New York Forex Report: Oil Prices Surge On Saudi Disclosure

Markets witnessed a return of risk appetite, on optimism of a December Fed rate hike as Friday’s Kansas City Fed manufacturing data surprisingly returned to positive territory for the first time since February this year. San Francisco Fed President John Williams said that there is a “strong case” for a December hike if data continues to show improvement in economic conditions, affirming expectation that the central bank is going to tighten policy in the upcoming December meeting. On similar note, Fed Bullard said the pace of monetary policy tightening should be data-dependent and that real consumption growth is fairly strong in 4Q.

USD was weaker over the European morning so far today whilst equities and commodities saw some improvement. Oil was sharply higher on the session as Saudia Arabia reported it will do whatever is necessary to stabilise the Oil market.

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

Fundamental: EUR was mostly unchanged over the European morning as the latest EZ manufacturing and services PMI’s both beat expectations, keeping EUR supported against the US Dollar. US manufacturing PMI and existing home sales data will be the key releases over today’s US session.

Technical: While 1.07 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 1.08 eases immediate downside pressure.

Interbank Flows: Bids 1.06 stops below. Offers 1.0750 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Short 1.0830 targeting 1.0560

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

Fundamental: GBP extending losses in the wake of dismal public finances data ahead of the UK Chancellor’s Autumn budget this week.Attention this week will also be on UK Q3 GDP figures due this Friday to provide further hints as to what the BoE’s next step could be.

Technical:  While 1.5230 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.54 eases immediate bearish bias

Interbank Flows: Bids 1.51 stops below. Offers 1.53 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

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

Fundamental: BoJ’s Sayuri Shirai saw Japanese inflation rising in the near future, but highlighted that higher wage growth remains key to reaching the central bank’s inflation target. She also stated the importance of BoJ to support the health of the economy by maintaining an accommodate monetary environment. USDJPY mostly unchanged over early European trading today as JPY markets were on holiday overnight and US players await key US data this week.

Technical: While 122.50/30 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Long 122.50 stops to entry target 125.50

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

Fundamental: Japan is on holiday Monday due to the Labour Thanksgiving holiday. EURJPY slightly firmer over the session thus far as EUR is better bid on domestic data improvements.

Technical:  Only a close above 133.50 eases immediate bearish pressure, while 132.50 caps upside reactions expect retest of 130.50 lows

Interbank Flows: Bids 130.50 stops below. Offers 132.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

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

Fundamental: AUD had broken higher last Friday, reaching as far as 0.7249 level. Recent upbeat jobs and confidence data from Australia reduces the risk of further RBA easing this year.This week’s focus will turn to RBA Governor Stevens’ speech on Tuesday and CAPEX figures due Thursday. AUDUSD was sharply higher over the European morning taking advantage of a softer US Dollar.

Technical: While .7170/50 supports downside reactions expect grind higher to retest Friday’s highs, a failure at .7150 suggests a retest of current base towards .7070

Interbank Flows: Bids .7100 stops below. Offers .7250 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

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

Fundamental:  The Canadian  Dollar was stronger over the European morning as Oil rallied sharply on news that Saudi Arabia will co-operate to stabilise Oil prices, alleviating recent concerns about the huge supply gut in the Oil market.

Technical: Offers just above 1.3350 eroded year to date highs are the primary upside objective now, bulls have the ball while 1.33/1.3280 supports intraday downside. A close below 1.3220 would ease the near term bullish bias.

Interbank Flows: Bids 1.33 stops below. Offers 1.34 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-23 07_33_11-NetDania - NetStation

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