London Forex Report: GBP Gap & Go

London Forex Report: GBP Gap & Go

London Forex Report: Positive dataflow to start the new quarter and Brent crude oil prices pushing above US$50/ barrel. Global manufacturing indices were largely positive with prints out of the majors namely the US, EU, and the UK all registered improvement for the month of September, alleviating slowdown concerns in the global economy. ISM manufacturing in the US rebounded to expansionary territory, setting at 51.5 in September, as higher new orders and production offset lower employment and inventories. USD rebounded against 50% G10FX amid renewed weakness in European majors and after a set of firmer US manufacturing figures. The USD Index climbed 0.24% to 95.69, jumping post-US data.

FX Majors: EUR PMI data out of Europe came in positive with manufacturing figures out of Spain and Italy beating forecasts, while German and Euro area figures were reported in line with expectations. GBP UK factories grew at quicker pace for two straight months, reversing the blip in July caused by the shock from Britain’s decision to leave EU. Manufacturing PMI climbed to 55.4 last month (August: 53.4) which was the highest in more than two years boosted largely by a weak Sterling. JPY Surveys on Japan’s large manufacturing and non-manufacturing firms suggest that outlook on the sectors were mostly unchanged. Sentiment index for next quarter on the manufacturing sector remained at 6 whilst the indicator for non-manufacturing sector was down by 1 point to 16. Firms were concern about profitability if yen remains around current levels.

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

Technical: Expect a test of 1.1120, a break of this price pivot opens equidistant swing support at 1.1085. Near term resistance is sited at 1.1220. Over 1.1280 opens 1.1365 next and eases bearish bias.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.2870 rejects corrective advances bears target 1.25 as the downside objective. Only a close over 1.31 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: A close over 102.80 would ease bearish pressure, and refocuses attention on the upside equidistant swing objective at 104.86 near term support is sited 101.80.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Near term symmetry swing resistance is sited at 114.34 as this level rejects advance bears target a grind back to test 110.44. A close over 114.50 opens a move to test offers over 116.35
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD price price weakened further on Monday on the stronger US dollar and firmer US Fed rate hike expectations for end- 2016. The gold price decreased by US$4.30 to US$1,309 on Monday. OIL markets climbed higher on Monday as investors continued to be buoyed by the OPEC agreement to a production cut made in Algeria in September. The US Nymex WTI futures rose by US$0.57 to US$48.81, while the London Brent oil futures increased by US$1.83 to US$50.89. AUD Australia’s performance of manufacturing index edged up to 49.8 last month (August: 46.9), rebounding from the 14-month low in the previous month. Despite the improvement in the headline reading, the sector remained in contractionary phase in September. RBA left the cash rate at 1 .50% at the first Board meeting of Governor Lowe’s tenure. There were no major changes in the accompanying statement, but nor did it provide any sense that the RBA is positioning for another rate cut this year. CAD domestic growth figures showed Canada’s economy got off to a stronger-than-expected start in the third quarter.

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

Technical: Symmetry swing resistance sited at .7685 stalls advance as this area contains .7550 is the next downside objective ahead of .7412 symmetry swing support. Over .7700 opens .7730.
Retail Sentiment: Bearish
Trading Take-away: Long

USDCAD
Outlook: Short Term (1-3 Days): Bearish – 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. Near term symmetry swing support is sited at 1.3030.

Retail Sentiment: Neutral
Trading Take-away: Neutral

XAUUSD
Outlook: Short Term (1-3 Days): Bearish – 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 1314, failure here opens move back to pivotal 1300/1296 equidistant swing support
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing resistance sited at 47.36 continues to repel the advance 41.87 remains the downside objective, over 48.00 opens equidistant swing objective sited at 52.40

Retail Sentiment: Bearish
Trading Take-away: Long

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