New York Forex Report: Oil Manages Slight Rebound On China Data

Oil prices, which have been sliding since news last week that OPEC failed to agree on terms to address the oversupply in Oil markets, have managed to sustain a slight recovery today on news that Oil imports have risen in China for the first time in 11 months. Given the incredibly low price of Oil currently it is considered that China is buying to stock its strategic reserves. As such, the moves are likely to be contained to the short term especially given the current economic weakness in China

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

Fundamental: EURUSD was mildly weaker over the European morning as 3Q EuroZone GDP was confirmed at 0.3% QoQ and 1.6% YoY. Data calendar is quiet for today’s US session with an absence of key US data seeing USD flows fairly flat.

Technical: While 1.0790 caps intraday downside corrections expect a grind higher to retest last weeks high. A failure at 1.0790 opens a retest of 1.0725 next

Interbank Flows: Bids 1.08 stops below. Offers 1.09 Stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines

eu2015-12-08 07_34_31-NetDania - NetStation

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

Fundamental: GBP was weaker over early European trading today despite an improvement in October Industrial Production figures which came in at 1.7% vs 1.2% expected. Market is favouring the short heading into Thursday’s BOE meeting.

Technical:  While 1.5050 supports intraday downside corrections expect a move to test symmetry resistance at 1.5200/10. A failure at 1.5050 opens a retest of last weeks 1.4890’s lows

Interbank Flows: Bids 1.5050 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

gu2015-12-08 07_35_02-NetDania - NetStation

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

Fundamental: The USD edged up about 0.1 percent to 123.32 against JPY while the surge of USD was limited by a drop in US Treasuries yields. The USDJPY one week ATM option volatility remained at a low level of 5.6 showing that range-bounded trade of JPT may persist.

Technical: While 122.50/30 supports downside reactions, market structure remains bullish to test 2015 highs next. A failure at 122 opens a test of 121.40 support next ahead of pivotal 120.

Interbank Flows: Bids 122 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

uj2015-12-08 07_35_31-NetDania - NetStation

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

Fundamental: Final reading of 3Q GDP confirmed the Japan economy avoided a technical recession. The economy expanded more than expected, led by a directional turn in household spending, overshadowing weaker public investment. The climbs in leading and coincident indices also suggest growth in the Japanese economy is expected to pick up in the next 3-6 months.

Technical:  While 134.80  caps upside reactions expect a retest of 132.50 from above to set the platform for another corrective leg higher.

Interbank Flows: Bids 130.50 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

ey2015-12-08 07_36_07-NetDania - NetStation

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

Fundamental: AUD was weaker over the European morning extending losses seen overnight following some hawkish rhetoric from Fed official Lockhart saying that the conditions for higher rates had been achieved. The weakening iron prices have also put some downward pressure on AUDUSD, which is trading at around 72.30 US cents. Australia’s NAB Business Confidence posted a better-than-expected reading of 5, which helped provide some initial support to AUD.

Technical: Breach of .7270 supports suggests a move to test the recovery base and broken descending trend line towards .7100, a failure here would suggest a retest of 2015 lows.

Interbank Flows: Bids .7200 stops below. Offers .7450 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

au2015-12-08 08_08_52-NetDania - NetStation

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

Fundamental: A slight rebound in Oil prices on news that Chinese Oil imports rose in November for the first time in 11 months have helped to cap USDCAD’s ascent over the European morning.

Technical: Bulls have the ball while 1.3450 supports intraday downside expect a grind higher to test stops above 1.3600. A close below 1.3389 would ease the near term bullish bias and suggest a correction is underway.

Interbank Flows: Bids 1.34 stops below. Offers 1.36 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

uc2015-12-08 08_12_30-NetDania - NetStation

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