London Forex Report: T Minus One Brexit Or Bremain

London Forex Report: T Minus One Brexit Or Bremain

London Forex Report: Janet Yellen, the Fed’s chair, delivered a speech on Tuesday. She said the Fed will be cautious about interest rate increase until having a clear picture that the job market is holding up. Yellen also highlighted the potential fallout from Britain’s June referendum which could darken the US economic outlook. All in all, her comments suggested that Fed is unlikely to raise rates at its next policy meeting in late July since there will be only one additional monthly employment report release by that time. USD finished higher against most G10 peers for the first time in a week, with the rally extending into the New York close.

FX Majors: EUR declined the most in a week against the USD after European Central Bank President Mario Draghi reiterated his willingness to act to bolster inflation. Inflation dynamics in the euro area remain “rather subdued” even as the economic recovery “gained momentum at the start of the year,” Draghi said at European Parliament hearing in Brussels. GBP reversed a 3.5% rally against the greenback made in the previous two days, retreating from its strongest level since before the vote date was set in February. The latest setback came on with an IG/Survation poll putting the “Stay” vote at 45 percent and “Leave” with 44 percent, suggesting the outcome of the UK’s referendum on whether to quit the European Union is still too close to call. JPY above 105.00 handle against yen for the first time in nearly a week as dollar was strengthened by slightly hawkish speech delivered by Yellen. Despite Yellen stressed the economic outlook was uncertain, markets are still widely expecting that there will be two rate hikes by the end of this year, causing USDJPY to rise.

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

Technical: Whipsaw price action within broader 1.11/ 1.14 range, 1.1230 near term support but range trade most likely ahead of Thursday’s major risk event.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 1.4770 symmetry swing objective achieved and price duly stalls, while 1.4530 supports expect bullish consolidation ahead of Thursday’s vote.. Expect volatility in GBP pairs.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Downside ratchet breaks 105.55 lows the failure at 105 opens 103 as the next downside objective. 105.50 becomes the near term pivotal resistance. Potential daily double bottom pattern developing need a close over 104.85 to entice bulls.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Weekly equality objective at 117.36 achieved. 119.30 near term resistance, only over 121.50 eases bearish pressure, while 119.50 caps upside bears target retest of 115.50 lows
Retail Sentiment: Bullish
Trading Take-away: Sidelines

Commodities FX: GOLD slipped for a second day, falling about 1.7% to $1,268.12 an ounce, a ten-day low, as safe haven demand retreated. Oil (July contract) reversed from lows of $48.85 (August’s contract) to finish slightly higher at $50.20 a barrel after API data showed a bigger-than-expected draw on inventory. AUD at a two-week high near 0.7500, after the country’s central bank gave no clear hint that it would ease policy again. Minutes of the Reserve Bank of Australia’s (RBA) 7 June meeting revealed the central bank considered the current policy setting as appropriate for promoting sustainable economic growth and returning inflation to target over time. CAD settled marginally weaker against the USD, affected by speculation over Britain’s future in the European Union. The commodity-linked currency was also knocked by oil prices, which weighed before turning positive post-settlement on figures showing a bigger-than-expected draw in US inventory.

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

Technical: Remains bid near term but yesterdays key reversal presents a potential double top, bulls require a close over .7510 to open .7640 target, below .7430 opens a move back to .7300.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.3150 is the next upside objective, the failure 1.28 opens 1.2650 next within broader trading range.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Failure below 1275 sets up a bearish double top pattern targeting a rotation back to test 1230 support, only a close over 1293 today would neutralise the near term bearish pattern
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Only a close below 46 threatens medium term bullish bias, as 46.00 survives on a closing basis expect rotation back towards 50.00 where a second wave of selling is likely to emerge. Sellers at 50.00 failed to stem the advance opening a retest of 51.64.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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