New York Forex Report: Buck on The Backfoot

New York Forex Report: Buck on The Backfoot

New York Forex Report: Friday’s ‘litmus test’ saw US President Trump and House Speaker Ryan fail in their bid to pass a new healthcare bill, with a blame game well and truly underway after Trump’s tweet to his 27 million followers to watch Jeanine Pirro on Fox News (who called for Ryan to resign). Markets are extrapolating failure at this juncture as a critical blow for the rest of the administration’s policy agenda, most significantly with regard to Trump’s expansionary fiscal ambitions. As a result, US Treasury yields and the USD have started the week on the back foot, continuing their declines post March’s FOMC. The key events in the week ahead are Tuesday, the Scottish Parliament votes on whether to have a second independence referendum, while Wednesday is likely to see PM Theresa May trigger Article 50, initiating the two-year process of the UK leaving the EU. Speculative GBP shorts have extended to new historical extremes, but in spite of this and following positive inflation and retail spending data, GBPUSD trades relatively well, back at current cycle highs.

EUR The EUR rose against the USD on Friday amid improving economic activity figures in the Euro area, , manufacturing and services PMI prints climbed to a record high of 56.2 and 56.5 in March as economic momentum in the single currency bloc quickened. The upbeat data will give rooms for ECB to end its monetary policy easing. Last week, the EUR advanced against the USD amid uneasiness regarding Trump’s pro-growth agenda and optimism over the French presidential debate. This week, the Euro area’s preliminary inflation and economic sentiment readings, along with Germany’s preliminary inflation, retail sales and labour data, will likely be key

GBP Last week, the GBP rose against the USD amid optimism regarding the UK’s better than expected retail sales and inflation in February. This week, developments regarding ‘Brexit’, along with the UK’s GDP and house prices, will likely attract traders’ attention. The official Brexit process finally gets underway this week, with the triggering of Article 50 by the UK on Wednesday. While the UK’s relationship with the EU will not change until it actually leaves the EU, probably in March 2019, this week’s formal declaration will still likely attract considerable attention

JPY Japan’s data was lacklustre, affirming that growth will likely remain modest in the first quarter of the year. Nikkei manufacturing PMI ticked down from 53.3 in February to 52.6 in March, reflecting softer pace of expansion. Leading index was unchanged at 104.9 and coincident index slipped to 115.1 in January (December: 115.6) as economic outlook remained modest. Last week, the JPY strengthened as traders hedged against concerns regarding the ability of the Trump administration to implement its economic policies. This week, Japan’s inflation, retail sales and industrial activity figures, along with the US GDP, might be in focus

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

Technical: 1.0830 primary upside objective bulls now target the corrective 1.0969 equidistant swing objective. Near term support is sited at 1.0820 A close back below 1.07 would concern 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: 1.2570 upside objective achieved potential for profit taking pullback to test symmetry swing support sited at 1.2470 as this area supports expect a test of triangle resistance sited at 1.2630 only below 1.2370 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 111.75 range support breached the daily close below here suggests downside range break and opens 108.43 equidistant swing objective to the downside, near term resistance is sited at 110.75. Only over 112 stems near term selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Anticipated test of 119.30 attracts profit taking as 121 caps upside attempts bears target a test of 118.22 as the next downside objective. Only over 121.80 arrests near term selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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