London Forex Report: Carney Blindsides Cable Bulls

BOE stood pat but Governor Carney signaled the central bank may be ready to hike rates as soon as next year. The downward revision in inflation forecasts in BOE’s quarterly inflation report however implied interest rates may still stay low for longer. USD closed mixed against the G10s while the USD Index dipped 0.02% to 97.93 in the absence of clear upside catalyst.

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

Fundamental: EUR trades 1.0832, fresh three month lows yesterday. ECB President, Draghi, reiterated yesterday that ECB will decide whether Quantitative Easing is needed to ramp up due to the headwind of global economic slowdown. Euro-zone retail sales (YoY) were released as 2.9%, slightly worse than the market expectations 3%. Besides, German September Factory Orders (YoY) released as -1%, missed the market
forecasts 1.8%

Technical: 1.0860 symmetry target achieved, bears have the ball below 1.10 with bids at 1.08 the next downside objective, intraday resistance comes in at 1.09 only a close above 1.10 eases immediate downside pressure.

Interbank Flows: Bids 1.08 stops below. Offers 1.1o Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

eu2015-11-06 07_32_20-NetDania - NetStation

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

Fundamental: GBP dropped to 1.5201, its lowest since 13 October, after BoE monetary policy meeting. The Bank of England kept interest rates unchanged, in addition, saying that Britain’s inflation would only pick up slowly even if borrowing cost stay on hold. After the dovish BoE’s announcement, Sterling fell sharply since investors, who had expected for clear rate hike signal, were surprised.

Technical:  Price testing stops subs 1.52 as suggested by another failure at 1.53, while 1.5250 caps upside intraday reactions a retest of of 1.5050 is the next downside objective

Interbank Flows: Bids 1.5150 stops below. Offers 1.53 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

gu2015-11-06 07_32_50-NetDania - NetStation

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

Fundamental: USDJPY trades bid ahead of the key nonfarm payrolls report due tonight, hitting a fresh three-month highs overnight, following the release of the ADP US employment report Automatic Data Processing (ADP) reported private sector added 182K new jobs in October, slightly above the 180K expected

Technical: The break of 121.85 supports the bullish advance, while 120.80 supports downside reactions offers at 122.50 are the next upside objective en route to test the primary equality objective at 123.50.

Interbank Flows: Bids 121 stops below. Offers 122 stops above
Retail Sentiment: Bearish
Trading Take-away: Longs from 120.50 targeting upside range break en route 123.50

uj2015-11-06 07_33_26-NetDania - NetStation

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

Fundamental: Japanese investors were net purchasers  of foreign bonds and buyers of foreign equities throughout October.  This is an accordance with BoJ policy which aims to encourage Japanese investors to seek yield advantage abroad. Cross continues to be weighed up on by the bearish price action in the EUR.

Technical:  Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.

Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-11-05 07_41_57-NetDania - NetStation

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

Fundamental: With the absence of domestic news yesterday, AUD traded sideways around 0.7150  all  eyes on US non-farm payrolls data which will be released today.

Technical: Sellers at .7230 are targeting a retest of last weeks .7070 lows en route to retest the year to date lows next. Only a break and close above .7230 eases immediate bearsih bias

Interbank Flows: Bids .7100 stops below. Offers .7230 stops above
Retail Sentiment: Neutral
Trading Take-away: Short against .7230 targeting .7030

ey2015-11-06 07_33_57-NetDania - NetStation

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

Fundamental: USD edged higher against the CAD as the loonie weakened following the release of worse-than-expected Canadian manufacturing data. The Ivey Purchasing Manager PMI fell to 53.1 in October, below the 54.0 expected, from 53.7 printed in the previous month.

Technical: 1.3260 is the pivotal resistance, as this area contains upside potential for another leg of corrective downside. A close above 1.3280 eases bearish pressure and resets focus on the 2015 highs and stops above.

Interbank Flows: Bids 1.3030 stops below. Offers 1.32 stops above
Retail Sentiment: Bearish
Trading Take-away: If short from failed retest of 1.3260, move positions to risk free

UC2015-11-06 08_39_29-NetDania - NetStation

Posted in Forex Analysis, London Forex Report, tagged with on