London Forex Report: Attention Shifts To NFP’s

London Forex Report: Attention Shifts To NFP’s

London Forex Report: According to the minutes of the Fed’s June policy meeting released earlier, Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain’s vote on EU membership. Markets are looking forward the US non-farm payrolls report due this Friday. The US employers added only 38,000 jobs last month, far below the expectations of 164,000 increases.

FX Majors: EUR dropped at the beginning of the American session to 1.1029, the lowest level in six days and then bounced to the upside erasing losses. The European Commission is aware of the difficulties facing by Italy’s banking industry and is ready to take further action if necessary, said Valdis Dombrovskis, a vice president of the commission. GBP slumped to a new 31-year low, crashing below 1.3000 against the USD, on fears over the effect of last month’s Brexit vote on Britain’s property market and the prospect of cuts in Bank of England interest rates. The pound dropped toward the 31-year low after four more UK property funds halted withdrawals, bringing the total to seven this week. UK business confidence sank to a 4 1/2-year low in the days after Britons voted to leave the European Union. JPY safe-haven rose yesterday amid the concerns over the broader impact that Britain’s vote to leave the European Union would have on the global economy. Japan needs large fiscal stimulus packages through 2018 to escape from deflation and the government should add 20 trillion yen in fiscal stimulus this year to achieve the 2% inflation target in fiscal 2017, according to an adviser to Japanese Prime Minister Shinzo Abe

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

Technical: Market appears to be trading in a range 1.12 resistance 1.10 support, over 1.12 sets target at symmetry swing resistance sited at 1.13, below 1.10 opens 1.09 reaction lows.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bears have the ball while 1.3120 near term resistance rejects upside reactions. Next downside objective is equality swing objective sited at 1.2720
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bears will look to test 99.90 a failure here opens 98.99 reaction lows. A sustained move through 103.50 is required to ease immediate downside pressure, intraday resistance sited at 101.40
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Next downside level to watch is 107 with 115.50 near term resistance now. A close over 116 would ease near term bearish bias. Near term support is sited at 110.60, with symmetry swing resistance sited at 113.30
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD rally continued on Wednesday as investors looked past the strong US non-manufacturing data and focused on the impact of Brexit on UK political landscape and the record low bond yields which will push more investors into gold. The gold price jumped higher by US$7.33 to US$1,363.78 on Wednesday. Oil ended higher on Wednesday (5 Jul) in tandem with higher US stock prices and the weaker US dollar and ahead of the latest weekly data on US crude inventories on Thursday (6 Jul) instead of the usual Wednesday release due to the US holiday earlier in the week. The US Nymex WTI futures increased by US$0.83 to US$47.43. AUD Risk aversion in yesterday early Asian trade on the back of a weaker Nikkei saw the AUDUSD slide to the low of 0.7404 before heading north over the remainder of the day. S&P revises Australia sovereign credit outlook down to negative from stable and the current rating is AAA-. CAD strengthened against the US dollar, boosted by a rebound in oil prices and shrugging off domestic economic risks as Canada posted a near-record trade deficit. Canada posted its second-largest trade deficit on record in May, a large negative surprise, as widespread export weakness cancelled out higher shipments from the battered energy sector. The loonie rebounded and bond yields recovered as prices for oil, a major Canadian export, soared after two days of declines.

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

Technical: Breach of .7480 the midpoint of the broader .7660/.7300 range places renewed emphasis on a test of upper end of the range. Intraday support is sited at .7430, below here opens move back to .7300 range support.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Range trade persists 1.30/1.28. While above 1.28 expect breach of 1.31 resistance below 1.28 opens broader 1.2660 support
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: 1361 achieved bulls now target 1391 with 1315 near term support now. Only below 1300 concerns near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Only a close below 46 threatens medium term bullish bias, below .46 opens a test of 44 as next downside objective. As 46.70 supports expect a retest of 51.60’s highs.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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