New York Forex Report: USD Hits 13 Year Highs

New York Forex Report: USD Hits 13 Year Highs

New York Forex Report: UK labour report was in focus this morning. Resilient post-referendum outturns in economic activity so far didn’t suggest any softening in the labour market. The timeliest data, jobless claims, were little changed in September and could dipped slightly in October. As such, the headline ILO measure of unemployment over Q3 remained at 4.8% versus 4.9% previous. GBP and its G10FX peers have been pressured throughout the European trade with the USD trading at 13 year highs. JPY eyes 110 despite narrowing 5yr UST/JGB yield spread. CAD has given back yesterday’s gains and has risen to threaten 1.3500 as WTI retreats towards $45/barrel. In the FX options space political risk (French elections) fuels demand for 6mth/1yr volatility plays and EUR puts. Looking ahead US producer Prices Index is the main data point in the US session

FX Majors: EUR Eurozone’s economy sustained a 0.30% QOQ expansion in 3Q, marking its fourteenth consecutive growth for the 19 bloc nation. Growth in Germany decelerated while growth in France and Italy rebounded from sluggishness in the previous quarter. Separately, trade surplus increased to €24.9 billion in September (August: €23.4 billion) as the decline in imports overshadowed the decline in exports. GBP In the UK, depreciation in the Sterling continued to uplift price pressure and was in line with BOE’s forecast that 2.00% inflation target will be achieved sooner than previously anticipated. Consumer price growth was a tad softer at 0.90% YOY in October from a nearly two-year high of 1.00% YOY in September while retail price grew at a unchanged pace of 2.00% YOY last month. Producers’ price growth accelerated to 2.10% YOY last month, marking its quickest pace since April 2012. JPY better-than-expected US retail sales data, should allow the Federal Reserve to raise interest rate by the end of the year. The USDJPY pair settled above 109 handle at 109.15. Markets believe that the JPY is under pressure amid the prospect of the Federal Reserve hiking rates more frequently than expected next year and a big chasm in US- Japanese interest rate spread that has increased the dollar’s relative attraction.

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

Technical: Bears have the ball a breach of 1.07 will shift bearish attention towards 1.05. Near term resistance is sited at 1.0850, medium term 1.1030 is a key upside hurdle which will need to be captured on a closing basis to stabilise the pair
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: The break back below 1.25 challenges the corrective advance and opens a move to retest last weeks lows at 1.2350 and the symmetry swing objective at 1.2270 in extension, over 1.26 opens a retest of last weeks highs at 1.2671
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Equidistant swing resistance sited at 108.03 achieved, 108.40 now near term support, as this level supports bulls focus on 1.10 as the next upside objective. only below 105.50 concerns bulls
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 116.20 primary upside objective achieved, this level now becomes near term support.The top side expansion through 117 opens 121 equidistant swing objective. A close below 114.60 questions bullish thesis
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD price continued to struggle but managed to etch a small increase on Tuesday after falling precipitously to a 5-month low at the start of the week. The gold price increased by US$2.80 to US$1,224.50. OIL was resurgent on Tuesday (15 Nov) as markets speculated that OPEC are working out details of a crude oil production cut. All eyes will be on the 30 November meeting for OPEC where its members aim to reduce production from October’s record levels of 33.83 million barrels, to between 32.5 million and 33 million barrels. The US Nymex WTI futures jumped by US$2.49 to US$45.81. AUD RBA released its monetary policy meeting minutes for November. As many expected, the RBA has adopted a more neutral tone as domestic economic data continues to improve while previous rate cuts have helped inflation in returning to target levels. “Reasonable prospect inflation will return to average levels in next 2 years” said RBA Governor Lowe yesterday while signalling the central bank is done with cutting rates CAD gained against the USD for the first time since last week’s US election as oil rallied and a spike in US bond yields paused. Canadian home resales and prices rose in October as the nation’s long housing boom sustained, but investors believed higher borrowing costs increased the risk of a correction.

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

Technical: Continues to rotates in the 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: Bullish
Trading Take-away: Short

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

Technical: 1.3573 achieved expect some profit taking to retest 1.3430 support, as this area contains the pullback 1.3620 becomes the next upside objective. Only a close below 1.3250 concerns the bullish bias
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bears target equidistant swing objective sited at 1203, near term resistance is sited at 1241. Only a close over 1280 stabilises the decline.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: 42.73 achieved as 45.90 contains upside reactions the next downside objective is the symmetry swing objective at 39.78. Only a close over 47.33 stabilises the decent a eases bearish pressure.
Retail Sentiment: Neutral
Trading Take-away: Neutral