London Forex Report: Markets Pricing Solid NFP’s

London Forex Report: Markets Pricing Solid NFP’s

London Forex Report: Data flow continues to reiterate improving growth outlook and rising inflationary pressure. Closely tracking the positive ADP report, US initial jobless claims registered a bigger than expected decline of 14k to 246k for the week ended 28-Jan, bolstering expectations of an upbeat NFP today. The US dollar remained broadly under pressure on Thursday despite a small recovery, after the US Federal Reserve stuck to its mildly upbeat view of the world but gave no hint on when it will next raise interest rates. USD Index registered a 0.15% gain closing .at 99.79

FX Majors: EUR With energy prices giving a boost to price pressure, producers’ prices surged more than expected in the euro area in December. PPI climbed 1.60% YOY in December followed a 0.10% YOY increase in November, registering its second positive growth after 10 months of factory gate deflation in 2016. GBP BOE left its base rate at 0.25% and maintained its asset purchase and corporate bond buying goal at £435 billion and £10 billion. The MPC revised its economic forecast, anticipating quicker growth of 2.00% this year instead of a previous estimate of 1.40%. 2018 (1.60% vs 1.50%) and 2019 (1.70% vs 1.60%) forecast were also revised to reflect more upbeat global outlook. On the inflation front, price growth will likely be unchanged at 2.70% in 4Q but is expected to be slightly lower in the next two year than November’s forecast. Inflation expectation is 2.60% in 2018 (previous: 2.70%) and 2.40% in 2019 (previous: 2.50%). Meanwhile on the data front, Markit/CIPS construction PMI slipped to a five month low of 52.2 in January. JPY Japan’s consumer confidence index rose to 43.2 in January, marking its highest reading since September 2013 amid anticipation of broad based economic recovery. Adding to optimistic sentiments, Nikkei services PMI hovered around a one year high of 51.9 in January.

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

Technical: Near term support sited at 1.0670 maintains bullish bias and sets 1.0873 as the next upside objective, only a close back below 1.0580 resets near term bearish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing objective at 1.2679 encourages profit taking ahead of 1.2772. Near term support sited at 1.2435 as this survives bullish momentum persists. A close below 1.24 opens 1.2236 symmetry swing support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 112 achieved profit taking pullback ensues, a breach here will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance is sited at 114.50 only over 116.20 reasserts upside targets.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Symmetry swing support at 120.40 defended sets sights on, 124.42 symmetry swing resistance. Near term resistance is sited at 122.76. A failure below 120.40 opens 118.70
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD prices advanced 0.5%, closing at 1216, The safe haven rose, though off intraday highs, amid a risk-off mood in equity markets. OIL traded lower following a choppy session as rising oil stockpiles in American storage facilities offset evidence that OPEC and other big exporters were cutting production. Gold, on the other hand, rose to an 11-week high after the Fed gave no clear signal on the likelihood of a March interest rate increase in its latest statement, prompting another drop in the USD. AUD up 1.25% against the USD on the back of stronger than expected trade figures with a record A$3.5bn surplus for December driven by sizeable increases in exports of iron ore and coal. CAD The relative underperformance comes as a recent Deutsche Bank report suggests that the BOC may have to consider QE if a US border tax is implemented.

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

Technical: Bullish attention on range highs towards .7800. The next upside objective is equidistant swing sited at .7631 Near term support is sited at symmetry swing level .7490 ahead of pivotal .7440
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Close below 1.3140 reestablishes a more bearish tone in erratic trade, 1.3150 now becomes resistance while this level contains upside reactions bears target a test of 1.30
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1206 supports intraday 1220 symmetry swing retest developing with the potential for a double top, a break below 1206 opens a move back to 1195.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Rejection from equality objective area at 55.30, 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 54.50.
Retail Sentiment: Bearish
Trading Take-away: Long

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