London Forex Report: Pound Pauses

London Forex Report: Pound Pauses

London Forex Report: US empire manufacturing index made a directional turn from the eight month high reading of 7.6 in December to 6.5 in January but underlying trend continued to point to broad based recovery in the manufacturing sector despite softer new order growth this month. USD plunged against all G10FX peers yesterday after comments from President-elect Trump that the currency is too strong. The Dollar Index was on a one way trade south, tumbling 0.84% to settle at 100.33.

FX Majors:

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

Technical: Test of pivotal 1.0708 larger symmetry resistance underway. Anticipate sellers/profit taking to emerge at the initial test of this level, as this band of resistance caps upside bears target retest of 1.0338 lows. Near term support sited at 1.0550 failure here suggests early reversal to trend.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: New monthly lows with gap lower at the Asian open Sunday sub 1.20 before profit taking prompts sharp reversal, this reversal has gathered significant momentum and is now threatening a reversal in sentiment. 1.2380 represents the 50% retracement from December highs to January lows ahead of symmetry swing resistance sited at 1.2458, near term support is sited at 1.23
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Broader corrective phase to test 112 is now underway, 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 115.10 only over 116.20 reasserts upside.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Close below 121.60 concerns bullish bias, expect test of symmetry swing support at 120.40 bulls will look to defend this level to set sights on, 124.42 symmetry swing resistance. A failure below 120.40 opens 118.70
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD jumped almost 1.2% to close at $1,217.07 per ounce, highest levels since 22-Nov, led by a weaker dollar which is typically negatively correlated to GOLD. OIL settled 11 cents higher at $52.48 per barrel, after touching as high as $53.52, after Saudi Arabia, top OPEC exporter said it would adhere strictly to its commitment to cut output under the agreement between OPEC and other producers reached in November. AUD a softer CNY tone, along with a decline in iron ore prices, could weigh on gains in the AUD. CAD hitting fresh multi-month highs at levels last seen in October, headline risk ahead today with the BOC decision, statement and MPR forecast update. CAD has also benefited from commodities jumping higher on the weaker dollar.

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

Technical: Price erodes symmetry swing resistance sited at .7494 the close above .7525 resets bullish attention on range highs towards .7800 Near term support is sited at symmetry swing level .7340
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Breach of corrective channel below 1.3160 increases bearish pressure, failure to recapture channel opens a tests of psychological 1.30. Near term resistance is sited at 1.3150
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1220 symmetry swing trend resistance test underway anticipate profit taking/sellers to emerge on the initial test of this level. Near tern support is sited at 1190, failure here opens 1153
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Sharp 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 53.50
Retail Sentiment: Bearish
Trading Take-away: Long

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