New York Forex Report: March Hike Fully Priced For Now

New York Forex Report: March Hike Fully Priced For Now

New York Forex Report: The USD is mainly firmer on the day, profit-taking could dampen the bull trend in the short run but rate differentials suggest limited downside potential for the USD at the moment and perhaps even a little room to appreciate still. Markets are starting off non-farm payroll week on a cautious note; European equities are weaker on renewed political worries and the JPY is firmer on safe-haven demand despite North Korea launching four missiles into the ocean. EUR Market retail PMI data was mixed across the major economies (stronger in Germany, weaker in France and Italy) in February. Eurozone Sentix investor sentiment rose to 20.7 in March, the highest reading since 2007. French opinion polls showed Le Pen ahead in the polls while Alain Juppe said he would not step in to replace Francois Fillon as the center-right candidate.

FX Majors: EUR Last week, improving sentiment towards French presidential elections supported the EUR. This week, the Euro area’s GDP figures and interest rate decision, along with Germany’s industrial production, will likely capture traders’ attention. GBP Last week, a drop in the UK’s consumer confidence readings and slowing manufacturing figures likely weighed on the GBP. This week, the UK’s retail sales readings, consumer inflation expectations and manufacturing and industrial production figures will be key for the GBP. JPY Last week, the JPY weakened against the USD, amid risk-on mood and rising probability of a Fed rate hike. This week, Japanese GDP and current account figures are likely to be in focus

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

Technical: Expected retest of 1.0521 base plays out interim double bottom retested, a closing breach opens a move to 1.0450 next, only over 1.0650 arrests near term bearish bias and resets attention on upside objectives
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Price has broken recent range support as 1.24 caps upside corrections a test of 1.22 becomes the next downside objective, only over 1.25 suggest false downside break and return to recent range
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance sited at 113.80 removed and now becomes near term support, a close over 114.50 reasserts upside targets primarily at 115.50. Failure below 113.40 opens 112.80 as the next downside objective
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Near term resistance sited at 120.50 removed and now becomes near term support, only a close over 121.50 stems near term selling pressure and resets focus on upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD touched fresh two week lows of 1,222.94 per ounce immediately after Yellen’s remarks but subsequently recovered to finish little changed at 1324.81 by the New York close Friday. OIL settled higher by 72 cents (+1.37%) to $53.33 a barrel, with gains encouraged by a slighter weaker dollar but tone remained cautious as a Baker Hughes survey showed U.S. drillers bringing more rigs online for a seventh straight week, increasing by seven rigs to 609, most since October 2015 AUD Last week, the AUD fell against the USD amid a stronger USD tone, triggered by hawkish remarks by several Fed officials. This week, the Reserve Bank of Australia’s interest-rate decision and retail sales figures are likely to affect the AUD. CAD Last week Bank of Canada held rates at 0.5% and kept its overall dovish tone, although the statement was shorter than normal. While the BOC did acknowledge that growth, employment, and inflation were better than expected, they were prepared to “look through” the recent increases citing the rebounds as temporary (inflation) or at high risk due to continued labour market slack, trade policy uncertainty, and weak non-energy exports. This week employment data released Friday is likely to be the key driver for the Loonie.

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

Technical: Breach of primary support pivot at .7600 suggest potential for broader correction to play out especially as .7610 caps near term upside, .7500 becomes the next downside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Breach of 1.3210 opens anticipated move back to test 1.3370 as 1.33 supports bulls target the symmetry swing objective sited at 1.3480.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1225 acts as support bulls target symmetry swing resistance sited at 1299, only a close below 1215 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Rejection from equality objective area at 55.30, a close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at 54.50.
Retail Sentiment: Bearish
Trading Take-away: Long

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