EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR reversed strength yesterday as risk-on sentiment saw EUR lower, pair has been trading below 1.1200 handle printing a 1.1170 low yesterday. On the data front, Eurozone’s September services and composite PMI slowed to 53.7 (prior 54.0) and 53.6 (prior 53.9) respectively. Eurozone’s August retail sales stalled at 0.0% m/m and 2.3% y/y.
Technical: Failure at 1.12, while 1.1250 caps intraday upside reactions expect a retest of 1.1150 next, a bearish break of 1.1150 sees price test the pivotal 1.1050 level
Interbank Flows: Bids 1.1130/50 stops below. Offers 1.13 Stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP erased the gain against the dollar and approached its weakest level in almost five months after Markit Purchasing Managers’ Index for services dropped to its lowest since April 2013. Markit’s PMI services index fell to 53.3 in September from 55.6 in August, missed even the most pessimistic market forecast of 54.7
Technical: Offers towards 1.5250 remain firm and cap the upside reaction. While 1.5250 stems the advance on a closing basis next downside objective is a test of 1.50 psychological support. A close above 1.53 opens 1.54 as the next upside objective.
Interbank Flows: Bids 1.5080/60 stops below. Offers 1.5250-1.53 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY has fallen overnight on improvement in risk appetite and has surrendered all its gains against the US dollar following Friday’s US non-farm payrolls data, lifting USD/JPY back above 120 levels. Local risk for the Japanese Yen is high this week as markets look to tomorrow’s BoJ rate decision meeting, which could potentially provide more hints for further monetary policy actions from the Central Bank.
Technical: Bids towards 118.50 hold strong once again, now trading back to the midpoint of the recent range. For now play range 121.50 the offer and 118.50 the bid until broken.
Interbank Flows: Bids 118.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now
EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Dragged lower with bearish cross flows from EUR. Japan’s September services and composite PMI slowed to 51.4 (prior 53.7) and 51.2 (prior 52.9) respectively. Today, Bank of Japan begins 2-day monetary policy meeting.
Technical: 134 intraday support to watch a failure here targets a retest of 133 bid. While 134 survives on a closing basis expect renewed upside pressure on 135.60 interim resistance. A close above 136 opens a retest of upper end of the recent range and a retest of offers at 137 next.
Interbank Flows: Bids 134 stops below. Offers 136 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now
AUD/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: RBA meeting a non-event with consensus expectations met as rates remain on hold at 2.00%. Australia’s trade balance came in worse off, printing a deficit of A$3.095 billion compared to expectations of A$2.4 billion deficit.
Technical:Rally breaks .71 resistance now set to test offers towards .7150 which will likely cap upside at the first attempt. While .7050 supports intraday downside reactions expect renewed upside pressure to target stops above .7150.
Interbank Flows: Bids .6850 stops below. Offers .7150 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Fundamental: The CAD strengthened against the USD as investors believed that the US Federal Reserve will keep interest rates at low levels following last week’s disappointing US jobs report. Stable oil prices also provided support for the Canadian dollar. US crude prices settled up 72 cents at $46.26 a barrel. Traders will turn their attention to Canadian domestic figures including the trade balance due today and the jobs report on Friday.
Technical: Testing downside symmetry objective at 1.31 stops sub 1.31 being eroded, broad supports between 1.30 and 1.31 are pivotal for trend continuation this area supports potential for trend continuation, a failure below 1.30 suggests the potential for a more significant trend reversal.
Interbank Flows: Bids 1.31 stops below. Offers 1.33 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
