New York Forex Report: USD Set To Print First Up Week Since December

New York Forex Report: USD Set To Print First Up Week Since December

New York Forex Report: President Trump’s promise of “phenomenal” news on the tax front in the next two to three weeks pumped up the reflation trade yesterday and while European stock markets have faded from an early bid, the “risk on” undertone is still reflected in the performance of the G10 currencies. The USD is higher and while ranges are remain fairly narrow on the day, the USD Index is set for its first weekly rise since mid December. Expectations of movement on the tax front should give renewed legs to the broader USD bull trend in the next few weeks, even if traders remain a little cautious ahead of Fed Chair Yellen’s congressional testimony next week. The AUD is outperforming (aided and abetted by rising iron ore prices) while JPY demand has weakened as risk appetite has improved.

FX Majors: EUR Germany’s trade surplus narrowed to EUR18.7bn in December from a revised EUR21.8bn the previous month and was also well below expectations of a EUR21.4bn surplus. In calendar and seasonally-adjusted terms, exports declined 3.3% in December from the previous month whilst imports were unchanged. GBP In the UK, the RICS house price balance rose 1.6pts to 24.9 in January and respondents were more optimistic about future price gains and sales activity. JPYcore machine orders rebounded a stronger-than expected 6.7% m/m in December. The seasonally-adjusted index rose over 9% y/y. Preliminary machine tool orders were up 3.5% y/y in January.

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

Technical: Near term support sited at 1.0670 eroded but not removed as this area survives on a closing basis anticipate a retest of 1.08, a close back below 1.0580 resets near term bearish bias, opening a move to test symmetry swing support at 1.0515. Near term resistance sited at 1.0710
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Equidistant swing objective at 1.2679 capping advance for now. Near term support sited at 1.2345 survives on a closing basis prompting sharp reversal suggesting a retest of recent cycle highs, a close below 1.2330 opens 1.2236 symmetry swing support.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Only a 112 sustained breach will open 110.70 symmetry swing support underpinned by 109.90 50% retracement of the move from August 2016 lows. Near term resistance sited at 113.30 removed a close over 114.50 reasserts upside targets.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: Symmetry swing support at 120.40 removed, the failure below 120.40 opens 118.70 as the next downside objective. Near term resistance sited at 121.50
Retail Sentiment: Bearish
Trading Take-away: Long

Commodities FX: GOLD prices eased from three-month highs, after US President Trump said he would give an announcement regarding taxes in the next few weeks. Also pressuring gold prices were US data, which pointed to a stronger economy, increasing the likelihood that the Fed will raise rates. OIL rose on Thursday after an unexpected draw in US gasoline inventories pointed to higher demand in the world’s biggest oil market. AUD In a speech on Thursday, RBA Governor Lowe remained positive about the Australian economy with expectations of firm growth and an underlying rise in inflation with the central bank expecting inflation to rise gradually over the next two years. There were significant comments on the currency with Lowe stating that the AUD was still around the average level seen against the US dollar over the past year while the currency has moved reasonably when compared with trends in commodity prices. CAD important Canada employment report due, anything short of a strong report would likely put the focus back on USD strength

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

Technical: The next upside objective is sited at .7750. Near term support is sited at symmetry swing level .7600 ahead of pivotal .7449
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: 1.3150 resistance eroded, over 1.32 opens a move back to test 1.3370.Price action remains erratic as price attempts to base above pivotal 1.30. Near term support is sited at 1.3050
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: The 1225 upside breach opens a move to 1245 as 1218 supports a failure below 1206 opens a retest of 1180
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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