London Forex Report: Buck On The Backfoot

London Forex Report: Buck On The Backfoot

London Forex Report: President-elect Donald Trump debut press conference turned out somewhat disappointing as it did not shed much light on policy direction with little detail. Meanwhile, data flow remained a positive bag nonetheless and did little to dampen optimism growth is picking up. Data stream from the US was thin but sentiments were broadly upbeat ahead of President elect Donald Trump’s inauguration next week. Second-tier housing market data showed that mortgage applications rose 5.80% last week followed a 0.10% weekly gain in the previous week, reflecting a robust housing market supported by low mortgage rates. USD tumbled against all G10FX counterparts while the Dollar Index crumbled and reversed all early gains to close 0.23% lower at 101.78 after President-elect Trump failed to offer details of his potentially economy-boosting fiscal stimulus plan.

FX Majors: EUR recovery post Trump press conference after the President-elect let down US Dollar bulls after failing to make and mention of taxes, deregulation or fiscal stimulus. Today the focus will shift to the ECB Minutes and Eurozone industrial production. As far as the ECB Minutes go, expect Draghi and company to continue to err on the dovish side. GBP UK’s industrial production climbed 2.00% YOY in November, alleviating drag from the 0.90% YOY drop in October thanks to the rebound in energy output as a major North Sea field resumed operations. On the other hand, trade deficits widened to £12.2 billion in November (October: – £9.9 billion) due to a higher surge in imports (+8.40%) compared to exports (+2.80%). Construction output rose 1.50% YOY in November (October: +0.70% YOY), affirming that demand for housing remained resilient amid shortages of housing supply. JPY Japan’s leading index surged to a fifteen month high of 102.7 in November (October: 100.8), reflecting an improvement in the outlook of the economy as momentum picked up in the second half of 2016. A gauge of current economic conditions also nudged higher to 115.1 in November (October: 113.5), marking its highest reading since March 2014. Separately, current account surplus narrowed to ¥1415.5 billion in November (October: ¥1719.9 billion) mostly due to the ¥266.4 billion decline in investment income.

EURUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: Testing symmetry swing resistance sited at 1.0640 ahead of pivotal 1.0720. Anticipate sellers to emerge at these levels, as this band of resistance caps upside bears target retest of 1.0338 lows. Near term support sited at 1.05 failure here suggests early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

GBPUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: New monthly lows printed yesterday before profit taking prompts sharp reversal, near term resistance sited at 1.23. A close over 1.23 suggests false downside break an opens move back to test 1.2430.
Retail Sentiment: Neutral
Trading Take-away: Neutral

USDJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: Price erodes pivotal 114.70 trend support a close below this level concerns near term bullish thesis and suggests broader corrective phase to test 112, near term resistance is sited at 116
Retail Sentiment: Neutral
Trading Take-away: Neutral

EURJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: Buyers on the front foot while 121.60 supports on a closing basis, 124.42 symmetry swing resistance remains the upside objective, anticipate sellers to emerge and price to stall on the initial test of this level for a retests of 123.80 from above.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price continued to benefit from a broadly weaker US dollar for a 3rd straight session and price closed at its highest level in 7 weeks. This gold price increased by US$11.10 to close at US$1,196.60 on Wednesday. OIL prices finally rebounded after marked declines for two straight sessions as data on Wednesday (11 Jan) showed that refiners processed a record amount of crude and supplies were down by 579,000, drained from the main storage hub in Cushing, Oklahoma. The US Nymex WTI finished the session higher by US$1.43 to close at US$52.25. AUD was a big winner in Wednesday trade, outperforming across the board on impressive performance in the base metals. CAD latest recovery in the price of OIL certainly has been a big help to the Canadian Dollar, with the Loonie rallying back towards its December high against the Buck

AUDUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: Price testing symmetry swing resistance sited at .7494 a close above .7525 resets bullish attention on range highs towards .7800 Near term support is sited at .7380
Retail Sentiment: Bearish
Trading Take-away: Sidelines

USDCAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish

Technical: 1.3620 becomes the next upside objective. The close below 1.3250 concerns the bullish bias, a second failure here opens symmetry swing support sited at 1.3090. Near term resistance is sited at 1.3290.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

XAUUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: Close above 1190 opens 1220 symmetry swing trend resistance. Near tern support is sited at 1150, failure here suggests trend resumption and opens 1113 symmetry swing objective..
Retail Sentiment: Neutral
Trading Take-away: Neutral

USOIL
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: A close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at symmetry swing 52.85
Retail Sentiment: Bearish
Trading Take-away: Long