New York Forex Report: Trump Up Next

New York Forex Report: Trump Up Next

New York Forex Report: The USD mostly higher on the session so far, losing (slight) ground only to the G10FX commodity block where the AUD is really the only notable gainer on the session (crude, gold, copper firmer). Quiet trading persists in global stocks (European markets are modestly higher) and developed market bonds, where US Treasury prices are under-performing very slightly. There are no data reports from North America today. NY Fed Pres. Dudley (voter, dove) is speaking on bank culture. It’s unclear whether he will refer to policy, however. President-elect Trump’s press conference, which is scheduled for 11ET, is the highlight of the session and is likely to prime reason for the relatively quiet trading. Traders will be looking for clues on growth and FX sensitive issues, such as trade, fiscal policy and de-regulation or indeed the performance of the USD since his election win.

FX Majors: EUR Lack of first tier EU data will keep the market steady into the Trump press conference, though the broader theme of monetary policy divergence and a more hawkish leaning Fed should ultimately keep the Euro contained. GBP remained under the spotlight in the currency market as UK Chancellor of the Exchequer Philip Hammond tried to salvage the situation after the widely perceived “hard Brexit” comments from his boss, PM Theresa May. JPY The gauge of Japanese consumer confidence climbed to 43.1 in December (November: 40.9), climbing to its highest reading since September 2013. The employment sub-index ticked up last month, underscoring a tighter labour market.

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

Technical: Close over 1.0550 opens symmetry swing resistance sited at 1.0640 before 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): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: As anticipated short squeeze subsides and 1.2198 eroded overnight, a close below here opens 1.21, 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: Bullish
Trading Take-away: Short

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

Technical: Testing pivotal 114.70 trend support, resistance sited at 117 eroded, a second close over this level resets bulls attention on 120 upside objective. Key upside hurdle is 117.61 symmetry swing resistance.
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 continued to benefit from a broadly weaker US dollar for a second straight session and stronger jewellery demand ahead of the Chinese Lunar New Year, and price closed at its highest level in 6 weeks. This gold price increased by US$2.50 to close at US$1,187.40. OIL prices endured another negative session on Tuesday (10 Jan) as the US and global crude oil prices clocked in the more than US$1 declines as investors continued to doubt the impact of the 2016 OPEC deal to reduce production. The WSJ reported on Tuesday that Libya which was exempted from production cuts, had increased its crude production by 3 times in the last 6 months. Meanwhile, the US EIA also reported that crude oil output from US is projected to increase 1.3% to 9 million bpd in 2017, reversing the previous forecast for a decline of 0.9%. And for 2018, EIA thinks that oil production is set to rise by 300,000 bpd to 9.3 million bpd. AUD Australia trade balance registered a surplus for the first time since March 2014 in November amid the 8.40% surge in exports. Trade surplus position was AUD China consumer prices grew at a softer pace of 2.10% YOY in December from a seven month high growth of 2.30% YOY in November. Marking its quickest pace of acceleration in more than five years, producers’ prices rose 5.50% YOY in December amid the surge in cost of raw materials and mining. Full year inflation growth was 2.00% in 2016 and while the figure fell short of the 3.00% goal, current pace of price growth will pave the way for economic stabilisation and sustained growth heading into 2017. CAD remains disconnected to its typical drivers (oil prices, yield spreads), trading in tandem with the broader USD for much of the past week.

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

Technical: While .7370 contains upside reactions on a closing basis .7092 AB=CD is the next downside objective. Near term support is sited at .7270, a failure here suggests early trend resumption.
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: 1190 pivotal for the near term bearish thesis to remain in tact, a 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: Sharp rejection from equality objective area at 55.30, a close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Current consolidation pattern is constructive suggesting a retest of recent cycle highs.
Retail Sentiment: Bearish
Trading Take-away: Long