New York Forex Report: Russia Cut Headlines Sends Crude Soaring

New York Forex Report: Russia Cut Headlines Sends Crude Soaring

New York Forex Report: Headlines just crossing the wires that Russia will join other OPEC members in cutting or even freezing output according to President Putin have put a bid under Crude prices. In FX a slow start to the trading week as markets continue to digest the cable flash crash. On the European data slate the main events were German August Trade Balance which printed E22.2 bln Vs E19.4 bln previously, E20.0 bln expected. Eurozone October Sentix registered 8.5 vs 5.6 previously, 6.3 expected. The Financial Times has reported that Deutsche Bank was given special treatment in EU stress tests. Kuroda reiterates central bank may push back forecast date to achieve its 2% inflation target according to comments reported by Bloomberg, BOJ’s Kuroda vows to cut rates, buy more assets to fight shocks. Trump vows to jail Clinton over emails if he wins White House, while Asian shares gain, Mexican peso jumps as markets lengthen odds on Trump to win the November election.

FX Majors: EUR ECB President Mario Draghi said he was uncertain what the impact of Brexit will be on medium term. He also highlighted that the Fed and ECB clearly on different paths although there is no concern about degree of divergence between Fed and ECB policy. GBP UK Halifax house prices climbed 5.80% to $214k in the third quarter. Price growth slowed for a second straight month and was the slowest pace since August 2013. Industrial production fell 0.40% MOM in August, snapping two months of growth amid softer production in mining and oil and gas sectors. A surge in goods imports raised trade deficits to £12.11 billion in August (July: – £ 9.5 billion), no thanks to weakness of Sterling. JPY Japan’s leading index gathered steam in August as firms were more confident about the economy in the final quarter. The index climbed 0.2 point to 101.2 in August (July: 100.0). On the contrary, the gauge of economic conditions deteriorated slightly in August (112.0 vs July: 112.1).

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

Technical: Reversal from initial 1.1120 test, a retest and break of this price pivot opens equidistant swing support at 1.1085. Near term resistance is sited at 1.12 over 1.1220 eases near term bearish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.25 rejects corrective advances bears target a retest of 1.20. Only a close over 1.30 eases bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bullish attention on the upside equidistant swing corrective objective at 104.86 near term support is sited 102.80
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 116.11 symmetry swing resistance stalls advance A close over 116.50 opens the larger scale AB=CD objective at 121.00 Near term support is sited at 114.60

Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD price initially went higher after the lackluster September US jobs number weakened the case for a Fed rate hike in the coming months but thereafter it pared back all the gains and ended slightly lower on Friday, with some reports blaming the drop being related to the decline in crude oil price. The gold price decreased by US$0.90 to US$1,248.90 on Friday OIL markets retreated on Friday (7 Oct) with US WTI crude futures closing back below US$50. Even though this was the 3rd consecutive week that US crude oil price marched higher, investors seemed to think that this is as high as it can get to given current circumstances. The US Nymex WTI futures ended lower by US$0.63 to US$49.81. AUD Comments from Aussie Treasurer Morrison that he doesn’t see much appetite within the RBA for further rate cuts could be helping to prop the Australian Dollar a bit in Monday trade. USD, CAD The fact that Friday’s Canada employment data was super strong and US employment data disappointed had no major impact on the Canadian Dollar, with the Loonie instead placing its focus on the drop in OIL and a wave of uncertainty in global markets.

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

Technical: Symmetry swing resistance sited at .7685 stalls advance as this area contains .7550 is the next downside objective ahead of .7412 symmetry swing support. Over .7700 opens .7730.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 1.30 supports 1.3372 is the equidistant AB=CD corrective objective, only below 1.2960 threatens near term bullish bias. Near term symmetry swing support is sited at 1.3030
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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

Technical: Anticipate test of 1229 symmetry swing support failure here lets bears target 1200 as the next downside objective, near term resistance is sited at 1300.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective as 48.50 supports the advance , only below 45.00 would suggest false upside break a continuation of a more complex corrective pattern
Retail Sentiment: Bearish
Trading Take-away: Long