New York Forex Report: Commodity Currency Surge Continues

New York Forex Report: Commodity Currency Surge Continues

New York Forex Report: Over an otherwise quiet European morning the main moves on the session were once again attributed to the commodity FX bloc which continues to forge higher ground in line with the moves broadly seen in Oil and equity markets. The continued strike by Kuwaiti Oil workers keeps Oil bid heading into the middle of the week with risk-sentiment similarly supported. Traders now await the release of the US Crude Oil Inventories data at 1530GMT1, which looks to be the only data for potential to move markets.

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

Fundamental: EUR remains supported following a satisfying German ZEW Survey of Economic Sentiment yesterday.. Another reason accounting for the gain of the Euro was the relief of Brexit concerns due the latest polls. The upside of Euro is limited ahead of ECB meeting this Thursday. However, markets doubt what measures the ECB can implement to weaken the Euro.

Technical: While 1.13 supports downside reactions expect another test of offers at 1,1465. A failure at 1.13 opens a retest of bids at 1.1220.

Interbank Flows: Bids 1.13 stops below. Offers 1.14 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: Sterling saw demand return over the European morning despite mixed earnings and employment data. Average Weekly earnings fell back to 1.8% 3M/YoY Feb whilst ex-bonus weekly earnings printed 2.2% against an expected 2.1%. The ILO unemployment rate remains unchanged at 5.1%.

Technical: While 1.43 supports downside reactions expect test of offers over 1.4450. Failure at 1.43 opens a near term base test at 1.4240 next.

Interbank Flows: Bids 1.43 stops below. Offers 1.4450 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: USD was back above 109.00 levels against the safe-haven JPY, pulling away from Monday’s trough of 107.75, as risk sentiment improved

Technical: The downside ratchet now targets 105.50 as the next major downside objective.Trend resistance is sited at symmetry and structure confluence at 110.70 which should attract fresh selling for renewed weakness.

Interbank Flows: Bids 107.50 offers below. Offers 110.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: BoJ Governor Kuroda reiterated that the economic condition in Japan has continued its moderate recovery trend and BoJ will not hesitate to add stimulus as long as it is necessary for maintaining price target in stable manner.

Technical: Bears now target weekly symmetry objective at 120.60, resistance is sited at 124.50. Only a close over 126.80 eases immediate downside pressure.

Interbank Flows: Bids 120.50 stops below. Offers 124.50 stops above.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: AUDUSD remains supported as Oil continues to probe higher levels. In minutes of 5 April policy meeting released yesterday, the RBA cautioned that a rising Aussie could tilt the economy off balance and it also reiterated that low inflation would provide scope to ease further if needed

Technical: .7770 upside objective achieved. While .7500 supports the advance bulls target .7880 as the next upside objective

Interbank Flows: Bids .7500 stops below. Offers .7800 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: CAD surged yesterday to a nine-month high against the USD, boosted by rising oil prices. Governor Stephen Poloz did not update the economic outlook in response to questions at a parliamentary committee yesterday. Last week, the central bank cautioned the country’s improving economy faced downside risks, including a stronger currency exports that could drag on non-commodity.

Technical: While prior support at 1.2740/60 acts as resistance expect a test of bids at 1.2560 as the next downside objective.

Interbank Flows: Bids 1.26 stops below. Offers 1.28 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral