New York Forex Report: A quiest start to the week as markets digest the huge moves seen last week following the announcement of the ECB’s latest measures. Weak data from China over the weekend has tempered commodity upside creating a softer start to the week for the commodity FX bloc. Equities continues to strengthen heading into the New York open on Monday, extending gains from Friday. Key event risk over the week with BOJ, FOMC and BOE to offer plenty of volatility.
EUR/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR weakened over the European morning as equities forged higher ground in the wake of the latest ECB stimulus.
Technical: 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 toward 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: Despite firm equities, GBP is trading lower into the US open on Monday, tracking the moves in Euro. UK March Budget and BOE meeting key risk this week alongside earnings and employment data.
Technical: 1.4424 corrective objective achieved, Profit taking pull back should find renewed buying interest toward 1.4280 setting a platform to challenge 1,4570 offers as the next upside objective . A failure at 1.42 opens a retest of bids toward 1.41
Interbank Flows: Bids 1.4280 stops below. Offers 1.4450 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: Despite firmer equities, JPY was firmer over the European morning as traders adjust positions ahead of the BOJ meeting. No further easing is expected but close attention will be paid to the statement and press conference following.
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): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR/JPY starts the week under pressure as EUR trades lower, on higher equities,and JPY strengthens ahead of the BOJ
Technical: While 125.60/40 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: Neutral
Trading Take-away: Neutral
AUD/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Fundamental: Data weakness from China over the weekend has AUD under a little pressure as we starts the week with commodities pulling back from recent highs. RBA March minutes due this week.
Technical: While .7400 supports intraday expect further upside pressure targeting .7672 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: CAD starts the week under pressure, weighed on by a recent uptick in Unemployment and softer Oil prices at the start of the week.
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. Only a close over 1.3650 negates the bearish bias.
Interbank Flows: Bids 1.3150 stops below. Offers 1.3350 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
