London Forex Report: US & European Political Deadlines Loom

London Forex Report: US & European Political Deadlines Loom

London Forex Report: Risk appetite continued to taper as market watchers remained cautious over a potential US government shutdown, amid another 48 hours deadline for UK decision over the Irish border. US President Donald Trump warns of government shutdown ahead of tomorrow’s meeting with the country’s Republican and Democratic congressional leaders for talks on spending bills, where the Democrats are said to demand legislative protections for undocumented immigrants as a condition to back the new spending. Trump made headline after he announced the US will recognise Jerusalem as the capital of Israel. The break of status quo may trigger fresh round of turmoil in the already fragile Middle East. Elsewhere, Brexit Secretary David Davis commented that there isn’t any economic impact assessment on the UK leaving the EU, more than a year after June 2016 Brexit vote. Meanwhile, EU’s chief Brexit negotiator Michel Barnier reportedly announced a 48 hours deadline for the British government to iron out disagreements over the Irish Border, ahead of tomorrow’s meeting for Brexit talks to continue.

NORTH AMERICA Employment as tracked by US ADP increased 190k in Nov, as widely expected. Despite being down from 235k in Oct, the figure remains decent amid continued tightening of the labour market. In a separate data, MBA reported that mortgage applications rose 4.7% WOW in the week ended 1 Dec after dipping 3.1% the week before

EUROPE In Eurozone, growth in retail sector accelerated in Nov, lifting the PMI to 52.4 from 51.1 previously. Sales at retailers decent amid continued expansion in purchasing activity, employment and business sentiment, all of which bode well for the economic outlook

ASIA Growth outlook of Australia was dented by another data miss; 3Q GDP grew 0.6% QoQ, slowing from 0.9% in 2Q and missed expectations of a 0.7% increase. Even though GDP grew 2.8% YoY in 3Q, which is an acceleration from 1.9% in 2Q, the point of contention was that household spending grew a meagre 0.1% in 3Q, slowest since 2008. This accentuated recent weak retail sales data while pointing to continually slow wage growth that hampers spending and weighs down on inflation. Meanwhile, AiG’s construction index rose to 57.5 in Nov from 53.2, indicating that the sector grew at the quickest pace in 4 months.

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

Technical: 1-3 Day View – 1.2092 cycle high vulnerable to retest, near term upside hurdle sited at 1.2010/30, near term support at 1.18 being eroded, sustained push sub 1.1770 suggests a false upside break an opens a retest of 1.17

1-3 Week View – 1.2130 the next upside objective. Weekly close below 1.16 neutralises bullish objectives opening a test of 1.14
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 – 1.3460 achieved, through here opens prior cycle highs at 1.3650 near term support sited at 1.3340 only below 1.3230 concerns bullish bias

1-3 Week View – 1.3263 achieved as this acts as support 1.3836 is the next upside objective only a close back below 1.30 would jeopardise the bullish advance.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Initial 110.85 test prompts profit taking , near term resistance moves to 113.30, a breach of this level opens 114.70, below 11.45 opens 109.30/10 as the next downside objectives

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): Bearish

Technical: 1-3 Day View – retest of 134 range resistance underway a closing breach opens 136 as the primary upside objective. Only failure below 130.66 concerns bullish bias and opens pivotal 127.50.

1-3 Week View – 136.10 is the principle upside objective as this area caps the current advance expect a retest of 131.50 to set a base for the next leg higher, a closing breach of 131 concerns the bullish basis.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Posted in Forex Analysis, London Forex Report, tagged with on