New York Forex Report: Equities Tank As Oil Forges New Lows

New York Forex Report: Equities Tank As Oil Forges New Lows

New York Forex Report: Markets traded with a heavily risk-off tone over the European morning as Oil forged new lows, breaking into the mid $20s, taking equity markets with it. An unwinding of US rate-hike expectations amidst growing global-growth concerns have seen a rampage this morning as investors flood to the safety of JPY and Gold among traditional safe-haven assets. Comments yesterday by Fed Chair Yellen reiterated the Fed’s committment to a gradual increase in rates though stressed that global developments “if they prove persistent” could weigh on the US grwoth outlook. These comments were taken by any as a clear sign that no Q1 rate-hike will be forthcoming and a worrying omen about the health of the global and US economies.

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

Fundamental: A renewed down turn in European equity markets has seen EUR ripping higher over recent session and this strength has continued over early European traidng today with EUR fuelled via its inverse correlation with risk and a weak USD.

Technical: While 1.1150/30 remains intact as support expect rotation through last weeks highs en route to test 1.14 symmetry objective. Below 1.1050 eases immediate upside pressure

Interbank Flows: Bids 1.12 stops below. Offers 1.1350 stops above
Retail Sentiment: Bullish
Trading Take-away: Long

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

Fundamental: Sharp selling across risk assets has GBP under pressure with sliding Oil prices weighing also. Yesterday’s January NIESR GDP estimate at 0.4% m/m with negative revisions to December was weaker than expected.

Technical: Failure at 1.4350 suggests false upside break and resets bearish trend to attack and break 1.40 as the primary downside objective. Over 1.46 re- establishes bullish bias and targets retest of last weeks highs en route to 1.4860

Interbank Flows: Bids 1.4450 stops below. Offers 1.46 stops above

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: Markets, while fearful of ‘intervention’, clearly expect JPY strength. USD fell to the lowest against JPY since November 2014 as investors rushed to safe-haven Japanese currency, withdrawing from earlier optimism that the Fed would continue to raise interest rates. The Yen has dropped 6.71 percent month-to-date. Markets await the US Retail Sales data due tomorrow.

Technical: USDJPY confirms break of major neckline support again overnight. While 114.10/20 caps intraday upside reactions expects a grind lower to test psychological 110 as the next downside objective.

Interbank Flows: Bids 112 offers below. Offers 114 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: JPY trength continues to weigh heavily on EURJPY despite market fears for a BOJ intervention.

Technical: While 128.30 caps upside reactions expect a retest of year to date lows, ahead of a test of stops sub 126 only over 130.50 eases immediate downside pressure.

Interbank Flows: Bids 126 stops below. Offers 128.50 stops above.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: The sharp turn lower across risk assets today has AUD under pressure as global-growth concerns and tanking commodity prices weigh on investor sentiment.

Technical: AUD tests and hold bids ahead of.6950 a failure of support here opens a retest of year to date lows. Only a close over .7150 eases immediate downside pressure..

Interbank Flows: Bids .6950 stops below. Offers .72 stops above.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Fundamental: The continued slide in Oil prices combined with USD weakness sees further choppy flows in USDCAD

Technical: Anticipated 1.40 retest from below under way, while this area contains the upside reaction potential for bearish bias to resume, however while 1.38 supports there remains potential fro a broader corrective phase with 1.4160 the next upside pivot.

Interbank Flows: Bids 1.3750 stops below. Offers 1.40 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral