New York Forex Report: EUR Down Despite Data

New York Forex Report: EUR Down Despite Data

New York Forex Report: Tomorrow is Independence Day in the US, so it is worth being mindful that liquidity today may also be poor. China’s Caixin released their Manufacturing PMI data for June, coming in above expectations and stronger than last month. Japan’s Tankan report also showed a pretty strong pickup, but was somewhat overshadowed by PM Abe’s Liberal Democrat Party performing very poorly in Tokyo Assembly elections, ahead of next year’s national elections. Europe continued the survey theme Eurozone manufacturing PMI inches higher to 57.4 in July (June 57.3), with the UK missing expectations for its manufacturing PMI printing 54.3 against an expected 56.3. This afternoon we get the US ISM manufacturing, which is forecast to edge higher and a rebound in construction spending is also anticipated. In terms of speakers, BoE Chief Economist Haldane is expected to speak on the first day of a two-day technical economics conference. We know his developing hawkish stance already. US Fed’s Bullard will also speak and we know his dovish stance.

USD The barrage of US data staged some positive surprises, setting the stage for sustained growth in the second quarter of the year. US personal income accelerated to 0.40% MoM even though spending slowed to 0.10% MoM as expected in May as household save a bigger portion of their income. On a brighter note, recovery in manufacturing is on track as Chicago PMI rose to a three-year high of 65.7 in June while University of Michigan consumer sentiment pulled back less than expected to 95.1 in June

EUR Eurozone’s consumer prices rose 1.30% YoY in June after growing 1.40% YoY in May, strengthening the case for gradual exit from ECB’s stimulus program. On a brighter note, core CPI increased at a quicker pace of 1.10% YoY (May: +0.90% YoY).

GBP In tandem with downside risks from Brexit and heightened political risks, a final report showed that the UK economy expanded 0.20% QoQ in the first quarter of the year on the heels of much quicker 0.70% QoQ growth in 4Q. Separately, index of services increased 0.20% in the three months through April, building on a 0.10% growth in the three months through March.

JPY Data showed that Japan’s housing starts and construction orders were on a decline in May, signalling modest expansion in the housing market this quarter. Housing starts dropped 0.30% YoY (April: +1.90% YoY) while construction orders slipped 0.50% YoY in May (April: -0.20% YoY)

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

Technical: 1-3 Day View – 1.1430 containing the advance for now as 1.1350 supports bulls target 1.1530 as the next upside objective only a daily close below 1.1290 concerns the near term bullish bias.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.1450 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – As 1.2960/40 supports on an intraday basis 1.3048 is the next upside objective, ahead of the pivotal 1.3238 Only a closing breach of 1.2710 concerns the near term bullish bias.

1-3 Week View – The weekly failure to close above 1.3045 ahead of the broader symmetry swing objective sited at 1.3238 suggest underlying weakness persists 1.2450 becomes pivotal for the medium term perspective
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – The daily closing breach of 111.80 level resets focus on upside objectives principally 114.35, near term support is now sited at 111.80/60, only below 111.20 would arrest the advance and return to 110/112 range.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Bullish expansion from consolidation targets 129.44 as the primary upside objective, support moves to 127.40/20, only below 126.80 concerns near term bullish bias.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 the weekly breach of this level opens 129.44 as the broader upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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