London Forex Report: Late Bid For The Buck

London Forex Report: Late Bid For The Buck

London Forex Report: Risk appetite stalled in the absence of positive catalysts and lack of details from Trump press conference although latest Fed speakers suggested policy makers remained hopeful of more optimistic growth prospects be it economic boost from Trump’s fiscal stimulus and tax cut plans or underlying economic strength. Fed Lockhart was optimistic over prospects of fiscal stimulus, tax reduction, and some amount of deregulation. Meanwhile, Fed Harker said “the economy is displaying considerable strength” even without extra stimulus from the government. The number of US jobless claims climbed less than expected by 10k to 247k last week. While job gains pulled back from 204k in November to 156k in December, the pace of labor market tightening last year was supportive of broad based economic recovery. USD tumbled against 90% of its G10 peers as sell-off extends on Trump’s failure to address the widely anticipated US fiscal stimulus plan. The Dollar Index slumped through Asian-European session but managed to halve its losses to close at 101.35, down 0.42% for the day.

FX Majors: EUR Eurozone’s industrial production climbed 1.50% MOM in November followed a revised 0.10% MOM increase in October. The improvement in headline IPI reading was driven by the strong output from France, Italy and Spain. By categories, non-durable consumer goods (+2.90%) and intermediate products (+1.60%) made the largest positive contribution to growth. GBP decline in the UK’s 2-year Gilt yield could have dragged on the GBP. Next week, the UK’s consumer and producer prices, along with retail sales data, will likely be key. JPY Two separate surveys conducted by the Economic and Social Research Institute indicated that household and business sentiments in Japan hovered around a one year high in December. Eco watchers outlook index and current index were at 50.9 and 51.4 last month, remaining above a reading of 50 and indicating that more participants thought that economic conditions were improving.

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

Technical: Testing symmetry swing resistance sited at 1.0640 ahead of pivotal 1.0720. Anticipate sellers to emerge at these levels, as this band of resistance caps upside bears target retest of 1.0338 lows. Near term support sited at 1.05 failure here suggests early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: New monthly lows printed yesterday before profit taking prompts sharp reversal, near term resistance sited at 1.23. A close over 1.23 suggests false downside break an opens move back to test 1.2430.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Price erodes pivotal 114.70 trend support a close below this level concerns near term bullish thesis and suggests broader corrective phase to test 112, near term resistance is sited at 116
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Technical: Buyers on the front foot while 121.60 supports on a closing basis, 124.42 symmetry swing resistance remains the upside objective, anticipate sellers to emerge and price to stall on the initial test of this level for a retests of 123.80 from above.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD continued to benefit from a broadly weaker US dollar for a 4th straight session as the uncertainty about Trump’s fiscal and trade plans added to the USD disillusion. This gold price briefly moved above US$1200 (for the first time in more than 1 month) and finally settled at US$1,199.80 on Thursday OIL prices extended gains for the second straight session on Thursday (12 Jan) after Saudi Arabia’s oil minister said that the kingdom has reduce its crude-oil production output to below 10-million barrels a day, exceeding the cuts established by the OPEC deal in 2016 to curb output. The US Nymex WTI finished the session higher by US$0.76 to close at US$53.01. AUD SAFE official, Guan Tao, said that the yuan’s “roller-coaster” moves last week was due to government’s policies and market expectations and not the PBoC’s FX intervention. He said the yuan rate may become focus of China-U.S. trade conflicts again this year and the USD strength is a significant challenge facing yuan’s stability. · Next week, Australia’s labour data, along with the US consumer prices and industrial production data, will likely affect the AUD. CAD CNPC indicated that China’s oil imports may rise in 2017, likely adding to the upbeat mood, keeping pressure on the Loonie

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

Technical: Price testing symmetry swing resistance sited at .7494 a close above .7525 resets bullish attention on range highs towards .7800 Near term support is sited at .7380
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 1.3620 becomes the next upside objective. The close below 1.3250 concerns the bullish bias, a second failure here opens symmetry swing support sited at 1.3090. Near term resistance is sited at 1.3290.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Close above 1190 opens 1220 symmetry swing trend resistance. Near tern support is sited at 1150, failure here suggests trend resumption and opens 1113 symmetry swing objective..
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: A close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at symmetry swing 52.85
Retail Sentiment: Bearish
Trading Take-away: Long

Posted in Forex Analysis, London Forex Report, tagged with on