London Forex Report: Markets To Mull ECB Minutes

London Forex Report: Markets To Mull ECB Minutes

London Forex Report: US data which continued to surprise on the upside bolstered hopes the US economy is regaining traction going into the final few months of the year, building the case for a December rate hike. Both PMI and ISM services indices climbed more than expected in September, to a 5-month high and 11-month high respectively. Separately, both factory orders and durable goods orders suggest business spending could be picking up. On a less positive note, ADP employment gains fell short of expectations but nevertheless remained at healthy level. USD fell against 7 G10s, failing to hold onto early gains as refuge demand ebbed in the US session. The USD Index was slightly lower at 96.12, dipping 0.05% after overturning gains from firmer US data.

FX Majors: EUR A final reading of Eurozone’s Markit services PMI was also lower at 52.2 in September compared to August’s reading of 52.8. Retail sales dropped 0.10% MOM in August, reversing the 0.30% MOM increase in July. GBP UK Markit services PMI edged lower to 52.6 in September (August: 52.9), diverging from the uptick in manufacturing PMI. Underlying details indicated that new business rose at the fastest pace since February and the rate of employment gathered steam, cushioning less rosy future expectation after Brexit which pushed the headline figure lower. JPY Japan’s gauge of the services sector was down by 1.4 point to 48.2 in September, posting another evidence of modest growth this quarter.

EURUSD
Outlook: Short Term (1-3 Days): Neutral – 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 1.2770 rejects corrective advances bears target 1.25 as the downside objective. Only a close over 1.30 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: The close over 102.80 eases bearish pressure, and refocuses attention on the upside equidistant swing corrective objective at 104.86 near term support is sited 101.80/102
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Price is testing offers at 116.11 symmetry swing objective. A close over 116.50 opens the larger scale AB=CD objective at 121.00 Near term support is sited at 114
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD price continued to slide lower as investors are increasingly convinced that the US Fed rate hike is coming at end-2016. The gold price decreased by US$1.10 to US$1,265.20. OIL markets climbed higher on Wednesday (5 Oct) on 2 pieces of news: 1) US EIA reported a bigger than expected 3 million barrel decline in US crude oil inventory and 2) Algerian Energy Minister Nouredine Bouterfa has told local Ennahar TV that OPEC and non-OPEC oil producers plan an informal meeting in Istanbul Oct. 8-13 to discuss how to implement a production deal OPEC members reached in Algiers in September. The US Nymex WTI futures rose by US$1.14 to US$49.83. AUD solid Aussie retail sales data has been followed up on Thursday with a better than expected Aussie trade data print, though the market has mostly shrugged off today’s Aussie release. CAD The Loonie has mostly been under pressure against the Buck on hawkish Fed speak and strong US economic data, but the combination of higher OIL and pre US NFP positioning could seems to be giving the Loonie temporary reprieve.

AUDUSD
Outlook: Short Term (1-3 Days): Bearish – 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: Neutral
Trading Take-away: Neutral

USDCAD
Outlook: Short Term (1-3 Days): Neutral – 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: Bearish
Trading Take-away: Long

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

Technical: Testing symmetry swing support at 1270/60 a failure to hold this area on a closing basis would portend further weakness targeting 1200 as the next downside objective, near term resistance is sited at 1300.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective as 47.50 supports the advance , only below 45.00 would suggest false upside break a continuation of a more complex corrective pattern

Retail Sentiment: Bearish
Trading Take-away: Long

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