New York Forex Report: Eyes On Retail Sales & Producer Prices

New York Forex Report: Eyes On Retail Sales & Producer Prices

New York Forex Report: Risk sentiment appears a little stronger into the end of the week. Soft Chinese trade data undercut risk appetite Thursday but better than expected inflation data from China today (CPI +1.9% y/y in September versus +1.6% expected) has helped lift sentiment. Note China also reported a 6.9% rise in power usage in the September year, suggesting strengthening activity across the economy. European equity markets are up strongly (~1.7%) and developed market bonds have sold off again, lifting US yields somewhat more than most other markets. The USD has picked up a little support overall within the G10FX space as a result but ranges are narrow.

FX Majors: EUR strengthened against the US dollar on Thursday as speculation that the European Central Bank is considering tapering its bond-buying. According to the latest Reuters poll participants are expecting the European Central Bank (ECB) extending its QE programme beyond March 2017 by end of this year while keeping monetary policy unchanged in next week’s policy decision on 20 October. GBP Report from RICS showed that UK house prices gauge strengthened more than expected in September, suggesting that shortage of property overshadowed impact of Britain’s vote to leave the European Union. The price gauge rose from 13% to 17% last month. JPY Japan‘s tertiary industry index indicated that growth in the services sector was flat in August after a revised 0.20% MOM acceleration in July. Finance and insurance companies, business related services and retail trade firms were the main drag to the headline number.

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

Technical: 1.0995 achieved as 1.1060/60 contains near term corrections bears target 1.0957. Medium term resistance is sited at 1.1120 only over 1.1220 eases near term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

euro

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

Technical: As 1.2330 rejects corrective advances bears target a retest of 1.20. Only a close over 1.25 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is sited 102.80
Retail Sentiment: Bearish
Trading Take-away: Long

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 is sited at 114 below 113.60 suggests an early reversal to trend
Retail Sentiment: Bearish
Trading Take-away: Sidelines

Commodities FX: GOLD price ended higher on the back of the stronger US dollar as the weak Chinese trade data stoked safe asset demand for gold, yen and US Treasuries. The gold price increased by US$4 to US$1,255. OIL prices edged higher on Thursday (13 Oct) after the US Federal data showed a 4.9 million barrel increase in crude inventory (the first increase in 6 weeks and well above the market forecast of just +900,000) but total crude and refined products fell by 5.1 million barrels. The US Nymex WTI futures increased by US$0.26 to US$50.44. AUD The Australian Dollar has found some support into the latter half of the week, mostly on profit taking and position squaring ahead of today’s US retail sales print. The early Friday release of hotter China inflation could be another source for some Aussie demand, which also is helping to offset Thursday’s discouraging China trade data. CAD Thursday was a day where OIL prices recovered and the market decided to book profit on long US Dollar exposure across the board. And so, when you get that type of a day, you are going to find the Canadian Dollar trading higher. But overall, data is still supportive of the Fed moving forward with a rate hike, particularly after Thursday’s US initial jobless claims came in at a 43 year low.

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

Technical: Symmetry swing resistance sited at .7685 stalls advance as .7615 caps corrections bears target .7412 symmetry swing support. Only over .7700 reverses bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

aussie

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias. Near term symmetry swing support is sited at 1.3130.
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