London Forex Report: All Eyes On BOE

London Forex Report: All Eyes On BOE

London Forex Report: US Data was largely negative, reaffirming patchy growth prospects globally. US Fed Beige Book maintained that the US economy is growing modestly but the report highlighted that consumer spending was on a softening trend since mid-May and that inflationary pressure remained modest. This further reinforced dimming Fed rate hike outlook. USD fell against for a second day as risk appetite in the markets continued to hold firm. The USD Index slipped 0.23% to 96.21 at closing after sliding in European and US mornings.

FX Majors: EUR continues to drift this week. The report, issued by the International Monetary Fund (IMF), suggested that economic activity in Italy will not reach its pre-Credit Crisis level of 2008 for almost another two decades, noting that Italy’s recovery is likely to be prolonged and subject to risks. Growth is projected to remain just under 1% this year and about 1% in 2017. Risks are tilted to the downside, including from financial market volatility, the refugee surge, and headwinds from the slowdown in global trade. GBP climbed as much as 0.7% to 1.3336 against the USD, the highest level since 4 July, but then turning down overnight. After the shock of Britain’s Brexit vote rattled the economy and Governor Mark Carney said easing will probably be needed this summer, traders are betting the central bank will cut interest rates for the first time since 2009. JPY Markets believe if the JPY continues to strengthen sharply, it would hurt the domestic capital spending by exporters and even create severe damage on a fragile economy.

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

Technical: Range trade persists, 1.12 resistance 1.10 support, over 1.12 sets target at symmetry swing resistance sited at 1.13, below 1.10 opens 1.09 reaction lows.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1.3340 continues to cap the advance. While 1.32 acts as near term support 1.3490 becomes the next upside objective. Below 1.32 opens 1.30 base retest.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Expected test of 105.50 underway, while 103.50 acts as support 106.70 becomes the next upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipated leg higher to test corrective AB=CD objective at 116.77 achieved, as 115 supports bulls target 118.50 as the next upside objective.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD price made gains on Wednesday on a mildly weaker US dollar. The gold price rose by US$9.54 to US$1,342.64 on Wednesday. Oil was the biggest loser on Wednesday (13 Jul) after the Us department of energy reported commercial crude oil inventories fell by 2.5 million barrels but missed the projected 3 million barrel decline and still remained at historically high levels. Product inventories including gasoline and distillates such as diesel fuel also unexpectedly increased. AUD The Australian unemployment rate was released at 5.8 percent this morning which was in line with the markets’ forecasts. Westpac consumer confidence index, a gauge of Australia’s households’ sentiments, fell to a three month low in July as political risks heightened. The index dropped from 102.2 in June to 99.1 in July. CAD Bank of Canada decided to keep the policy rate unchanged at 0.5% as widely expected but cut its growth forecast for 2016. BoC stayed optimistic despite it cut the growth forecast. The Canadian 2016 GDP forecast was trimmed to 1.3% from 1.7%, saying that it expected a bounce back in the third quarter and beyond.

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

Technical: .7648 range high test achieved profit takers emerge, a renewed push through here sets bullish sites on .7830 next. Intraday support is sited at .7550.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: The break below 1.30 opens move back to test range support at 1.28. Range trade appears to be carving out a potentially bullish base, with higher lows.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Bulls now target 1391 with 1334 near term support. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 44 acts as pivotal support while this level survives 48.30 become the upside objective. Below 44 opens 41.87 as the downside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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