London Forex Report: RBA On Hold, As Are FX Majors

London Forex Report: RBA On Hold, As Are FX Majors

London Forex Report: Data flow was scant yesterday and focus was on US factory orders, which rose for a 2nd straight month by 1.2% MoM in January, slightly slower than the 1.3% MoM gain in December but better than expectations for a 1.0% increase. While this bolstered hopes that business spending is picking up along with improving performance in the manufacturing sector, orders for non-defence capital goods excluding aircraft indeed fell 0.1% MoM in January, albeit at a slower pace compared to the 0.4% decline the preceding month. USD rebounded to beat 90% of its G10 peers buoyed by refuge demand as risk-off extended on top of support by firmer rate hike expectations. The Dollar Index trended higher through all sessions, inching 0.1% higher to 101.64 at closing.

FX Majors: EUR investors’ confidence index surged to 20.7 this month, the highest level since August 2007 thanks to quicker increase in output, broad based improvement in economic sentiment and tighter labor market. The index was at 17.4 in February GBP retreated against the USD, amid positive US factory orders figures, in addition, negatives cues from the upcoming UK budget likely dragged on the GBP. JPY Japan’s Nikkei 225 dropped 0.5%, trimming the YTD gain to 1.4%. Stocks fell, as the JPY strengthened, amid geopolitical tensions between Japan and North Korea

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

Technical: Expected retest of 1.0521 base plays out interim double bottom retested, a closing breach opens a move to 1.0450 next, only over 1.0650 arrests near term bearish bias and resets attention on upside objectives
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Price has broken recent range support as 1.24 caps upside corrections a test of 1.22 becomes the next downside objective, only over 1.25 suggest false downside break and return to recent range
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance sited at 113.80 removed and now becomes near term support, a close over 114.50 reasserts upside targets primarily at 115.50. Failure below 113.40 opens 112.80 as the next downside objective
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Near term resistance sited at 120.50 removed and now becomes near term support, only a close over 121.50 stems near term selling pressure and resets focus on upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD resumed its move lower overnight, adjusting to a higher dollar and an imminent rate hike by the Federal Reserve, closing lower by $9.52 per ounce (-0.77%) to $1,225.29, lowest closing levels since 13 February. OIL whipsawed on Monday, strengthening initially on comments by Iraqi oil minister on possibility of extending OPEC production cuts into second half of 2017. The gains later vaporized after IEA forecast an increase in U.S shale oil production at higher oil prices and weakening demand for European refined products. AUD The Reserve Bank of Australia (RBA) met today and as widely expected to kept interest rates on hold at a record low of 1.50% with a neutral stance. CAD Canadian GDP had a strong headline number, there is still a lack of non-energy exports and business investment which suggests the Canadian economy is not running on all cylinders. Traders will eye Trade Balance data today.

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

Technical: Breach of primary support pivot at .7600 suggest potential for broader correction to play out especially as .7610 caps near term upside, .7500 becomes the next downside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.33 supports bulls target the symmetry swing objective sited at 1.3480. Only a close below 1.32 concerns the near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1225 acts as support bulls target symmetry swing resistance sited at 1299, only a close below 1215 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

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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