New York Forex Report: Volatile Dollar Leaves Markets Mute

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

Fundamental: EUR continues to remain in consolidation mode ahead of tomorrow’s ECB meeting as we quietly pivot around the 1.1350 level. Little in way of data releases today so market remains neutral. Yesterday’s bounce was sold into suggesting heavy short bias heading into ECB. A squeeze higher should be capped into offers at around 1.1420-40 with demand at 1.13 propping up the action.

Technical: a close above 1.1390 now required to present the catalyst for renewed topside momentum bringing the key 1.1500 resistance level back into play .To the downside we continue to look at the recent non-farm break up levels with 1.1310 and 1.1270 providing key support.

Interbank Flows: Bids 1.13 stops below. Offers 1.1420 Stops above.
Retail Sentiment: Bearish to neutral
Trading Take-away: Sidelines for now

eu2015-10-21 07_44_18-NetDania - NetStation

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

Fundamental: Better public sector net borrowing & financing figures saw Sterling better bid over the European morning with net-borrowing at £8.6bln vs £10.9bln previous and £9.6bln expected.

Technical:  While 1.5380 supports downside reactions expect a grind higher to test 1.56 symmetry objective. A breach of 1.5360 targets a retest of pivotal 1,53 support.

Interbank Flows: Bids 1.54 stops below. Offers 1.5550 stops above
Retail Sentiment: Bearish to neutral
Trading Take-away: Buy pullback against 1.5380 targeting 1.56

gu2015-10-21 07_46_59-NetDania - NetStation

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

Fundamental: September’s disappointing trade data (exports rising only +0.6 pct vs +3.4 pct exp, trade balance at ­114.5 bio vs +84.4 bio exp) should heighten the market’s expectations and excitement going into next week’s BOJ policy decision and in this current environment of low volatility and a recovering USD, the path of least resistance for the pair in the next few sessions is a grind higher.

Technical: Breach of 119.50 eases bearish pressure and opens a retest of 120.50 next. A  failure at 119 support suggests upside failure and a rotation back to 118 support to follow.

Interbank Flows: Bids 118.50/30 stops below. Offers 120.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

uj2015-10-21 07_47_39-NetDania - NetStation

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

Fundamental: Flows remain constrained with market expectations for both ECB & BOJ easing. Better risk sentiment over the European morning sees JPY weaker.

Technical:  While 136 caps upside reactions expect a retest of yesterdays low at 134.80 a failure here sets bearish tone targeting 133.40 next. A break back above 136.00 eases bearish pressure and sets a retest of 137.

Interbank Flows: Bids 134.80/60 stops below. Offers 137 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-10-21 07_48_09-NetDania - NetStation

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

Fundamental: Despite better risk sentiment over the European morning with a small bounce in commodities, AUDUSD remains weak, subject to a whipsaw session in the US Dollar so far today.

Technical: Bids ahead of .7200 being tested , while this level holds on an intraday basis expect a retest of offers above .7300. A close back above .7300 targets a .7400 resistance next. Failure at .7200 targets .7160 symmetry objective.

Interbank Flows: Bids .7200 stops below. Offers .7400 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

au2015-10-21 08_33_41-NetDania - NetStation

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

Fundamental: Main focus will be on the BoC monetary policy announcement. In line with consensus, we expect them to leave monetary policy unchanged. More importantly, however, economists expect the central bank to lower 2016 growth projections as the 2.3% full-year growth estimate appears overly optimistic.

Technical: Near term bearish tend remains intact as intraday resistance at 1.3050 contains intraday upside reactions bears target a retest of bids below 1.2850. A breach of 1.3050 opens test of 1.31 offers next.

Interbank Flows: Bids 1.2850 stops below. Offers 1.3060 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Sidelines for now

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