New York Forex Report: BoJ Open To Extending Negative Rates

New York Forex Report: BoJ Open To Extending Negative Rates

New York Forex Report: The USD Index has given back some of its gains from Fridays FED Fischer comments which led the market to believe that rate adjustments remained on the table for 2016. This morning has witnessed some profit taking and likely position adjustment as we head into this weekends Jackson Hole symposium and FED Chair Yellen’s speech. BoJ’s Kuroda was noted on the wires this morning as he stated that he wouldn’t rule out a further foray into negative rates and this months BoJ meeting. A very light news day today likely encourages further range trade ahead of Fridays key event risk.

FX Majors: EUR Although the latest German Producer Price Index figures beat the forecasts, this was not enough to prevent the Euro retreating further on Friday. Germany released its July PPI figures with better-than-expected results, up by 1% monthly basis and down by 2% compared to a year before. GBP dropped the most in two weeks against the USD as Prime Minister Theresa May was said to be leaning toward the first part of 2017 as the best moment to trigger the start of formal talks over the UK’s withdrawal from the European Union. Sterling still posted a weekly gain after reports showed July inflation, retail sales and jobless claims beat the forecasts, suggesting a more optimistic picture of the post-Brexit economy. JPY Japan’s all industry activity index rose 1.0% MOM in June (May: – 1.3% MOM), helped by the expansion in industrial output and services activities. However, household spending remained lackluster last month, underscoring the government’s challenge to fuel spending and revive inflation. Department store sales declined 0.1% YOY in July after a 3.5% YOY drop in June.

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

Technical: Offers above symmetry swing objective at 1.1330 stall advance, as this resistance is removed bulls target 1.1430 next. Near term support is sited at 1.1230, only a failure below 1.11 would concern the near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Close over 1.31 alerts to the potential of more meaningful correction, with rejection from the initial test of pivotal 1.3165. As 1.30 supports expect a retest of last weeks highs
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 101.50 caps profit taking expect further downside pressure with 97.30 the next downside objective. Only a move over 102.80 will ease near term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance is sited at 114, as this area caps the correction expect a drift back to test and breach 112 support.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD weakened end of last week on the back of US dollar rebound on hawkish Fed comments putting September as a “live” meeting. The gold price decreased by US$10.89 to US$1,341.47 on Friday. Oil markets held on to its weekly gains on Friday (19 Aug) as investors continued to buy into the talks from Saudi Arabia and Russia that major oil exporters could agree to cap output in the next OPEC meeting in Algeria in September. AUD came under renewed selling pressure following a break below 0.7650 supporting handle and tested a fresh weekly low of 0.7596 on Friday with strong bid tone surrounding the US dollar during the day. CAD weakened 0.7% to 1.2870 against the USD as Canadian retail sales posted an unexpected decline, showing signs of fading consumer spending that had been propping up the economy. Retail sales fell 0.1% in June compared with forecasts for a gain of 0.5% while annual inflation slowed to 1.3% in July, from 1.5% in the prior month.

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

Technical: The close over .77 shifts attention to broader range resistance sited at .7830, bulls will be looking for pivotal .7550 to support only a close below .7500 would concern the near term bullish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: With the breach of 1.2843, attention shifts to 1.2718 symmetry swing support. Near term resistance is sited at 1.30
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bulls target 1391 as the next upside objective, near term support is sited at 1330. Below 1300 opens 1270.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Symmetry swing resistance sited at 48.13 removed as 46.50 supports expect a further rind higher to test 50.00 as the next upside objective, only below 43.60 concerns the near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long