New York Forex Report: Sterling Soars On Court Ruling

New York Forex Report: Sterling Soars On Court Ruling

New York Forex Report: Market sentiment appears slightly less fragile this morning, though the underlying tensions surrounding the US presidential election persist. Asian stocks slipped and the JPY rose in Asian trade before steadier sentiment emerged in European trading where equities firmed. The USD retains a defensive undertone but losses are generally contained while the MXN is flat on the day. Gold has eased modestly (crude is a little firmer) while European bond markets have weakened slightly, pushing yields 1-2 bps higher. GBP is something of an outlier, rising nearly 1% on the day after the UK high court ruled against the government on Article 50. With the Fed done with, payrolls tomorrow and the last days of election campaigning ahead, markets have perhaps found some sort of equilibrium in terms of positioning and will likely now adopt a “wait and see” approach.

FX Majors: EUR German unemployment declined by 13,000, beating the forecast of zero. In addition, manufacturing PMI reports were mixed, as the German reading of 55.0 almost matched the forecast, but the Eurozone reading of 53.5 missed expectations. GBP UK’s house prices climbed 4.60% YOY to £ 205.9k in October, according to report by Nationwide. Affirming that the property market continued to show signs of underlying weakness, house price growth moderated from the 5.30% YOY increase in September and was the slowest pace of increase since January. Construction however, remained on solid footing. October’s reading of construction PMI climbed to 52.6 in October (September: 52.3), the highest in seven months. JPY Japan’s gauge of consumer confidence fell from a three-year high reading of 43.0 in September but settled at a healthy print of 42.3 in October. The employment sub-index led the decline in optimism, indicating that more households were more concerned about job market conditions in the near term.

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

Technical: Expect advance to find offers on initial test of 1.1120/30, expect former 1.1030 resistance to act as support, only over 1.1230 eases bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Medium term resistance is sited at 1.2380 removed, only a close over 1.25 eases bearish pressure. Interim support is sited at 1.2260/80
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 105 is attained bulls target 107.40 symmetry swing objective next, 103. is near term support subsides below 102.80 eases bullish bias
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Upside attention on 116.20 as the primary upside objective with in in the broader 112-116 range. A tops side expansion through 116 opens 121 equidistant swing objective. Back below 114 opens 112 again.
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD rose above the key 1,300 mark to as high as 1,308.02, as prices are supported by U.S elections worries and the Fed keeping rates unchanged yet for another month on Wednesday. OIL settled down $1.33, or 2.9%, to $45.34 after EIA said crude inventories rose by a record 14.4 million barrels, vs estimates of 1 million barrels, for the week ended Oct. 28. AUD Australia’s services sector rebounded in October, signaling broader economic recovery last month. Services sector PMI rose to 50.5 in October (September: 48.9), the highest in three months. An earlier release showed that the manufacturing sector was back on expansionary phase last month, painting the picture of quicker growth in the final quarter of the year. Trade deficits narrowed to AUD 1.23 billion in September (August: AUD 1.89 billion) due to the increase in exports (+2.0%) and the decline in imports (-1.0%). CAD taking hits on a pullback in OIL and broad based risk off flow that is not supportive of the more risk correlated commodity currencies. Still, the CAD did get a bit of relief on Tuesday with US ADP employment disappointing and the US Dollar under pressure as US election tension heated up.

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

Technical: AUD continues to rotates in a contracting range with .7730 capping upside and .7500 containing downside reactions, a breach of the lower end of the range opens .7412 symmetry support. Through .7750 opens .7830 on the upside.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.3360 equidistant AB=CD upside objective achieved as 1.3230 supports bulls target a move to 1.35, only below 1.2960 threatens this objective and suggests a test of pivotal 1.2820.
Retail Sentiment: Bearish
Trading Take-away: Long

XAUUSD
Outlook: Short Term (1-3 Days): Neutral – 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 1290 ahead of pivotal 1300.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing objective sited at 52.40 is the primary upside objective. The failure at 49.50 has opened symmetry swing support at 46.03 a breach here opens 42.73 as the next downside objective
Retail Sentiment: Bullish
Trading Take-away: Short