New York Forex Report: Better IFO Data But EUR Bid Fades Fast

New York Forex Report: Better IFO Data But EUR Bid Fades Fast

New York Forex Report: The USD is trading moderately lower on the day so far following four days’ worth of consecutive daily gains. Asian and European equities are mixed while major commodity prices are broadly firmer (iron ore up strongly), providing a bid for the AUD and NZD at the expense of the JPY. The CAD is a notable under-performer on the day following yesterday’s volatility driven by confusing comments from BoC Governor Poloz. Despite minor losses on the day,the dollar remains in pretty good shape overall. The data calendar is a little fuller for the US today, housing, consumer confidence and the Richmond Fed survey and there is a little Fed speak (Lockhart , a non-voter in 2016). However, traders are perhaps biding time ahead of the heavyweight data later in the week— durable goods and Q3 GDP—and may have an eye on the looming FOMC and US election.

FX Majors: EUR Two separate reports from Markit showed that both manufacturing and services sectors in the Eurozone gathered steam in October. Manufacturing PMI surged to 53.3 in October (September: 52.6), the highest reading since April 2014, indicating a pick- up in factory activities heading into the final quarter of the year. On the other hand, services sector was expanding at a quicker pace. PMI came in at 53.5 in October after a reading of 52.2 in September. GBP total order trends as measured by UK CBI showed orders staged a surprised deterioration in October, weighed down by weaker domestic demand in the face of Brexit concerns. JPY Final reading of Japan’s leading index came in at 100.9 in August (July: 100.0), according to the Cabinet office in Tokyo. The print was the highest in nine months, signaling that households were optimistic about the outlook of the economy despite the gradual pick up in current economic conditions. In a second release by the Cabinet office, the gauge of current activities was little changed in August (112.0 vs July: 112.1).

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

Technical: Bears seek the next downside objective sited at 1.0845 after falling 10 pips short Friday, below here opens 1.08. Near term resistance is sited at 1.0930/50, medium term resistance is sited at 1.1030 only over 1.1230 eases bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1.2250 rejects near term corrective advances bears target a retest of 1.2134 ahead of pivotal 1.20. Medium term resistance is sited at 1.2330. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is at 103.30 only a close below 102.80 eases bullish pressure.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 113.30 under pressure breach here opens channel resistance at 113.95 as this caps near term corrections bears target 1.12 only a close over 114.30 eases bearish pressure.

Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD firmed as the dollar retreated from an earlier near nine-month high, though uncertainty over the timing of a Fed rate hike kept prices hemmed in a range. OIL held lower on Monday. Iraq indicated it would not comply with OPEC production cuts because of ongoing conflict with Islamic forces and it said it is producing more than OPEC has indicated. Recall OPEC announced plans last month to cut output to boost prices, but has not yet given details on how it will reach the target. The group will iron out the details of how it will hit the target at its next meeting in Vienna on 30 November. AUD Monthly CPI estimates from the Melbourne Institute suggest that the official quarterly Australian Q3 CPI data may be biased to disappoint market estimates to the downside. CAD is increasingly sensitive to monetary developments Overnight, USDCAD fell to 1.3283 after Bank of Canada Govenor Poloz said that their best plan right now was to “wait for the next 18 months or so. Loonie has since rallied back after Poloz made it clear that he was not referring to monetary policy but to the time frame over which the output gap is expected to close.

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

Technical: Sharp rejection from pivotal 7730 sees test of bids sub .7600, near term resistance is sited at .7660 as this area caps corrections .7530 becomes the next downside objective . A close over .7730 reverses bearish bias and focus shifts to .7830.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.3360 equidistant AB=CD upside objective achieved as 1.3230 supports bulls target a move to 1.35, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820.

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited 1276 ahead of pivotal 1300.

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective as 49.90 supports the advance ,only below 48.00 would suggest false upside break a continuation of a more complex corrective pattern
Retail Sentiment: Bearish
Trading Take-away: Long

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