New York Forex Report: NY Snowday Leaves Focus on FED Speakers

New York Forex Report: NY Snowday Leaves Focus on FED Speakers

New York Forex Report: The USD is trading in a mixed fashion in relatively subdued markets so far. A winter storm that is due to hit the East Coast this afternoon may keep trading on the quiet side today, with the NYC area facing significant disruption. Asian and European stocks are trading higher on the day while developed market bonds are mixed; US Treasury bonds are under-performing, pushing US yields some 4-5bps higher at the longer end of the curve and sustaining yield spreads at USD supportive levels. GBP is out performing modestly on the day while the NZD is under-performing after the RBNZ left the overnight rate left on hold at 1.75%, as expected, but messaged that interest rates will stay low for a prolonged period (projecting no rise in rates until late 2019). For the session ahead, there is only second-tier data from the US for markets will focus on but comments from the Fed’s Bullard and Evans will interest markets following hawkish Fed-speak earlier this week.

FX Majors: EUR Spain’s industrial production fell 0.5% m/m in December coming off the back of a 1.5% m/m gain in November, leaving output up 1.9% y/y. In France, the BoF’s index of business sentiment edged down 1pt to 101 in January. GBP Volatility in the Pound is likely to pick back up now that the House of Commons has paved the way for PM May to invoke Article 50 and trigger a hard Brexit. Reuters has reported the UK might need to pay Euro 55-60 billion to leave the EU. JPY a measure of peoples’ assessment of the Japanese economy decreased unexpectedly at the start of the year. The current index of Economy Watchers’ survey dropped to 49.8 in January from 51.4 in December. Similarly, the outlook index fell to 49.4 in January from 50.9 in the preceding month.

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

Technical: Near term support sited at 1.0670 eroded but not removed as this area survives on a closing basis anticipate a retest of 1.08, a close back below 1.0580 resets near term bearish bias, opening a move to test symmetry swing support at 1.0515. Near term resistance sited at 1.0710

Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective at 1.2679 capping advance for now. Near term support sited at 1.2345 survives on a closing basis prompting sharp reversal suggesting a retest of recent cycle highs, a close below 1.2330 opens 1.2236 symmetry swing support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

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 is sited at 113.30 only over 114.50 reasserts upside targets.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Symmetry swing support at 120.40 removed, the failure below 120.40 opens 118.70 as the next downside objective. Near term resistance sited at 120.50
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD drifted lower from a near three-month peak, pressured by a strong dollar as the euro fell on nervousness ahead of the French elections and weak German industry data. OIL prices also fell on Tuesday, as lower production by OPEC and other exporters was undermined by growing evidence of a revival in GOLD hit a three-month peak on Wednesday as the political risk of European elections and worries over President Donald Trump’s policies stoked safehaven demand. OIL prices moved lower after data showed US crude oil and gasoline inventories soared, whilst oil demand in China stalled. AUD The Housing Industry Association (HIA) in Australia reported that its monthly survey of large-volume builders showed new home sales climbed 0.2% in December, following a gain of 6.1% the previous month. CAD oil prices have been falling and central bank policy divergence has been highlighted by the BOC, both of which would suggest that any moves lower would be temporary unless USDCAD breaks through the lower end of the current trading range at around 1.30.

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

Technical: The next upside objective is sited at .7750. 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: 1.3150 resistance eroded, over 1.32 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..

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: The 1225 upside breach opens a move to 1240 as 1218 supports a failure below 1206 opens a retest of 1180
Retail Sentiment: Neutral
Trading Take-away: Neutral

USOIL
Outlook: Short Term (1-3 Days): Neutral – 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: Neutral
Trading Take-away: Neutral

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