London Forex Report
Absence of first tier economic releases in the US prompted a relief market rally. Dataflow was scanty but positive from the US and only limited to a rebound in wholesale inventories and small business confidence, which should have little influence over expectations on Fed policy move. USD ended mixed, outpaced by rebounds in commodities. The USD Index closed 0.18% higher at 94.29 after twice bouncing off intraday lows, supported by relatively weaker index components EUR, CHF and JPY
FX Majors: EUR Germany released disappointing Industrial Production data for Match, up by 0.3% YoY, against expectation of a 1.0% increase, while monthly basis it declined by 1.3%. Its trade balance for the March, however, posted a larger than expected surplus of €23.6B. GBP opinion polls showing that outcome of June’s referendum was totally unclear due to the equal force on both sides.The short-term market interest rates are now pricing in a substantial chance for BoE to cut rates by the end of this year, also reflecting concerns over what Brexit will do to economic growth. JPY remained defensive early Wednesday, following the steep decline after two Japanese officials gave warnings about intervening to weaken the currency. A Japanese economic adviser said BoJ will take action in needed even if that upsets the United States
EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Technical: EUR bulls back under pressure with the failure at 1.1450, the next support level to be tested will be the symmetry support at 1.1368 failure here opens 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
Technical: The failure at 1.4470 opens a deeper correction to 1.4280 next. Intraday resistance is now sited at 1.4540/60. Over 1.46 refocuses bullish spirits towards 1.4828
Retail Sentiment: Neutral
Trading Take-away: Neutral
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: 105.50 weekly swing objective achieved, 107.50 resistance now becomes support as the corrective move aims to retest 110 from below
Retail Sentiment: Neutral
Trading Take-away: Neutral
EUR/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Technical: Bears now target weekly symmetry objective at 120.60. The breach of intraday resistance at 123.30/50 targets 126.80 a close above here eases immediate downside pressure.
Retail Sentiment: Neutral
Trading Take-away: Neutral
Commodities FX: Gold hovered near a two-week low on Tuesday, after its steepest loss since March in the prior session, as a firm USD and higher equities curbed appetite for the precious metal. Crude Oil, on the other hand, rose nearly 3% as supply disruptions of 2.5mn barrels per day in Canada and elsewhere offset concerns about growing record high US crude stockpiles. AUD fell to multi-week lows yesterday, after sliding oil and metal prices combined with fears about economic strength in China weakened appetite for the commodity-linked currencies. CAD second-quarter growth may slow to a standstill due to the Alberta wildfires, leaving the central bank on hold.
AUD/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Technical: Initial test of .7330 attracts buyers resistance is sited at .7490. A failure at.7300 threatens medium term bullish bias, below .7240 establishes a bearish medium term stance.
Retail Sentiment: Bullish
Trading Take-away: Sidelines
USD/CAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: 1.30 upside objective achieved expected correction to retest 1.2740/60 from above as this level should now act as support for further upside corrective action.
Retail Sentiment: Neutral
Trading Take-away: Neutral
XAU/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Technical: Gold has tested and held the 1260 symmetry swing level, 1283 is now resistance for a further leg of corrective price action to set up a test of the pivotal 1240. Over 1285 suggests early upside reversal targeting a retest of 1303 next.
Retail Sentiment: Neutral
Trading Take-away: Neutral
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: While 43.00 supports the bullish consolidation a break of 44.90 set ups a retest of prior cycle highs at 46.76 with 47.78 the next upside objective. Failure at 43.00 opens a move to 41.90 as the next support level
Retail Sentiment: Neutral
Trading Take-away: Neutral
