New York Forex Report: Following the violent reaction yesterday in response to the ECB’s announced measures, or more specifically Draghi’s comments in the subsequent press conference stating that he did not anticipate rate cuts in further meetings, it seems that markets have had a change of heart and the expected effects of the ECB’s new measures are driving the action with EUR down sharply and equities up.
EUR/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR under pressure this morning as European equities reverse yesterday’s losses. On the data front, February German CPI printed in line with expectations flat YoY and 0.4% MoM.
Technical: Close over 1.1080/1.11 eases immediate downside pressure. Intraday support is sited at 1.1060/40 while this survives expect a further grind higher to test pivotal resistance at 1.1370. Failure at 1.10 suggests false break and opens retest of bids towards 1,0820
Interbank Flows: Bids 1.1050 stops below. Offers 1.13 stops above
Retail Sentiment: Bearish
Trading Take-away: Long
GBP/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP remains firm after yesterdays impulsive burst to the uspide, taking its cue from a significantly weakened US Dollar.Sterling remains supported today by better risk sentiment as Oil and equities trade higher.
Technical: While 1.4240 acts as intraday support expect a continued grind higher with the next corrective objective at 1.4424. A failure at 1.42 opens a retest of bids towards 1.41
Interbank Flows: Bids 1.42 stops below. Offers 1.4350 stops above.
Retail Sentiment: Bullish
Trading Take-away: Sidelines
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY is weaker today amidst of a broadly risk-on atmosphere with Oil breaking out above key resistance and equities supported by yesterday’s ECB moves.
Technical: 112.30/10 continues to support expect a further leg of corrective gains, to retest the broken neckline support at 115/116. Failure at 112 open 11 again.
Interbank Flows: Bids 112 offers below. Offers 114 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines
EUR/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR/JPY trading lower today as EUR weakness dominates the European morning. Recent comments from BOJ’s Kuroda, makets are not expecting further easing at the BOJ’s next meeting.
Technical: Close over 125.10 eases near term bearish bias.While 125 acts as support for the current advance expect a test of symmetry resistance at 128.15 as the immediate corrective objective. Failure at 124.50 suggest false upside break and opens retest of 123.
Interbank Flows: Bids 125 stops below. Offers 128 stops above.
Retail Sentiment: Bearish
Trading Take-away: Long
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: AUD contonues to remain supported at current levels driven by firm risk appetite as Oil breaks out above key resistance. Traders now look ahead to Chinese data this weekend with the release of industrial production and fixed asset investment figures.
Technical: While .7400 supports intraday expect further upside pressure targeting .7679 next. Only a failure at.7300 support threatens near term bullish bias.
Interbank Flows: Bids .7400 stops below. Offers .7600 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: Renewed strength in Oil ahs the Canadian Dollar supported over early European traidng today. Traders now look ahead to key Canadian data at 1330GMT with the release of February Unemployment rate and employment change data.
Technical: While 1.3400 contains the recovery, downside pressure remains the driver with bears focusing on a AB=CD ultimate downside objective at 1.2966, the next interim support level to watch is is 1.3176. Only a close over 1.3650 negates the bearish bias.
Interbank Flows: Bids 1.3200 stops below. Offers 1.3400 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
