London Forex Report: Jackson Hole Gets Underway

London Forex Report: Jackson Hole Gets Underway

London Forex Report: Overall demand in the US housing market remained upbeat despite the drop in existing home sales print. Home resales fell 3.2% from June to July after four straight months of strong gains, but rising home prices and new home sales hitting nine year high levels pointed to firm demand for housing thanks to low borrowing costs and strong job gains. USD rose moderately against buoyed by rising risk aversion in the markets. The USD Index reversed an early dip and climbed throughout US session to close 0.26% higher at 94.78 in response to the equities sell-off.

FX Majors: EUR Germany’s finalized GDP figures for the second quarter of 2016 have held steady, showing the economy expanded by 0.4% on the quarter and 3.1% on the year. GBP The month after Britain vote to leave EU, the number of mortgage approvals fell an annual 19% to 37.66k in July (June: 39.76k) as households anticipate murkier economic outlook ahead. Contrary to the housing market which started to bear the brunt of Brexit, household spending remained resilient last month. Consumer credit rose the quickest in almost a decade in July (+6.4% YOY vs June: +6.3% YOY) as shoppers took advantage of low interest rates on loans. JPY Japan’s coincident and leading index were higher in June from the previous month, signaling a pick-up in business activities and better assessment of the economy in the next few months. Coincident index rose to 111.1 in June (May: 109.2), helped by the increase in the consumer durable goods shipments sub index. Leading index was also higher (June: 99.2 vs May: 98.4) amid the surge in the new manufacturing machine orders sub index.

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

Technical: As last weeks highs are hurdled bulls target 1.1430 next. Near term support is sited at 1.1230, only a failure below 1.12 would concern the near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As prior resistance at 1.31 now acts as support broader range resistance sited at 1.3370 is the next upside objective. Only a close below 1.3000 would suggest a termination of the current correction
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 101 caps profit taking expect further downside pressure with 97.30 the next downside objective. Only a move over 101.50 will ease near term bearish bias.

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance is sited at 114, as this area caps the correction expect a drift back to test and breach 112 support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD declined to a 4-week low on Wednesday due to investors spooked by a potentially more hawkish Fed guidance on rates outlook in this Friday’s Jackson Hole symposium, leading them to close out positions on the precious commodity. Oil prices retreated on Wednesday (24 Aug) after the usual Wednesday weekly petroleum status report from the US Energy Information Administration (EIA) reported a surprise 2.5 million increase in crude inventory versus expectations of a 850,000 decline, adding to the oversupply concerns which re-emerged earlier this week. AUD dipped modestly in Asian session but recovered most of its previous losses in European session with investors reluctant to take big positions ahead of a speech by the US Federal Reserve Chair tomorrow. CAD traded sideways at 1.2924 on Wednesday as investors are on hold ahead the Jackson Hole meeting.

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

Technical: The close over .77 shifts attention to broader range resistance sited at .7830, bulls will be looking for pivotal .7550 to support only a close below .7500 would concern the near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: With the breach of 1.2843, attention shifts to 1.2718 symmetry swing support. Near term resistance is sited at 1.30.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bulls target 1391 as the next upside objective, near term support is sited at 1330 is under pressure pivotal support is sited at 1301 which represents AB=CD equidistant swing support. Below 1300 opens 1270.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 46.50 supports expect a further rind higher to test 50.00 as the next upside objective, only below 43.60 concerns the near term bullish bias
Retail Sentiment: Neutral
Trading Take-away: Neutral

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