New York Forex Report: USD Remains In Range Ahead of ADP

New York Forex Report: USD Remains In Range Ahead of ADP

New York Forex Report: USD remains in an eight day range as we head into the US employment reports, starting with ADP private payroll release today. The ‘street’ looks for a rise of 180k, ahead of the official Non-farm Payrolls tomorrow. Likely market views a positive number having a limited effect on the market at this stage, as other issues in the US economy are of greater importance. The Fed’s Kaplan highlighting this overnight suggesting the slow, uneven inflation process merits close scrutiny in the coming months. Wage growth is going to be an important factor. A clearly shocking employment report would see the USD and US yields come under further pressure. We also get the ISM manufacturing survey, and hear from the Fed’s Powell today, talking on monetary policy. While UK data is still important, it and price action in the pound is being overshadowed at the moment by the UK elections. A latest YouGov/Times poll shows the gap narrowing again between the Conservatives (42) and Labour (39). This saw the pound come under renewed pressure this morning.

USD Political tensions continued to keep risk appetite at bay. US economic releases did little to sway expectations for a June Fed rate hike but the case is very fluid for any further move beyond June amid mixed US data flow. In line with weaknesses seen in recent housing prints, pending home sales disappointed by falling 5.4% YoY in April. On the contrary, Chicago PMI unexpectedly quickened to a two and a half year high in May. Meanwhile, the Fed Beige Book maintained that the US economy expanded at a modest to moderate pace, but inflation showed little signs of picking up in April-May.

EUR In the Eurozone, unemployment rate slumped to an eight-year low of 9.30% in April (March: 9.40%) which is supportive of quicker recovery in the bloc this quarter. On the other hand, CPI slowed to this year’s low of 1.40% YoY in May after advancing 1.90% YoY in April amid softer increase in airfares and a drop in energy costs

GBP The number of UK mortgage approvals fell to 64.6k in April (March: revised to 66.0k), posting further signal that housing market is slowing amid Brexit’s negotiation. Offering some reprieve, consumer borrowing was almost unchanged at £1.5 billion in April. Consumer confidence index reflected improving optimism and came in a smaller negative at -5 in May (April: -7), marking its best reading in four months

JPY Japan’s industrial production rose 4.00% MoM in April, expanding at its quickest pace since June 2011. The increase reversed the 1.90% MoM decline in March. Small business confidence ticked up to 48.9 in May (April: 48.6) while housing starts increased 1.90% YoY in April followed a 0.20% YoY advance in March.

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

Technical: 1-3 Day View – Breach of 1.12 refocuses bulls on equidistant swing objective of 1.1291 en-route to a test of broader symmetry swing objective at 114.30. Only below 1.11 concerns near term bullish bias opening a move back to test 1.1020.

1-3 Week View – While 1.0830 supports 114.30 becomes the primary upside objective. A weekly close over 1.14 sets upside focus on 1.1876. Weekly close below 1.08 neutralises bullish objectives
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – Symmetry swing objectives at 1.3060 & 1.3118 are targeted a close below 1.2750 concerns near term bullish bias and opens a move back to test the 1.26 pivot, the near term upside hurdle is sited at 1.2920

1-3 Week View – The weekly closing breach of 1.2880 opens 1.30 as the next upside objective ahead of the broader symmetry swing objective sited at 1.3238.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1-3 Day View – 115 becomes the next upside objective only back below 110.20 would concern the near term bullish bias opening a retest of 1.0940, near term 112.30 is the next upside hurdle.

1-3 Week View – As 108.40 equidistant swing support survives on a weekly closing basis bulls will look for a grind higher to retest 115, a close below 108 negates the broader bullish theme and opens the psychological 100 magnet
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: 1-3 Day View – Close over 124.40 opens 129.44, near term support is sited at 123.10, near term upside objective of 126.84 equidistant swing objective, only below 122 concerns near term bullish bias.

1-3 Week View – The weekly close above 118.50 arrested the immediate downside risk, resetting focus on pivotal 124.40 a weekly breach of this level opens 129.44 as the broader upside objective
Retail Sentiment: Bearish
Trading Take-away: Long

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