New York Forex Report
A reversal in risk appetite this week has so far seen the USD reclaim some lost ground, despite further data weakness on Monday with ISM Manufacturing printing below expectations. Traders now look ahead to the ISM Non-Manufacturing print at 1500GMT1 today, which is expected to improve slightly to 54.8 from 54.5 previous. Alongside this release we also have Factory Orders and Durable Goods followed by Crude Oil Inventories.
EUR/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: EUR weakened over the European morning fuelled by soft EZ data and a stronger US Dollar. EuroZone Retail Sales for March printed below expectations at 2.1% vs 2.6% expected.
Technical: EUR bulls now target a weekly AB=CD target of of 1.1766, intraday support is now sited back at prior resistance which should now act as support 1.1460/80 area, while this holds expects a grind higher to test previous reaction highs at the 1.1710 level. A failure at 1.1450 suggest a a return to retest 1.1240 support.
Retail Sentiment: Bearish
Trading Take-away: Long
GBP/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Fundamental: The Sterling sell-off continued over the European morning as the latest UK Construction PMI data printed its lowest level since June 2013. Sterling has been weighed upon this week by reports of a re-emergence of strength for the “VoteLeave” campaign in the latest Brexit polls.
Technical: 1.4670 achieved bulls now set their sites on the psychological 1.50 levels. Near term support is sited at 1.45. While this area contains downside reactions expect continued upside pressure. A failure at 1.44470 opens a deeper correction to 1.4280 next.
Retail Sentiment: Bullish
Trading Take-away: Sidelines
USD/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY has weakened overnight with reports linking the moves to a possible GPIF bid. Traders now look ahead to key US data to provide short-term directional catalyst.
Technical: 105.50 weekly swing objective achieved, intraday 107.50 now become resistance a move through here opens a retest of 110 from below.
Retail Sentiment: Bullish
Trading Take-away: Sidelines
EUR/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: Erratic price action persists in the pair in the wake of recent BPJ and ECB meetings. Euro Zone growth will be slower than previous forecasts with subdued poor inflation this year, revealed by the European Commission’s economic forecasts on Tuesday.
Technical: Bears now target weekly symmetry objective at 120.60. Only a close over 126.80 eases immediate downside pressure. Intraday resistance now sited at 123.30
Retail Sentiment: Neutral
Trading Take-away: Neutral
AUD/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Fundamental: AUD continues under pressure today following the latest RBA rate-cut which leaves the headline cash rate now sitting at 1.75%.
Technical: Price is probing pivotal .7470/50 support. While this level holds expect a recovery and grind higher to retest .7830 resistance. Failure at .7450 opens .7380 as the next downside objective.
Retail Sentiment: Bullish
Trading Take-away: Short
USD/CAD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: The Canadian Dollar continued to weaken over the European morning today following sharp selling in Oil fuelled by rising output in the Middle East & North Sea which has renewed concerns about global oversupply.
Technical: The challenge of 1.2750 eases immediate downside pressure but bulls require a close above this level to negate near term bearish pressure and open a move to 1.30 as the next upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long
