London Forex Report: OPEC Cuts, Black Gold Bounces

London Forex Report: OPEC Cuts, Black Gold Bounces

London Forex Report: OPEC agreed to cut oil production for the first time in eight years. The group will limit production to a range of 32.5 to 33 million barrels a day, fuelling a rally in the price of the commodity. At close, crude oil rose 0.80% to USD 48.7/barrel. Headline US durable goods orders was unchanged from July to August after a revised 3.60% growth from June to July. The figure was better than the expected 1.00% decline and underlying details suggested that business spending continued to pick up as headwinds dwindled. Excluding commercial aircrafts, core orders rose 0.6% from the previous month and sustained a third month of back to back increase. The USD Index overturned gains into losses, closing at 95.43 after strong surge in major component CAD.

FX Majors: EUR dropped to a five-day lows near 1.1180 handle during early London session, the euro had managed to recover majority of its lost ground against the US dollar and closed around 1.1210 region. On the economic data front, Germany preliminary CPI data and unemployment change figures will be released today. GBP set for its fifth quarterly decline against the USD, the longest run since 1984, since the currency bears the brunt of Britain’s decision to quit the world’s largest trading bloc. Sterling erased some of its post-Brexit losses in August when the first economic data covering the period since the referendum came in stronger than forecast, whereas the currency resumed the decline recently amid speculation that the country is heading for an exit from the EU soon. BoE Deputy Governor Minouche Shafik said that more easing will probably be needed after the “sizable economic shock” of the Brexit vote . JPY retail industry remained in the doldrums, painting a picture of subdued household consumption in August. Retail sales dropped 2.1% from a year ago, marking its sixth straight contraction.

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

Technical: Near term resistance is sited at 1.13 removing this hurdle opens 1.1366. Near term support is sited at 1.1220, a break of 1.1120 price pivot opens equidistant swing support at 1.1085
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.31 rejects corrective advances bears target 1.2870 as the next downside objective. Near term support is sited at 1.2980. Only a close over 1.3130 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 101.20 prior resistance now near term support for a move to target pivotal 102.80, a close above this level would ease bearish pressure. Near term resistance is sited at 102.

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Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Failure below 113 opens move back to 112 as the next downside objective, near term resistance is sited at 113.80 as this level survives on a closing basis bears target 110.80 next.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD prices fell for a second straight session and hit a one week low on Wednesday, pressured by earlier strength in the greenback and as market participants assessed Federal Reserve Chair Janet Yellen testimony before a congressional committee. OIL OPEC agreed to cut oil production for the first time in eight years. The group will limit production to a range of 32.5 to 33 million barrels a day, fuelling a rally in the price of the commodity. At close, crude oil rose 0.80% to USD 48.7/barrel. The decision rallied markets and boosted risk-sensitive and commodity-linked currencies. AUD news of the OPEC production cut has been the big story into Thursday, with the headlines inspiring a wave a risk on flow that has been supporting the correlated Australian Dollar. CAD strengthened the most in nearly four weeks against the USD as oil prices flew on the news of the OPEC to limit output, any time you get such a move in OIL it’s going to have an impact on he highly correlated Canadian Dollar.

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

Technical: Testing symmetry swing resistance sited at .7685. As .7640 supports expect a grind higher to test .7730 offers next
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, near term support is sited at 1314, failure here opens move back to pivotal 1300.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing resistance sited at 47.36 holds firm on the initial test as this level repels the advance 41.87 remains the downside objective, over 48.00 opens prior highs at 48.90 as the next upside objective
Retail Sentiment: Bullish
Trading Take-away: Short

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