London Forex Report: USDJPY Bid On Buy The BoJ Rumour

London Forex Report: USDJPY Bid On Buy The BoJ Rumour

London Forex Report: Macro performance remains tepid apart from signs of stabilization in China. The US reported softer small business optimism while inflationary pressure in the UK ebbed, which is likely to raise the eyebrows of central bank watchers. In contrast, China bucked its trend to record stronger IPI, retail sales and steady investment, a sign that steadier trend may be forming going forward. Bond markets are signalling growing scepticism over the prospect of a Federal Reserve interest-rate increase before next week’s policy meeting. Since June, the debate between camps on the FOMC has sharpened. There’s a majority group who want to move up rates gradually, based on their forecast of rising inflation and diminishing labour market slack. Positioned against that camp is a group of “other participants,” according to minutes of the Fed’s meeting in July, who see little evidence that inflation was responding to a tighter job market. USD Index climbed through all sessions to close 0.57% higher at 95.63

FX Majors: EUR Lautenschläger, member of the ECB’s Executive Board, stated that the central bank should not pass fresh stimulus measures and should give its earlier policy measures time to work, while she was skeptical about any further interest rate cuts given the increasing side effects of such measure. GBP UK’s consumer prices rose 0.6% YOY in August, sustaining the quickest pace of rise in price growth since Nov 2014. Retail price index decelerated last month (1.8% vs 1.9%) but producers’ price index quickened (0.8% vs 0.3%), depicting the impact of a weaker pound sterling. JPY Nikkei reported that BoJ will focus its policy on lower rates as its expansion of asset buying is reaching its limit.

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

Technical: As 1.12 supports 1.1366 is the next upside target with a further equidistant symmetry swing objective sited at 1.1530. Below 1.1190 opens 1.1120 and suggests potential early reversal.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.32 supports 1.3470 is the next upside objective, the near term upside hurdle is sited at 1.3280. Failure below 1.3185 suggests early reversal to downtrend.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: 102.80 near term resistance removed. A close over 103 opens 106 equidistant swing objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 113.80 supports potential for another leg higher to target equidistant swing objective at 117.87. Failure below 113.60 opens move back to 112.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD weighed down by a firmer dollar and uncertainty about whether the Fed will raise interest rates next week, while the potential for more stock market weakness offered support. Oil prices came under pressure after the International Energy Agency (IEA) warned in its latest report that markets would have to wait “a while longer” for the oil market to rebalance. The IEA said a sharp slowdown in oil demand growth, coupled with ballooning inventories and rising supply, means the market will be oversupplied at least through the first half of 2017. This contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly. AUD Australian data released by National Australia Bank (NAB) sent mixed signal, with one report pointing to moderation in business conditions in August yet another report showed that business sentiment has proven to be resilient to negative influences over recent months. Last month, business conditions index slipped (from 9 to 7) whilst business confidence index rose (from 4 to 6), the latter likely attributable to the recent 25bps cut in RBA’s cash rate, according to NAB. CAD was soft overnight on falling oil prices, with USDCAD climbing through major psychological level at 1.3150. Markets will pay attention to Canada’s manufacturing sales data due this Friday.

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

Technical: Close below .7500 threatens a more significant bearish reversal, the next downside objective is symmetry swing support sited at .7412. Near term resistance is sited at .7500
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance sited at 1.2970 removed next upside objective is 1.32. 1.2960 becomes near term support.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, below 1320 opens move back 1301 base. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.38 becomes the downside objective over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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