London Forex Report: Retail Sales To Clear Path For Fed Liftoff

London Forex Report

Retail sales to clear path for fed liftoff next week; turbulence in the global financial markets prior to the September meeting has settled somewhat and tentatively economic conditions in the US suggest that the central bank is on track to tighten monetary policy in the two day meeting ending on Wednesday. USD Index climbed steadily through trading to close 0.61% higher at 97.93

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

Fundamental: EUR gave back a portion of Wednesday’s gain, fell 0.8 percent versus the dollar to a low of 1.0924 after the comments from ECB’s members doubted about how much Fed and ECB policy will diverge. Traders widely expect the Fed to tighten monetary policy while ECB to ease, the drop of ECB’s bank deposit rate was smaller than expected. However, dollar was supported since traders are convinced the Fed will raise rates at the next meeting

Technical: While 1.0850 caps intraday downside corrections expect a grind higher to test 1.1050

Interbank Flows: Bids 1.0850 stops below. Offers 1.10 Stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines

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

Fundamental: GBP was little changed in light of BoE’s decision to keep interest rates on hold at 0.5%. As the central bank raised concerns over the recovery of economic growth and inflation next year, markets expected a further delay in the timing of a first BoE rate hike. GBPUSD fell to 1.5147 from 1.5178 before the publication of the minutes and rate decision.

Technical:  While 1.5050 caps intraday downside attempts expect renewed upside pressure to retest offers at 1.52

Interbank Flows: Bids 1.5050 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Fundamental: USDJPY recovered Wednesday‘s slide, trading in range of 121.23 to 121.87. Traders are adopting wait–and-see approaches to see whether JPY will go back into the previous range 122.2 to 123.5

Technical: While 122.50 caps intraday upside attempts expect a retest of bids at 121.00, a breach of 122.50 opens 123 offers next

Interbank Flows: Bids 121 stops below. Offers 123 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Fundamental: A rebound in the Nikkei and positive EUR cross flows keep the pair supported.

Technical:  While 132.70 supports intraday downside expect a test of 134.80 offers a failure at 132.50 opens a retest of bids at 131..

Interbank Flows: Bids 132.50 stops below. Offers 134.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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