New York Forex Report: Brainard On Traders Brains Ahead of Monday’s Speech

New York Forex Report: Brainard On Traders Brains Ahead of Monday’s Speech

New York Forex Report: The USD mixed at the start of the North American session. Event risk this week has not had much impact on the USD broadly but traders still appear loathed to extend positioning and take a stronger conviction view on the USD direction. A speech by Fed Governor Lael Brainard Monday has drawn interest from the markets and may serve to dampen activity today; Brainard is a dove and the speech on the economy comes just before the Fed black out period ahead of the September 21 policy decision; her comments will be, in effect, the last word on the outlook ahead of the meeting and will help shape expectations running into the decision. Needless to say, a more hawkish undertone from Brainard would be a clear signal to the markets that this policy meeting is “live”. Note, however, that speculation the speech has been quickly (and deliberately) shoe-horned into the calendar is perhaps a bit wide of the mark; the host of the event in Chicago has had the speech listed for some time

FX Majors: EUR In line with expectation, ECB left its key interest rates unchanged. Main refinancing rate, deposit rate and marginal lending rate held at 0.0%, – 0.4% and 0.25% respectively. The central bank also refrained from expanding its stimulus program, contrary to expectation that bond purchase may be extended beyond its current due date of March 2017. Growth forecast for this year was revised up to 1.7% (previous: 1.6%) but forecast for 2017 and 2018 was revised down to 1.6% (previous: 1.7%). No change to inflation forecast for 2016 and 2018, at 0.2% and 1.6% respectively, while inflation outlook for 2017 was revised down to 1.2% (previous: 1.3%). GBP Against the dollar, sterling fell to an intraday low of 1.3280, trading well below a seven-week high with investors reluctant to hold sterling after Bank of England Governor Mark Carney kept the option of further monetary easing on the table. JPY Economy Watchers Surveys indicate that Japanese businesses have more favourable view of the economy in August. The index climbed from 45.1 to 45.6 in August, the highest reading since Jan. A separate survey also showed that firms anticipate business activities to pick up in the near future.

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

Technical: As 1.1230 supports 1.1366 is the next upside target with a further equidistant symmetry swing objective sited at 1.1530. Only below 1.1120 concerns near term bullish bias

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3270 supports 1.3470 is the next upside objective. Only failure below 1.3185 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Breach of 102.80 support opens a move back to test base at 100.90, expect 102.80 to act as resistance near term.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Failure below 114.50 has opened retest of pivotal support at 114 as this area supports potential for another leg higher. Failure below 114 opens move back to 112.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD pared earlier gains to finish half percent lower, at $1,338.30 an ounce as the dollar recovered in the NY session Oil surged $2.12 (+4.6%) to close $47.62 a barrel after EIA data showed an unexpected drop in U.S. crude inventories, by 14.5 million barrels last week for the biggest weekly drop in stockpiles since January 1999. AUD Australia’s trade deficits narrowed to AUD 2.41 billion in July (June: AUD 3.26 billion), helped by the 2.7% MOM increase in exports. Import, on the other hand, was stagnant. CAD weakened to a three-day low against the USD, stressed by the Bank of Canada’s more dovish stance while losses for the currency were restrained as oil rallied. The Bank of Canada warned that the economy could be weaker than it anticipated just two months ago as exports disappointed. Canada’s economy is running mixed, with household spending growth holding up even as sectors linked to low commodity prices struggle, said the Bank of Canada.

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

Technical: .7501 capped downside correction and set a base opening a move back to .7750 as the next upside objective, near term support is sited at .7610. Only a close below .7500 would concern the near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Initial test of 1.2830 bids garners support, near term resistance is sited at 1.2970, bears target symmetry swing objective at 1.2719.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357 with 1333 near term support. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejects 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