New York Forex Report: Dollar Dented By Counterparts Data

New York Forex Report: Dollar Dented By Counterparts Data

New York Forex Report: The USD is in broad retreat after gains through the end of last week stalled around the Aug peaks for the DXY index, a little above the 94 level. Monday’s hawkish comments from ECB Lautenschlaeger boosts EUR, although. weaker French Industrial Production data initially dented gains which were recovered with stronger than expected Industrial output release, with no real data to drive action later today EUR likely eyes 508Mln of options at 1.1750. JPY weighed on by continued back and forth with the US and North Korea the latter caliming to have developed the capability to launch a missile with a US West Coast range. GBP has been on the front foot this morning after better than expected output data driving gains, however, focus is likely to shift to political risk with the next round of Brexit negotiations underway ahead of next weeks EU summit.

NORTH AMERICA USD registered modest gains versus half of the G10 FX complex but the Dollar Index was down 0.13% to 93.67 in the absence of buying interest and firmer EUR and GBP, both of which are major components of the index. USD buying interest is likely to remain soft in the absence of major data catalyst as markets await FOMC minutes.

EUROPE Following on from Friday’s upbeat factory orders report, Germany’s industrial production rose a stronger than expected 2.6% MoM in August to be up 4.7% YoY. Meanwhile, the BoF business sentiment index continued to move sideways in September at a level consistent with GDP growth of about 2.0% YoY, whilst the Sentix index of European investor confidence rose 1.5pts to a new post-GFC high of 29.7 in October. The European Central Bank (ECB) released its stress test results on the potential impact of interest rate changes to the area’s banking system. Most big Eurozone banks are well braced for possible future interest rate rises. On a scale running from a top mark of 1 to the lowest of 4, 60 out of 111 banks scored 1 or 2 in the test, the ECB said.

ASIA Growth of the services sector in China was the slowest in 21 months, as recorded by the Caixin PMI which slid to 50.6 in September from 52.7 in August. The sector recorded slower growth in business activity and employment, though expansion in new orders was a tad firmer. This morning, Japan released figures on its current account balance; surplus increased by 60b to widen the excess to 2380.4b in August.

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

Technical: 1-3 Day View – Range support 1.1830/60 now becomes resistance the initial test of pivotal 1.1660 prompted a profit taking pull back, as the near term upside hurdle sited at 1.1794 caps the correction expect a retest of bids below 1.17

1-3 Week View – 1.2130 the next upside objective. Weekly close below 1.16 neutralises bullish objectives opening a test of 1.14
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Profit taking pull back on the initial test of trend support at 1.3060 , near term resistance is sited at 1.3160/80 the break below 1.31 concerns the broader bullish bias opening the potential for a test of 1.2910.

1-3 Week View – 1.3263 achieved as this acts as support 1.3836 is the next upside objective only a close back below 1.30 would jeopardise the bullish advance.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Near term support is sited at 112.30 as this area attracts bids expect a test of offers over 113.50 the next upside objective expect profit taking on the first test, only below 110.50 concerns near term bullish bias.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Breach of 133 supports delays a test of 136.10 as 133 now acts as resistance, expect a retest of 1.32/1.3150 support zone only below 131 concerns the bullish bias opening a move back to 129 base.

1-3 Week View – 136.10 is the principle upside objective as this area caps the current advance expect a retest of 131.50 to set a base for the next leg higher, only a closing breach of 127 concerns the bullish basis.
Retail Sentiment: Bearish
Trading Take-away: Long

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