New York Forex Report: Buck Bargain Hunters

New York Forex Report: Buck Bargain Hunters

New York Forex Report: The USD is trading modestly higher overall against its G10 peers, reversing three days of net losses that surrounded the change of leadership in Washington. There has been scant news to drive the markets; rather, it looks like USD bargain hunters have stepped up activity as US Treasury bonds have retreated, helping lift USD supportive yield spreads modestly. European and Asian stocks are firmer while crude oil prices have strengthened and gold has eased slightly, suggesting a slightly more constructive risk environment in the markets broadly. The USD slipped late yesterday as markets noted US Treasury Secretary nominee Mnuchin comments, referring to the negative impact of an “excessively strong” USD. But the comments were made in response to questions about the potential impact on the USD of the Trump team’s fiscal plans on the currency and were not a deliberate comment aimed at talking the USD lower. The new administration may have a different view of exchange rate policies than its predecessors but overtly manipulating the exchange rate is perhaps something it will want to avoid, given its focus on China’s exchange rate practices. The GBP is the main under-achiever in the European session as markets react to the UK Supreme Court ruling that that the UK parliament will get a vote on the Article 50 decision.

FX Majors: EUR Eurozone’s consumer confidence index came in a smaller negative in January, marking its best reading since April 2015. The gauge of consumer sentiments (January: -4.9 vs December: -5.1) showed that household turned increasingly less pessimistic about the economy, signalling that broad based recovery remains on track this quarter. GBP key event to watch out for will be the UK Supreme Court delivering its judgement whether a parliamentary vote would be required before PM May goes about triggering Article 50. JPY Data from Japan suggested that economic conditions had improved in November. Rising to the highest level since January 2015, the coincident index surged to 115.0 in November (October: 113.5) according to final report by the Cabinet Office of Tokyo. Echoing the result, all industry activity index rose at a quicker pace of 0.30% MOM in November (October: 0.00%).

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 symmetry swing resistance sited at 1.2458, near term support is sited at 1.2250, as this level supports bulls target equidistant swing objective at 1.2679.
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 rose on Monday as uncertainty about Trump’s policies grew and dollar fell, with the metal touching a two-month high of $1,219.55 per ounce before closing at $1,218.23. OIL settled down 47 cents to $52.75 a barrel on Monday after a report by Baker Hughes showed U.S drillers adding the most rigs since April 2013 for the week ended 20-Jan, possibly adding to global supply glut. AUD climbed against the USD, amid a rise in iron ore prices and a stronger CNY tone. CAD There are no data releases scheduled in Canada today in a week that is bereft of important economic data. USDCAD is likely to look to broader moves in the USD and US rates for directional bias.

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: Recapture of corrective channel opens a test of 1.3370, as 1.3190 supports potential to build a base for next leg higher. Only below 1.3140 reestablishes a more bearish tone.
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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