London Forex Report: Back To Business

London Forex Report: Back To Business

London Forex Report: Markets saw the biggest jump for equities in a month yesterday, after weaker-than-expected US jobs report released last Friday, which made traders wind back Federal Reserve interest rates rise expectations. Leaders from the world’s top economies broadly agreed at the G20 meeting in China to continue to coordinate macroeconomic policies and oppose protectionism, with Chinese President Xi Jinping urging major economies to spur growth through innovation, not just fiscal and monetary measures. USD fell amid downside pressure from recent soft US data on top of a lack of buying support from holiday US markets. The USD Index failed to hang on to early gains as it closed unchanged at 95.84. With the summer vacation period coming to an end US traders return and participants will be looking for an uptick in volumes and volatility in the days and weeks ahead.

FX Majors: EUR Euro zone’s retail sales grew 1.1% MOM in July, signaling a pick-up in household spending after falling 0.1% MOM in June. The increase was driven by larger business volume at stores selling food, drink, tobacco and petrol stations. Forward looking indicator signals investor confidence rises from 4.2 in August to 5.6 in September, suggesting that domestic demand will likely keep growth supported this quarter. GBP UK services PMI rebounded in August as Brexit shock dissipates. PMI leaped from a seven year low reading of 47.4 in July to 52.9 in August and was the biggest monthly gain in two decades. While long term risks remain a major concern, August services and manufacturing PMI prints posted tentative signs of contained risks from Brexit fallout in the short term. JPY Bank of Japan Governor Haruhiko Kuroda signalled its already massive stimulus programme would continue, but there was nothing explicit enough to suggest an expansion is imminent. Japanese Prime Minister Shinzo Abe said yesterday that he stressed at the G20 summit that risks in global growth must be avoided and that he wanted to spur the adoption of a global trade pact.

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

Technical: EUR tests and holds symmetry swing support sited at 1.1125. Over 1.1250 brings last weeks highs back into play at 1.1366. Failure below 1.1120 opens 1.1050 next.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Rejection from initial pivotal test of 1.3372 next as 1.3260 supports 1.3470 is the next upside objective. Only failure below 1.3185 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipated test of offers over 104 reject the initial foray above the figure, as 102.80 supports 105.50 is the next upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 114.70 supports bulls target 117, failure below 114.50 opens a retest of pivotal support at 114.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD rose on Monday as the dollar’s drop post a disappointing employment report extended, with the bullion rising $1.87 (+0.14%) to $1327.08 per ounce. Oil traded higher on news that Saudi Arabia and Russia were due to make a joint statement on cooperation to support oil markets but pared gains after the announcement was made. For the day, WTI crude futures added $0.58 (+1.31%) to $45.06 a barrel. AUD Australia’s central bank remain on hold with its record low cash rate at 1.5% after two cuts this year. Low inflation and preference for a weaker currency to spur exports have prompted the central bank to cut rate previously and while downside risks are contained at this juncture. CAD strengthened by the most in five weeks against the USD on as domestic figures disclosed a jump in exports and oil rose. Canada’s trade deficit in July unexpectedly shrank to C$2.49 billion from a record C$3.97 billion in June as exports jumped by 3.4%.

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

Technical: Support at symmetry swing .7501 capped downside correction and set a base to remove .7600 resistance opening a move back to .7750 as the next upside objective. Only a close below .7500 would concern the near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Failure at 1.2960 support opens a move back to test bids at 1.2830, near term resistance is sited at 1.3040
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance at 1333. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Offers at anticipated resistance 46.44 stall the advance as this area continues to reject expect a grind lower to 41.00. Over 46.60 opens 47.50 as the next upside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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