London Forex Report: Markets Polarised On Trump Spending Plans

London Forex Report: Markets Polarised On Trump Spending Plans

London Forex Report: Volatility caused by the US general election has somewhat settled, and a December rate hike remained on the table although markets expect very gradual path of hike henceforth. According to data from the Labour Department, initial jobless claims dropped 11k to 254k last week, affirming that job market remained competitive. USD extended its rally to beat 70% G10FX on the back of rising inflation expectations in the US that boosted rate hike outlook. The USD Index climbed 0.29% to 98.78.

FX Majors: EUR continued to tumble lower on Thursday as global demand for the greenback continued to rise in recovery from Wednesday’s mass selloffs GBP Housing market survey from RICS showed that UK’s households were expecting property market transactions and prices to surge. The house price balance index, an indicator of surveyors reporting rise in house prices, climbed from 18% in September to 23% in October. Record low mortgage rates kept demand in the property market intact, alleviating impact of Brexit’s fallout on the slowdown in price growth. JPY Japan’s machine orders rose more than expected in September. Despite registering softer growth (September: +4.30% YOY vs August: +11.60% YOY), orders rose for a third straight month as domestic firms boosted capital spending. On a second report, machine tool orders dropped 8.90% YOY in October (September: -6.30% YOY), dragged by sluggish foreign and domestic demand. Underscoring the government’s struggle to lift price growth, producers prices slumped 2.70% YOY in October (September: – 3.20% YOY).

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

Technical: Bears have the ball and target near term support is sited at 1.0900 failure here opens pivotal 1.0850. 1.1030/50 is near term resistance ahead of 1.1150
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Medium term resistance is sited at 1.2550 under pressure. A close over 1.2550 eases bearish pressure. Below 1.2350 suggests false upside break and return to broader range trade.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Whipsaw price action opens a move to target 107.40, prior 105.50 now support. only below 104.20 concerns bulls
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Upside attention on 116.20 as the primary upside objective with in in the broader 112-116 range. A tops side expansion through 116 opens 121 equidistant swing objective. A close below 114 opens 112 again.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD slipped 1.46% to 1259.20 per ounce, lowest level in almost a month, as jitteriness over a Trump Presidency receded further and risk assets continued to rally. OIL closed lower by 1.35% to $44.38 per barrel as the market refocused back onto oversupply concerns, as well as upcoming OPEC talks on 30-Nov to cut production. AUD A series of lower highs and lower lows suggest that the Australian dollar could be exposed to a further downward correction. Markets will pay attention to RBA Governor Lowe’s speech and domestic jobs data due next week CAD The rally in oil prices has not done enough to keep the Canadian dollar stronger against the US dollar. Amid a much strong US dollar across the board overnight, USDCAD hit as high as 1.3508 before crawling back to current level at 1.3480s

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

Technical: rotates in the contracting range with .7730 capping upside and .7500 containing downside reactions, a breach of the lower end of the range opens .7412 symmetry support. Through .7750 opens .7830 on the upside.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1.35 target achieved, as 1.3250 supports bulls target a test of 1.3573 only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820.

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1337 contains the upside reaction expect a retest of support back at 1245, near term resistance is sited at 1310. Over 1340 opens pivotal 1375.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: The failure at 46.03 has opens 42.73 as the next downside objective ahead of 39.78. Near term resistance is sited at 46.38
Retail Sentiment: Bullish
Trading Take-away: Short

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