New York Forex Report: Traders Await The FOMC

New York Forex Report: Traders Await The FOMC

New York Forex Report: Despite recent positive data the Fed is largely expected to keep rates on hold at their July meeting as they await further post-Brexit data to judge the impact made on the US economy. Whilst there is no doubt that recent data has certainly started to move in the right direction, the Fed is certainly likely to want to allow for more data to be assessed before it looks to act. Some analysts are pointing to a September rate move whilst other are looking at December as being the strongest candidate because by that point the Fed will have gathered over half a years’ worth of data post-Brexit on which to make a decision. Referencing the data, the Fed is likely to acknowledge recent positive developments, especially in labour market conditions, although the underlying trend in job growth is still down.

FX Majors: UK 2Q GDP surprised to the upside printing 0.6% vs 0.5% expected QoQ and 2.2% vs 2.1% expected YoY. The GFK Consumer Confidence Survey for Germany looking ahead to August was stronger than expected also printing 10 against an expected score of 9.9.

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

Technical: Bears look to challenge of 1.09 post Brexit reaction lows. Intraday resistance is sited at 1.10, while 1.1060 caps expect further downside.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.3260 represents symmetry resistance while this area caps expect a retest of 1.30 base, with an equidistant swing objective sited at 1.2875. Over 1.3330 shifts attention back to 1.3550 symmetry swing objective.

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Yesterday’s close below pivotal 105.50 threatens near term bullish bias although price action reversed sharply overnight. While above 104 on a closing basis expect another test of 107.50 offers. Below 104.09 symmetry swing support opens 103.50 as the next downside objective
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Symmetry swing support sited at 114.49 supports expect retest and breach of cycle highs, below 113.50 opens 110.80 as the next downside objective

Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD climbed close to $5 per ounce to $1,320.26 ahead of the FOMC decision due early tomorrow. Oil settled down $0.21 (-0.5%) at $42.92 a barrel on Tuesday for a 3-month low as concerns over excess supply still lingered. AUD higher on stronger than trimmed mean CPI this morning while the trimmed mean CPI higher than expected at 1.7% Y/Y vs 1.5% expected. Though the pair jumped then eased as Q2 headline CPI cools to 1.0% Y/Y sidelines ahead of inflation figures which could reinforce the occasion for another rate cut as early as next month. Underlying inflation is expected to dip to a fresh trough of 1.4% expected by markets while the figures due tomorrow. The market is pricing in around a 64% chance of a rate cut in August, proposing the biggest move would come if inflation surprised on the high side. CAD retreats from four month low against the USD. Domestic economic calendar is light this week except the GDP due Friday. It is expected to show that economic growth pulled back in May, likely due to the disruption caused by wildfires in Alberta

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

Technical: 7430 supports, as we continue to rotate in a broader .7660/.7340 range, with .7330 representing symmetry swing support. Intraday resistance is sited at .7570
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1.32 upside objective achieved, as 1.3140 supports bulls target an equidistant swing objective at 1.3381

Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Testing symmetry swing support sited at 1305, while this area attracts buyers will set a potential platform to challenge and breach 1360 highs en-route to 1391. Below 1300 opens 1270 as next downside objective

Retail Sentiment: Neutral
Trading Take-away: Long

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

Technical: Break below 44 opens 41.87 as the downside objective, expect 44.50 prior support to act as resistance, a close over 47.80 required to ease bearish pressure.

Retail Sentiment: Bullish
Trading Take-away: Sidelines