London Forex Report: GBP Supported On M&A Flows

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

Fundamental: EUR continued to rally after breaking above 1.1300 to the dollar on Friday but the rally fell short of a few pips to 1.1400 and subsequently fizzle off to 1.1358 by NY close. Further upside for the EUR will probably be more of a grind as price trades back towards the topside of the range traders are cognisant of the potential for ECB official rhetoric, regarding ‘more QE if the need arises’.

Technical: price is pressuring the upper end of the recent range the sustained breach of 1.1330 now targets 1.1460 as the next upside objective. Look for 1.1280/1.13 to provide intraday support for the advance

Interbank Flows: Bids 1.13 stops below. Offers 1.14 Stops above.
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 1.1280 targeting 1.15

eu2015-10-13 07_34_15-NetDania - NetStation

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

Fundamental: GBP shrugged off previous day losses and closed 0.17% stronger at 1.5348 against USD, helped by M&A flows overnight with the multi billion dollar deal in the brewing industry. Traders  are waiting for the CPI data due today while the claimant count due tomorrow will be another important data for the pound. With headline inflation anchored near zero, the debate over whether to raise interest rates is likely to be robust in the coming quarter.

Technical: 1.54 offers cap advance for now. While intraday downside reactions are support towards .153 near term upside remains in tact, with 1.55 targeted as the next upside objective.

Interbank Flows: Bids 1.5260/80 stops below. Offers 1.54 stops above
Retail Sentiment: Bearish to neutral
Trading Take-away: Stay long for 1.55

gu2015-10-13 07_36_01-NetDania - NetStation

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

Fundamental: JPY was thinly traded on Monday since it was a national holiday in Japan. JPY opened at 120.24 and closed at 120.02 yesterday and has breached 120.00 overnight. One-month USDJPY option implied volatility stood at 8.475%, its lowest since 21 AUG, confirming the range contraction. Important data such as September’s CPI and Machine Tool Orders will be released today. Markets are waiting for the data to decide the following direction

Technical: Continues to coil in contracting range, play range 121.50 the offer and 118.50 the bid until broken.

Interbank Flows: Bids 118.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Neutral to bullish
Trading Take-away: Sidelines for now

uj2015-10-13 07_36_25-NetDania - NetStation

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

Fundamental: Week ahead has BOJ minutes; September preliminary machine tool orders (Tue); Sep PPI (Wed); Aug IP, capacity utilization, tertiary index (Thu). Markets looking for the BOJ to add to its easing measures at end of October meeting (the BOJ semi annual outlook report will be released at the same time) given the lack of inflationary pressures and sluggish growth.

Technical:  The close above 136 opens a retest of upper end of the recent range and a retest of offers at 137 next. Remain bullish while 135.80/136 supports intraday downside reactions

Interbank Flows: Bids 135.80 stops below. Offers 137 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Sidelines for now

ey2015-10-13 07_36_51-NetDania - NetStation

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

Fundamental: The Australian dollar has continued to post gains ahead of NAB business survey and China’s trade balance data. While the markets see continued risks in China’s economic growth, the AUD will remain particularly sensitive to data releases. Amid stronger commodity prices, improving market sentiment and broad US dollar weakness, AUDUSD reached new highs yesterday coming close to 74 US cents and is now trading in the
range around 73 to 74 US cents.

Technical: Near term bullish bias remain intact while .73 supports intraday downside reactions. Bulls now target .7400 as the next upside objective en route to the pivotal .7520/.7620 trend resistance

Interbank Flows: Bids .7300 stops below. Offers .7400 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pull backs against .7300 targeting .7400

au2015-10-13 08_00_16-NetDania - NetStation

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

Fundamental: USDCAD retested Friday’s low near 1.2900 once again but managed to find support and bounced on weaker oil prices. Oil prices tumbled lower as investors took profits after last week’s surge to an 11-week high and on a report that OPEC continued to increase crude production despite a persistent surplus.

Technical: Near term bearish tend remains intact as intraday resistance at 1.3060 contains intraday upside reactions bears target 1.2850 bids as the next downside objective

Interbank Flows: Bids 1.289 stops below. Offers 1.3060 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

uc2015-10-13 08_05_03-NetDania - NetStation