New York Forex Report: Oil Falls Back From Recent Highs Weighing On Risk

New York Forex Report: Hopes for a deal between OPEC and Russia to cut output have started to wane as markets grow sceptical of such a deal being struck with Oil invent0ries continuing to increase. Hopes for such a deal had led a rebound higher in Oil over recent session but price is now once again challenging the $30 mark as the huge supply glut looks set to go unchallenged in the near term, weighing on risk-sentiment over early European trading today.

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

Fundamental: EURUSD grinded higher over early European trading as European equities lost ground amidst the latest downturn in Oil prices furthered by unexpected beats in both EuroZone and German unemployment data.

Technical: Trading mid to upper range, a sustained breach of 1.08 bids opens 1.07 range lows. A breach of 1.0990 trend resistance opens a broader 1.1240 symmetry corrective objective.

Interbank Flows: Bids 1.08 stops below. Offers 1.0950 Stops above.
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: Despite weak construction manufacturing PMI data GBPUSD was stronger over the European morning as USD extended losses following yesterday’s ISM manufacturing data.

Technical: Over 1.4450 eases immediate downside pressure and sets up a broader correction. Broader corrective bias remains in tact while 1.4280 supports intraday downside reactions failure at 1.4250 suggests false upside break and resets bearish tone

Interbank Flows: Bids 1.4250 below. Offers 1.4450 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: Despite weaker Oil & Equity prices so far today USD has continued to strengthen against JPY which is not finding the same safe haven appeal following the BOJ’s move into negative rates. ATM spot-week volatility retreated from 16 to 9.5 after the BoJ meeting, showing that markets remain uncertain on near term JPY direction.

Technical: 121.66 is initial resistance an upside breach here opens a move to test 123.64 next, bulls have the ball while 120 supports intraday downside reactions. A failure at 119.60 opens 118.60 on the downside

Interbank Flows: Bids 119.50 stops below. Offers 122 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Fundamental: EUR strengthened against JPY over early European trading today driven by better EuroZone & German Unemployment data

Technical: While 130.40 supports intraday downside reactions expects s retest of 132.30 offers and stops above, a close above 132 opens a test of 134 next.

Interbank Flows: While 130.40 supports intraday downside reactions expects s retest of 132.30 offers and stops above, a close above 132 opens a test of 134 next.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: : Reserve Bank of Australia (RBA) left the cash rate unchanged at 2% consistent with the RBA’s previous assessment of gradual improvement in the domestic economy. The accompanying statement highlighted the risk of potentially weaker global and domestic demand. FX commentary was little changed, and continued to reflect consistency with commodity prices.

Technical: While .7000 caps intraday downside expect a test .7200. Only a closing breach of .7150 eases immediate downside pressure.

Interbank Flows: Bids .7000 stops below. Offers .7150 stops above
Retail Sentiment: Neutral
Trading Take-away: Short

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

Fundamental: USDCAD is caught between flows at the moment as the US Dollar weakens following yesterday’s disappointing manufacturing data and CAD weakens with the renewed downturn in Oil prices.

Technical: While 1.4160 caps upside reactions expect a broader corrective phase to test AB=CD corrective swing target at 1.3750 support. Only above 1.4330 eases immediate downside pressure and opens a retest of 2016 highs.

Interbank Flows: Bids 1.3950 stops below. Offers 1.4150 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines

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