London Forex Report: Brexit, Month & Quarter End Trading

London Forex Report: Brexit, Month & Quarter End Trading

London Forex Report: USD Markets continued to feel uneasy as President Trump’s defeat in a major healthcare reform bill sparked concerns over potential delays in other fiscal plans and reforms that would derail his growth agenda. This spurred haven demand and the Dollar Index erased all gains it garnered post-Trump election victory. US Dallas Fed manufacturing index dropped from a decade-high of 24.5 in February to 16.9 in March, signaling more modest factories growth before the turn of the quarter. The survey showed that shipment volume declined and factories were receving lower prices for their products compared to last month. The softer reading mirrored the decline in March Markit manufacturing PMI (53.4 vs February: 54.2).

EUR German March IFO survey came in better than expected as the business climate indicator was higher at 112.3 (from 111.1 in Feb and above forecast of 111.1) while the expectations indicator was also higher at 105.7 (from 104.2 in Feb and above forecast of 104.3). The current assessment indicator was also higher at 119.3 (from 118.4 in Feb and above the forecast of 118.3). Following the unexpected Saarland state election victory (Germany’s second-smallest state), German Chancellor Angela Merkel (27 March) vowed to fight hard to win a fourth term in September as the biggest win for Merkel’s CDU party in the Saarland state in 13 years provided a reality check for the Social Democratic Party leader Martin Schulz. Merkel also said on Monday, that she would consider governing with any party except the Left or the anti-immigration Alternative for Germany if her CDU-led bloc wins on 24 September.

GBP Even as we are a day away from UK PM Theresa May’s formal triggering of Article 50 the formal notification of Britain’s intention to leave the EU on 29 March, a Bloomberg report (27 March) cited three unnamed senior members of May’s administration that there is an increasingly concern of an “emotional” backlash from the EU as it will seek to punish the UK for leaving the bloc, amid claims PM May has not done enough to quell European hostility which could prove a weakness in the talks as she prepares to start Brexit.

JPY Trump’s promised large U.S. tax cuts caused the rally in USDJPY in November and December 2016. USDJPY has traded lower since the beginning of the year because market participants have reduced the odds Trump can deliver the tax cuts and U.S. treasury yields have decreased since the FOMC’s March rate hike. Early Wednesday morning, we will be receiving February retail sales data.

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

Technical: 1.0830 primary upside objective bulls now target the corrective 1.0969 equidistant swing objective. Near term support is sited at 1.0820 A close back below 1.07 would concern near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1.2570 upside objective achieved potential for profit taking pullback to test symmetry swing support sited at 1.2515 as this area supports expect a test of triangle resistance sited at 1.2640 only below 1.2370 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 111.75 range support breached the daily close below here suggests downside range break and opens 108.43 equidistant swing objective to the downside, near term resistance is sited at 110.75. Only over 112 stems near term selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Anticipated test of 119.30 attracts profit taking as 121 caps upside attempts bears target a test of 118.22 as the next downside objective. Only over 121.80 arrests near term selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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