New York Forex Report: Cable Clawing Back Poll Losses

New York Forex Report: Cable Clawing Back Poll Losses

New York Forex Report: General global sentiment helped by the decent Chinese PMI data this morning. Alongside this, Japanese industrial production beat expectations, which should help support an already buoyant JPY. While Gfk consumer confidence was a little stronger, the Lloyds Business Barometer dropped back to 27. Uk housing data demonstrated the lowest levels of mortgage approvals since September last year. This hasn’t help the pound, which is under pressure again from the latest YouGov/Times poll suggesting a higher risk of a hung parliament. The EUR has bounced back well, after selling off on the back of ECB President Draghi’s more dovish tone on Monday. He noted that more evidence is required that inflation is returning to target on a sustained basis. Eurozone May inflation estimated at 1.4% YoY vs 1.9% in April. A light day in the US, ahead of employment data Thursday and Friday, while Canada release their latest GDP figures.

USD In the US, incoming consumer and inflation data remain supportive of the Fed rate hike outlook. Fed Brainard echoed the view that an interest rate hike is probably coming soon although she acknowledged that there could potentially be some delays if inflation remains soft. Income and spending growth gathered steam in April and could pave the way for quicker US GDP growth this quarter. Income rose 0.40% MoM (March: +0.20% MoM) while spending increased 0.40% MoM last month (revised to March: +0.30%) as brighter economic outlook encouraged spending appetite. Manufacturing and housing data were upbeat, reflecting broad based recovery this quarter. Dallas Fed manufacturing index climbed to 17.2 in May (April: 16.8). Separately, a report from S&P CoreLogic showed that house prices advanced 5.89% YoY in 20 major cities in the US in March (February: +5.76% YoY)

EUR Eurozone’s gauges of sentiment pulled back in May, affirming that the economy still need expansive monetary stimulus to sustain price growth and spur growth. Economic confidence index dropped to 109.2 in May from a decade high reading of 109.7 in April while business climate indicator ticked down to 0.90 last month (April: 1.10), both pointing to rather optimistic yet softer economic outlook this quarter. Consumer confidence index remained at a decade high at -3.3 last month (April: -3.6) but as ECB president Mario Draghi cautioned, increasingly solid recovery may reverse course as risks surrounding the growth outlook “remain tilted to the downside”

GBP Traders began to turn cautious and jittery ahead of UK snap election where the latest poll indicated a narrow lead by UK PM Theresa May. U.K Times, quoting research by Yougov cited PM May’s Conservatives could fall short of outright majority by 16 seats.

JPY North Korean leader Kim Jong Un reportedly oversaw the missile test early Monday from the country’s east coast. The latest ballistic missile test was said to involve a new rocket with a precision guidance system that landed within seven meters of its target.

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

Technical: 1-3 Day View – Breach of 1.1160 support opens the potential for a pullback to test 1.1025 pivot, over 1.12 refocuses bulls on equidistant swing objective of 1.1291 en-route to a test of broader symmetry swing objective at 114.30. Only below 1.10 concerns near term bullish bias.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.14 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Symmetry swing objectives at 1.3060 & 1.3118 are targeted a close below 1.2750 concerns near term bullish bias and opens a move back to test the 1.26 pivot, the near term upside hurdle is sited at 1.2880

1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of the broader symmetry swing objective sited at 1.3238.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of the broader symmetry swing objective sited at 1.3238.

1-3 Day View – 115 becomes the next upside objective only back below 110.20 would concern the near term bullish bias, near term 112.30 is the next upside hurdle.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet

1-3 Day View – Close over 124.40 opens 129.44, near term support is sited at 122.50, near term upside objective of 126.84 equidistant swing objective, only below 121.30 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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