Markets quiet ahead of major data by way of the US October NFP and Unemployment rate. NFP’s are expected to improve to 184k vs 142k previous and the unemployment rate is expected to decline further to 5.0% from 5.1%. The Fed’s recent signalling that a December rate hike is still a strong possibility places even more importance on today’s numbers with markets likely to respond very strongly. US Dollar is close to flat over the European morning with commodities and equities slightly down whilst oil remains flat.
EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR/USD is flat on the session as market remain range-bound ahead of the key US data. German Industrial production printed below expectations early in the European session coming in at 0.2% against 1.3% expected.
Technical: 1.0860 symmetry target achieved, bears have the ball below 1.10 with bids at 1.08 the next downside objective, intraday resistance comes in at 1.09 only a close above 1.10 eases immediate downside pressure.
Interbank Flows: Bids 1.08 stops below. Offers 1.1o Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP was weaker over the European morning extending losses incurred in the wake of yesterday’s Dovish BOE. Better UK trade balance data earlier today ( with deficit narrowing further) was unable to stem the heavy tide as industrial production undershot expectations of 1.3% to print 1.1%
Technical: Price testing stops subs 1.52 as suggested by another failure at 1.53, while 1.5250 caps upside intraday reactions a retest of of 1.5050 is the next downside objective
Interbank Flows: Bids 1.5150 stops below. Offers 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: USD/JPY trades bid ahead of the key nonfarm payrolls report due today, hitting a fresh three-month high overnight, following the release of the ADP US employment report which reported private sector added 182K new jobs in October, slightly above the 180K expected
Technical: The break of 121.85 supports the bullish advance, while 120.80 supports downside reactions offers at 122.50 are the next upside objective en route to test the primary equality objective at 123.50.
Interbank Flows: Bids 121 stops below. Offers 122 stops above
Retail Sentiment: Bearish
Trading Take-away: Longs from 120.50 targeting upside range break en route 123.50
EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Japanese investors were net purchasers of foreign bonds and buyers of foreign equities throughout October. This is an accordance with BoJ policy, which aims to encourage Japanese investors to seek yield advantage abroad. Cross continues to be weighed up on by the bearish price action in the EUR though contained against a similarly weak JPY.
Technical: Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.
Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now
AUD/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: With the absence of domestic news yesterday, AUD traded sideways around 0.7150; all eyes on key US data. Soft commodities over the European morning keep rates pressured.
Technical: Sellers at .7230 are targeting a retest of last weeks .7070 lows en route to retest the year to date lows next. Only a break and close above .7230 eases immediate bearish bias
Interbank Flows: Bids .7100 stops below. Offers .7230 stops above
Retail Sentiment: Neutral
Trading Take-away: Short against .7230 targeting .7030
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Fundamental: USD/CAD was higher over the European morning as oil consolidates against yesterday’s lows keeping the Canadian Dollar pressured. Alongside key US data, we also have the release of Canadian unemployment rate which is expected to remain unchanged at 7.1%
Technical: 1.3260 is the pivotal resistance, as this area contains upside potential for another leg of corrective downside. A close above 1.3280 eases bearish pressure and resets focus on the 2015 highs and stops above.
Interbank Flows: Bids 1.3030 stops below. Offers 1.32 stops above
Retail Sentiment: Bearish
Trading Take-away: If short from failed retest of 1.3260, move positions to risk free
