New York Forex Report: ECB’s Hansson Snubs December QE


As expected, the European morning has passed quietly with traders remaining cautious ahead of today’s FOMC meeting. The meeting is not expected to see the US lift-rates though traders will be keenly scrutinising the statement for any clues as to the likelihood of a potential December lift-off. Risk remains fairly well bid heading into the New York open with both commodities and equities seeing better demand.

US Dollar is up off session lows heading into the American crossover. MBA Mortgage Applications data earlier in the session came in at -3.5% against 11.8% previous whilst Advance goods trade balance data showed a slight beat printing $58.663B vs $64.200B exp.

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

Fundamental: EUR was firmer over the European morning following comments from ECB’s Hansson saying that he doesn’t “see any convincing reason to consider further policy action in December”. Data wise  German consumer confidence came in in-line with expectations at 9.4. Main focus on the session is the October FOMC release at 1800 GMT.

Technical: Breaches 1.10 support, while 1.1080/1.11 caps intraday upside reactions expect bearish pressure to be maintained targeting 1.09 bids next. A close above 1.1150, targets 1.1250 next.

Interbank Flows: Bids 1.0950 stops below. Offers 1.1120 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell pullbacks against 1.1120 targeting 1.09

eu2015-10-28 07_41_04-NetDania - NetStation

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

Fundamental: GBP was weaker over early European trading extending losses from yesterday weak GDP print, suffering too from the resurgent Dollar heading into the American crossover.

Technical:  While 1.5300 supports downside reactions expect a grind higher to test 1.56 symmetry objective. A breach of 1.5280 targets a retest of pivotal 1.52 support.

Interbank Flows: Bids 1.5250 stops below. Offers 1.54 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Venture long back through 1.5330 targeting 1.56

gu2015-10-28 07_41_41-NetDania - NetStation

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

Fundamental: Japan’s year over year Retail Trade was announced as -0.2%, worse than the market forecast 0.4%, showing that headwinds are being seen by the Japan economy increasing expectations for BoJ to exercise more easing policies at the end of this month. JPY has entered the trading range of 119 to 121 again. Range-bounded price action in JPY may persist until more clues will be given out by BoJ meeting.

Technical: Bulls target a sustained break of 121 to target range highs at 121.85 an intraday failure at 120.00 would suggest return to range.

Interbank Flows: Bids 119.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 120.50 targeting upside range break

uj2015-10-28 07_42_14-NetDania - NetStation

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

Fundamental: EURJPY traded higher over the European morning amidst EUR strength & JPY weakness stemming from European official comments against the need for December QE.

Technical:  Breach of 133.40 means bears now target equality corrective objective at 131.20 while 134.20 caps upside reactions, only a close above 134.20 eases immediate bearish pressure.

Interbank Flows: Bids 133.00 stops below. Offers 134.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell pullback against 134,50 targeting 131.20

ey2015-10-28 07_42_59-NetDania - NetStation

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

Fundamental: AUD lost ground against the USD due to AUDNZD cross flow sales. As markets expect an on-hold decision from RBNZ and a rate cut from RBA next week, the cross broke through four month lows. Australia’s Q3 CPI QoQ posted a reading of 0.5%, against expectations of 0.6%. Slightly firmer risk sentiment this morning has seen AUDUSD losses stemmed for now as commodities rebound.

Technical: The breach of .7140 concerns near term bullish bias and suggests a retest of pivotal .7030/50 next failure here firmly re-establishes the bearish tone and open a retest of 2015 lows and potential broader bearish trend continuation move.

Interbank Flows: Bids .7100 stops below. Offers .7250 stops above
Retail Sentiment: Neutral to bullish
Trading Take-away: Sidelines for now

au2015-10-28 08_11_53-NetDania - NetStation

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

Fundamental: Stronger oil price so far today have seen the Canadian Dollar recover a little ground against the US Dollar, pulling back from recent session highs.

Technical: Near term bearish tend remains intact as intraday resistance at 1.3260 contains intraday upside reactions bears target a retest of bids below 1.2850. A breach of 1.3260 opens test of 1.3450 offers and potential broader bullish trend continuation

Interbank Flows: Bids 1.3090 stops below. Offers 1.3260 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-10-28 08_17_14-NetDania - NetStation

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