New York Forex Report: USD Under Pressure…Again

New York Forex Report: USD Under Pressure…Again

New York Forex Report: A generally soft USD greets the start of the North American trading session today but trading is relatively quiet and may remain so for the session ahead. The USD remains in correction mode as traders appear to doubt the Trump reflation trade. However, although developed market bonds are broadly higher but US Treasury bonds are under-performing slightly, sustaining yield spreads at USD supportive levels, and global stocks are broadly higher on the day. In the G10 FX space, traders are warming to the GBP again after yesterday’s dip around the Supreme Court decision on Brexit, pushing GBPUSD to its highest since mid-December. The AUD is a notable under-performer on the day, following a downside “miss” on the Q4 CPI data. With a very light US data schedule and the Fed in black-out mode ahead of next week’s meeting, markets will be a slave to the headline risk

FX Majors: EUR Euro zone’s PMI survey showed that employment rose at the fastest rate since 2008 and inflationary pressure picked up further, contributing to upbeat Markit manufacturing and services PMI prints this month. Manufacturing PMI ticked up by 0.2 point to 55.1 in January, the highest in 69 months, as all the sub-indexes pointed to robust factory activities at the start of the year. Services PMI also painted the picture of healthy pace of expansion (January: 53.6 vs December: 53.7). GBP UK’s public sector borrowing slipped to £ 6.9 billion in December (November: £ 11.3 billion) amid the surge in tax revenue, placing the shortfall in the first nine months of 2016-17 at £ 63.8 billion. Lesser borrowing reflected higher income tax, corporation tax and property stamp duty collection last month. JPY Japan’s trade surplus rose to 641.4 billion yen in December (November: 150.8 billion yen) amid quicker exports growth. Exports increased 12.10% MOM versus imports growth of 4.00% MOM last month.

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

Technical: Test of pivotal larger 1.0788 symmetry resistance is the next upside objective. Anticipated sellers/profit taking to emerge at the initial test of this level. Near term support sited at 1.0670, on a close back below 1.0580 resets near term bearish bias.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Confirmation of a more bullish bias near term achieved on a close above symmetry swing resistance sited at 1.2458, near term support is sited at 1.2250, as this level supports bulls target equidistant swing objective at 1.2679.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Broader corrective phase to test 112 is now underway, a breach here will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance is sited at 116.10 only over 116.20 reasserts upside.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Symmetry swing support at 120.40 defended sets sights on, 124.42 symmetry swing resistance. Near term resistance is sited at 122.76. A failure below 120.40 opens 118.70
Retail Sentiment: Neutral
Trading Take-away: Neutral

Commodities FX: GOLD prices fell 0.8%, closing at USD 1,208.9/oz. The safe haven retreated as improving risk sentiment in US equity markets likely dragged on the mood. OIL prices ended higher USD 52.9/bbl, amid renewed expectations of a decline in oil output from members of the Organisation of the Petroleum Exporting Countries AUD subdued inflation report overnight rekindles rate cut hopes, headline CPI rose 0.5% on a QoQ basis in Q4, below expectations. The downside surprise was driven largely by food prices. Overall, underlying inflation remains low. CAD may have gotten a bit of a boost as comments from a White House adviser that suggested Canada had no reason to be “enormously worried” about the renegotiation of NAFTA. Additionally, CAD could benefit from possible executive action to approve the keystone pipeline or additional information on trade.

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

Technical: The close above .7525 resets bullish attention on range highs towards .7800. The next upside objective is equidistant swing sited at .7631 Near term support is sited at symmetry swing level .7490 ahead of pivotal .7440
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Recapture of corrective channel opens a test of 1.3370, as 1.3190 supports potential to build a base for next leg higher. Only below 1.3140 reestablishes a more bearish tone.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1220 symmetry swing trend resistance test underway anticipated profit taking/sellers emerged on the initial test of this level. Near tern support is sited at 1190, failure here opens 1153
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Rejection from equality objective area at 55.30, a close below symmetry support at 50.68 confirms a medium term high and opens a retest of pivotal 49.00. Near term resistance is sited at 54.50.
Retail Sentiment: Bearish
Trading Take-away: Long

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