New York Forex Report: Central Bank Speakers Center Stage

New York Forex Report: Central Bank Speakers Center Stage

New York Forex Report: The USD is trading mostly higher in quiet trade. Broader market sentiment appears somewhat constructive, with European equities trading mostly higher and energy prices firm (while precious metals are weaker). The NZD and (to a slightly lesser extent) the CAD are the main G10FX under-performers on the day so far. Volatility in the major markets remains subdued as G10 currencies largely conform to recent ranges. Event risk today is, however, not insignificant, with Fed Chair Yellen providing congressional testimony and four other Fed president speaking over the course of the day. Yellen is talking about bank supervision and the forum is unlikely to see any significant focus on monetary policy or the economic outlook; if it does, the chair’s comments will largely reflect the recent Fed policy statement. The views of the more obviously hawkish Fed presidents who speak today (Mester and George) will be of more interest for the markets but these comments come late in the day or after the market close.

FX Majors: EUR dropped quickly below 1.1200 handle and bottomed out at 1.1190, the lowest level since last Thursday but managed to rise back above 1.1200 level. Today, in the Eurozone, consumer confidence numbers will be released while the European Central Bank President Mario Draghi will address a parliamentary Committee to discuss monetary policy in Germany. GBP outperformed other major currencies yesterday, getting some relief after recent losses, with GBPUSD scoring a four-day peak of 1.3025 during New York session. Bank of England Governor Mark Carney said that BoE has looked to provide support to the economy to help with adjustment, both in terms of improving ability of banks to lend and improving cost of borrowing . JPY Bank of Japan policymakers fretted over weak inflation expectations and uncertain prospects for achieving its price goal even before announcing its plan to conduct in September a comprehensive review of its policies, according to minutes of the central bank’s policy meeting released yesterday.

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

Technical: Near term resistance is sited at 1.13 removing this hurdle opens 1.1366. A break of 1.1120 support opens equidistant swing support at 1.1085.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.3150 rejects corrective advances bears target 1.2870 as the next downside objective. Only a close over 1.3130 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 101.20/40 caps corrections bears target a retest of 99.50 lows. Only a close over pivotal 102.80 would ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Failure below 113 opens move back to 112 as the next downside objective, near term resistance is sited at 113.80 as this level survives on a closing basis bears target 110.80 next.
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD fell on Tuesday as the dollar and stocks gained ground on the view that US presidential candidate Hillary Clinton got the better of rival Donald Trump in their first debate. Among other precious metals, silver edged lower after falling 1.2% in the previous session, which was its biggest loss over two weeks. OIL fell 3% on Tuesday after Saudi Arabia said it did not expect to agree on output cuts at a meeting with other producers in the Algerian capital, although a production freeze deal was still possible later in the year. The Organization of the Petroleum Exporting Countries (OPEC) will hold informal talks around 10pm Singapore time on Wednesday. Its members are also meeting non-OPEC producers on the sidelines of the International Energy Forum, which groups producers and consumers. AUD bounced from early losses yesterday as investors seemed to judge Democrat Hillary Clinton as the winner of the first US presidential debate against Republican Donald Trump. When risk appetite is high, the Aussie is chosen as a carry currency with investors to borrow low rates currencies and buy higher yielding Australian assets. CAD gained against the US dollar, improving from nearly six-month lows earlier despite a dovish speech by Bank of Canada Governor Stephen Poloz on Monday.

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

Technical: Testing symmetry swing resistance sited at .7685. As .7640 supports expect a grind higher to test .7730 offers next
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, near term support is sited at 1323.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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 rejected the corrective advance 41.81 becomes the downside objective, near term resistance is sited 46.62 over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bullish
Trading Take-away: Short