London Forex Report: Sterling Attempting To Stabilise

London Forex Report: Sterling Attempting To Stabilise

London Forex Report: Inflation data reinforced our recent observation that inflation is finally creeping up, not only in the US but in other parts of the world. US consumer prices rose 1.50% YOY in September, marking its quickest pace since October 2014, driven by higher costs of housing, medical care and energy. Meanwhile, core CPI climbed 2.20% YOY last month, a tad slower than the 2.30% YOY pace in September, suggesting the pace of rate normalisation will be gradual even if the Fed were on track to hike in December. USD slipped against 60% of G10FX following softer demand though the USD Index inched 0.01% higher to 97.89, lifted by a relatively weaker EUR.

FX Majors: EUR The European Central Bank is expected to stay on hold in Thursday’s meeting for many reasons, including risk events such as US elections and the constitutional referendum in Italy. GBP Inflation indicators from the UK showed that price pressure accelerated in September, driven largely by Sterling’s depreciation. Consumer prices surged 1.00% YOY in September, the most since Nov 2014, whilst factory gate prices climbed 1.20% YOY (August: +0.90% YOY). In addition, retail prices increased 2.00% YOY last month (August: +1.80% YOY). JPY Moody’s said Japanese banks see only limited deterioration in their profitability following introduction of a negative interest rate policy.

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

Technical: Bears target 1.0957 as the next downside objective ahead of 1.0845. Near term resistance is sited at 1.1035, medium term resistance is sited at 1.1120 only over 1.1220 eases bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1.2260/80 rejects near term corrective advances bears target a retest of 1.20. Medium term resistance is sited at 1.2330. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support at 103.80 is eroded bulls will lean on the medium term pivot at 103, only a close below 102.80 eases bullish pressure.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 116.11 symmetry swing resistance stalls advance, a close over 116.50 opens the larger scale AB=CD objective at 121.00 Near term support is sited at 114 eroded, focus now on 113.60, below 113.30 suggests an early reversal to trend
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price ended higher for the second straight session on Tuesday due to weaker US dollar spurring foreign demand for gold. The gold price increased by US$6.40 to US$1,260.80 on Tuesday. OIL was trading between gains and losses and eventually ended slightly higher on Tuesday (18 Oct) as investors continued to debate whether OPEC can coordinate an effective production cut. The US Nymex WTI futures increased by US$0.35 to close back above US$50 at US$50.29. AUD Australia’s Westpac leading index increased 0.06% MOM in September, picking up from the revised 0.01% MOM in August. The improved reading showed that consumers were more confident about the state of the economy in the near term. CAD outperforming along with the rest of its commodity currency cousins. The combination of elevated OIL prices, softer US economic data and improved risk sentiment have all been helping to keep the Loonie in demand.

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

Technical: Symmetry swing resistance sited at .7685 under pressure over .7730 reverses bearish bias and focus shifts to .7830. Near term support is sited .7600
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3080/60 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited 1276 ahead of pivotal 1300.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective as 49.00 supports the advance ,only below 45.00 would suggest false upside break a continuation of a more complex corrective pattern
Retail Sentiment: Bearish
Trading Take-away: Long

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