London Forex Report: Geopolitics Gives JPY Support

London Forex Report: Geopolitics Gives JPY Support

London Forex Report: Geopolitiical concerns kept markets in risk-off mode. Syria and North Korea aside, upcoming French election next Friday is beginning to dominate headlines

USD data due from the US was second tier. NFIB small business optimism index slipped to a four-month low of 104.7 in March (February: 105.3) likely dragged by the defeat of Trump’s administration to overhaul health care.

EUR Euro zone’s industrial production contracted 0.30% MOM in February followed a revised 0.30% MOM expansion in January, due to the decline in energy output. On a separate report, economic confidence index rose to 26.3 in April, the highest level since December 2015. The indicator was boosted by robust outlook in Germany’s economy.

GBP Sterling’s depreciation since last year continued to fuel price growth in March, putting strain on consumer spending as real wage growth decelerated. CPI rose at an unchanged pace of 2.30% YoY in March and exceeded BoE’s 2.00% target since last month. Retail price index (March: +3.10% YoY vs February: 3.20% YoY) and producers price index (March: +3.60% YoY vs February: 3.70% YoY) rose at a slightly slower pace last month but affirmed that import costs was high although domestic price pressure stayed modest, leaving rooms for BoE to refrain from tightening monetary policy just yet.

JPY In Japan, machine tool orders rose 22.60% YoY in March after a 9.10% YoY increase in February. Foreign orders climbed a whopping 39.10% YoY in March, offsetting the pullback in domestic orders (+1.80% YoY) last month amid firmer global demand.

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

Technical: 1-3 Day View – 1.0570 symmetry swing support the immediate downside objective achieved, near term resistance is sited at 1.0639 as this contains corrections 1.05 should be tested next, over 1.07 opens 1.0860.

1-3 Week View – While 1.10 contains corrective attempts higher focus remains on a retest of 1.03 ahead of 1.0118 extension objective form 2015/17 consolidation. Only over 1.14 sets upside focus on 1.1876
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1-3 Day View – as 1.2460 now acts as support price looks set to test a breach 1.2505 setting up a quick move to symmetry swing resistance sited at 1.2544 and a return to the established 1.26/1.24 range

1-3 Week View – While below 1.2864 bears set sites on 1.10 as the broader downside objective, a weekly closing breach of 1.2660 will set up a move to test the weekly bearish line in the sand

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View 111.75 range support breached the daily close below here suggests downside range break and opens 108.43 equidistant swing objective to the downside, near term resistance is sited at 110.20, only over 112 stems selling pressure.

1-3 Week View – as 110 weekly symmetry swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 which represents an equidistant swing from the cycle, negates the broader bullish theme.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1-3 Day View – pivotal trend line support at 116.57 has been breached and barring a snap back move today with a close over 117.60, 114.65 becomes the next downside objective Only over 120.50 arrests near term selling pressure.

1-3 Week View – As symmetry swing support sited at 117.69 survives on a weekly closing basis bulls will continue to target weekly symmetry swing resistance sited at 124.42, a weekly close above here would set a broader base for further upside.
Retail Sentiment: Bullish
Trading Take-away: Short

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