New York Forex Report: Marekts Cautious On China Trade Data

New York Forex Report: Marekts Cautious On China Trade Data

New York Forex Report: Markets have a “risk-off” undertone so far today; the USD is mixed against its G10FX counterparts as the JPY and CHF out-perform while the AUD and GBP are under-performing. The net change in the currencies remains limited but the USD has lost a little ground after three days of solid gains in the USD Index. Weaker than expected Chinese trade data, a lower trade surplus resulting from a drop in exports (-10% y/y and well below expectations) and slower growth in imports – appears to have spooked market sentiment. European stocks are posting sharp losses and the resulting bid for bonds has pulled US Treasury yields off their recent peaks and trimmed USD-supportive short-term spreads somewhat.

FX Majors: EUR dropped to its lowest levels in over two months. Eurozone’s industrial output increased 1.60% MOM in August, reversing the revised 0.70% MOM fall in July. There was a broad based pick up in factory production from July to August, spanning from energy to capital goods output, soothing slowdown concern. GBP gives back gains on the intial news regarding soft Brexit possibility. Speaking in Parliament on Wednesday, May promised lawmakers would get to debate her negotiating strategy, but refused to say whether they would also get a vote. JPY Japan’s machine tool orders fell 6.30% YOY in September, moderating from the 8.40% YOY pace in August. The headline number was helped by softer pace of decline in domestic orders but extended contractions suggested that overall demand was weak.

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

Technical: Next downside objective is 1.0995 ahead of 1.0957. Near term resistance is sited at 1.11 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: 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 114.60 has been eroded, below 113.60 suggests an early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX:

GOLD ended lower as the stronger US dollar was up further after the FOMC minutes release. The gold price decreased by US$1.90 to US$1,251.10 on Wednesday. OIL markets saw crude prices easing lower on Wednesday (12 Oct) after the OPEC monthly bulletin released on Wednesday showed the discrepancies between the data data provided by OPEC and the information provided by the individual countries, leading to concerns how honest OPEC members are about their production and raise doubts about OPEC’s ability to enforce any cuts. The US Nymex WTI futures declined by US$0.61 to US$50.18. AUD inched up from a three-week low boosted by strong demand from investors for a long-term government bond sale. Australia rated triple-A by S&P and Moody’s which has A$443 billion of bonds on issue. CAD notched a small loss against a broadly stronger USD, as the release of minutes from the last US Federal Reserve meeting left a December interest rate hike in play and crude oil prices fell. Traders focus on monetary policy divergence between Canada and the US, which is widening the spread between the two countries’ bond yields.

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

Technical: Symmetry swing resistance sited at .7685 stalls advance as this area contains .7550 primary downside objective achieved as .7615 caps corrections bears target .7412 symmetry swing support.

Retail Sentiment: Neutral
Trading Take-away: Neutral

USDCAD
Outlook: Short Term (1-3 Days): Bullish – 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: Bearish
Trading Take-away: Long

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