New York Forex Report: NFP’s & FED Chair Into French Election Weekend

New York Forex Report: NFP’s & FED Chair Into French Election Weekend

New York Forex Report: The USD is heading into the weekend and the NFP report on a mixed note. Global stocks are softer, with Asian equities down more significantly amid the rout in commodities and the US stock markets’ apparent indifference to the Republican health care bill progressing through the house. The second round of the French presidential election may also be a factor restraining investor sentiment although polling has indicated Macron’s lead over Le Pen has remained stable and significant at around 20 points since the first round. Markets are looking for a solid gain in US jobs (street +188k) and will continue to note developments in wages but this week’s FOMC, which implied that the Fed was sticking with its base case view despite the Q1 slowdown in growth, has pre-empted the jobs report to an extent. Comments from Fed Chair Yellen, VC Fischer, Williams, Rosengren, Bullard and Evans over the session may be more influential for the market than jobs

USD US factory orders registered four straight months of growth in March but decelerated to a pace of 0.20% MOM after growing 1.20% MoM in February. In tandem, durable goods orders pulled back to +0.90% MoM (February: +2.40% MoM). On a more comforting note, core durable goods, a gauge of business spending, climbed 0.50% MOM. Business spending increased at a quicker pace after February’s +0.10% MoM and registered six straight months of positive growth, signalling firm business confidence in the economy. Labour market conditions remain on solid footing. Initial jobless claims dropped more than expected by 19k to 238k last week and continued to hover near the lowest levels seen in the past 40 years.

EUR Data from the Eurozone were upbeat. Markit services PMI climbed to a 6-year high of 56.4 in April (March: 56.2) while retail sales rose more than expected in March, report from Eurostat showed. Sales increased 0.30% MoM in March (February: +0.50% MoM).

GBP UK’s Markit services PMI climbed to a four-month high of 55.8 in April, after a reading of 55.0 in March. Despite Brexit related uncertainty, the survey showed that new business picked up at its quickest pace this year. Spurred by record low interest rates, the increase in net consumer credit picked up to £1.60 billion in March.

JPY Japan’s Golden Week holidays running for the rest of the week, could keep activity in the JPY somewhat subdued, overall sentiment remains fragile and markets could quickly revert to a risk-off mode in the event of renewed concerns on the geopolitical front.

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

Technical: 1-3 Day View – 1.0982 upside objective achieved expect profit taking pullback as 1.09 expect a grind higher to test offers and stops above 1.10/1.1030 . Only below 1.0820 concerns near term bullish bias.

1-3 Week View – While 1.10 contains corrective attempts higher focus remains on a retest of 1.03 ahead of 1.0118 extension objective form 2015/17 consolidation. Only over 1.14 sets upside focus on 1.1876
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – As 1.2860/30 supports bulls will focus on a test of psychological 1.30 magnet , only below 1.2750 concerns near term bullish bias.

1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of symmetry swing objective sited at 1.3238
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – 113 descending trend line test prompts profit taking, as 111.75 supports 115 becomes the next upside objective only back below 110 would concern the near term bullish bias

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Near term support sited at 120.35 as price prepares to test pivotal trend line resistance at 122.35 a close over this level opens 124.40.

1-3 Week View – The weekly close below symmetry swing support sited at 117.69 sets a bearish tone with 113.70 the medium term downside objective , a weekly close above 118.50 would arrest the immediate downside risk, resetting focus on pivotal 124.40.
Retail Sentiment: Bearish
Trading Take-away: Long

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