London Forex Report: US Data Keeps Buck Bid

London Forex Report: US Data Keeps Buck Bid

London Forex Report: Economic data was back in the fore after weeks of Brexit-led headlines and market influences. The rather rosy bag of data out of the US revived expectations another Fed rate hike could very much be on the cards again. Industrial production and retail sales prints were upbeat in June but consumer sentiments took a beating from Britain’s decision to leave the EU. IPI rebounded more than expected to increase 0.6% MOM in June mostly due to the surge in utility output. Manufacturing and mining output were also upbeat. Consumer spending will likely lead overall growth again in 2Q as retail sales gathered steam to increase faster than expected by 0.6% MOM in June.

FX Majors: EUR Euro zone’s trade surplus narrowed to € 24.5 billion in May, falling from a record high of € 25.4 billion in April. Exports (-1.8%) and imports (- 1.5%) fell MOM from April to May. A final release from Eurostat affirmed that consumer prices rose 0.1% YOY in June (May: -0.1% YOY) after two straight months of deflation. Separately, UK construction output slipped 2.1% MOM in May after a 2.8% MOM climb in April as investors delay major spending decisions ahead of EU referendum. GBP slipping from a two-week high of 1.3480 after the Bank of England’s chief economist said Britain required “muscular” stimulus to boost the economy. Sterling rose nearly 2% for the week because of the surprise decision by the BOE to keep rates on hold while investors had largely expected a rate cut following Britain’s vote to leave the European Union. JPY USD rose to a three-week high against the JPY and posted its largest weekly gain against the Japanese currency in 17 years after strong US and Chinese economic figures pleased the market. Speculation has grown since Prime Minister Shinzo Abe’s ruling coalition won elections and the former Federal Reserve Chairman Ben Bernanke visited the Bank of Japan last week.Today is Japanese public holiday and markets could expected poorer liquidity than usual

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

Technical: Range trade persists, 1.12 resistance 1.10 support, over 1.12 sets target at symmetry swing resistance sited at 1.13, below 1.10 opens 1.09 reaction lows
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.3340 breach focuses upside attention on symmetry swing resistance sited at 1.3550. Below 1.32 opens 1.30 base retest.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: While 104 acts as support 106.70 becomes the next upside objective. Only a close below pivotal 103.50 threatens near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 116.40 supports bulls target 119.30 as the next upside objective.Only below 115 threatens near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD turned higher to reverse earlier losses after Turkish Prime Minister Binali Yildirim said a group within the country’s military has attempted to overthrow the government. Oil prices rose as well. Notably, oil prices were on track for a second consecutive weekly gain on Friday after data from top energy consumers the US and China boosted the oil demand outlook. Also on Friday, data from oilfield services firm Baker Hughes showed US drillers added oil rigs for a sixth week in the last seven. The number of oil rigs operating in US fields rose by 6 to 357, compared to 638 at this time last year. AUD lifted to a 10-week high as the Chinese economic figures beat expectations, but retreated sharply in the US session. Figures from China showed growth, industrial output and retail sales all beat forecasts indicated there was some resilience in the economy. Traders are now cautious on the inflation figures due on 27 July while the Reserve Bank of Australia (RBA) could cut its 1.75% cash rate next month if it is soft. CAD weakened against the USD Friday, retreating from an earlier 10-day high as firm US figures supported the US dollar and domestic manufacturing figures disappointed. Canadian factory sales fell more than expected in May, sliding 1.0% from April on weakness in motor vehicles and some energy products

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

Technical: Offers above .7660 proving sticky for now renewed push through here sets bullish sites on .7830 next. Intraday support is sited at .7550.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 1.2850 pivotal for carving out a potentially bullish base, with higher lows.Below 1.28 opens move back to range lows 1.2650.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bulls now target 1391 as 1320 bids continue to support. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 44 acts as pivotal support while this level survives 48.30 become the upside objective. Below 44 opens 41.87 as the downside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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