New York Forex Report: Markets Marking Time Ahead of Trump

New York Forex Report: Markets Marking Time Ahead of Trump

New York Forex Report: Markets marking time ahead of a busy week, with the schedule full of key data (US durable goods today), central bank speeches and policy meetings (BoC Wednesday) as well as President Trump’s address to Congress (Tuesday). All this event risk is prompting a rather quiet start for markets, with the USD narrowly mixed versus its G10 peers amid steadier equity markets after last week’s wobbles. Developed market sovereign debt is mixed as well, although US Treasury bonds are under-performing while peripheral Eurozone bonds are doing relatively better and French markets improve on hopes that election risks are subsiding as centrist Macron improves in the opinion polls. GBP is under-performing on news that the UK government may be preparing for another Scottish independence referendum.

FX Majors: EUR ECB’s Weidmann reassured that the central bank will not end asset purchases all of a sudden. Given high debt levels in some Euro zone countries, government bond purchases could create pressure on monetary policy to keep interest rates low longer than is absolutely necessary. GBP According to data from the British Bankers’ Association, the number of housing loans approved in the UK increased to a one year high of 44657 in January (December: 43581), showing little evidence that Brexit talks is halting demand in the housing market. JPY all about external drivers, namely yield differentials and surging global equities, which have been JPY bearish, and Trump protectionism and fear of impending risk off flow, which have been JPY supportive.

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

Technical: Expected retest of 1.0521 base plays out potential here for interim double bottom, a closing breach opens a move to 1.0450 next, intraday 1.0585 is the first upside hurdle, only over 1.0650 arrests bear term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective at 1.2679 capping corrective advance. Near term support sited at 1.2345 survives on a closing basis with range resistance sited at 1.2580
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Only a 112 sustained breach will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance sited at 113.80, a close over 114.50 reasserts upside targets primarily at 115.50
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 118.70 downside objective achieved as near term resistance sited at 120.50 caps corrections bears target 117.69 next, only a close over 121.50 stems near term selling pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD hit its highest levels in three and a half months on Friday, briefly touching above $1,260 per ounce before finishing at $1,257.19 (+0.61%), helped by rising geopolitical risks and a directionless U.S dollar. OIL crude settled down 46 cents at $53.99 a barrel on Friday but ended the week overall 1.1% higher. AUD RBA Governor Lowe offered some balanced testimony this past Friday with respect to the Australian Dollar. While the central banker conceded the currency wasn’t fundamentally overvalued, he also said they would like to see the Australian Dollar lower. CAD data out of Canada was mixed with softer retail sales offset by Friday’s hotter Canada CPI. Meanwhile, the price action in the OIL market has become much less relevant to the Canadian Dollar now that the commodity has deferred to range trade.

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

Technical: The next upside objective is sited at .7750 as price continues to consolidate at elevated levels. Near term support is sited at symmetry swing level .7600 ahead of pivotal .7449
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Over 1.3210 opens a move back to test 1.3370.Price action remains erratic as price attempts to base above pivotal 1.30. Near term support is sited at 1.3050, failure here opens a retest of 1.2967
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 1225 acts as support bulls target symmetry swing resistance sited at 1299, only a close below 1200 concerns near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

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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