New York Forex Report: Equity markets were higher over early European trading today, mapping moves in oil, which saw Crude rallying to retrace half of yesterday’s $2 loss. Main focus over the US session today is the Bank Of Canada Rate Decision. The BOC is not expected to cut rates but traders will be keen to hear the Bank’s latest economic assessment with oil up over 40% from the YTD lows.
EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR is weaker so far today as equities trade higher ahead of tomorrow/s ECB meeting. The ECB are widley expected to introduce further stimulus measures including a further reduction to the already negative deposit rate.
Technical: Only a close over 1.1080/1.11 eases immediate downside pressure. Intraday support is sited at 1.0955/35 while this survives expect a further grind higher to test pivotal resistance at 1.11. Failure at 1.09 opens retest of bids towards 1,08
Interbank Flows: Bids 1.0950 stops below. Offers 1.11 stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Sterling rallied initially over the European morning supported by a recovery in risk sentiment. Upside was capped however on the release of the latest Manufacturing & Industrial Production data which both printed below expectations. NIESR GDP Estimate is at 1500 GMT.
Technical: While 1.4130 acts as intraday support expect a continued grind higher with the next corrective objective at 1.4424. A failure at 1.41 opens base support test at 1.4030
Interbank Flows: Bids 1.41 stops below. Offers 1.4250 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines
USD/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY weakened a little over the European morning as better risk-appetite saw safe-haven demand diminished though upcoming China CPI keeps JPY in the spotlight.
Technical: Bulls will be looking for 112.50/30 to continues to support expect a further leg of corrective gains, to retest the broken neckline support at 115/116. Failure at 112.50 open 11 again.
Interbank Flows: Bids 112 offers below. Offers 113.10 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR/JPY traded sharply lower over the European morning as EUR weakens ahead of tomorrow’s ECB meeting.
Technical: While 124.20 provides intraday resistance bears look to test bids back at 123 ahead of the pivotal psychological 120 en route to a weekly downside objective at 118/117, only a close over 125.10 eases bearish bias.
Interbank Flows: Bids 123 stops below. Offers 124.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: AUD continues to forge higher ground over early European trading today supported by better risk-sentiment as equities and commodities turn higher once again.
Technical: While .7330/10 supports intraday expect further upside pressure targeting .7530 next. Only a failure at.7150 pivotal support threatens bullish bias.
Interbank Flows: Bids .7350 stops below. Offers .7500 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: USD/CAD was truned lower over the European morning as a recovery in Oil boosted the Canadian Dollar. Key focus today is on the BOC meeting though the Bank are largely expected to keep rates unchanged.
Technical: While 1.3460/80 contains the recovery, downside pressure remains the driver with bears focusing on a AB=CD ultimate downside objective at 1.2966, the next interim support level to watch is is 1.3176. Only a close over 1.3650 negates the bearish bias.
Interbank Flows: Bids 1.3250 stops below. Offers 1.3500 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
