London Forex Report: Positions Pared Ahead Of NFP’s

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

Fundamental: The Euro has edged lower overnight. With most Eurozone’s PMI figures coming in line with expectations, the EURUSD remains supported above 1.11 levels yesterday. The deterioration in Spain and Italy PMI figures added to concerns of widening German-Periphery divergence. The risk of ECB QE expansion is rising into the year-end, exposing downside potential for the currency.

Technical: Bids towards the 1.11 handle keep the pair supported, likely range bound ahead of headline risk event. Breach of 1.1250 resistance targets 1.1350 offers. Breach of range support targets 1.1050 bids.

Interbank Flows: Bids 1.1080/60 stops below. Offers 1.1250 Stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now

eu2015-10-02 07_35_42-NetDania - NetStation

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

Fundamental: The Pound dropped to 1.5150 after British second quarter GDP growth year over year missed market expectations on Wednesday. Yesterday GBP “stabilised” (after 8 consecutive sessions of decline). UK PMI manufacturing was slightly better than expected. Cable is trading in a range of around 1.51 to 1.52 ahead of US jobs data.

Technical: Remains under pressure while capped by 1.52 resistance, next downside objective is a test of 1.50 psychological support.

Interbank Flows: Bids 1.5130/10 stops below. Offers 1.5210/30 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

gu2015-10-02 07_36_37-NetDania - NetStation

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

Fundamental: The USDJPY remained in consolidation mode hovering around the 120-region as the market awaits US NFP later today and in the face of a sell-off in the EUR against the JPY. Also weighing is the rebound in household spending, which rose by 2.9% y/y in Aug (Jul: -0.2%), coming in better than market estimate of +0.3%. This suggested that the expected economic contraction in 3Q might not be as deep as previously thought.

Technical:  Range trade persists ahead of Friday’s NFP release. 119 the bid 121 the offer for now, topside break targets 122.50 while a downside breach targets 118.

Interbank Flows: Bids 119/118.80, 118.50/30 stops below. Offers 120.50/80 stops above
Retail Sentiment: Bullish to neutral
Trading Take-away: Sidelines for now

uj2015-10-02 07_38_05-NetDania - NetStation

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

Fundamental: JPY saw suggestions and hopes of further BoJ stimulus dashed by officials who said they needed more data on order to consider this. This prompted a fresh turn lower.

Technical: Interim support at 134 eroded next downside objective is a retest of bids at 132. A close above 135 opens a retest of upper end of the recent range and a retest of offers at 137 next.

Interbank Flows: Bids 133 stops below. Offers 135.10/30 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-10-02 07_39_19-NetDania - NetStation

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

Fundamental: China’s Manufacturing PMI climbed to 49.8 in September, moving closer to the 50 threshold between contraction and expansion. Encouraging data from China bolstered the Australian dollar to reach its intraday high at 0.7085 level against the US dollar. The currency pair opened comfortably above 70 US cents, and it may trade sideways throughout the European session as markets will pay attention to US non-farm payroll report later today.

Technical: Positions are pared into today’s headline risk event, as relief rally stalls ahead of .71 resistance. While offers at .71 cap upside attempts bears targets new year to date lows. A breach of .71 resistance targets a retest of offers towards September highs towards .7270.

Interbank Flows: Bids .6850 stops below. Offers .7100 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

au2015-10-02 08_26_24-NetDania - NetStation

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

Fundamental: The Canadian dollar has strengthened on the back of satisfying domestic GDP data and stronger oil prices. In the aftermath of better-than-expected China Manufacturing PMI data release, the market sentiment has gradually recovered which has lent further support to the Canadian dollar. In the absence of local data release today, the CAD may remain vulnerable to volatile oil prices and employment data release from the US.

Technical: While 1.32 supports intraday downside reactions expect new trend highs en route to test projected ascending trend line resistance at 138 next. A failure at 1.32 concerns near term bullish bias and suggests a deeper corrective phase targeting downside symmetry objective at 1.31.

Interbank Flows: Bids 1.32 stops below. Offers 1.34 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

uc2015-10-02 08_28_19-NetDania - NetStation

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