London Forex Report: FED Hawks Hover Over Gradual Glide Path

Fed rhetoric remains hawkish, implying that the Fed is adamant over an interest rate increase next month. The key takeaways however were on the Fed’s take on the pace of subsequent increases, where officials appear to be in consensus for a very measured pace of rise after the initial rate liftoff. Fed Dudley also mentioned that the risks of moving too quickly vs too slowly are finely balanced. Yesterday’s jobless claims were unchanged at 276K, underscoring continuous job recovery and setting the stage for a December Fed rate hike. The USD Index closed 0.37% lower at 99.01.

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

Fundamental: EUR lifted as the USD dropped for a second day while trader’s booked profits from its precipitous rise in November. Latest figures from the Commodity Futures Trading Commission showed that the short euro positions among speculators in futures markets were at their highest since June.

Technical: While 1.0830/50 caps intraday upside corrections, bears target a test of 1.0560 next ahead of an assault on year to date lows. Only a close above 1.09 eases immediate downside pressure.

Interbank Flows: Bids 1.07 stops below. Offers 1.0830 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Short 1.0830 targeting 1.0560

eu2015-11-13 06_44_45-NetDania - NetStation

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

Fundamental: GBP weakened against the USD recently after the BoE cooled expectations of a rate hike in the near term. Although trader’s pushed back their expectations of when the Bank of England will start to raise interest rates until late next year, the believe that UK is still heading towards tighter monetary policy supporting GBPUSD.

Technical:  While 1.5250 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.53 eases immediate bearish bias

Interbank Flows: Bids 1.50 stops below. Offers 1.5250 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell 1.5280 stops above 1.5350 Target 1.50

gu2015-11-13 06_45_16-NetDania - NetStation

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

Fundamental: JPY continued its correction against the USD following last week’s greenback rally, when USDJPY climbed from 120.50s to 123.50s, that boosted by the upbeat US employment report. USDJPY broke below 123 handle amid the sharp decline in US stock markets.

Technical: While 122.50/30 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122.50 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Long 122.50 stops below 122 target 125.50

jpy2015-11-13 06_45_44-NetDania - NetStation

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

Fundamental: JPY traded sideways as bids for EUR improved spurred on by better than expected Eurozone production data

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

ey2015-11-13 06_46_21-NetDania - NetStation

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

Fundamental: AUD rose to 0.7153, from 0.7065 before the figures after it touched a one-month low of 0.7012 this week. The Australian dollar jumped around three quarters of a cent after a strong jobs report led markets to price less chance of an interest rate cut in December

Technical: While .7170 caps corrective upside reactions expect a retest and breach of Friday’s lows as bearish momentum builds for a retest of year to date lows. A close above .7200 eases bearish pressure

Interbank Flows: Bids .7000 stops below. Offers .7170 stops above
Retail Sentiment: Bullish
Trading Take-away: Squared shorts into .7030 target, sidelines for now

au2015-11-13 06_47_13-NetDania - NetStation

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

Fundamental: CAD tumbled to its weakest in six weeks against the US dollar before paring some losses, as falling crude oil prices and mixed messages from the Federal Reserve on US monetary policy. Oil prices tumbled almost 4 percent yesterday, accelerating a slump that threatens to test new six-and-a-half year lows.

Technical: Offers just above 1.33 stall the upside ratchet, bulls have the ball while 1.3220 supports intraday downside. However a close below 1.3220 today would suggest a false upside break and a bull trap sustained weakness below 1.3220 confirms.

Interbank Flows: Bids 1.3250 stops below. Offers 1.3350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-13 06_47_48-NetDania - NetStation

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