London Forex Report: Trump ‘Fire & Fury’ Rattles Risk Sentiment

London Forex Report: Trump ‘Fire & Fury’ Rattles Risk Sentiment

London Forex Report: USD President Trump’s “fire and fury” remark hogged headlines. Renewed geopolitical risks could continue to unsettle global financial markets ahead, depending on evolution of the US-North Korean tension. This overshadowed positive data releases, which showed US job openings jumping to a record high in June and NFIB small business confidence rose for the first time since January.

EUR Germany’s trade surplus improved to EUR 21.2 billion beating the estimate of EUR 20.8 billion. However, German Industrial Orders disappointed with a decline of 1.1%, compared to the estimate of +0.2%. Recent German data has been solid, so July’s Industrial Production sharp decline was a surprise. This marked the weakest reading this year. Overall, German indicators continue to point to an expanding economy. Retail Sales jumped 1.1%, its second-highest gain in 2017. Factory Orders gained 1.0%, while unemployment claims dropped 9,000 which has declined almost every month in 2017. Although manufacturing and services PMIs dipped in July, both are well over the 50-level, indicative of expansion

GBP UK house prices continue to decelerate, according to the “Halifax” house price survey (2.1% YoY in July, down from 2.6% in June) but the labour market remains robust, according to an industry survey which suggested the number of permanent positions increased at the fastest pace in two years in July amid a sharp fall in the supply of workers. Policy makers will have to continue juggling Brexit consequences but, after last week’s BoE “hold” vote, prospects for a rate increase any time soon appear to have disappeared.

JPY Eco Watchers current index fell to 49.7 in July (previous: 50.2) whilst Eco Watchers outlook index tapered off to 50.3 (previous: 51.0). The softer survey results was mainly due to softer business sentiment, which tied in with subdued business spending as flashed out in recent data.

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

Technical: 1-3 Day View – Pivotal 1.1730/10 survives second test as this level contains downside reactions bulls look for a retest of cycle highs en route to 1.20 only a daily close below 1.1660 concerns the near term bullish bias setting a top for a test of 1.1440

1-3 Week View – 1.1876 achieved focus shifts to 1.20 . Weekly close below 1.14 neutralises bullish objectives.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – 1.31 daily closing breach concerns the near term bullish bias opening a retest of 1.28, near term resistance is sited at 1.3080, only a close over 1.3160 reestablishes near term bullish tone

1-3 Week View – The weekly close above 1.3045 targets the broader symmetry swing objective sited at 1.3263 only a close back below 1.28 would jeopardise the bullish advance
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1-3 Day View – As 111 contains upside reactions 108.93 is the immediate downside objective. Near term support is sited at 109.70

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1-3 Day View – 133.36 broader upside objective, the breach of 130.60/40 support warns of potential correction, below 129.20 opens 128.50 a close below here sets a top for retest of 125.80.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, 129.44 upside objective achieves as 128 supports bulls look for a move to test 133.36 as the broader upside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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