New York Forex Report: Dollar Down Into Month End Quarter End Flows

New York Forex Report: Dollar Down Into Month End Quarter End Flows

New York Forex Report: Month end quarter end flows expected as we had into the New York session and the London close today as traders attention shifts to tomorrows NFP release. Dollar remains on the back foot, hampered by better than expected Eurozone inflation data and a rebound in UK GDP data released this morning. ADP job report showed that US private sector added 200k jobs in March, less than the revised 205k increase in Feb but beat consensus estimate of 195k. Markets anticipate Friday’s nonfarm payroll to suggest similar traction in the US job market.

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

Fundamental: Eurozone HICP inflation fell at an annual rate 0.1% in March, according to the flash estimate of Eurostat, matching the median MNI estimate. The core rate, excluding volatile food and energy prices was 1.0% Y/Y in March, Eurostat

estimated, above the MNI estimate of 0.9%

Technical: The close over 1.1220 opens a move to test the symmetry swing objective at 1.1420, expect intraday support to come in at the aforementioned 1.1220.

Interbank Flows: Bids 1.1250 stops below. Offers 1.14 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: UK GDP was revised higher in the fourth quarter of 2015, helped by an upward revision in the construction sector in December 2015. GDP was revised to +0.6% q/q and 2.1% y/y in the period, up from the second estimate of 0.5% and 1.9% respectively. Real household disposable income fell in the quarter, down 0.6%. The quarterly household savings ratio also fell, standing at 3.8% vs 4.8% in Q3. The annual savings rate for 2015 was 4.2%, with both the Q4 and 2015 levels the lowest ratios since records began in 1963.

Technical: 1.4050 pivotal support provides a platform for technical rebound to retest the topside of the broader 1.45/1.40 range, intraday support sited at 1.4280. A failure to hold 1.4050 opens a retest of year to date lows at 1.38 ahead of 1.37 weekly swing objective.

Interbank Flows: Bids 1.4050 stops below. Offers 1.45 stops above
Retail Sentiment: Bullish
Trading Take-away: Neutral

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

Fundamental: Today marks the end of Japan’s fiscal year and two way flows will prevent a significant move of USDJPY in either direction. Bank of Japan (BoJ) Governor Haruhiko Kuroda signals his readiness to expand an already huge asset-buying programme or push interest rates deeper into negative territory, officials fear a homogeneous board could brush aside pitfalls such as market distortion, and the rising perils of an exit strategy.

Technical: Continue to play the broader range of 110/114 with 112 the pivot to lean against intraday, a breach of the range is required to help define the next directional play.

Interbank Flows: Bids 110.50 offers below. Offers 114 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: Heightened concern after the Brussels attacks was reflected in Eurozone’s March economic confidence index. The index tumbled to 103.0 (Feb: 103.9), the lowest level in 13 months and consumer confidence plunged further to -9.7 (Feb: -8.8), suggesting that recovery in the euro area will likely be modest this year.

Technical: While 126.40 bids support intraday expect a test of symmetry resistance at 128.15 as the immediate corrective objective. Failure at 124.50 suggests false upside break and opens retest of 123.

Interbank Flows: Bids 126.50 stops below. Offers 128 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 hit a nine month high at 0.7707 before slowly crawling back to current levels at 0.7670s, as the market was still digesting Yellen’s dovish speech which cooled down expectations of a Fed rate hike in April. The change in expectations has meant that the AUD still remains a more appealing and higher-yielding currency. Amid the lack of domestic data this week, traders now look to next Tuesday’s RBA rate decision meeting and see if the central bank will talk down its currency.

Technical: Only a close below .7550 threatens the near term bullish bias, while this level supports intraday expect a grind higher to test .7770

Interbank Flows: Bids .7550 stops below. Offers .7750 stops above.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: On the release slate today is January GDP, CIBCWM Economics expects +0.4%, market consensus is +0.3%. That result will be well-received, though caution should be taken as “both the year and the quarter won’t do as good as this firm looks suggests”

Technical: Bears have the ball while 1.3160 contains upside reactions expect a retest of recent lows in the 1.2920’s to set a potential double bottom base, a failure of buyer participation here opens a run down to test structural support at 1.2830.

Interbank Flows: Bids 1.2900 stops below. Offers 1.3150 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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