London Forex Report: Mind The GBP Gap

London Forex Report: Mind The GBP Gap

London Forex Report: US consumer spending, which accounts for more than two-thirds of US economic activity, fell 0.1% last month after accounting for inflation. The figures dropped for the first time in seven months while inflation showed signs of accelerating, mixed signals that could keep the Federal Reserve cautious about raising interest rates. The University of Michigan Surveys Of Consumers Sentiment was 91.2 in September, better than the preliminary data of 89.8. The USD ended slightly weaker on Friday (30 Sep) with the dollar index down 0.1%, adding to the 0.5% decline for the 3Q 2016.

FX Majors: EUR gained against the USD during European session as Deutsche Bank AG shares rebounded on speculation it will reach a lower settlement with the US Department of Justice in connection with an investigation into residential mortgage-backed securities. The currency has been little changed since 8 September when the European Central Bank refrained from expanding its quantitative-easing program and kept its key interest rates unchanged. GBP posted a fifth straight quarterly decline against the US dollar, the longest losing streak since the mid-1980s after touching a three-decade low in the wake of the 23 June vote to leave the European Union. Prime Minister Theresa May said she’ll begin the UK’s process of withdrawal from the European Union in the first quarter of 2017 in her clearest announcement yet about her government’s Brexit strategy. JPY strengthened during Asian session last Friday amid the investors’ suspicions that the Bank of Japan had reached a practical limit in stimulus and lost clout in cheapening the yen helped boost the currency over the quarter. The USDJPY dropped to an intraday low of 100.73 on Friday but the pair recovered some of its previous losses as some concerns surrounding Deutsche Bank’s health were reduced.

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

Technical: Near term resistance is sited at 1.1260, while this level caps upside expect a test of 1.1120, a break of this price pivot opens equidistant swing support at 1.1085. Over 1.1280 opens 1.1365 next.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.2960 rejects corrective advances bears target 1.2828 as the downside equidistant swing objective. Only a close over 1.3130 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: 101.80/90 acts as resistance bears target a sustained breach of 100. Only a close over 102.80 would ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term symmetry swing resistance is sited at 114.34 as this level rejects advance bears target a grind back to test 110.44. A close over 114.50 opens a move to test offers over 116.35
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD price weakened on Friday (30 Sep) as European banking concerns eased slightly while US Fed rate hike, expectations remained a big question mark and whether the November FOMC is a “live” meeting. The gold price decreased by US$7.94 to US$1,313.30 on Friday (30 Sep). OIL rose by US$0.41 to US$48.24. OPEC reached a surprise agreement on 28 Sep to boost prices by cutting daily production by about 750,000 barrels to between 32.5 million and 33 million barrels. AUD struggled for gains after concerns about Deutsche Bank’s health undermined risk appetite globally, however, the Aussie still posted for a solid monthly gain for September.The RBA will hold its monthly policy meeting tomorrow and is likely to keep rates unchanged at an all-time low of 1.5%. CAD strengthened against the USD as its economy grew more than expected in July. Canada’s gross domestic product grew 0.5% in July, fuelled by a rebound in oil and gas extraction after wildfires in Alberta earlier this year.

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

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

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, near term support is sited at 1314, failure here opens move back to pivotal 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 resistance sited at 47.36 continues to repel the advance 41.87 remains the downside objective, over 48.00 opens equidistant swing objective sited at 52.40

Retail Sentiment: Neutral
Trading Take-away: Neutral

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