London Forex Report: All Eyes On The BoE

London Forex Report: All Eyes On The BoE

London Forex Report: Markets continued to stay directionless in the absence of major US data. USD continued to trade mixed, driven by further gains in commodities and absence of major US data, traders booked profits as USD stalled for the first time in seven trading sessions. The USD Index lost 0.49% to 93.82 as at yesterday’s close, near its intraday low of 93.68

FX Majors: EUR ECB is monitoring property prices for risk of asset bubbles stemming from its quantitative easing program, according to Governing Council member Ewald Nowotny comments in Vienna. He also stated that the ECB doesn’t have exchange rate goal nor does it have means to influence currency. GBP UK industrial production rebounded to increase 0.3% MoM in March but this missed expectations for a 0.5% gain. The EU referendum next month will pose further downside pressure on growth. An estimate by NIESR showed that growth moderated to 0.3% in the month of April compared to 0.4% in March. All eyes on BOE’s monetary policy meeting and inflation report due today, likely to reiterate growing concerns on EU referendum and low inflation. JPY Data flow from Japan was hardly encouraging, affirming lackluster 1Q growth. A survey on current economic conditions ticked up 0.5 point to 111.2 in March but a separate survey on outlook in the near term dropped to 98.4 (Feb: 98.9), suggesting that businesses do not expect economic activities to pick up any time soon. Current account surplus surged to 2.98 trillion yen in March (Feb: 2.43 trillion yen) due to higher trade surplus.

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

Technical: A failure at 1.1350 failure opens a return to retest 1.1240 support. While 1.1350 survives as support expect a test of 1.1487 en route to a retest of 1.1616 highs

Retail Sentiment: Bearish
Trading Take-away: Long

EURUSD chart Bullish

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

Technical: The failure at 1.4470 opens a deeper correction to 1.4280 next. Downside momentum loss suggest a base attempt to test resistance is now sited at 1.4590/1.46 before lower
Retail Sentiment: Bullish
Trading Take-away: Short

GBPUSD chart bullish

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

Technical: 105.50 weekly swing objective achieved, 107.50 resistance now becomes support as the corrective move aims to retest 110 from below
Retail Sentiment: Bearish
Trading Take-away: Long

USDJPY chart bearish

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

Technical: Bears now target weekly symmetry objective at 120.60. The breach of intraday resistance at 123.30/50 targets 126.80 a close above here eases immediate downside pressure
Retail Sentiment: Neutral
Trading Take-away: Neutral

EURJPY chart bearish

Commodities FX: GOLD rebounded from two-week lows on Wednesday as the dollar’s rally paused and global shares fell, rekindling appetite for the precious metal.. OIL,prices jumped more than 3% after the US government reported crude inventories fell unexpectedly for the first time since March, adding to concerns over supply disruptions in Canada and Nigeria. The US Energy Information Administration (EIA) said crude inventories fell 3.4 million barrels last week, compared with expectations for an increase of 714k barrels and the American Petroleum Institute’s (API) build of 3.5mn barrels in preliminary data issued on Tuesday. AUD economic growth will be slower and inflation will stay low, therefore, traders foresee the Australian central bank will be dragged into moderate further easing over the next 6 to 12 months. CAD second-quarter growth may slow to a standstill due to the Alberta wildfires, leaving the central bank on hold.

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

Technical: Initial test of .7330 attracts buyers resistance is sited at .7490. A failure at.7300 threatens medium term bullish bias, below .7240 establishes a bearish medium term stance.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

AUDUSD chart bullish

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

Technical: 1.30 upside objective achieved expected correction to retest 1.2740/60 from above as this level should now act as support for further upside corrective action.
Retail Sentiment: Neutral
Trading Take-away: Neutral

USDCAD chart bearish

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

Technical: Gold has tested and held the 1260 symmetry swing level, 1283 is now resistance for a further leg of corrective price action to set up a test of the pivotal 1240. Over 1285 suggests early upside reversal targeting a retest of 1303 next.
Retail Sentiment: Bearish
Trading Take-away: Long

XAUUSD chart bullish

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

Technical: Oil While 43.00 supports the bullish consolidation the break of 44.90 set ups a retest of prior cycle highs at 46.76 with 47.78 the next upside objective. Failure at 43.00 opens a move to 41.90 as the next support level.
Retail Sentiment: Bearish
Trading Take-away: Long

USOIL chart bearish

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