New York Forex Report: Markets Muted Ahead Of BoJ & FOMC

New York Forex Report: Markets Muted Ahead Of BoJ & FOMC

New York Forex Report: Trading remains muted as participants await this week’s central bank decisions. In G10 FX the NZD continues to perform strongly; dairy prices have been rising and higher auction prices are expected at today’s GDT auction. Markets are primed for good news but, after the Kiwi’s recent run, it appears to us that a lot of good news is priced in. Most other majors are trading narrowly mixed against the USD, meanwhile, with the GBP and the CAD at the foot of the overnight performance league. Participation in the markets remains relatively weak and that is probably because conviction surrounding the BoJ and Fed outcomes is low. For the Fed, most expect no move; two US primary dealers are, however, forecasting a rate hike this week.

FX Majors: EUR Eurozone’s current account surplus dropped from € 29.5 billion in June to € 21.0 billion in July, dragged by the drop in exports while imports increased. On a second report, construction output rose 1.80% MOM in July after an upwardly revised 0.30% MOM growth. GBP A report by real estate website Rightmove showed that house prices rose 4.0% YOY in September which was similar to the 4.1% growth pace in August. After stamp duty changes, buyers flocked to cheaper properties, sending prices higher. On the other hand, prices of high end properties dropped due to drop in demand, narrowing the gap in price difference between the two. JPY Japanese markets closed yesterday for Respect-for-the-Aged Day. Markets await the BoJ policy meeting due tomorrow. Investors believe with three years of massive money printing failing to lift inflation, the central bank is widely expected to move away from shock therapy to a protracted battle against deflation, according to sources familiar with this matter.

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

Technical: The breach below 1.1190 opens 1.1120, a failure of bid support here opens a retest of the base at 1.1050, near term symmetry swing resistance is sited at 1.1230.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Failure below 1.3130 suggests early reversal to downtrend. As 1.3150 rejects corrective advances bears target 1.2870 as the next downside objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: The break of 101.90 opens 101.20 next ahead of pivotal 110.90 base support. Near term resistance is sited at 102.80, only over 103.50 would ease near term bearish bias
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 113.80 supports potential for another leg higher to target equidistant swing objective at 117.87. Failure below 113.60 opens move back to 112.
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD rose for the first day in three as dollar slipped on Monday, with the bullion inching up $2.84 (+0.21%) to $1313.19 an ounce. Oil pared gains of as much as 2.6% to finish up only $0.27, or 0.63%, to $43.30 a barrel.. AUD near one-week highs at 0.7572 yesterday as the US dollar fell with few expecting a Federal Reserve interest rate hike this week. RBA September Minutes largely as expected. Policy is consistent with sustainable growth and inflation goals, reiterating yet again, higher AUD would complicate economic growth. The A$9.7 billion ($7.30 billion) sale of the Port of Melbourne to a group boosted sentiment and highlighted the strong appetite for Australian assets. CAD finished with a slight gain against the USD, Bank of Canada Governor Stephen Poloz will give a speech today and traders will see whether Poloz emphasises the downbeat tone of the bank’s most recent policy statement.

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

Technical: The next downside objective is symmetry swing support sited at .7412. Near term resistance is sited at .7560/80 a breach of this area opens a move to .7660.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.3030 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, the break below 1320 opens move back to retest 1301 base. Only below 1300 concerns near term bullish bias
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.81 becomes the downside objective over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bullish
Trading Take-away: Short