New York Forex Report: Slow Summer Thursday So Far

New York Forex Report: Slow Summer Thursday So Far

New York Forex Report: The two-day EU Leaders’ Summit kicks off today, which will be attended by PM May and she speaks at a dinner tonight. The tone of the meeting will be important with Brexit negotiations having formally begun this week. The main agenda, however, is security and defence, and migration. It will also be the first meeting for French President Macron. Economic data releases this morning were mostly of the second-tier variety and included a number of June surveys, UK CBI industrial trends survey which printed its highest levels since 1988 , Eurozone consumer confidence is due this afternoon along with US Kansas Fed manufacturing. US weekly jobless claims are also due. The Norwegian central bank is followed in the footsteps of the RBNZ and leaving policy rates unchanged at 0.5%

USD US existing home sales rebounded to increase 1.10% MoM to 5.62 million units in May followed a 2.30% MoM decline in April. Steady job gains and economic outlook continue to bolster demand for previously owned home sales, alleviating concerns from weak building permits and housing starts figure last month. In tandem, mortgage applications rose 0.60% last week after a 2.80% growth in the previous week

EUR no data reports of note from the Eurozone yesterday and the EUR continues to struggle to extend from recent ranges as short (and longer) term rate spreads remain widely in favour of the USD (2Y yield spread remains near 200 bps). European stocks have flattened somewhat after gaining strongly earlier in the Spring and support the EUR gains earlier in the year.

GBP UK’s budget deficits narrowed to £6.7 billion last month (April: revised to £9.4 billion), figure from the Office for National Statistics showed. Tax revenue and spending rose 5.10% and 4.20% respectively. Deficit for the fiscal year ended in March was revised downward to £46.6 billion and was equivalent to 2.40% of GDP, the lowest in a decade. There are apparent signs of diverging views within BOE. Contrasting Governor Carney’s remark that brushed off a near term rate hike, Chief Economist Haldane who voted for a pause at the last meeting said he is in support for a rate hike in 2H2017. The diverging views among policy makers implies future policy decisions would potentially be close calls. Cable traders were whipsawed on Wednesday with cable moving lower then sharply higher before selling off again.

JPY Dataflow from Japan was mostly positive, signalling modest but sustained economic growth in the second quarter. The all industry activity gauge rebounded to stage a 2.10% MoM increase in April after a short lived 0.70% MoM drop in March. The increase was led by quicker activity in the construction and services industries. On a separate report, machine tool orders rose 24.50% YoY in May (April: 34.70% YoY), advancing at double digit pace for three straight months

1-3 Day View – The near term downside objective sited at 1.1125 symmetry swing support has been achieved expect profit taking pause as 1.12 contains upside corrections expect a test of equidistant swing and channel support sited at 1.1040. Over 1.12 again delays downside attempts and retains range environment.

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

Technical: 1-3 Day View – The near term downside objective sited at 1.1125 symmetry swing support has been achieved expect profit taking pause as 1.12 contains upside corrections expect a test of equidistant swing and channel support sited at 1.1040. Over 1.12 again delays downside attempts and retains range environment.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.1450 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Perceived corrective price action played out leaving 1.2639 vulnerable, this support has now been removed, as 1.2660 contains upside attempts 1.2450 becomes the downside magnet, only over 1.2760 arrests bearish pressure.

1-3 Week View – The weekly failure to close above 1.3045 ahead of the broader symmetry swing objective sited at 1.3238 suggest underlying weakness persists 1.2450 becomes pivotal for the medium term perspective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – A daily closing breach of 111.80 level would reset focus on upside objectives principally 113.78, near term support is now sited at 110.80, only below 110.30 would arrest the advance.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Bullish consolidation targets 129.44 as the medium term upside objective, near term upside objective of 126.84 as 123.90 supports, only below 122 concerns near term bullish bias, opening a move to test 121.36.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 a weekly breach of this level opens 129.44 as the broader upside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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