New York Forex Report: Market Awaits Mario

New York Forex Report: Market Awaits Mario

New York Forex Report: The USD has added modestly to yesterday’s gains overall through the overnight market but the DXY is trading well off the earlier high at present as the AUD, NZD and GBP remain well supported on the session. Developed market bonds remain under pressure but US Treasuries are out-performing modestly, crimping yesterday’s sharp re-widening in USD supportive spreads somewhat. With the Trump inauguration a day away and the president-elect promising prompt action on key issues, trade concerns clearly reflect on the relative performance of the above currencies. Event risk is at a premium today; beyond US data releases (housing starts/building permits, weekly claims and the Philly Fed survey), there are another couple of Fed speaking engagements (Harker & Williams) which may maintain the steady tightening drumbeat. Trump’s Treasury Secretary nominee Mnuchin appears before the Senate and may be asked about the USD. The ECB as expected left policy settings on hold; President Draghi will likely be asked about the policy outlook in the context of the recent pick-up in Eurozone inflation at the press conference.

FX Majors: EUR Greece’s sovereign debt yields fell as the country’s prime minister (PM) signalled on Wednesday that Greece’s bailout programme is likely to end in mid-2018. Traders willl focus on European Central Bank policy meeting and the Euro area’s current account data due today. GBP UK’s unemployment rate was unchanged at 4.80% in the three months through November. The number of employees added to payroll dropped by 9000 in the same period while applicants filing for unemployment benefits declined by 10.1k in December (November: revised to +1.3k). JPY is giving ground to the dollar for the first time in over a week as the overall rally in safe haven assets took a breather. The broader tone remains dominant in the absence of domestic releases, and we note JPY’s failure to respond to FX-related comments from Chief Cabinet Secretary Suga (watching ‘FX moves with vigilance’, ‘currency stability is important’).

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

Technical: Test of pivotal 1.0708 larger symmetry resistance underway. Anticipate sellers/profit taking to emerge at the initial test of this level, as this band of resistance caps upside bears target retest of 1.0338 lows. Near term support sited at 1.0550 failure here suggests early reversal to trend.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: New monthly lows with gap lower at the Asian open Sunday sub 1.20 before profit taking prompts sharp reversal, this reversal has gathered significant momentum and is now threatening a reversal in sentiment. 1.2380 represents the 50% retracement from December highs to January lows ahead of symmetry swing resistance sited at 1.2458, near term support is sited at 1.23
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Broader corrective phase to test 112 is now underway, a breach here will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance is sited at 115.10 only over 116.20 reasserts upside.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Close below 121.60 concerns bullish bias, expect test of symmetry swing support at 120.40 bulls will look to defend this level to set sights on, 124.42 symmetry swing resistance. A failure below 120.40 opens 118.70
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD retreated for the first time in eight sessions, by 1% to $1,204.30 per ounce as the U.S dollar recovered from a 2-week low. OIL settled down $1.40 (-2.7%) at $51.08 per barrel on expectations that U.S. shale producers would boost output. AUD Australian data showcased a resilient job market which could aid broad based recovery this year as global demand picks up. Unemployment rate ticked up 0.1 point to 5.80% as labour force participation climbed to a five month high of 64.70% in December. Employers unexpectedly added 13.5k to payrolls last month (November: 39.1k), adding to signs that labor market will continue to tighten this year. . CAD The Bank of Canada continues to see the economy shifting to above-trend growth this year and next, thus gradually absorbing excess capacity and returning inflation to 2% on a sustained basis by mid-2018.

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

Technical: Price erodes symmetry swing resistance sited at .7494 the close above .7525 resets bullish attention on range highs towards .7800 Near term support is sited at symmetry swing level .7340
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Breach of corrective channel below 1.3160 increases bearish pressure, failure to recapture channel opens a tests of psychological 1.30. Near term resistance is sited at 1.3150 removed price testing 1.33 as 1.3190 supports potential to build a base for next leg higher
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1220 symmetry swing trend resistance test underway anticipate profit taking/sellers to emerge on the initial test of this level. Near tern support is sited at 1190, failure here opens 1153
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Sharp 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 53.50
Retail Sentiment: Bearish
Trading Take-away: Long

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