1.13 should see a move back to test pivotal 1.1240; failure here suggests a retest of broader range support towards 1.1140 next
Interbank Flows: Bids 1.13 stops below. Offers 1.1390 Stops above.
Retail Sentiment: Bearish to neutral
Trading Take-away: Sidelines for now
GBP/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: In the absence of domestic data, GBP has remained range-bound between 1.5430 and 1.5490 since last Thursday. Markets will focus on BoE Governor Carney’s speech today for further hints on BoE monetary stance. As for overseas, attention today is on US building permits and Fed Chair Yellen’s speech
Technical: While 1.5380 supports downside reactions, expect a grind higher to test 1.56 symmetry objective. A breach of 1.5360 targets a retest of pivotal 1,53 support.
Interbank Flows: Bids 1.54 stops below. Offers 1.5550 stops above
Retail Sentiment: Bearish to neutral
Trading Take-away: Buy pullback against 1.5380 targeting 1.56
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: China GDP figures did not give any definite direction to USD/JPY’s movement. Under the lack of other tier one data, JPY persists in its range between 119.10 to 119.60. Traders are waiting for any breakout of USD/JPY. Markets are patiently waiting for the BoJ rate decision meeting, which will be held on 30 Oct.
Technical: While 119.50 caps upside, expect further bearish price action and further exploration of stops sub 118.50. A failure at 118 emboldens bearish spirits and targets 116 next. A close above 119.50 opens a retest of 120.50 next.
Interbank Flows: Bids 118.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
EUR/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY remains little changed around the 135.50 region as bourses proved mixed. The BoJ maintained its upbeat view on the Japanese economy, implying it was unlikely to add further stimulus. Expect the pair will continue to struggle for direction unless we see significant moves in major equities, or a sustained break lower in the EUR, with cross flows likely dragging the pair down.
Technical: While 136 caps upside reactions, expect a retest of yesterdays low at 134.80. A failure here sets bearish tone targeting 133.40 next. A break back above 136.00 eases bearish pressure and sets a retest of 137.
Interbank Flows: Bids 134.80/60 stops below. Offers 137 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: Despite falling below 7% target level, Chinese Q3 GDP grew 6.9% YoY, as compared to 6.8% expected. AUD/USD was well supported above 0.725 levels. The RBA meeting minutes this morning noted that the declines in AUD are supportive of the economic re-balancing. The Aussie dollar edged higher on the rather optimistic tone from the central bank.
Technical: Bids ahead of .7230 continue to support, while this level holds on an intraday basis expect a retest of offers above .7300. A close back above .7300 targets a .7400 resistance next. Failure at .7200 targets .7160 symmetry objective.
Interbank Flows: Bids .7200 stops below. Offers .7400 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Fundamental: CAD weakened against USD as voters elect a liberal prime minister who has assured to spend on infrastructure to fuel economic growth. The drop in the price of oil, a major Canadian export, also helped drag the loonie down while the US crude prices settled down $1.37 at $45.89 a barrel. The Canadian currency has strengthened more than 2 percent this month, in line with a broader move in the direction of riskier assets.
Technical: Near term bearish tend remains intact as intraday resistance at 1.3050 contains intraday upside reactions; bears target a retest of bids below 1.2850. A breach of 1.3050 opens test of 1.31 offers next.
Interbank Flows: Bids 1.2850 stops below. Offers 1.3060 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Sidelines for now
