New York Forex Report:Shaky Start As Traders Await FOMC

New York Forex Report: Shaky Start As Traders Await FOMC

New York Forex Report: The US Dollar remains under pressure ahead of the June FOMC meeting with the disappointingly low May Non-Farm Payrolls print causing a sharp downshift in US rate hike expectations. Fed Chair Yellen removed the reference to the “coming months” in her recent comments regarding the US rate path. Traders now await the June FOMC meeting with bulls hoping for a clear sign that July/August remain strong contenders.

FX Majors: EUR extended losses against the US dollar and other safe-haven currencies last Friday due to Brexit fears. The European Central Bank is ready to use all available tools, starting from its currency swap lines with the Bank of England, if a UK referendum vote to leave the European Union shocks financial markets, ECB rate setter Ilmars Rimsevics said last Friday GBP The “Leave” camp was 10 points ahead of “Remain” with less than two weeks to go before Britain’s referendum on whether to leave the European Union, according to a poll by ORB for The Independent newspaper published last Friday. Sterling lost more than a cent against the US dollar after the ORB poll was released. The concerns over the Brexit knocked the pair to a seven-week low. JPY BSI index showed Japan business activities were slower across all industries in 2Q (-7.9 vs 1Q: -3.2), dragged by deeper decline in manufacturing index (2Q: -11.1 vs 1Q: -7.9), reaffirming that the Japanese economy remained in the doldrums.

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

Technical: Sharp Rejection by symmetry swing resistance sited at 1.140 Below 1.12 suggests false upside break and resets attention on 1.1065, intraday resistance sited at 1.1310

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Pre Brexit referendum range of 1.4770/1.4330 expands to the downside, only a daily close above 1.4350 suggest false downside break. As 1.4330 contains upside reactions expect test of 1.40 next, over 1.4350 suggest return to range

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Downside ratchet now targeting a retest of 105.55 lows with the potential for a daily double bottom pattern to develop. Failure at 105 opens 103 as the next downside objective. 108.50 is the near term pivotal resistance

Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: While 121.60 contains upside reactions expect a grind lower to breach last weeks lows enroute to a weekly equality objective at 117.36. A close over 122.70 suggests a broader recovery targeting 124.30 as the next upside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD safe have bid persists testing pivotal resistance, expect some consolidation of recent gains as markets await FOMC meeting later this week. Oil continues to weaken from last weeks highs as risk sentiments stage a distinct retreat and the USD found some support. AUD fell from highs and hit an intraday low of 0.7366 against the USD last Friday amid Britain’s vote on ending its membership in the European Union. Today is the public holiday of Australia and in the lack of domestic data likely sees the pair take its lead from risk sentiment. CAD weakened against the USD Friday due to the falling oil prices and the demand for less risky assets, offsetting earlier gains from a robust domestic jobs data. Oil prices were under pressure, falling nearly 3%, amid US energy firms adding drilling rigs for a second week in a row for the first time since August last year.

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

Technical: Rejected by resistance sited at .7480/.7500 where fresh selling emerged as expected. As .7450 rejects upside reactions expect rotation to test .7230 support next
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Close below 1.2740 negates near term bullish pressure and suggests a grind back to test bids at 1.2459 and stops below. Fridays close 1 pip below 1.2760 suggest a potential false break of support, watching today’s close for confirmation

Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Pivotal 1280 resistance being tested, as 1260 acts as support expect retest of 1303 potential double top. Failure at 1230 opens 1190 again.

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipated AB=CD swing objective at 51.07 achieved and prompts sharp reversal, only a close below 46 threatens medium term bullish bias, as 47.40 supports expect deep retest of prior 51.60 highs, potential double top.

Retail Sentiment: Bearish
Trading Take-away: Sidelines