New York Forex Report: Dollar Defensive Ahead Of Data

New York Forex Report: Dollar Defensive Ahead Of Data

New York Forex Report: The USD is trading more defensively overall on the session so far, losing ground against most G10 FX in quiet trade. With month end out of the way, traders can focus on the next round of event risk with US NFP Friday and the Italian referendum at the weekend. ADP data suggested US employment trends are strong and worries about the referendum outcome suggest the EUR is likely contained near-term. With US yields firm (10Y bonds at 2.40%), the USD should perhaps be doing at least a little better than it is this morning, even if rising commodity prices (WTI above $50 in the aftermath of OPEC) represent a modest USD negative. US PMI data are the highlight of the session ahead, along with some Fed speak, and the data coincide with large EUR option expiries at 1500 GMT. Trading volumes and interest may pick up after that.

FX Majors: EUR In the Eurozone, CPI estimate inched a notch higher to 0.60% YOY as expected in November, its fastest since Apr-14, as higher food costs offset bigger falls in energy costs. GBP UK GfK consumer confidence unexpectedly skidded to -8 in November, from -3 a month ago, as consumers turned the most pessimistic in four months. Personal finances outlook and intention for major purchases all retreated during the month, suggesting dented consumer spending going forward. JPY Japan’s housing starts grew 13.70% YOY in October, its quickest pace of increase since June 2015. Approvals for housing for rent properties surged the most, driving up headline print last month after an equally upbeat 10.00% YOY advance in September. Construction orders rose 15.20% YOY last month followed an increase of 16.30% YOY in September, underscoring sustained demand for housing. On the other hand, small business confidence index was unchanged at 48.3 in November, hovering at seven month high since October.

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

Technical: Bearish attention remains towards 2015 lows at 1.0463 ahead of the larger weekly AB=CD objective at 1.0423. Near term resistance sited at 1.0650/80 a break here targets a retest of 1.0740 , medium term 1.0850 is a key upside hurdle which will need to be captured on a closing basis to stabilise the pair.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bears target symmetry swing objective at 1.2270 as 1.2510 contains upside reactions, over 1.2520 opens an equidistant swing objective of 1.2570 as this level stalls correction there is a window for a resumption of downside pressure. Medium term hurdle at 1.2670 if captured would reset attention on upside objectives.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 115.59 is the next upside objective representing the 61.8% retracement of the 2015/16 decline. A breach of 111.07 would suggest a broader correction to the advance opening a move back to test symmetry swing support at 109.60
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 121 equidistant swing objective achieved as 120.10 supports 121.82 is the next upside objective. A break back below 119 opens 118.45 opens ahead of pivotal bullish trend support at 116.20
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD fell amid a stronger dollar overnight, with the precious metal finishing off by 1.27% to 1,173.20 an ounce, lowest close since February. OIL settled up $4.21, or 9.3%, to $49.44 a barrel after OPEC finalised a deal to cut production from 33.8 million barrels a day (bpd) to 32.5 million, for the first time since 2008, in an effort to prop up prices. AUD retreated to .7382 yesterday, it started its decline after domestic building approvals dropped 12.6% in October, a knock to what has been one of the strongest sectors of the economy. Iron ore futures traded in China skidded 7 percent, a second day of sharp losses likewise weighed on the currency. CAD edged higher against the USD as oil prices jumped on a deal by major producers to cut output and figures showed the domestic economy grew at the fastest pace in more than two years, but the pair retreated to close at 1.3433 after stronger than expected US data.

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

Technical: .7092 AB=CD remains the downside objective. Near term resistance sited at .7440 has been eroded the correction should now challenge pivotal 7530 as this levels contains the upside reaction there is potential for resumption of downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Price continues to consolidate in a bullish pattern, the profit taking pullback tests equidistant swing objective at 1.3349, as this area contains the pullback 1.3620 becomes the next upside objective. Only a close below 1.3250 concerns the bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As equidistant swing objective sited at 1202 contains upside reactions bears target 1149 as the next downside objective. A close over 1220 suggest broader correction to the recent decline.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: The breach of 49.20 opens a quick test of offers above 50.00 and critically the equidistant swing objective sited at 51.79 as this level halts advance there remains an opportunity for a move to the downside targeting symmetry swing objective at 39.78.
Retail Sentiment: Bearish
Trading Take-away: Long