London Forex Report: Buck Battered By ISM Blow Out

London Forex Report: Buck Battered By ISM Blow Out

London Forex Report: US ISM services slipped more than expected to a six and half year low at 51.4 in August further dampened expectations for a September rate hike. This worse-off reading in services, coupled with prevailing lacklustre in manufacturing added to signs of less robust growth momentum in 3Q. USD fell against all G10s after worse than expected data dampened the outlook of the upcoming Fed policy decision. The Dollar Index that was already heading south in early trade plunged and closed 1.07% lower at 95.82 after reports confirmed softer conditions in the US

FX Majors: EUR Final print showed the Eurozone economy grew at a slower pace of 0.3% QOQ and 1.6% YOY in 2Q, as slower inventories and investment offset gains in net exports and household demand. GBP further to the upside, peaked at 1.3445 during New York session, the level last seen back in 18 July. Brexit without access to European Union markets could exacerbate the UK’s near-record current-account deficit, according to Fitch Ratings. JPY dropped more than 1.3% yesterday. The worse-than-expected US services data dragged the USD to the downside as the services sector makes up more than two-thirds of the US economy. With the aid of poor Non-farm payrolls data in August, the expectations for Fed hiking rate this month have diminished, pulling down the USDJPY..

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

Technical: EUR holds symmetry swing support sited at 1.1125. Over 1.1250 brings last weeks highs back into play at 1.1366. Only below 1.1170 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3370 supports 1.3470 is the next upside objective. Only failure below 1.3185 concerns near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Breach of 102.80 support opens a move back to test base at 100.90, expect 102.80 to act as resistance near term
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Failure below 114.50 has opened retest of pivotal support at 114 as this area supports potential for another leg higher. Failure below 114 opens move back to 112.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD rose the most since Brexit day, by $22.92 (+1.72%) to $1,350 per ounce as the dollar weakened after the services ISM miss. Oil ended 0.75% lower, from Monday’s shortened holiday levels, to $44.83 per barrel on receding hopes of a output freeze deal later this month. AUD RBA held interest rates unchanged at 1.5% as expected in yesterday’s meeting following two cuts in four months to spur sluggish inflation. The accompanying statement suggests that the central bank has more rooms for easing should economic conditions deteriorate or if further appreciation of the Australian dollar hinders exports and growth. Market shrugged off other economic data. Current account deficits rose from AUD 14.9 billion in the first quarter to AUD 15.5 billion last quarter. Separately, performance of construction index was released this morning. The index ticked down to 46.6 in August (July: 51.6), indicating a contraction in the building industry last month. CAD rose yesterday, marked its strongest close in almost three weeks against a broadly weaker USD, as stronger domestic figures and signs that oil-producing countries may work together to tackle a supply glut. The Bank of Canada has a rate announcement scheduled for today while Canada’s August employment report is due on Friday.

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

Technical: Support at symmetry swing .7501 capped downside correction and set a base opening a move back to .7750 as the next upside objective. Only a close below .7500 would concern the near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Testing bids at 1.2830, near term resistance is sited at 1.29, bears target symmetry swing objective at 1.2719
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357 with 1333 near term support. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Offers at anticipated resistance 46.44 stall the advance as this area continues to reject expect a grind lower to 41.00. Over 46.60 opens 47.50 as the next upside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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