New York Forex Report: BoE Delivers Cable Clobbered

New York Forex Report: BoE Delivers Cable Clobbered

New York Forex Report: BoE delivers cutting the base lending rate 0.25% (-25bps from 0.50%) QE Total £435 Billion (Up from £375 Billion) The cut in base rate was the minimum that the MPC could get away with, but the key is that there was no descent. GBP has sold off over 150pips from pre BoE levels. USD has continued to catch a bid. Elsewhere ECB Wiedman says there is a possibility of adjusting the bond buying programme amidst growing uncertainty about the global growth outlook. Global growth concerns were echoed by BoJ Dep Gov Iwata commenting that easing by the central bank recently was aimed to deal with increased overseas risks.

FX Majors: EUR Eurozone’s retail sales were flat in June, indicating that the surge in spending appetite in May was unsustainable. In May, purchases grew at its quickest pace this year. Final print of the services PMI (52.9 vs June: 52.8) affirmed slightly quicker pace of expansion in July. GBPBoE delivers cutting the base lending rate 0.25% (-25bps from 0.50%) QE Total £435 Billion (Up from £375 Billion) The cut in base rate was the minimum that the MPC could get away with, but the key is that there was no descent. JPY Japan’s services PMI gathered steam last month (50.4 vs June: 49.4) as successful business negotiations and new store openings contributed to increase in output. On a cautious note, business sentiments eased to the lowest in 4 years, which signal that the usually volatile PMI print could slip into contraction again soon..

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

Technical: Advance stalls at symmetry swing resistance 1.1230, breach of 1.1180 support opens 1.1090 as the next downside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Breach of 1.32 near term support reaffirms potential triangle trade below 1.3150 opens opens 1.2950 equidistant swing objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: The close below 103 will see bears target a retest of cycle lows below 100. Near term resistance is sited at 102.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Below 113 opens 110.80 as the next downside objective. Near term resistance is sited at 114.50
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD was little changed, hovering close to a three-week high hit in the previous session, as the impact of lower European equities was offset by a steadier dollar. Oil l prices jumped about 3% after the US government reported a larger-than-expected gasoline inventory drawdown that offset a surprise build in crude stockpiles. US crude inventories rose 1.4 million barrels last week, compared with expectations for a decrease of 1.4 million barrels, the Energy Information Administration (EIA) reported. Gasoline stocks slumped by 3.3 million barrels, compared with forecasts for a 200,000-barrel drop. Preliminary weekly production data indicated that US output fell below 8.5 million barrels per day. AUD stood at 0.7588, retreated slightly even the Reserve Bank of Australia (RBA) cut rates to record lows. After the latest cut, Australian rates still look attractive compared to other nations which partly supported the currency. Ten-year domestic debt yields are at 1.83% compared to 1.53% in the United States and -6 basis points in both Germany and Japan. The Aussie’s resilience has in turn led the market to price in a 50-50 chance of yet another cut by November. CAD edged higher against the US dollar as oil rallied and risk appetite was better. Markets are now turning to the US non-farm payrolls report, Canada’s international trade data for June and Canadian employment report for July.

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

Technical: Offers above resistance sited at .76 continues to cap upside attempts. Range resistance is sited at .7676 with range support now at .7400
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Breach of 1.3060 opens 1.2965 symmetry swing support as this level attracts bids expect a further higher to target equidistant swing target of 1.3380

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Anticipated breach 1360 sets bulls sites on 1391 as the next upside objective, near term support is sited at 1335. Below 1300 opens 1270.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Breach of bids at 41.87 opens 38.19 as the next downside objective, expect 41.87 prior support to act as resistance, a close over 44.40 is required to ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Sidelines