New York Forex Report: Sterling Slide Continues As Uncertainty Grows

New York Forex Report: Sterling Slide Continues As Uncertainty Grows

New York Forex Report: The sharp sell-off in Sterling continued over the European morning as investor uncertainty surrounding a potential “Brexit” weighs heavily with GBP down across the board. As risk sentiment continues to recover this week, fuelled by continued strength in Oil markets, commodity currencies are slamming the British Pound lower with even a weak Euro making gains against the UK currency. Key data focus over the US session will be US Manufacturing PMI.

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

Fundamental: EUR continues to break lower this week fuelled by strong equity markets and growing expectations of further ECB easing to come in March. EuroZone February Manufacturing, Services & Composite PMI’s all printed below expectations further compounding fears for the health of the EZ.

Technical: Initial test toward pivotal support at 1.1050/30 attract profit taking bounce. While 1.1220 caps upside, sellers have the ball targeting stops sub 1.10. A breach of 1.1250 suggests consolidation and potential return to test offers over 1.13 ahead of 1.1376 highs.

Interbank Flows: Bids 1.1050 stops below. Offers 1.1250 stops above
Retail Sentiment: Bearish
Trading Take-away: Neutral

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

Fundamental: GBP continued to suffer sharp losses over the early European session as growing Brexit fears weigh on investor sentiment. The pound fell considerably against the dollar this morning after London Mayor Boris Johnson, said he’ll campaign for Britain to leave the European Union.

Technical: Continued failure above 1.4380 give bears the upper hand, the failure at 1.42 support opens a retest of 1.4040 lows. A close over 1.4450 eases bearish bias.

Interbank Flows: Bids 1.4150 stops below. Offers 1.44 stops above.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: JPY weakened over the European morning as continued Equity market strength this week has diminished JPY safe-haven demand somewhat.Latest CFTC COT positioning data shows that JPY long positions continue to grow

Technical: While 112.40 supports downside rotations expect a grind higher to retest the broken neckline resistance at 115.80/116 where fresh selling interest should emerge. Failure at 112 opens retest of 111 bids

Interbank Flows: Bids 112 offers below. Offers 113.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: EURJPY remains under pressure though directional moves are contained by weakness in both EUR & JPY so far today.

Technical: While 126.20/40 caps upside reactions expect further fresh two and a half year lows for a move down to 124 as the next downside objective. A close over 128.20 would ease immediate downside pressure

Interbank Flows: Bids 125 stops below. Offers 126.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: AUD continued to strengthen over the European morning fuelled by a recovery in risk-appetite and heavy cross flows selling in GBPAUD.Latest CFTC COT positioning data shows that positioning has flipped net long in AUDUSD for the first time since 2015.

Technical: While AUD continues to trade above the pivotal .7100/.7070 expect a retest of offers above .7240 en-route to .7310. Another failure at .7050 would suggest further weakness to retest year to date lows at .6820’s

Interbank Flows: Bids .6950 stops below. Offers .7250 stops above.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: USDCAD remained range-bound over the European morninga s both Oil and USD trade higher at the start of an important week for USDCAD with OPEC members set to speak and a raft of key US data to come.

Technical: While USDCAD trades sub 1.3850 downside pressure remains the driver with bears fully focused on a retest of 1.3630 bids ahead of 1.3530. A close over 1.3850 suggests a retest of 1.40 offers in broader range trade.

Interbank Flows: Bids 1.3630 stops below. Offers 1.3850 stops above
Retail Sentiment: Bullish
Trading Take-away: Neutral