London Forex Report: Buck On The Backfoot Ahead Of NFP’s

London Forex Report: Buck On The Backfoot Ahead Of NFP’s

London Forex Report: Extended recovery in manufacturing and the job market, with the latest initial jobless claims hovering below 300k despite the bigger than expected 17k rise to 268k as at end-last week, shall continue to cement the case for a Fed rate hike in December. USD failed to hold on to gains from firmer US data, sliding against all G10FX peers, possibly on risk aversion ahead of market-sensitive US employment data today. USD Index rebounded in the US morning but failed to overturn losses before continuing its retreat to close 0.45% lower at 101.04.

FX Majors: EUR Final print of PMI manufacturing in the Eurozone came in higher than initially estimated at 53.7, its best in nearly three years. EU unemployment rate improved slightly to 9.80% in October from a revised 9.90% a month ago, its lowest since Jul-09, signalling continuous recovery in the job market that could spare the ECB from any further more aggressive monetary policy actions beside extending the bond purchase programme beyond Mar-17. GBP rose on Thursday as market participants seized on the prospect of the UK retaining preferential access to the European Union’s single market after Brexit. The pound achieved its strongest level in two months as Brexit Secretary David Davis said the UK would consider making contributions to the EU in order to secure the best possible access to the single market. JPY Nikkei PMI remained expansionary for the 3rd straight month although it pulled back slightly to 51.3 in November as slower exports overshadowed higher new orders. In tandem, Nikkei PMI in Malaysia also slipped a notch to 47.1 in November, retreating for the 2nd straight month to its lowest in five months. On the contrary, PMI in Vietnam jumped 2.3ppt to 54.0 in November, its highest in 16 months and remained firmly in expansion, underscoring continuous robustness in the Vietnam economy

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

Technical: Bearish attention remains towards 2015 lows at 1.0463 ahead of the larger weekly AB=CD objective at 1.0423. Near term resistance sited at 1.0650/80 a break here targets a retest of 1.0740 , medium term 1.0850 is a key upside hurdle which will need to be captured on a closing basis to stabilise the pair.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing objective at 1.2670 achieved and prompts anticipated profit taking bulls require a close above this level to develop further upside momentum, near term support is sited at 1.2530 a failure here reopens symmetry swing objective at 1.2270.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 115.59 is the next upside objective representing the 61.8% retracement of the 2015/16 decline. A breach of 111.07 would suggest a broader correction to the advance opening a move back to test symmetry swing support at 109.60
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 121.82 achieved as 119 supports scope for a test of offers above 123.50 as the next upside objective. A break back below 119 opens 118.45 opens ahead of pivotal bullish trend support at 116.20

Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD continued its decline, hitting its lowest since February on Thursday. The precious metal ended lower by 0.12% to 1,171.69 an ounce after touching as low as 1,160.80. OIL extended the OPEC output cut rally to settle up $1.62, or 3.3%, to $51.06 a barrel. Intraday, it rose as high as $51.80, almost testing a 2016 high of $51.93 last seen in Oct. AUD briefly dipped following a surprising 4% drop in local business investment versus forecasts of a 2.5 percent fall, but the Aussie dollar quickly recovered as the figures did little to change the market’s view on interest rates. The central bank will hold its monthly policy review on 6 December and traders believe it will keep rates at a record low of 1.5%. CAD hit a three-week high against the USD as oil extended a lift after the Organisation of the Petroleum Exporting Countries agreed to cut output for the first time in eight years. The loonie also gained after figures showed that the economy accelerated in the third quarter at its fastest pace in more than two years as it benefited from a rebound in oil exports, reinforcing expectations that the Bank of Canada will keep interest rates steady next week.

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

Technical: .7092 AB=CD remains the downside objective. Near term resistance sited at .7440 has been eroded the correction should now challenge pivotal 7530 as this levels contains the upside reaction there is potential for resumption of downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Price rotating lower set to test pivotal 1.3250 a failure here concerns the bullish bias and opens a retest of channel support sited at 1.3050. A hold of key 1.3250 sets base for 1.3650 attempt
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As equidistant swing objective sited at 1202 contains upside reactions bears target 1149 as the next downside objective. A close over 1220 suggest broader correction to the recent decline.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: The breach of 49.20 opens a quick test of offers above 50.00 and critically the equidistant swing objective sited at 51.79 as this level halts advance there remains an opportunity for a move to the downside targeting symmetry swing objective at 39.78.
Retail Sentiment: Bearish
Trading Take-away: Long

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