New York Forex Report: All Eyes On US CPI

Markets over the European morning today have very much been an extension of the moves we saw yesterday with equity markets continuing their recovery higher in line with a firmer US Dollar which is now back up to last week’s post NFP highs. Players now looking ahead to today;s US CPI print which is the key US data before Thursday’s FOMC minutes release where traders are looking for further endorsement of a potential December lift-off.

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

Fundamental: EURUSD continued to stay range-bound toward yesterday’s lows over the European morning as the US Dollar continued to trade higher. EZ ZEW economic sentiment survey printed 28.3, undershooting expectations of 30.1, also keeping rate capped. Traders now look ahead to US CPI at 1330 GMT, expected to remain unchanged at 0.2% and 1.9% on the core.

Technical: While 1.07 caps intraday upside corrections, bears target a test of 1.0560 next ahead of an assault on year to date lows. Only a close above 1.08 eases immediate downside pressure.

Interbank Flows: Bids 1.06 stops below. Offers 1.0750 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Short 1.0830 targeting 1.0560

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

Fundamental: GBP was higher over the European morning as October CPI , despite revealing  the UK remained in deflationary territory for a second consecutive month printing -0.1% on the headline figure, showed a positive uptick in core CPI at 1.1% vs 1% exp.

Technical:  While 1.5250 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.53 eases immediate bearish bias

Interbank Flows: Bids 1.50 stops below. Offers 1.5250 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell 1.5280 stops above 1.5350 Target 1.50

gu2015-11-17 07_33_04-NetDania - NetStation

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

Fundamental: JPY continues to remain soft as global equity markets recover from initial losses seen in response to the Paris attacks last week. The shadow of another technical recession hangs heavy over the Yen following the weak 3Q GDP print on Sunday evening.

Technical: While 122.50/30 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Long 122.50 stops below 122 target 125.50

uj2015-11-17 07_33_44-NetDania - NetStation

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

Fundamental: EURJPY remained firmly range-bound over the European morning as EUR and JPY were both soft against a strengthening US Dollar.

Technical:  Only a close above 133.50 eases immediate bearish pressure, while 132.50 caps upside reactions expect retest of 130.50 lows

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

ey2015-11-17 07_34_54-NetDania - NetStation

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

Fundamental: In the latest meeting minutes, RBA appeared optimistic about the improvement in economic conditions over recent months, pushing the Aussie back above the 0.71 handle. Under the lack of domestic data this week, the USD is expected to be the key driver for AUDUSD, in which attention will turn to US CPI and FOMC meeting minutes due today and Thursday respectively.

Technical: While .7170 caps corrective upside reactions expect a retest and breach of .7010 as bearish momentum builds for a retest of year to date lows. A close above .7200 eases bearish pressure

Interbank Flows: Bids .7000 stops below. Offers .7170 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

ey2015-11-17 07_34_54-NetDania - NetStation

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

Fundamental: Yesterday’s rebound in Oil price have been largely reversed over early European trading today which, combined with the firmer US Dollar, have seen USDCAD recovering ground on yesterday’s losses.

Technical: While bids at 1.33 cap intraday downside reactions bulls now target a retest of 2015 highs, only a close below 1.3260 eases immediate bullish pressure.

Interbank Flows: Bids 1.3250 stops below. Offers 1.34 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-17 08_25_28-NetDania - NetStation

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