New York Forex Report: BoE On Hold, Focus Shifts To BoJ & FOMC

New York Forex Report: BoE On Hold, Focus Shifts To BoJ & FOMC

New York Forex Report: The USD is trading modestly higher in the session so far, though ranges in FX – and other markets – remain contained. The AUD and the JPY are modest out-performers on the session, with the AUD shrugging off weaker than expected employment data earlier while the JPY has found support from weaker Japanese stocks. BoE left policy on hold today, as expected, after retail sales fell less than forecast in August. The SNB also left policy on hold. The real interest for markets is clearly the Fed and, to a lesser extent, the BoJ meetings next week. A raft of US data releases today will provide a little more context on the economy via retail sales, weekly claims, PPI and industrial production (and an early look at September trends, via the regional surveys from NY and Philadelphia); retail sales are expected to be sluggish but with expectations skewed to the downside, flat would be a modestly positive surprise. In Japan, meanwhile, the BoJ may be falling into a familiar trap of failing to prevent leaks on potential policy steps which undermines their effectiveness once unveiled; reports suggest the focus on next week’s policy decision will fall on rates (meaning a greater focus on negative rates, presumably) rather than asset purchases.

FX Majors: EUR Eurozone showed stalling growth in July. Industrial production fell 1.10% since June, reversing the upwardly revised 0.8% growth in the previous month. Output contracted in Germany (-1.90%), and France (-0.60%). Undermined by weakness in global demand. GBP Britain’s firms hired 174k more workers from May-July, slightly more than the expected 171k. The nation’s jobless rate remained at its decade low of 4.90% while claimant count rate in August was also unchanged at 2.20%. Last month, 2.4k people filed for unemployment benefits after a drop of 3.6k claims in July. Job data pointed to contained short-term risks from Brexit fallout and was largely in line with earlier release of manufacturing and services PMI showing a broad base rebound in economic activities last month. JPY The Bank of Japan will be likely explore ways to clearly and narrowly define conditions allowing for the easing program to be lifted and the debate is expected to take place when the central bank’s board meets next week for a comprehensive assessment of its easing policy, according to Nikkei reports.

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

Technical: As 1.12 supports 1.1366 is the next upside target with a further equidistant symmetry swing objective sited at 1.1530. Below 1.1190 opens 1.1120 and suggests potential early reversal.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.32 supports 1.3470 is the next upside objective, the near term upside hurdle is sited at 1.3280. Failure below 1.3185 suggests early reversal to downtrend.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Offers ahead of 103.50 stall advance A close over 103 opens 106 equidistant swing objective. A break of 101.90 opens 101.20 next.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 113.80 supports potential for another leg higher to target equidistant swing objective at 117.87. Failure below 113.60 opens move back to 112.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD rose as the dollar slipped against a basket of currencies as expectations the Fed will raise rates at next week’s policy meeting recede. Oil prices fell almost 3 percent as data showing large weekly builds in US petroleum products offset a surprise draw in crude stockpiles. The Energy Information Administration (EIA) reported that crude inventories fell 559k barrels during the week ending 9 September. But the EIA also reported that inventories of distillates, which include diesel and heating oil, rose by 4.6mn barrels in the week to 9 September, versus expectations of an increase of 1.5mn barrels. That build weighed on broader market sentiment, forcing crude futures to reverse gains. AUD Broad sweep of evidence points to reasonably resilient conditions in the Australian labour market; nothing alarming enough to draw RBA into further easing in the near term. CAD weakened on Wednesday as commodity currencies were broadly stumbled amid subdued risk sentiments. USDCAD surged to an intraday high of 1.3208, it then retreated a little bit overnight and the pair is now trading at 1.3200s to start Thursday’s session.

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

Technical: Close below .7500 threatens a more significant bearish reversal, the next downside objective is symmetry swing support sited at .7412. Near term resistance is sited at .7500
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1.32 upside objective achieved. As 1.2960 supports 1.3372 is the equidistant AB=CD corrective objective
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, below 1320 opens move back 1301 base. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.38 becomes the downside objective over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bullish
Trading Take-away: Short

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