London Forex Report: Eyes On NFP’s

London Forex Report: Eyes On NFP’s

London Forex Report: USD US data flows was a little mixed, showing some softening in the still decent job market but improvement in the services sector. Markets turned a little jittery as the softer job prints set back expectations for the Fed tightening path. ADP showed the private sector added fewer than expected jobs of 158k in June while weekly initial jobless claims inched up for the 3rd straight week to 248k, though still below 300k. On a more positive note, both PMI and ISM services indices climbed higher to 54.2 and 57.4 in June respectively, pointing to continuous expansion in the services sectors that will help bolster growth in the 2Q.

EUR Policy makers discussed plans to begin tapering as the Eurozone economy shows signs of picking up. Nonetheless, there are nothing to suggest an immediate and aggressive move, hence our view that the ECB will trail the Fed in trimming its bond buying programme.

GBP demand for the GBP remained tepid after a recent trio of PMIs fell short. These showed slight slowdowns in UK manufacturing, construction and services activity, largely attributed to all the recent political uncertainty. On an otherwise fairly quiet day, Prime Minister Theresa May is expected to meet with Donald Trump at the G20 Summit. The meeting of global leaders takes place over Friday and Saturday and could see May discuss UK-US trade deals for the post-Brexit period

JPY remains vulnerable in an environment of elevated geopolitical risk with a focus on developments in Korea and headlines into Friday’s G20.

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

Technical: 1-3 Day View – 1.1430 containing the advance for now as 1.1300/30 supports bulls target 1.1530 as the next upside objective, a daily close below 1.1290 concerns the near term bullish bias and open a test of 1.11

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.1450 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 1-3 Day View – As 1.2940/20 supports on an intraday basis 1.3048 is the next upside objective, ahead of the pivotal 1.3238 Only a closing breach of 1.2810 concerns the near term bullish bias.

1-3 Week View – The weekly failure to close above 1.3045 ahead of the broader symmetry swing objective sited at 1.3238 suggest underlying weakness persists 1.2450 becomes pivotal for the medium term perspective

Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 1-3 Day View – The daily closing breach of 111.80 level resets focus on upside objectives principally 114.35, near term support is now sited at 112.80/60, only below 111.80 would arrest the near term advance and return to 110/112 range.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Bullish expansion from consolidation targets 129.44 as the primary upside objective, support moves to 127.40/20, only below 126.80 concerns near term bullish bias.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 the weekly breach of this level opens 129.44 as the broader upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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