London Forex Report: US Jobless Claims Hit 43 Year Lows

London Forex Report: US Jobless Claims Hit 43 Year Lows

Market sentiments took a beating after the release of weaker than expected China trade data that renewed slowdown concerns. Yesterday data showed foreign demand for Chinese goods took another plunge in September. Exports dropped a sharp 10.00% YOY to USD 184.51 billion last month, building on a 2.80% YOY annual decline in August. Imports, on the other hand, tumbled 1.90% YOY to USD 142.52 billion in September, reversing the surprisingly upbeat 1.50% increase in August. Amid prevailing devaluation in the renminbi to a six-year low, exports may see some revival in the months ahead.

In the US, steady initial jobless claims reaffirmed the case of a healthy labour market. Meanwhile, Fed Harker said the Fed might want to refrain from raising rates until after the US presidential election. He further expressed his view for one rate hike this year followed by two next year, very much echoing the Fed policy stance and reiterating the case of a rate hike in December. USD tumbled against all G10s in an apparent correction after recent upward move. The USD Index was progressively lower through European and US sessions to close 0.46% weaker at 97.51

FX Majors: EUR strengthened against the US dollar on Thursday as speculation that the European Central Bank is considering tapering its bond-buying. According to the latest Reuters poll participants are expecting the European Central Bank (ECB) extending its QE programme beyond March 2017 by end of this year while keeping monetary policy unchanged in next week’s policy decision on 20 October. GBP Report from RICS showed that UK house prices gauge strengthened more than expected in September, suggesting that shortage of property overshadowed impact of Britain’s vote to leave the European Union. The price gauge rose from 13% to 17% last month. JPY Japan‘s tertiary industry index indicated that growth in the services sector was flat in August after a revised 0.20% MOM acceleration in July. Finance and insurance companies, business related services and retail trade firms were the main drag to the headline number.
EURUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: 1.0995 achieved as 1.1060/60 contains near term corrections bears target 1.0957. Medium term resistance is sited at 1.1120 only over 1.1220 eases near term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

euro

GBPUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: As 1.2330 rejects corrective advances bears target a retest of 1.20. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

cable

USDJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is sited 102.80
Retail Sentiment: Bearish
Trading Take-away: Sidelines

yen

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 below 113.60 suggests an early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

yuppy

Commodities FX: GOLD price ended higher on the back of the stronger US dollar as the weak Chinese trade data stoked safe asset demand for gold, yen and US Treasuries. The gold price increased by US$4 to US$1,255. OIL prices edged higher on Thursday (13 Oct) after the US Federal data showed a 4.9 million barrel increase in crude inventory (the first increase in 6 weeks and well above the market forecast of just +900,000) but total crude and refined products fell by 5.1 million barrels. The US Nymex WTI futures increased by US$0.26 to US$50.44. AUD The Australian Dollar has found some support into the latter half of the week, mostly on profit taking and position squaring ahead of today’s US retail sales print. The early Friday release of hotter China inflation could be another source for some Aussie demand, which also is helping to offset Thursday’s discouraging China trade data. CAD Thursday was a day where OIL prices recovered and the market decided to book profit on long US Dollar exposure across the board. And so, when you get that type of a day, you are going to find the Canadian Dollar trading higher. But overall, data is still supportive of the Fed moving forward with a rate hike, particularly after Thursday’s US initial jobless claims came in at a 43 year low.
AUDUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Technical: Symmetry swing resistance sited at .7685 stalls advance as .7615 caps corrections bears target .7412 symmetry swing support. Only over .7700 reverses bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

aussie

USDCAD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish
Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias. Near term symmetry swing support is sited at 1.3130.
Retail Sentiment: Neutral
Trading Take-away: Neutral

loonie

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

yellow

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

black

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