New York Forex Report: Markets Quiet For US Veterans Day

Further data weakness from China overnight saw industrial production undershooting expectations of 5.7% to print 5.6%, following on from Tuesday’s CPI miss. Commodity and equity markets were lower initially on the new but have since recovered over the European morning with the US Dollar rebounding so far also. US markets are on holiday today for US Veterans day so flows expected to be light over the European afternoon session.

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

Fundamental: Despite a recovery late in yesterday’s session EURUSD is weaker once again today falling victim to a resurgent US Dollar and still pressure by talk of a December deposit rate cut by the ECB.

Technical: While 1.0830/50 caps intraday upside corrections, bears target a test of 1.0560 next ahead of an assault on year to date lows. Only a close above 1.09 eases immediate downside pressure.

Interbank Flows: Bids 1.07 stops below. Offers 1.0830 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell against 1.0830/50 resistance targeting 1.0560

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

Fundamental: UK labour market data saw average weekly earning remain unchanged at 3%, failing to meet expectations of 3.2% whilst ex-bonus figures fell to 2.5% from 2.8% previous. On the plus side the unemployment rate fell again to 5.3% . GBP was lightly bid following the data releases.

Technical:  While 1.52 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.52 eases immediate bearish bias

Interbank Flows: Bids 1.50 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sold 1.5150 targeting a 1.50 test, stops above 1.52

gu2015-11-11 07_43_23-NetDania - NetStation

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

Fundamental: USDJPY is in a phase of consolidation above 123 handle while the greenback remains firm after the Nonfarm Payrolls gave the green-light for a rate hike in December. The US-Japan 2-year yield spread remains elevated close to its recent multi-year high on the basis of Fed-BoJ’s policy divergence.

Technical: Upside objective of the primary equality objective at 123.50 essentially achieved, while 122.50 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122.50 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uj2015-11-11 07_44_00-NetDania - NetStation

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

Fundamental: Lower UST yields after a solid 10 year auction saw a modest move to the downside but with equities erasing earlier losses, support was quickly found. Pair remains weighed by negative EUR cross flows. Draghi due on the wires later and could see an uptick in volatility.

Technical:  Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.

Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-11-11 07_44_31-NetDania - NetStation

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

Fundamental: AUD was off one-month lows but remained weak due to expectations that the Federal Reserve will raise US interest rates soon. Domestic figures from Australia showed business conditions remained strong in October even as firms became a little less confident on the outlook. The marked slowdown in China, a key export market for Australia, also weighed on the AUDUSD.

Technical: While .7100 caps corrective upside reactions expect a retest and breach of Friday’s lows as bearish momentum builds for a retest of year to date lows.

Interbank Flows: Bids .7000 stops below. Offers .7100 stops above
Retail Sentiment: Bullish
Trading Take-away: Squared shorts into .7030 target, sidelines for now

au2015-11-11 08_20_11-NetDania - NetStation

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

Fundamental: CAD was little changed against the USD, caught between a modest pick-up in oil prices and a stronger USD. US crude settled up 34 cents at $44.21 a barrel after a report from the International Energy Agency said a sharp drop in oil investment.

Technical: Offers just above 1.33 stall the upside ratchet, bulls have the ball while 1.3260 supports intraday downside. However a close below 1.3260 today would suggest a false upside break and a bull trap sustained weakness below 1.3220 confirms.

Interbank Flows: Bids 1.3250 stops below. Offers 1.3350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-11 08_20_50-NetDania - NetStation

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