London Forex Report: Lockhart Locks In A No For April Hike

London Forex Report: Lockhart Locks In A No For April Hike

London Forex Report: In sync with Yellen’s stance for gradual pace of tightening, Atlanta Fed President Dennis Lockhart said that he will not vote for a hike in April, citing weak consumer spending and business investment in 1Q. Strengthening the case for a more gradual appreciation path, US consumer prices prints posted signs that price pressure may not be sustainable as Yellen has pointed out previously. CPI rose 0.9% YoY in March (Feb: +1.0% YoY), moderating for two straight months amid renewed weakness in energy prices. USD extended its rebound, erasing losses from weaker than expected US CPI data to advance teh USD Index climbed 0.17% to 94.90 as it recovered moderately to overturn losses in European session.

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

Fundamental: EUR traded sideways yesterday, generally staying in the rage of 1.1240 to 1.1280. The Euro Zone CPI did not give any surprise to the markets. Eurostat said the annual rate of inflation was 0% in March, compared with the previous estimate of -0.1%. On the other hand, the inflation on monthly basis rose to 1.2% which is in line with the market expectations. The headline inflation was flat because the collapse of energy prices was offset by an increase in other components.

Technical: 1.1220 support survives on the initial test as 1.1330 now becomes resistance. A breach of 1.1220 opens 1.1140 as the next downside objective.

Interbank Flows: Bids 1.12 stops below. Offers 1.1350 stops above.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: BOE maintained its record low interest rate of 0.5% and reiterated heightening risks of the EU referendum. According to the minutes, “capital expenditure and commercial property transactions are being postponed” affirming that the referendum is already weighing down on growth. The next interest rate move is more than likely an increase to ensure inflation returns to the target, dashing expectation of a rate cut, but the central bank conceded that path of hike will be “gradual and to a lower level than in recent cycles”

Technical: Price continues to finds bids at 1.4050 pivotal support within the broader 1.45/1.40 range, While 1.4140 supports 1.44 symmetry swing objective is the upside target.. A failure to hold 1.40 opens a retest of year to date lows at 1.38 ahead of 1.37 weekly swing objective.

Interbank Flows: Bids 1.41 stops below. Offers 1.44 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: The USD bounced back above 109 levels against Yen overnight amid improving risk appetite, however, the pair still down 9.5% so far this year. Initial jobless claims of the US decreased by 13,000 to 253,000 from previous week’s total of 267,000.

Technical: The downside ratchet now targets 105.50 as the next major downside objective.The breach of 1.09 intraday resistance now sets sites on a symmetry and structure targets at 110.70 which should attract fresh selling for renewed weakness.

Interbank Flows: Bids 107.50 offers below. Offers 110.50 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: Bank of Japan Governor Haruhiko Kuroda said on Thursday the yen’s “excessive” rises have been corrected somewhat in the past few days and BoJ need to spend a bit more time scrutinizing economic developments.

Technical: Bears target a retest of 122.05 year to date lows, resistance is sited at 124.50. Only a close over 126.80 eases immediate downside pressure.

Interbank Flows: Bids 122 stops below. Offers 124.50 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: Australia’s unemployment rate shocked by falling to 30-month lows in March as the economy generated more part-time work. Investors assumed the pick-up in jobs combined with the drop in the unemployment rate may comfort the central bank and pare back the chance of a further cut.

Technical: Only a close below .7500 threatens the near term bullish bias, while this level supports intraday expect a grind higher to test .7770. A failure at .7500 opens pivotal .7450 support.

Interbank Flows: Bids .7500 stops below. Offers .7700 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: CAD weakened slightly against the USD as oil prices fell, while some losses were trimmed after the US inflation figures. Oil markets closed lower on a mixed report from the International Energy Agency and doubt that the coming meeting of major producers would do much to tighten the supply demand balance.

Technical: Bids just below below 1.2780 encourage a bounce intraday resistance now sited at 1.29 ahead of pivotal 1.30 resistance. As 1.29 rejects the rebound expect a move to 1.2550 as the next downside objective.

Interbank Flows: Bids 1.29 stops below. Offers 1.3250 stops above.
Retail Sentiment: Bullish
Trading Take-away: Short

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