New York Forex Report: All Eyes On The NFPs – Watch Wage Growth Also.

New York Forex Report: Markets remained very quiet over the European morning as traders await the release of the key US employment data: the January NFPs, which are forecast to print 190k vs 292k previous, and the Unemployment rate which is expected unchanged at 5%. Average weekly earnings will also be closely watched and are expected to improve to 0.3% from 0% MoM yet fall back slightly to 2.2% from 2.5% YoY. Given recent weak US data and Dovish comments from Fed’s Dudley, a weak NFP print today is likley to spur further sharp USD unwinding whilst a beat should allow for some recovery, especially if accompanied by positive wage-growth data.

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

Fundamental: German factory orders printed well below expectations at -0.7% MoM and -2.7% YoY in December. EUR remains flat following yesterday;s strength which flew in the face of Dovish comments from ECB’s Draghi.

Technical: 1.1220 symmetry corrective objective achieved, while 1.1050 supports downside reactions 1.14 is the next bullish objective

Interbank Flows: Bids 1.1050 stops below. Offers 1.1250 Stops above.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: GBP surged to a one month high as BoE’S chairman Carney quashed the rate cut rumor. Carney said the next rate move of BoE will be rate hike instead of rate cut while his speech supported Sterling to its highs around 1.4668. According to the inflation report released yesterday, BoE cut its economic growth forecasts due to a gloomier global economy.

Technical: A close over 1.46 opens 1.4860 next, expect a broader corrective phase to continue to develop while 1.4370 remains intact as support

Interbank Flows: Bids 1.45 below. Offers 1.47 stops above
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: USDJPY in near free fall since 2 February while it is now trading at around 116.90, just below the 117.00 handle. The chaos in stock markets and weakening USD has provided reasons for investors to get into short positions. USDJPY is on track to post a weekly loss of around 3.5 percent.

Technical: While 119.50 contains upside reactions expect a grind lower to retest 115.90

Interbank Flows: Bids 116.50 stops below. Offers 119.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Neutral

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

Fundamental: EURJPY tested support into 130.50 yesterday and although we broke and cleaned out some advertised stops below we didn’t make it past 130 which has given the market cause to try to base out this morning and we find ourselves back within spitting distance of the 132.00 region which happens to be where the market broke down post Dec ECB and so this as a solid area of resistance for future runs above.

Technical: While 130.40 supports intraday downside reactions expects s retest of 132.30 offers and stops above, a close above 132 opens a test of 134 next.

Interbank Flows: Bids 130.50 stops below. Offers 132.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: AUD softened over the European market as players take profits ahead of the US NFPs later today. Australia’s December retail sales (MoM) came at 0.0%, failed to meet expectations at 0.4%. According to the RBA’s quarterly Statement on Monetary Policy, the policymakers are still seeing reasonable prospects for continued growth in the economy, adding that there are no material changes to GDP or inflation forecasts.

Technical: 7200 upside objective achieved, while .7140 supports .7300 is the symmetry upside target. Only a closing breach of .71 eases immediate upside pressure.

Interbank Flows: Bids .71 stops below. Offers .73 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Fundamental: USDCAD pauses in its descent ahead of the NFPs. Canadian Unemployment rate data is also out later today and is expected to remain unchanged at 7.1%

Technical: AB=CD corrective swing target at 1.3750 achieved, while 1.3630 supports expect a retest of 1.40 from below.

Interbank Flows: Bids 1.3650 stops below. Offers 1.3950 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral