New York Forex Report: Sterling Stumbles On Inflation Miss

New York Forex Report: Sterling Stumbles On Inflation Miss

New York Forex Report: Sterling takes the limelight again during European trade with a UK inflation data showing a small uptick during August but this wasn’t sufficient to meet market expectations with CPI coming in at +0.6% y/y vs 0.6% prev, 0.7% expectations. The data dented GBP which has traded steadily lower post the release falling from above 1.3320 to print sub 1.3250 as of writing. The other performer of note this morning was the USDJPY which caught a bid on headlines that Japan’s Ministry of Finance is considering raising the amount of 40-year Japanese government bonds (JGBs) sold at each auction to 500 billion yen ($4.92 billion) from the current level of 400 billion yen, a senior ministry official said. Markets are starting to turn their attention towards next weeks pivotal BoJ, FOMC meetings. The FED has now moved into their blackout period so there are no more scheduled speakers ahead of their meeting on the 21st September.

FX Majors: EUR started off the trading week quietly with the EURUSD pair trading in a narrow range between 1.1220 and 1.1250 in most time on Monday. On the data release front, the quarterly Italian unemployment rate edged lower to 11.5%, matching the forecast. Today, Germany releases the ZEW Economic Sentiment report GBP inched higher after reaching the daily low of 1.3234 scored in London session, and managed to regain the 1.3300 mark overnight, printing fresh daily highs at 1.3346. Market participants’ attention remains in a string of UK fundamental data to be published throughout the week, including inflation figures in August, unemployment data and retail sales coupled with the BoE monetary policy decision on Thursday . JPY dipped to an intraday low of 101.54 following Fed Governor Lael Brainard speech, which dampened bets that the Fed would raise interest rates this month. Japan’s core machinery orders unexpectedly rose for a second straight month in July from a month earlier, the Cabinet Office said yesterday, increasing by 4.9 percent in a sign of a tentative pickup in capital expenditures.

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

Technical: As 1.12 supports 1.1366 is the next upside target with a further equidistant symmetry swing objective sited at 1.1530. Below 1.1190 opens 1.1120 and suggests potential early reversal.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: As 1.3270 supports 1.3470 is the next upside objective. Failure below 1.3185 suggests early reversal to downtrend.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Breach of 102.80 support opens a move back to test base at 100.90, expect 102.80 to act as resistance on a closing basis near term. A close over 103 opens 106 equidistant swing objective.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: As 113.80 supports potential for another leg higher to target equidistant swing objective at 117.87. Failure below 113.60 opens move back to 112.
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD price weakened on Monday although it did pare some of the losses due to the dovish Fed comments putting September as less likely to hike rates. The gold price decreased by US$9.10 to US$1,321.60. Oil markets rose on Monday (12 Sep) due to a broadly weaker US dollar as Fed comments turned dovish thanks to Brainard. This was despite the latest September OPEC report that revised its 2017 forecast for non-OPEC oil supplies upwards by 350,000 barrels per day, supplies will now in fact grow by 200,000 to an average 56.5 million barrels per day. The US Nymex WTI futures increased by US$0.41 to US$46.29. AUD rebounded at 0.7491, after falling for three straight days. It slid 1.3% last Friday, its biggest one-day fall in 2-1/2 months, because of the broadly stronger USD . The dovish comments from Fed Governor Brainard delivered last night gave a lift to the Aussie to an overnight high of 0.7567. CAD pared losses against the USD on Monday, rebounded from an earlier 11-day low as oil rose and the dovish comments from Fed. The dovish comments helped support the Canadian dollar while the probability of a Fed rate hike in September fell.

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

Technical: Symmetry swing support sited at .7490 supports on the initial test printing a bullish key reversal candle. Only a close below .7500 would be a threaten a more significant bearish reversal.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Initial test of 1.2830 bids garners support, near term resistance sited at 1.2970 removed next upside objective is 1.32. 1.2960 becomes near term support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1301 AB=CD equidistant swing support has provided anticipated base. Near term resistance now at 1357, below 1320 opens move back 1301 base. Only below 1300 concerns near term bullish bias.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing resistance sited at 47.36 as this level rejected the corrective advance 41.38 becomes the downside objective over 47.50 targets retest of 48.90 potential double top.
Retail Sentiment: Bearish
Trading Take-away: Sidelines