London Forex Report: UK Terror Attack, National Security Increases

London Forex Report: UK Terror Attack, National Security Increases

London Forex Report: Newswires reported at least 20 killed and many others injured after terror suspected explosions at a concert in the Manchester Arena in U.K. Market risk sentiments somewhat improved in the absence of fresh negative news flows and a light economic calendar. Saudi Arabia and Iraq agreed on the need for further production cut for another nine months, clearing the path for an extension in production curb in the coming OPEC meeting, spurring further increases in global oil prices.

USD US calendar is limited to only Chicago Fed national activity that showed a spike to a 2.5-year high of 0.49 in April, suggesting that broad based recovery in the manufacturing sector may contribute to quicker GDP growth this quarter. On Fed speak, Fed Kaplan echoed views for two more interest rate hikes this year and to begin balance sheet reduction later in the year.

EUR German Chancellor Merkel said a “too weak” euro together with low oil prices partly contributed to Germany’s trade surplus. Separately, she argued the case to prevent further states from leaving EU and that the best way to counter populists is to solve problems. ECB’s Weidmann said that the ECB should not postpone decision on normalising policy while reiterating that easy monetary policy is still appropriate now.

GBP an explosion in a Ariana Grande concert in Manchester. Police have responded, more than 20 BBC confirmed deaths. GBP reacted sensitively to the headlines – initial fall from 1.3004 to 1.2990 then recovered back to 1.3000 when one report said the explosion was linked to a technical issue. Pressure returned when UK police said they are treating this as terrorist incident.

JPY A preliminary report showed that Japan’s Nikkei manufacturing PMI dropped to 52.0 in May from 52.7 in April. Factories remained in the expansionary phase for nine straight months albeit at slower pace amid the pullback in output and new orders. .

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

Technical: 1-3 Day View – As 1.1160 supports bulls target interim equidistant swing objective of 1.1291 en-route to a test of broader symmetry swing objective at 114.30. Only below 1.10 concerns near term bullish bias.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.14 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Psychological 1.30 magnet achieved as 1.2880 supports interim symmetry swing objectives at 1.3060 & 1.3118 are targeted next, only below 1.2750 concerns near term bullish bias.

1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of the broader symmetry swing objective sited at 1.3238.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – 115 becomes the next upside objective only back below 110.20 would concern the near term bullish bias, near term 111.75 is the upside hurdle that must be removed to rejuvenate bullish spirits

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: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Close over 124.40 opens 129.44, near term support is sited at 122.50, with the near term upside objective of 126.84 equidistant swing objective, only below 121.30 concerns near term bullish bias.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 a weekly breach of this level opens 129.44 as the broader upside objective
Retail Sentiment: Bearish
Trading Take-away: Long

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