New York Forex Report: UK Data Disappoints Again

It was all about manufacturing prints on the data front yesterday which turned out largely downbeat across the globe as a result of lower production and new orders, signalling still sluggish global demand although year end seasonal spending could provide some cushion to 4Q growth. The official ISM print in the US fell into contractionary territory for the first time in three years while China saw extended contraction in both official and Caixin readings. Bucking the trend was the Eurozone, with its PMI manufacturing picking up to a 19-month high in November. The region’s jobless rate also surprisingly fell to a 4-year low in October, suggesting further ECB easing could potentially be more measured. Markets remain fairly quiet ahead of key risk tomorrow with the ECB’s December meeting, followed by the US Jobs report on Friday.

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

Fundamental: EURUSD traded lower over the European morning as the latest inflation data saw EZ November CPI 0.1% vs 0.2% expected and core 0.9% vs 1.1% expected. The figures add yet further weight to investor expectations of increased easing at tomorrow’s ECB meeting.  Key focus for today;s US session: Fed Chair Yellen speaks later today alongside the release of the Fed’s Beige Book.

Technical: While 1.0680 caps intraday upside corrections, bears target a test of 1.05 next ahead of an assault on year to date lows. Only a close above 1.07 eases immediate downside pressure.

Interbank Flows: Bids 1.0550 stops below. Offers 1.07 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

eu2015-12-02 07_37_02-NetDania - NetStation

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

Fundamental: Following a slightly weaker-than-expected survey of the British manufacturing sector released yesterday, GBP was lower again today as Construction PMI data for November also missed expectations printing 55.3 vs 58.2 expected.

Technical:  With 1.50 breach achieved expect near term profit taking to meet resistance at 1.5160/80. Only a close above 1.52 eases immediate bearish bias, while below here expect retest and break of current cycle lows.

Interbank Flows: Bids 1.4950 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

gu2015-12-02 07_37_42-NetDania - NetStation

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

Fundamental: USDJPY remains range-bound at yesterday’s session highs. JPY remains weaker today as equities market remain firm.

Technical: While 122.50/30 supports downside reactions, market structure remains bullish to test 2015 highs next. A failure at 122 opens a test of 121.40 support next ahead of pivotal 120.

Interbank Flows: Bids 122 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

uj2015-12-02 07_38_12-NetDania - NetStation

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

Fundamental: Recent JPY data saw an impressive Q3 Japan capex countering a weaker Japan manufacturing PMI. Expectations of further ECB easing to be announced tomorrow led EURJPY lower over the European morning.

Technical:  While 131.30 caps upside reactions expect a sustained break below 130 to confirm a retest of 2015 lows. Only a close above 132.50 eases immediate bearish pressure.

Interbank Flows: Bids 129.50 stops below. Offers 131.00 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines

ey2015-12-02 07_38_51-NetDania - NetStation

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

Fundamental: AUDUSD continues to forge higher ground, as positive momentum builds for the Aussie. Reserve Bank of Australia (RBA) Governor Glenn Stevens spoke in this morning that past booms had ended with galloping inflation, severe monetary tightening and eventual bust. He made no mention of monetary policy but to note that the RBA left rates unchanged at two percent yesterday.

Technical: While .7170/50 remains the bid zone expect grind higher to test .7350 area next, only a close below .7150 concerns near term bullish bias.

Interbank Flows: Bids .7150 stops below. Offers .7350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

au2015-12-02 07_39_46-NetDania - NetStation

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

Fundamental: CAD slipped against a broadly softer USD after domestic growth figures showed the economy ended the third quarter on a soft note. Canada dragged out of recession in the third quarter but a deep contraction in September gross domestic product suggested weakness could stay. USDCAD remains range-bound heading into the US crossover as USD strength pauses and Oil remains flat to weak on the session. Markets look ahead to the BOC rate decision at 1500GMT were the BOC are expected to remain on hold.

Technical: Bulls have the ball while 1.3280/60 supports intraday downside. A close below 1.3220 would ease the near term bullish bias and suggest a broader correction is underway.

Interbank Flows: Bids 1.3250 stops below. Offers 1.34 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines

uc2015-12-02 07_41_01-NetDania - NetStation