London Forex Report: Brighter IFO Fails To Lift EUR, FOMC Kicks Off

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

Fundamental: EUR saw a quick flush below 1.10 yesterday, admittedly in very thin and very early Asia trade. Although the EUR saw a bounce thereafter, it has struggled to build any momentum despite a better than expected IFO survey. For this week, traders eye the FOMC, and a number of data events like the jobs report and CPI data from both Germany and Eurozone.

Technical: Breaches 1.10 support, while 1.1080/1.11 caps intraday upside reactions expect bearish pressure to be maintained targeting 1.09 bids next. A close above 1.1122, targets 1.1240 next.

Interbank Flows: Bids 1.0950 stops below. Offers 1.1120 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell pullbacks against 1.1120 targeting 1.09

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

Fundamental: GBP posted a limited intraday advance and retreated at the end of the day from a daily high of 1.5381. Data from UK was disappointing as manufacturing production declined for the first time in the last two years according to the CBI Quarterly Industrial Trends Survey while Mortgage Approvals also fell to 44,489 in Sept from 46,567 in Aug according to British Bankers’ Association

Technical:  While 1.5300 supports downside reactions expect a grind higher to test 1.56 symmetry objective. A breach of 1.53 targets a retest of pivotal 1.52 support.

Interbank Flows: Bids 1.5300 stops below. Offers 1.54 stops above
Retail Sentiment: Neutral to bullish
Trading Take-away: Sidelines for now

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

Fundamental: JPY recovered all its loss on 23 Oct and now trading at 120.70. USDJPY may further test 120 barrier in coming days. With Japan filling with recession due to weak exports, the BoJ’s yearly report will likely cut its growth and price forecasts for the fiscal year that begins in Apr. BoJ will have their new forecasts and policies decisions due 30 Oct. However, many BoJ officials
prefer to stand pat for now

Technical: Bulls target a sustained break of 121 to target range highs at 121.85 an intraday failure at 120.00 would suggest return to range.

Interbank Flows: Bids 119.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 120.50 targeting upside range break

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

Fundamental: JPY rally maintained as risk markets pause persists and cross flow continue to weigh on the pair. The main focus for Japan will be the Fed and BoJ meetings later this week.

Technical:  133.40 pivotal support being eroded, while 134.50 caps intraday upside reactions expect a breach of 133.40 to target equality corrective objective at 131.20 next

Interbank Flows: Bids 133.00 stops below. Offers 134.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sell pullback against 134,50 targeting 131.20

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

Fundamental: AUD saw a quiet day as a blank domestic docket offered little to spark investor action. AUDUSD continued to range-bound ahead of CPI data and FOMC meeting. US new home sales surprised the markets on the downside, raising concerns about the Fed’s ability to hike rates at the upcoming FOMC meeting. Coupled with the rate cut by PBoC last Friday, the promise of widespread accommodative monetary policy might continue to support the Australian dollar.

Technical: Bids ahead of  .7160 symmetry objective support as this level holds anticipate a grind higher to retest .7400 offers. A breach of .7140 concerns near term bullish bias and suggest a retest of pivotal .7060 support next.

Interbank Flows: Bids .7150 stops below. Offers .7400 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now

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

Fundamental: CAD was little changed against the US dollar ahead of US and Japan central bank
decisions on interest rates. The Canadian dollar rallied through the first half of Oct as markets projected the Fed to hold off on a rate hike. A lift in oil prices helped boost the loonie but US crude inverted direction to settle down 62 cents at $43.98 a barrel on worries about the oversupply in oil products.

Technical: Near term bearish tend remains intact as intraday resistance at 1.3260 contains intraday upside reactions bears target a retest of bids below 1.2850. A breach of 1.3260 opens test of 1.3450 offers and potential broader bullish trend continuation

Interbank Flows: Bids 1.3090 stops below. Offers 1.32 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-10-27 08_11_22-NetDania - NetStation

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