New York Forex Report: All Eyes on ECB Press Conference

New York Forex Report: All Eyes on ECP Press Conference

New York Forex Report: The USD is tracking slightly higher this morning, extending three days of relatively narrow gains versus its major currency peers. Overall, however, the tone of the market remains quiet and consolidative as the markets digest the USD’s strong gains at the start of the month. It’s hard to pin down the market’s broader mood this morning; global stocks are mostly firmer and developed market bonds are better offered (driving yields 1-2bps higher at the long end of the curve). Commodities are mixed, though energy prices are notably lower (WTI -1%) on the day. In the FX space, the CHF is a modest out-performer on the day (for no obvious reason) while the AUD is under-performing following the release of weaker than expected employment data (jobs fell 9.8k in September versus expectations of +15k and full time jobs were particularly weak). ECB have left rates unchanged now market focus is firmly on Draghi’s press conference for further discussion around quantitative easing.

FX Majors: EUR Construction output in the euro zone dropped 0.90% MOM in August, reversing the revised 1.50% MOM growth in July. Separately, Japan’s all industry activity index grew 0.20% MOM in August, unchanged from the pace in July. The modest reading showed that growth remained sluggish in 3Q. GBP UK’s unemployment rate was 4.90% in the three months through August, hovering around its decade low rate since May. Companies added 106k employees to payrolls in the same time period which was much lower than the 174k increase in July. Despite the low unemployment rate, rapid price growth dampened real wage gains, potentially undermining household spending with Brexit fallout. On a positive note, the number of jobless claims fell to 0.7k in September from 7.1k in August. JPY Construction output in the euro zone dropped 0.90% MOM in August, reversing the revised 1.50% MOM growth in July. Separately, Japan’s all industry activity index grew 0.20% MOM in August, unchanged from the pace in July. The modest reading showed that growth remained sluggish in 3Q..

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

Technical: 1.0957 achieved expect profit taking ahead of headline risk, as 1.1035 caps correction bears seek the next downside objective sited at 1.0845. Medium term resistance is sited at 1.1120 only over 1.1220 eases bearish bias..
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1.2260/80 rejects near term corrective advances bears target a retest of 1.20. Medium term resistance is sited at 1.2330. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support at 103.80 is eroded bulls will lean on the medium term pivot at 103, only a close below 102.80 eases bullish pressure.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: 116.11 symmetry swing resistance stalls advance, a close over 116.50 opens the larger scale AB=CD objective at 121.00. Near term support at 113.60 stalls decline as 114.50 caps upside expect s test of 113.30 a breach of which suggests an early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price also ended higher for the third straight session on due to weaker US dollar. The gold price increased by US$7.10 to US$1,267.90 on Wednesday. OIL prices ended higher on Wednesday (19 Oct) with US crude oil price settling at a 1-year high after the US Energy Information Administration reported a bigger than expected decline of US crude inventories of 5.2 million barrels.. The US Nymex WTI futures increased by US$1.31 to close at US$51.60. AUD Australia’s Westpac leading index increased 0.06% MOM in September, picking up from the revised 0.01% MOM in August. The improved reading showed that consumers were more confident about the state of the economy in the near term. CAD Although the BoC didn’t downgrade forecasts as much as the market thought it would, which initially helped to prop the Loonie, the fact that the statement still leaned to the dovish side was enough to reverse any positive Canadian Dollar flow.

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

Technical: Sharp rejection from pivotal 7730 near term support is sited .7600. A close over .7730 reverses bearish bias and focus shifts to .7830.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1.3360 equidistant AB=CD is the next upside objective, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited 1276 ahead of pivotal 1300.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective as 49.00 supports the advance ,only below 45.00 would suggest false upside break a continuation of a more complex corrective pattern
Retail Sentiment: Bearish
Trading Take-away: Long