New York Forex Report: Dollar Dented Ahead of ISM Data

New York Forex Report: Dollar Dented Ahead of ISM Data

New York Forex Report: The USD is greeting the start of the two-day FOMC meeting by giving back a little more of its October rally. No-one is expecting the Fed to deliver a rate hike this week but a fairly clear pointer to a hike in December may come in the statement and help limit USD losses even if investors do keep risk exposure fairly limited into the US election. Most G10FX are posting gains versus the dollar this morning, the exception being the JPY which weakened after the BoJ maintained all its main policy settings but announced a further delay in reaching its 2% inflation target (to the second half of FY 2018, so nearer 2019. AUD is out-performing after the RBA left rates unchanged and said it expected a gradual rise in inflation to unfold – at the margin, less dovish. EUR trading has been fairly quiet, with many European markets closed today. Gold is firmer while crude oil prices remain weak near 1-month lows. For the session ahead, markets will watch the US ISM manufacturing data and remain wary of political headline risk.

FX Majors: EUR The euro zone’s economy expanded at an unchanged pace of 0.30% QOQ in 3Q. The pace of growth was encouraging given prevailing drag from Brexit, posting signs that ECB’s bond purchase program was putting a floor to growth slowdown. GBP UK’s consumer credit and mortgage approvals suggested that credit conditions was supportive of growth, leaving rooms for BOE to refrain from further easing this week. JPY As widely expected the BoJ kept monetary policies on hold even as weak consumption and external headwinds force it to concede that inflation is still far away from its target.

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

Technical: Bears seek a retest of last weeks lows at 1.0849. Near term resistance is sited at 1.1030 only over 1.1230 eases bearish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.2250 rejects near term corrective advances bears now target pivotal 1.20. Medium term resistance is sited at 1.2330. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 105 is attained bulls target 107.40 symmetry swing objective next, support is at 104.20 only a close below 103.80 eases bullish pressure.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Upside attention on 116.20 as the primary upside objective with in in the broader 112-116 range. A tops side expansion through 116 opens 121 equidistant swing objective. Back below 114 opens 112 again.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD rose slightly to $1277.21 per ounce from $1,275.47 as concerns over the outlook for the U.S. election keeps safe haven demand well supported. OIL settled down $1.84, or 3.8%, at $46.86, the lowest close in over a month amid OPEC officials approving a document outlining their long term strategy on managing production. AUD As widely expected RBA have kept rates on hold at 1.5%, this comes after cuts to the cash rate of 25bp at this year’s August and May meetings. The RBA statement was little changed, and again ‘near-neutral’ with only a ‘weak easing bias’ Chinese service sector expanded at a slightly faster rate in October, while growth of the manufacturing sector has hit its two-year high in the sign that the world’s second largest economy continued to stabilize. As a major trading partner, Australia is expected to benefit from the stabilizing Chinese economy. CAD actually held up rather well when you consider Monday’s development. On Monday, OIL prices dropped over 4% on the day and any time that happens, it usually has a big negative impact on the correlated Canadian Dollar. . It seems some of the negative flow from lower OIL was offset by the highly disappointing Chicago PMI print.

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

Technical: AUD continues to rotates in a contracting range with .7730 capping upside and .7500 containing downside reactions, a breach of the lower end of the range opens .7412 symmetry support. Through .7750 opens .7830 on the upside.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1.3360 equidistant AB=CD upside objective achieved as 1.3230 supports bulls target a move to 1.35, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited 1290 ahead of pivotal 1300.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective. The failure at 49.50 has opened symmetry swing support at 46.03 a breach here opens 42.73 as the next downside objective
Retail Sentiment: Bullish
Trading Take-away: Short