New York Forex Report: Bond Bid Buoys Buck

New York Forex Report: Bond Bid Buoys Buck

New York Forex Report: Global bonds are under pressure while global stocks are firm; Asian equity markets rose strongly in response to yesterday’s US market gains and the impression, albeit tentative, is that the Trump reflation trade may be getting back on track. The USD is benefiting as key short-term yield spreads turn slightly more supportive and is broadly higher on the session so far within the G10 FX space. GBP which had gained earlier in European trade on better UK GDP data has faded. Meanwhile, the NZD has given back all of its late Wednesday gains on the above expectations CPI print and the JPY is under-performing as risk appetite improves. The US data calendar picks up today, with trade, inventory, weekly claims, Markit PMI, new home sales, lead index and the Kansas City Fed index numbers due over the course of the session.

FX Majors: EUR German’s IFO survey for January disappointed expectations, with business climate at 109.8 vs 111.3 expected, current conditions in-line at 116.9 and expectations index 103.2 vs 105.8. GBP In the UK, factories orders were rising at the fastest pace in two years as depreciation in Sterling helped competitiveness in overseas market. According to the Confederation of British Industry, the total orders index edged up from 0 in December to 5 in January. Companies intend to raise selling prices in both domestic and foreign markets as cost pressure have risen considerably and are expected to build over the quarter ahead. JPY strengthened against the USD, as Japan’s exports rose for the first time in the last 14 months.

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

Technical: Test of pivotal larger 1.0788 symmetry resistance is the next upside objective. Anticipated sellers/profit taking to emerge at the initial test of this level. Near term support sited at 1.0670, on a close back below 1.0580 resets near term bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Confirmation of a more bullish bias near term achieved on a close above 1.2458, near term support is sited at 1.2435, as this level supports bulls target equidistant swing objective at 1.2679 ahead of 1.2772.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Broader corrective phase to test 112 is now underway, a breach here will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance is sited at 116.10 only over 116.20 reasserts upside.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Symmetry swing support at 120.40 defended sets sights on, 124.42 symmetry swing resistance. Near term resistance is sited at 122.76. A failure below 120.40 opens 118.70
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD finished 0.7% lower to $1,200.69 per ounce, down for a second day as a risk-on environment reduced safe haven demand. OIL down 43 cents at $52.75 after an EIA report that showed U.S crude inventories rising by 2.8 million barrels in the week through 20 January. AUD Australia’s consumer inflation climbed 1.50% YOY in 4Q after increasing 1.30% YOY in 3Q. Prices grew at the fastest pace in one year as slower decline in transport costs, quicker rise in food prices and advance in housing costs pushed overall prices higher. Headline inflation reading will allow RBA to hold cash rate at its record low level of 1.50% at this juncture, but core inflation slipping to a record low of 1.60% YOY last quarter indicated that the central bank will continue to closely monitor price level and act if deem necessary. On the other hand, Westpac leading index rose 0.44% MOM in December (November: +0.03% MOM). CAD D is benefiting from the executive order signed by US President Trump that clears the path for the Keystone XL pipeline to go ahead. CAD has had a volatile week with the BOC last week saying that monetary easing was still on the table causing CAD to weaken, only to have Trump’s pipeline announcement completely make up that weakness.

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

Technical: The close above .7525 resets bullish attention on range highs towards .7800. The next upside objective is equidistant swing sited at .7631 Near term support is sited at symmetry swing level .7490 ahead of pivotal .7440
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Close below 1.3140 reestablishes a more bearish tone in erratic trade, 1.3150 now becomes resistance while this level contains upside reactions bears target a test of 1.30
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1220 symmetry swing trend resistance test underway anticipated profit taking/sellers emerged on the initial test of this level. Near tern support is sited at 1190, failure here opens 1153
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Rejection from equality objective area at 55.30, a close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at 54.50.
Retail Sentiment: Bearish
Trading Take-away: Long

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