London Forex Report: Buck Bid At Month End

London Forex Report: Buck Bid At Month End

London Forex Report: The USD Index hit a three-week high of 96.14 as Fed Vice Chairman Stanley Fischer said in an interview that the US job market is nearly at full strength and the pace of interest rate increases by the Federal Reserve will depend on how well the economy is doing. US consumer confidence jumped to an 11-month high in August on the back of improving labour market conditions, suggesting the US economic recovery is back on track after faltering in the first half of the year.

FX Majors: EUR traded weaker on the back of a batch of unfriendly data. German CPI readings were softer, while Eurozone sentiment missed expectations. Meanwhile, US consumer confidence was buoyant. All of this highlights diverging yields and has been fuelling this latest bout of declines in the major pair. Looking ahead, plenty of data to take in, featuring German retail sales and employment, Eurozone unemployment and CPIBP slipped against the USD on Tuesday on divergent expectations for monetary policy, traders increasingly betting US interest rates could rise by year-end while British rates may be cut again. With London markets closed on Monday for a public holiday, Tuesday marked the first full day of trading there since US Federal Reserve Chair Janet Yellen and Vice Chair Stanley Fischer left the possibility of a near-term rise in US rates on the table, undermining cable. JPY Strengthening the case for more stimulus in BOJ’s monetary policy review due next month, Japan’s household spending fell 0.5% YOY (June: -2.20% YOY) while retail trade slumped 0.20% YOY (June: -1.30% YOY) last month. Both readings reflected weak domestic demand despite previous easing measures. The only bright spot was monthly retail sales which accelerated to increase 1.4% MOM in July after growing 0.3% MOM in June.

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

Technical: As 1.1240 caps upside, EUR looks set to test symmetry swing support sited at 1.1125. Over 1.1250 brings last weeks highs back into play at 1.1366
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1.3165 contains upside moves 1.30 becomes the next downside objective, over 1.32 opens a move back to 1.3278 highs
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: The breach of 102.80 resistance opens a move back to test offers over 104, a close below 102.80 opens a retest of 101.30.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: The close over 114.70 symmetry swing resistance opens a move to test 116.10 as the next meaningful upside hurdle. A break back below 113.40 opens 112.70/80 again
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD fell following the hawkish tone by Fed officials, which boosted the USD. Oil Warnings of a tropical storm system developing around the oil-and-gas hub in the US Gulf of Mexico limited some of the downside in crude prices, as energy companies announced some production suspensions there. AUD there wasn’t any reaction to mostly in line Aussie private sector credit, while RBA Debelle failed to touch on monetary policy CAD weakened to a nearly three-week low against the US dollar, ahead of a key US jobs report on Friday.

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

Technical: Bulls will be looking for pivotal symmetry swing support at .7501 to cap the downside correction and set a base to target offers over .7600. A close below .7500 would concern the near term bullish bias
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Resistance sited at 1.30 has been removed as 1.2960 supports near term expect a further grind higher to test 1.32 as the next upside objective
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1301 represents AB=CD equidistant swing support. Below 1300 opens 1270. As 1300 expect a test of 1320 to suggest a base
Retail Sentiment: Bullish

Posted in Forex Analysis, London Forex Report, tagged with on