New York Forex Report: Buck Bid On FBI Boost

New York Forex Report: Buck Bid On FBI Boost

New York Forex Report: Markets appear in a more confident mood this morning. Uncertainty over the US election outcome has lifted somewhat following the weekend news that the FBI had absolved Clinton from any further wrong-doing in the email saga, possibly taking the wind out of the Trump campaign’s sails at the last minute. In the FX space, this is reflected in the sharp rise in the MXN on the session (+1.7%) and the fall in the safe-haven JPY (-1.2%) and CHF (-0.9%) at the same time while implied volatility has broadly softened. A similar mood is reflected in European equities, up firmly on the day, and precious metals, where gold has dropped 1.4%. US 10Y Treasury yields are around 3bps higher on the day. In the G10FX space more broadly, the USD is up against most of its peers, although the CAD is a modest out performer by virtue of the fact that is has remained virtually unchanged from Friday.

FX Majors: EUR showed limited movement on Thursday, following the gains on Wednesday, and closed just above 1.1100 handle. On the release front, Eurozone employment rate came in at 10%, in line with the forecast. Markets remain nervous about Brexit fallout, and negotiations between Britain and the EU are expected to be lengthy and arduous GBP posted its best weekly gain against the greenback since October 2009, thanks to a combination of an expected softening in the government’s hard-line stance on Brexit and a weakening USD The currency climbed 2.7% against the USD last week, breaking above the 1.2500 barrier for the first time in a month. A London high court ruled that the government cannot trigger Article 50 without parliamentary approval, raising hopes of a ‘soft Brexit’ and prompting speculation of an early general election, which boosted the currency sharply last Thursday. JPY Japan’s Nikkei services PMI expanded in October after two straight months of contractions. Separately in Australia, the construction sector registered a slow month in October. Performance of construction index edged down to 45.9 in October (September: 51.4), signalling that growth in the building industry was lagging behind recovery seen in the manufacturing and services industries.

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

Technical: Expect advance to find offers on initial test of 1.1120/30, expect former 1.1030/20 resistance to act as support, only over 1.1230 eases bearish bias with 1.1304 the symmetry swing upside objective.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Medium term resistance is sited at 1.24920. Only a close over 1.25 eases bearish pressure. Interim support is sited at 1.24, below 1.2350 suggests false upside break and return to broader range trade.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 102.50 to 105.50 will likely contain the price action ahead of this weeks major headline risk Wednesday. A downside break target 101.28 an upside break targets 107.40
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Upside attention on 116.20 as the primary upside objective with in in the broader 112-116 range. A tops side expansion through 116 opens 121 equidistant swing objective. Back below 114 opens 112 again.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD continued to be well bid Friday amid election jitters, adding 0.45% to 1,302.70 per ounce, althought overnight prices have weakened has risk sentiment has rebounded. OIL closed down 59 cents, or 1.32%, at $44.07 a barrel due to emerging tensions between Saudi Arabia and Iran that could jeopardize OPEC’s plan to cut production. For the week, it has dropped 9.5%, the biggest decline since mid-January. AUD has remained firm following the cash rate decision and statement from the Reserve Bank of Australia (RBA) last Tuesday. The statement rhetoric suggested that the central bank is not looking to further cut interest rates this year following their last cut in August, while there was some expectation for another cut in the first quarter of 2017 CAD Statistics Canada reported that the number of employed people increased by 43,900 in October, beating expectations for a 10,000 decline, however, Canada’s trade deficit widened to C$4.08 billion in September from C$1.99 billion the previous month.

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

Technical: AUD continues to rotates in a contracting range with .7730 capping upside and .7500 containing downside reactions, a breach of the lower end of the range opens .7412 symmetry support. Through .7750 opens .7830 on the upside.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3230 supports bulls target a move to 1.35, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited at pivotal 1307.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: The failure at 46.03 has opened 42.73 as the next downside objective ahead of 39.78. Near term resistance is sited at 44.86 ahead of 46.38
Retail Sentiment: Bullish
Trading Take-away: Short