London Forex Report: Clinton Takes Trump In First Debate

London Forex Report: Clinton Takes Trump In First Debate

London Forex Report: Risk sentiment took a backseat heading into the Trump-Clinton US Presidential debate, consensus suggests Candidate Clinton got the better of the first of the three debates and risk sentiment has stabilised overnight. Continuous downbeat US headline data added to the retreat in risk yesterday. New home sales fell 7.6% MOM in August, pulling back from the 9-year high level in July while Dallas Fed showed manufacturing activities remained mired in negative territory although the pace of contraction was notably smaller. USD fell against 90% of G10FX amid dismal US data that continued to impose a soft outlook on the Fed’s policy normalisation path. The Dollar Index trended lower through Asian-European trades but rebounded softly in US session and narrowed losses to 0.19% at 95.29.

FX Majors: EUR was supported by the release of the September German IFO index, which rose sharply to 109.5 from a revised 106.3, originally reported as 106.2. The consensus was for a more modest advance to 106.5 for the month and the sharp recovery from last month’s notably weak reading will help improve confidence after a run of generally disappointing German data. GBP According to British Banker’s Association, the number of home loans fell to 37k in August (July: 37.7k), posting signs that Brexit fallout may reflect on economic data sooner than anticipated after the initial shock. Services and manufacturing PMI suggested that some part of the economy rebounded sharply last month after the initial jolt from Britain’s vote to leave EU in July. That provided some reprieve and eased concerns of a drastic deceleration in growth due to Brexit in the short term. JPY Japan’s coincident index was barely changed in July, according to a final report by the Cabinet Office. The index inched up 0.1 point to 112.1, signaling that the economy was broadly stagnant. Leading index, a gauge of economic outlook, was down 0.6 point to 100.0 in July, reflecting a turn in sentiments as headwinds loomed.

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

Technical: 1.1120 supports on the retest, near term resistance is sited at 1.13 removing this hurdle opens 1.1366. A break of 1.1120 support opens equidistant swing support at 1.1085.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3150 rejects corrective advances bears target 1.2870 as the next downside objective. Only a close over 1.3130 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 101.20/40 caps corrections bears target a retest of 99.50 lows. Only a close over pivotal 102.80 would ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Failure below 113 opens move back to 112 as the next downside objective, near term resistance is sited at 113.80 as this level survives on a closing basis bears target 110.80 next.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD was steady after a retreat in the dollar helped it build on last week’s gains but moves were muted. OIL rebounded strongly on speculation that a OPEC production freeze could be agreed on the sidelines of this week’s International Energy Forum in Algeria. Algeria’s energy minister has said that OPEC oil ministers will “not come out empty-handed” from the meeting, but analysts remain sceptical. AUD has been benefiting from a wave of risk on trade in reaction to the US presidential debate. Still, with the outcome of the presidential race many weeks away and with the more pressing issue of extended monetary policy a major concern, there is the possibility the rally runs into resistance rather quickly. CAD The Bank of Canada was more inclined to ease monetary policy than tighten it was revived after figures showed Canada’s annual inflation rate in August dipped to a 10-month low and retail sales unexpectedly fell in July.

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

Technical: Testing symmetry swing resistance sited at .7685. As .7640 supports expect a grind higher to test .7730 offers next
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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 now at 1357, near term support is sited at 1323.

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.81 becomes the downside objective, near term resistance is sited 46.62 over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bullish
Trading Take-away: Short

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