New York Forex Report: Soft Eurozone PMI Data Eases EUR Bid

New York Forex Report: Soft Eurozone PMI Data Eases EUR Bid

New York Forex Report: More lacklustre trade as thin summer markets prove to be tricky to navigate. Initial PMI data out of France this morning suggested we may witness some improve in the data across Europe, however, this wasn’t to be and the broader view of the Eurozone was weaker data overall. As such EUR has retreated from early European session highs as has GBP as USD demand picked up into the cross over with North America. The broader tone is showing signs of tentative risk appetite, with modest gains across European equity indices and U.S. equity futures. U.S. yields are steady, along with gold, however commodities remain under pressure with continued weakness in oil and copper. U.S. releases scheduled through the session include the flash Markit manufacturing PMI, Richmond Fed, and new home sales.

FX Majors: EUR With no events from the Eurozone or US on the schedule on Monday, the EUR showed limited movement throughout the day. Better services and manufacturing PMIs from Europe this morning have but a bid tone under the EUR. Low inflation numbers have long been the bane of the Eurozone economy and last week’s numbers were also soft, although at least the indicators were within weak market expectations. GBP opened the week around 1.3060 and dropped to test Friday’s lows during Tokyo session, but managed to hold on top and turned to the upside, gaining bullish momentum above 1.3080 in early London session. The pair then extended gains and approached last week highs during the American session. This week’s data schedule is limited to Friday’s second release of Q2 GDP, expected unchanged at 0.6% QoQ. JPY Japan plans to spend additional 45 billion US dollars to prop up its economy under a second extra budget for fiscal 2016, according to local media reported yesterday. The plan of extra budget is expected to be approved by the cabinet on Wednesday.

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

Technical: Equidistant swing objective at 1.1330 resistance is removed as last weeks highs are hurdled bulls target 1.1430 next. Near term support is sited at 1.1230, only a failure below 1.11 would concern the near term bullish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As prior resistance at 1.31 now acts as support broader range resistance sited at 1.3370 is the next upside objective.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 101.50 caps profit taking expect further downside pressure with 97.30 the next downside objective. Only a move over 102.80 will ease near term bearish bias.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Near term resistance is sited at 114, as this area caps the correction expect a drift back to test and breach 112 support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price weakened further on Monday due to the stronger US dollar and hawkish Fed comments putting September as a “live” meeting. The gold price decreased by US$2.38 to US$1,339.09 on Monday. Oil After seven straight sessions of price gains, the US and global oil markets finally slipped on Monday (22 Aug) by more than 3% as investors refocused on oversupply issues and a broadly stronger dollar as Fed comments turned sharply hawkish in recent weeks. Baker Hughes reported last Friday (19 Aug) that US oil rigs count increased again for the 8th straight week, adding 32 new rigs so far in August while there are concerns about rising Chinese fuel exports, more Iraqi and Nigerian crude shipments. Headwinds for oil may also come in the form of lower petroleum demand for China in the 2 weeks ahead of the G20 Summit in Hangzhou China, as many Chinese factories are ordered to stop activity to keep skies blue ahead of the event. AUD extended losses in Asian session on Monday after the US dollar was lifted by speculation the US Federal Reserve may raise interest rates this year after all. The Aussie then recovered all previously losses and surged to an intraday high of 0.7639. CAD weakened on Monday after Federal Reserve Vice Chairman Stanley Fischer gave a generally upbeat assessment of the US economy, giving bulls a reason to buy the USD. Traders now awaiting comments by Fed Chair Janet Yellen later this week at the annual economic symposium in Jackson Hole, Wyoming

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

Technical:

The close over .77 shifts attention to broader range resistance sited at .7830, bulls will be looking for pivotal .7550 to support only a close below .7500 would concern the near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: With the breach of 1.2843, attention shifts to 1.2718 symmetry swing support. Near term resistance is sited at 1.30.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bulls target 1391 as the next upside objective, near term support is sited at 1330. Below 1300 opens 1270
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: As 46.50 supports expect a further rind higher to test 50.00 as the next upside objective, only below 43.60 concerns the near term bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long