New York Forex Report: EUR Consolidates Gains ECB Eyed

New York Forex Report: EUR Consolidates Gains ECB Eyed

New York Forex Report: USD is marginally mixed against its major currency peers today as recent volatility driven by position adjustment subsides. European equities are firmer, developed market bonds better supported and major commodities are mixed, with crude oil’s post-OPEC rally losing momentum. Within the G10FX space, the GBP is out-performing as focus remains on the UK courts’ Brexit decision. The AUD is under-performing after the RBA left rates unchanged but sounded a note of caution on the outlook. Market attention is turning to event risk later in the week, namely the ECB policy meeting but the data calendar is pretty full today, US and Canadian trade for October, followed by the Ivey PMI and US unit labour costs, factory orders and final durable goods data. Later, Australia releases Q3 GDP (expected slower at +0.2% Q/Q) and China may release November FX reserves data where focus will be on the rate of attrition.

FX Majors: EUR Data from the Eurozone was mixed. The services sector grew slower than expected as the PMI was downwardly revised to 53.8 in Nov final reading from initial reading of 54.1, though still representing acceleration from 52.8 in Oct. Sentix investor confidence dipped to 10.0 in Dec from 13.1 previously, likely weighed down by recent risk events. Retail sales picked up in Oct, rising 2.4% YOY compared to 1.1% in Oct. GBP still showed no sign of immediate Brexit fallout as services sector stayed resilient in Nov. The Markit / CIPS gauge of PMI climbed to 10- month high of 55.2, up from 54.7 and resisted market consensus of a dip to 54.6. Employment in the sector grew the quickest since Apr, though business sector softened for the first time since Jul, impacted by continued uncertainty over the UK’s fate in the single market. JPY Services sector also grew quicker in Japan in Nov, pushing the Nikkei PMI higher to 51.8 from 50.5 in Oct. However, consumer confidence amongst the Japanese recorded a 6-month low, with the index sliding to 40.9 in Nov from 42.3 in Oct. This dents BOJ’s objective to lift inflation beyond 2%, particularly as employment sentiment dipped while gauge for willingness to purchase durable goods also fell.

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

Technical: Near term resistance sited at 1.0650/80 removed and the subsequent break of 1.0740 targets medium term 1.0850 is a key upside hurdle which will need to be captured on a closing basis to stabilise the pair and sets corrective sites on the symmetry swing resistance at 1.0950.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: The close over 1.2670 suggests further upside momentum to target the key structural resistance sited at 1.28, near term support is sited at 1.26 a failure below 1.25 reopens symmetry swing objective at 1.2270.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 115.59 is the next upside objective representing the 61.8% retracement of the 2015/16 decline, near term support is sited at the symmetry swing level of 112.27 A breach of 111.07 would suggest a broader correction to the advance opening a move back to test symmetry swing support at 109.60
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 121.82 achieved as 119 supports scope for a test of offers above 123.50 as the next upside objective ahead of the pivotal symmetry swing resistance sited at 124.42. A break back below 119 opens 118.45 opens ahead of pivotal bullish trend support at 116.20
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD fell to its lowest in 10 months on Monday as global equities strengthened as market participants shrugged off worries of political instability in Italy, while US Treasury yields rose after US economic data. OIL to a fresh 16-month high, as optimism spread about the prospect of a tightening market after OPEC members agreed on a landmark deal to cut production last week. AUD current account deficit narrowed to AUD$11.4billion in Q3, mainly contributed by the higher export commodity prices. The RBA as expected kept the official cash rate unchanged at its record low of 1.5% this morning ahead of tomorrow’s Australian GDP print. CAD unemployment rate dropped for the first time in five months in November since people dropped out of the labour force and companies added part-time jobs. The unemployment rate declined to 6.8% after holding at 7% in the prior three months while employment increased by 10,700.

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

Technical: .7092 AB=CD remains the downside objective. Near term resistance sited at .7440 has been eroded the correction should now challenge pivotal 7530/50 as this levels contains the upside reaction there is potential for resumption of downside pressure.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Price rotating lower set to test pivotal 1.3250 a failure here concerns the bullish bias and opens a retest of channel support sited at 1.3050. A hold of key 1.3250 sets base for 1.3650 attempt
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: As equidistant swing objective sited at 1202 contains upside reactions bears target 1149 as the next downside objective. A close over 1220 suggest broader correction to the recent decline.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: The breach of 49.20 provided the anticipated quick test of offers above 50.00 and critically the equidistant swing objective sited at 51.79 as this level halts advance there remains an opportunity for a move to the downside targeting symmetry swing objective at 39.78. Over 52.40 opens 55.000 as the next upside objective
Retail Sentiment: Bearish
Trading Take-away: Long