London Forex Report: Cable Craters, Conservatives Miss Majority

London Forex Report: Cable Craters, Conservatives Miss Majority

London Forex Report: USD The number of initial jobless claims in the US fell 10k to 245k last week and hovered around the lowest level in four decades. Sustained job gains and low unemployment rate paved the ground for solid economic recovery in the second half of the year.

EUR ECB stood pat with its current monetary policy as expected, holding its main refinancing rate at zero and asset purchase at £ 60 billion per month. ECB chief Mario Draghi was more optimistic about GDP growth but highlighted downside risks to inflation outlook. There was no concrete discussion but two policy makers raised the topic of shrinking the 2.3 trillion asset purchases.

GBP UK’s Prime Minister Theresa May failed to win a majority after yesterday’s general election stoked investors’ concerns amid possibility of another round of political turmoil after Brexit. A hung parliament may delay Brexit talks, due to start in less than two weeks, and shorten the time than Britain has to negotiate before officially leaving the EU in March 2019. The Conservatives are most likely to form a minority government with support from the DUP in Northern Ireland. Such a government might struggle to see out its full five-year term.

JPY Japan’s eco watcher outlook index remained below 50 for three straight months but ticked up to 49.6 in May (April: 48.8). On a second survey, eco watchers current index edged up to 48.6 last month (April: 48.1), registering its highest level in three months. Current account surplus increased to 1807.4 billion yen in April (March: 1731.2 billion yen) mainly due to the 74.6 billion yen increase in receivables from the services sector.

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

Technical: 1-3 Day View – Breach of 1.12 from above reaffirms range trade delaying attempts at equidistant swing objective of 1.1291 en-route to a test of broader symmetry swing objective at 114.30. Near term downside objective is sited at 1.1125 symmetry swing support.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.1450 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Breach of 1.2750 concerns near term bullish bias and opens a move back to test the 1.26 pivot ahead of symmetry swing support sited at 1.2450, the near term upside hurdle is sited at 1.2770

1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of the broader symmetry swing objective sited at 1.3238.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – 110.20 breach negates near term upside prospects opening a retest of 1.0940, near term as 110.30 contains upside reactions 108 will be a key downside objective. Over 110.50 opens 111 symmetry swing resistance.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1-3 Day View – 129.44 is the medium term upside objective, near term upside objective of 126.84 equidistant swing objective, only below 122 concerns near term bullish bias.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 a weekly breach of this level opens 129.44 as the broader upside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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