New York Forex Report: Dollar Still Down, Oil Rebounds On Fresh OPEC Deal Hopes

New York Forex Report: A recovery in Oil prices, driven by reports that Russia have expressed their willingness to engage in talks with OPEC to discuss cutting output, has given equities some support heading into the US crossover. US Dollar remains weak US Dollar remains weak on the back of Monday’s manufacturing and PCE data-misses as rate-hike expectations continue to unwind. ISM Non-Manufacturing data is the key event over the US session, expected to show a slight contraction in January.

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

Fundamental: EUR flows remain very choppy at the moment, with European equities responding neurotically to shifting Oil prices and the US Dollar continuing to weaken. Dec EZ Retail Sales printed below expectations.

Technical: Trading upper range. A breach of 1.0990 trend resistance opens a broader 1.1240 symmetry corrective objective.

Interbank Flows: Bids 1.08 stops below. Offers 1.0950 Stops above.
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: GBPUSD was driven higher over the European morning as both Services and composite PMI data printed above expectations. Services PMI is a key data point for the BOE with the services sector comprising the majority of jobs in the UK economy.

Technical: Over 1.4450 eases immediate downside pressure and sets up a broader correction. Broader corrective bias remains in tact while 1.4280 supports intraday downside reactions failure at 1.4250 suggests false upside break and resets bearish tone.

Interbank Flows: Offers 1.45 stops above
Retail Sentiment: Bearish
Trading Take-away: Short

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

Fundamental: JPY was strengthened in tandem with Euro due to risk aversion sentiment. US/JPY broke down at 120.00 handle and it is now trading at around 119.70. NIKKEI 225 Index dropped more than three percent overnight. Shrugging off the impact of BoJ’s negative interest rate, markets turned their focus to risk sentiment. Besides, markets await non-farm data due this Friday .

Technical: 121.66 is initial resistance an upside breach here opens a move to test 123.64 next, bulls have the ball while 119 supports intraday downside reactions. A failure at 119 opens 118 on the downside

Interbank Flows: Bids 119.50 stops below. Offers 122 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Fundamental: The Kuroda trade has seen further unwinding in the past 24 hours as bearish external forces dominate, and EURJPY has given back the 131 level and has added to losses this morning in spite of further doveish speak from Kuroda

Technical: While 130.40 supports intraday downside reactions expects s retest of 132.30 offers and stops above, a close above 132 opens a test of 134 next.

Interbank Flows: Bids 130.50 stops below. Offers 132.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: AUD recovered some ground over the European morning as a rebound in oil prices saw the Antipodean currency supported with a tentative improvement in risk-sentiment.

Technical: While .7000 caps intraday downside expect a test .7200. Only a closing breach of .7150 eases immediate downside pressure.

Interbank Flows: Bids .7000 stops below. Offers .7150 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: A weakened US Dollar and a recovery in Oil prices over the European morning have combined to drive USDCAD lower as we head into the US crossover today. US data and Oil flows to remain key drivers.

Technical: While 1.4160 caps upside reactions expect a broader corrective phase to test AB=CD corrective swing target at 1.3750 support. Only above 1.4330 eases immediate downside pressure and opens a retest of 2016 highs.

Interbank Flows: Bids 1.3950 stops below. Offers 1.4150 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines