New York Forex Report: Commodity FX Recovers Over Volatile European Morning

New York Forex Report: Commodity FX Recovers Over Volatile European Morning

New York Forex Report: The sharp losses suffered by commodity currencies as Asia opened last night, driven by reports of this weekend’s Doha talks having failed, have now since reversed as Oil traded up off lows over the European morning. Optimism had been building in Oil markets regarding a proposed Oil production-freeze to be agreed between Russia and members of OPEC. However these talks, held on Sunday, failed to produce the desired outcome and traders now await the next OPEC meeting later in June. Nothing in the way of key data for today’s US session though we do have Fed’s Dudley on deck later which is likely to be the key focus of the session.

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

Fundamental: Traders await the ECB rate decision on Thursday, the first since the recent announcement of another huge wave of stimulus by the ECB. Mario Draghi, the president of ECB, said ECB will do anything necessary to boost inflation and so far has not seen that expansion monetary policies are creating asset bubbles.

Technical: 1.1220 support survives on the initial test as 1.1330 now becomes resistance. A breach of 1.1220 opens 1.1140 as the next downside objective.

Interbank Flows: Bids 1.12 stops below. Offers 1.1350 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: Sterling strengthened over the European morning, benefiting from a recovery in risk appetite. The pound has fallen 1.06% month-to-date against USD on worries that Britain will vote to leave European Union at the referendum on June 23. BoE and IMF both warned the harm of Brexit issue that it may damage the British and even the global economy.

Technical: Price continues to finds bids at 1.4050 pivotal support within the broader 1.45/1.40 range, While 1.4140 supports 1.44 symmetry swing objective is the upside target.. A failure to hold 1.40 opens a retest of year to date lows at 1.38 ahead of 1.37 weekly swing objective.

Interbank Flows: Bids 1.41 stops below. Offers 1.44 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: The USDJPY so far has dropped nearly 10% this year, on track for its worst year since 2010. Some research said that soft Japanese data and wage negotiations pointed to a slowing growth of the domestic economy, BoJ may have to take action at its April meeting. It is possible for BoJ to cut rate deeper into negative territory.

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 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: Japan’s industrial output fell 1.2% YoY in Feb, according to a final report from Ministry of Economy, Trade and Industry. It was the third straight monthly contractions after the 4.2% YoY decline in Jan, foreshadowing a technical recession in 1Q.

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: Bullish
Trading Take-away: Short

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

Fundamental: Aussie recovered losses over the European morning as Oil rebounded off lows fuelling a recovery in risk-appetite. Traders now await the release of the RBA meeting minutes overnight.

Technical: Only a close below .7500 threatens the near term bullish bias, while this level supports intraday expect a grind higher to test .7770. A failure at .7500 opens pivotal .7450 support.

Interbank Flows: Bids .7500 stops below. Offers .7700 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Fundamental: After falling sharply on the Asian open, the Candian Dollar has since reovered in line with the moves in Oil.

Technical: Bids just below below 1.2780 encourage a bounce intraday resistance now sited at pivotal 1.30 resistance. An upside breach of 1.30 opens 1.33 as the next upside objective

Interbank Flows: Bids 1.29 stops below. Offers 1.30 stops above
Retail Sentiment: Bullish
Trading Take-away: Short