New York Forex Report: Eyes On NFP’s

New York Forex Report: Eyes On NFP’s

New York Forex Report: Markets are anxious following GBP’s Asian session flash crash from 1.26 to a fresh multi-decade low in the mid-1.18s. JPY and gold are outperforming, CAD and MXN are under pressure, and the USD is strengthening broadly against most of the G10FX. Risk will remain elevated into the much anticipated payrolls release, given its implications for the Fed and the market’s sensitivity to tightening into year-end. Expectations are relatively modest (172K vs. 151K prev and the balance of risk appears to favour the USD given the recent emergence of three hawkish dissents and an increasingly confident tone from a range of policymakers

FX Majors: EUR pushed lower on Thursday as the US dollar was seen outperforming all of its counterparts on the day, and remains the top performer for the week, however, the euro has shown the least amount of losses among the majors this week as a report released on Tuesday indicated that the ECB might taper their QE efforts, keeping the currency bid. The Financial Times reported that Hollande, speaking in Paris at a dinner attended by EU officials, urged the bloc to lead tough negotiations with Britain to avoid contagion and protect the fundamental principles of the single market GBP Market participants questioned whether computer-driven orders had triggered the plunge, exacerbated by a lack of liquidity in early Asian session, while some saw the possibility of human error or a so-called “fat finger” Others pointed to a Financial Times article citing French President Francois Hollande as saying the UK must suffer the consequences of leaving the European Union. JPY Y edged down 103.70 at Asian session on Friday ahead of US non-farm payrolls data, dropping below the 104.00 handle. JPY is expected to be quiet today as there is a lack of domestic economic news and traders seldom open significant positions before the release of US non-farm data. The Japan’s foreign reserves rose to 1.26 trillion at the end of September. The Ministry of Finance said Japanese authorities did not conduct any intervention between 30 August and 28 September.
EURUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Technical: Expected 1.1120 test underway, a break of this price pivot opens equidistant swing support at 1.1085. Near term resistance is sited at 1.1180. Over 1.1220 eases near term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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GBPUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: As 1.25 rejects corrective advances bears target a retest of 1.20. Only a close over 1.30 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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USDJPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is sited 103.30
Retail Sentiment: Bearish
Trading Take-away: Long

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EURJPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: 116.11 symmetry swing resistance stalls advance A close over 116.50 opens the larger scale AB=CD objective at 121.00 Near term support is sited at 114.60
Retail Sentiment: Neutral
Trading Take-away: Neutral

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Commodities FX: GOLD price continued to slide lower on Thursday to a new 4-month low as investors are increasingly convinced by the recent strong US data that the US Fed rate hike is coming at end-2016. The gold price decreased by US$15.40 to US$1,249.80 on Thursday. OIL climbed higher on Thursday (6 Oct) still buoying from the bigger than expected 3 million barrel decline in US crude oil inventory and the news that OPEC and non-OPEC oil producers plan an informal meeting in Istanbul Oct. 8-13 to discuss how to implement a production deal OPEC members reached in Algiers in September. The US Nymex WTI futures rose to close above the US$50-mark for the first time since 21 July 2015, closing by US$0.61 to US$50.44. AUD slipped to 0.7582 after two straight weekly gains as traders attention turned to the action of central banks like the Fed, the European Central Bank and the Bank of Japan. Australia reported a smaller-than-expected trade deficit for August yesterday but the movement was limited. CAD weakened against a broadly stronger USD, with higher oil prices offering little support. Traders await September employment figures from Canada due today.
AUDUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: Symmetry swing resistance sited at .7685 stalls advance as this area contains .7550 is the next downside objective ahead of .7412 symmetry swing support. Over .7700 opens .7730.
Retail Sentiment: Bullish
Trading Take-away: Short

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USDCAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias. Near term symmetry swing support is sited at 1.3030.
Retail Sentiment: Bearish
Trading Take-away: Long

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XAUUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: 1270/60 portends further weakness targeting 1200 as the next downside objective, near term resistance is sited at 1300.
Retail Sentiment: Bullish
Trading Take-away: Short

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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 47.50 supports the advance , only below 45.00 would suggest false upside break a continuation of a more complex corrective pattern
Retail Sentiment: Bearish
Trading Take-away: Long

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