New York Forex Report: Post-FOMC Dollar Slide Continues

The US Dollar has retraced nearly all of its post-FOMC gains following weaker than expected 3Q GDP yesterday which printed  1.5% against 1.6% expected, followed by similarly disappointing  PCE data which undershot expectations of 1.4% printing 1.3%. This marks the first set of data weakness in the wake of the October FOMC which saw traders increasing expectations for a December lift-off. Main focus will now shift to next week’s October jobs report.

Equities are soft heading into the New York open with the S&P500 retesting Wednesday’s post-FOMC high with crude oil selling off having initially trade higher over the European morning.

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

Fundamental: EUR has been firmer over the European morning as USD continues to weaken. Domestic data has seen EZ CPI recover from last month’s negative print moving back up to 0% whilst core beat expectations of 0.9% to print 1.0%. September EZ unemployment rate increased to 11.8% from 10.9% previous.

Technical: Today while 1.10 caps intraday upside reactions anticipate a retest of the post FOMC lows, with a daily symmetry objective at 1.086 as the next downside objective. A sustained move over 1.10 would suggest a broader corrective pattern is underway targeting 1.1130.

Interbank Flows: Bids 1.0850 stops below. Offers 1.10 Stops above.
Retail Sentiment: Neutral
Trading Take-away: 1.09 target achieved, sidelines for now

eu2015-10-30 07_36_43-NetDania - NetStation

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

Fundamental: GBP  made some initial gains over early European trading though mostly retraced heading into the American crossover. Lack of domestic data leaves sterling trading mainly off USD flows.

Technical:  The upside rotation back through 1.53 resets bullish expectations for a test of 1.56. Another failure at 1.53 targets stops sub 1.52 next.

Interbank Flows: Bids 1.52 stops below. Offers 1.5350 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Venture long back through 1.5330 targeting 1.56

gu2015-10-30 07_38_15-NetDania - NetStation

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

Fundamental: The central bank left monetary policy unchanged. However, they decided to postpone the deadline to reach a two percent inflation target to the latter half of fiscal 2016. At the same time growth forecasts were lowered meaningfully. This in turn suggests that QE will remain in place for longer.

Technical: Bulls target a sustained break of 121 to target range highs at 121.85 an intraday failure at 120.00 would suggest return to range.

Interbank Flows: Bids 119.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 120.50 targeting upside range break

uj2015-10-30 07_39_10-NetDania - NetStation

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

Fundamental: Japan’s September year over year CPI was released as 0%, worse than the previous one 0.2%. However, this did not put much pressure on Yen. Japan government officials said CPI remained on upward trend excluding effect of falling energy price.

Technical:  Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.

Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell pullback against 134,50 targeting 131.20

uj2015-10-30 07_39_10-NetDania - NetStation

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

Fundamental: AUD  remained range-bound over early European trading with US Dollar weakness offset by commodity weakness with copper down on the session.

Technical: The breach of .7140 concerns near term bullish bias and suggests a retest of pivotal .7030/50 next, failure here firmly re-establishes the bearish tone and opens a retest of 2015 lows and potential broader bearish trend continuation move.

Interbank Flows: Bids .7050 stops below. Offers .7210 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

ey2015-10-30 07_40_06-NetDania - NetStation

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

Fundamental: USDCAD retraced some of yesterday’s losses over European trading as Oil pulled back from its intra-day high of $46.37. Canadian GDP came in 0.9% against expected 1.0% leading the Canadian Dollar lower into the weekend.

Technical:1.3260 provides decent resistance as anticipated as this area contains upside potential for another leg of corrective downside. A close above 1.3280 eases bearish pressure and resets focus on the 2015 highs and stops above.

Interbank Flows: Bids 1.3090 stops below. Offers 1.3260 stops above
Retail Sentiment: Bearish
Trading Take-away: Sell a double top test and hold against 1.3280 for another leg lower

uc2015-10-30 08_28_05-NetDania - NetStation

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