London Forex Report: USD Retains NFP Gains In Quiet Start

The DJIA dropped 179.85 pts to 17,730.48 and the Nasdaq dropped 51.82 pts to 5,095.30; US 10 yrs and 30 yrs Treasury Bond yields closed at 2.34% and 3.11% respectively. German September Trade Surplus came in at 19.4 billion EUR, worse than expected; EUR fell against USD on Monday after Reuters reported the ECB is converging on a deposit rate cut in December, and may even consider more than 0.1%; Gold hovered at three months low level as USD retained gains after last weeks robust US jobs data, the USD Index currently trades above the 99.00 level.

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

Fundamental: EUR closed at 1.0749, rebounded from the low of 1.0704 hit on last Friday. Four governing council members said a consensus was forming at the European Central Bank to take one of its benchmark interest rates deeper into negative territory in the coming meeting in December

Technical: While 1.0830/50 caps intraday upside corrections, bears target a break of Friday’s lows en route to a test 1.0560 next ahead of an assault on year to date lows. Only a close above 1.09 eases immediate downside pressure.

Interbank Flows: Bids 1.07 stops below. Offers 1.0830 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell against 1.0830/50 resistance targeting 1.0560

eu2015-11-10 08_06_24-NetDania - NetStation

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

Fundamental: GBP slid to the low of 1.5038 and slowly clawing back its losses from last Friday. BoE Governor Mark Carney signaled that he was in no hurry to raise interest rates and highlighted risks to UK growth from external developments. The Bank of England is forecasted to be the next major central bank to raise interest rates after the Fed, while the expectation is deferred until late 2016

Technical:  While 1.5150 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.52 eases immediate bearish bias

Interbank Flows: Bids 1.50 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell against 1.51 resistance targeting a 1.50 test

gu2015-11-10 08_06_52-NetDania - NetStation

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

Fundamental: USDJPY traded to the downsides at 123 handle overnight after being unable to hold above 123.50. Risk aversion favored the JPY during the American session with the slump in US stock markets.

Technical: Upside objective of the primary equality objective at 123.50 essentially achieved, while 122.50 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122.50 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uj2015-11-10 08_07_21-NetDania - NetStation

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

Fundamental: Headline ECB speech may send EUR veering off in either direction. ECB Council member Jens Weidmann speaks this morning. Will the policy hawk rubber stamp the December cut in deposit rates send the EUR deeper into negative territory or will he have a negative stance against easing and further action and support the EUR.

Technical:  Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.

Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-11-10 08_07_47-NetDania - NetStation

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

Fundamental: AUD fell as far as 0.7013, its lowest since early October. AUDUSD fell to one-month lows after the upbeat US jobs report firmed up the case for a Federal Reserve interest rate increase in December. Poor Chinese trade figures released over the weekend also weighed on the Aussie.

Technical: While .7100 caps corrective upside reactions expect a retest and breach of Friday’s lows as bearish momentum builds for a retest of year to date lows.

Interbank Flows: Bids .7000 stops below. Offers .7100 stops above
Retail Sentiment: Bullish
Trading Take-away: Squared shorts into .7030 target, sidelines for now

au2015-11-10 08_08_19-NetDania - NetStation

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

Fundamental: CAD managed a modest bounce against the USD, as the greenback paused after recent gains because of the concerns about the global growth outlook. Weaker oil prices weighed on Canada’s economic outlook, with US crude oil closed at $43.87 while Brent crude closed at $47.26.

Technical: Offers just above 1.33 stall the upside ratchet, bulls have the bal while 1.3260 supports intraday downside. However a close below 1.3260 today would suggest a false upside break and a bull trap sustained weakness below 1.3220 confirms.

Interbank Flows: Bids 1.3250 stops below. Offers 1.3350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-10 08_08_45-NetDania - NetStation