New York Forex Report: JPY Jumps On BoJ Blip

New York Forex Report: JPY Jumps On BoJ Blip

New York Forex Report: The USD has lost ground on the session so far but with overall gains by the dollar’s G10FX peers still relatively limited and the USD Index holding near recent highs, USD price action appears consolidative overall and markets remain constructive on the USD’s outlook. US data reports have been of little support so far this week it has to be said; yesterday’s CPI data came in on expectations in headline terms (the highest inflation rate in nearly two years) but the core rate missed slightly on the downside. Yield differentials have narrowed but remain at USD-supportive levels in general. The JPY is the top-performing currency among the majors today, helped by losses in European equity markets and reports suggesting that the BoJ is not considering more easing measures at the November policy meeting. The GBP is under-performing overall following reports that Germany will shut off “back door” negotiations with the UK on Brexit.

FX Majors: EUR The European Central Bank is expected to stay on hold in Thursday’s meeting for many reasons, including risk events such as US elections and the constitutional referendum in Italy. GBP Inflation indicators from the UK showed that price pressure accelerated in September, driven largely by Sterling’s depreciation. Consumer prices surged 1.00% YOY in September, the most since Nov 2014, whilst factory gate prices climbed 1.20% YOY (August: +0.90% YOY). In addition, retail prices increased 2.00% YOY last month (August: +1.80% YOY). JPY Moody’s said Japanese banks see only limited deterioration in their profitability following introduction of a negative interest rate policy.

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

Technical: Bears target 1.0957 as the next downside objective ahead of 1.0845. Near term resistance is sited at 1.1035, 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): Neutral – 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: Bullish
Trading Take-away: Short

USDJPY
Outlook: Short Term (1-3 Days): Bearish – 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 is sited at 114 eroded, focus now on 113.60, below 113.30 suggests an early reversal to trend
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price ended higher for the second straight session on Tuesday due to weaker US dollar spurring foreign demand for gold. The gold price increased by US$6.40 to US$1,260.80 on Tuesday. OIL was trading between gains and losses and eventually ended slightly higher on Tuesday (18 Oct) as investors continued to debate whether OPEC can coordinate an effective production cut. The US Nymex WTI futures increased by US$0.35 to close back above US$50 at US$50.29. 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 outperforming along with the rest of its commodity currency cousins. The combination of elevated OIL prices, softer US economic data and improved risk sentiment have all been helping to keep the Loonie in demand.

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

Technical: Symmetry swing resistance sited at .7685 under pressure over .7730 reverses bearish bias and focus shifts to .7830. Near term support is sited .7600
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3080/60 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820
Retail Sentiment: Bullish
Trading Take-away: Short

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