New York Forex Report: Dollar Down Off Yesterday’s Highs

New York Forex Report: Dollar Down Off Yesterday’s Highs

New York Forex Report: Following the surge higher last week in the wake of the UK Brexit move, the US Dollar weakened over the European morning today markets stemmed the recent tide of losses. On the data front, US data was decent but yet, nothing to shout about. PMI services sustained a 51.3 reading in June while Dallas Fed manufacturing contracted at a slower pace. Data suggesting moderate growth outlook reaffirmed that the Fed would be in no hurry to hike. Traders now await US GDP and PCE data later today followed by US Consumer Confidence.

FX Majors: In comments made this morning ECB President Mario Draghi urged central banks to work together and highlighted the risks of divergent monetary policies. Two top ratings agencies have downgraded the Britain’s sovereign credit score, judging last week’s vote to leave the European Union. S&P dropped the grade from AAA to AA and warned more downgrades could follow. The Bank for International Settlements said central banks are ready to cooperate to support financial stability in the wake of Brexit . JPY strength remains a concern for Japanese officials, Bank of Japan said it would respond to extremely volatile exchange-rate moves, signalling a readiness to intervene to stem the JPY strength.

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

Technical: While 1.1170 caps upside reactions expect a grind south to retest the spike low of Friday, a close over 1.12 is required to ease near term bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Grind lower to retest Fridays spike low achieved as anticipated, with bears now targeting a test of psychological 1.30 level. Near term resistance is site at 1.3350.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: While 102.30 contains upside reactions expect bears to target a retest of bids sub the pivotal 100 level. A sustained move through 103.50 is required to ease immediate downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Next downside level to watch is 107 with 115.50 near term resistance now. A close over 116 would ease near term bearish bias
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD rose to session high of $1,335.55 an ounce before settling at $1,324.60, up 0.67% for the day as traders continue to seek safe haven in the bullion Oil fell 2.75% to settle at $46.33, down $1.31 a barrel, weighed by a strengthening dollar and the fallout for the Brexit vote. AUD closed at 0.7322 due to heavy sales overnight as markets were digesting the referendum outcome which has shocked global markets by voting to leave the European Union. CAD weakened to a three-week low against the USD yesterday as Britain’s vote to leave the European Union propelled new shockwaves through financial markets, weighing on Canada’s risk-sensitive currency. Traders cut bullish bets on the loonie for the third straight week, according to the Commodity Futures Trading Commission statistics showed on last Friday. Net long Canadian dollar positions tumbled to 2,595 contracts in the week ended June 21 from 18,440 contracts in prior week

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

Technical: Recovery from Brexit lows stalls at the pivotal .7480 the midpoint of the broader .7660/.7300 range. While .7480 caps upside reactions expect a further attempt to breach range lows.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: While 1.29 supports price appears to be in a bullish consolidation with risk to the upside, with bulls targeting a 1.32 test. Below 1.29 opens 1.2680 range lows.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Sharp reversal higher next level to watch on the upside is 1361 en route to a broader 1390 with 1303 near term support now. Only below 1240 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Only a close below 46 threatens medium term bullish bias, below .46 opens a test of 44 as next downside objective. As 46.70 supports expect a retest of 51.60’s highs.
Retail Sentiment: Neutral
Trading Take-away: Neutral