New York Forex Report: Risk Trimmed Ahead Of First Debate

New York Forex Report: Risk Trimmed Ahead Of First Debate

New York Forex Report: JPY is outperforming in an environment of broad-based risk aversion as market participants focus on renewed banking sector concerns out of Europe and position themselves ahead of this week’s risk events including the OPEC discussions and the heavy Fedspeak schedule (Chair Yellen Wed/Thurs). Most G10 currencies are performing according to their risk profile. Global equity indices are under pressure and U.S. futures are pointing to a negative open. Monday’s U.S. releases include new home sales and the Dallas Fed manufacturing activity index, however focus is likely to centre on public appearances from the Fed’s Tarullo (consensus voter) and Kaplan (voting 2017), ahead of today’s main even the first of three scheduled US Presidential debates.

FX Majors: EUR In the Eurozone, the similar manufacturing gauge surprisingly ticked up to 52.6 in September, marking the quickest expansion this quarter. On the other hand, the services sector lost steam. Services sector PMI edged down to 52.1 this month (August: 52.8) according to Markit, which was the lowest reading since December 2014. GBP hit a five-week low at 1.2912 last Friday after three straight weeks of losses, as worries over Britain’s exit from the European Union kept pressure over the currency. Despite the pound trading back over 1.3100 after the Bank of England policymaker Kristen Forbes said she saw no case for a further cut in interest rates, the markets were still in panic which dragged sterling to the downside. JPY Japan’s Nikkei manufacturing rebounded to positive territory for the first time in seven months driven by new orders and hiring.

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

Technical: 1.1120 supports on the retest, near term resistance is sited at 1.13 removing this hurdle opens 1.1366. A break of 1.1120 support opens equidistant swing support at 1.1085.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3150 rejects corrective advances bears target 1.2870 as the next downside objective. Only a close over 1.3130 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 101.20/40 caps corrections bears target a retest of 99.50 lows. Only a close over pivotal 102.80 would ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Failure below 113 opens move back to 112 as the next downside objective, near term resistance is sited at 113.80 as this level survives on a closing basis bears target 110.80 next.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD edged lower, backing off the two-week high struck in the previous session as the dollar stayed firm, but the yellow metal was still on track for its biggest weekly gain in nearly two months. OIL prices fell on Friday after reports that Saudi Arabia did not expect an agreement among major crude exporters aimed at freezing production at a meeting next week. AUD got a boost after the Reserve Bank of Australia (RBA) governor gave an upbeat assessment of the economy last Thursday while adding it was “not particularly useful” to continue cutting rates, after already easing twice this year. CAD stumbled on last Friday as data showed that the Canada’s annual inflation rate dipped in August to 1.1% from 1.3% in July, as price gains slowed in food. Apart from the weak CPI data, the Canadian retail sales in July fell by 0.1% from July to CAD 44.14 billion as gas station sales dropped 3.0% on lower pump prices.

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

Technical: .7660 stalling advance just ahead of symmetry swing resistance sited at .7685. As .7600 supports expect a test of symmetry resistance next.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, near term support is sited at 1323.

Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.81 becomes the downside objective, near term resistance is sited 46.62 over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bullish
Trading Take-away: Short