New York Forex Report: Central Bankers Take Center Stage

New York Forex Report: Central Bankers Take Center Stage

New York Forex Report: ECB Governing Council members Praet, Coeure and Visco speak at the ECB and its watchers conference but the main highlight likely to be a speech from Draghi from 15.00 onwards at a meeting of Portuguese President Marcelo Rebelo de Sousa’s Council of State. Then later this evening at 22.30 Fed Chair Janet Yellen takes part in a discussion with former Fed chiefs Ben Bernanke, Alan Greenspan and Paul Volcker, hosted by International House.

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

Fundamental: European Central Bank President Mario Draghi said in the foreword to the ECB’s annual report 2015 published Thursday that the central bank would “not surrender” to the challenge brought about by low inflation, reaffirming his commitment to the Bank’s price stability mandate. The renewed easing package unveiled in March “reaffirmed that, even when faced with global disinflationary forces, the ECB does not surrender to excessively low inflation,” Draghi wrote.

Technical: Price achieved the symmetry swing objective at 1.1420, printing a hight of 1.1438 before pulling back below the figure, price action appears to be coiling. While 1,1330 continues to support expect a test of offers towards 1.15 next

Interbank Flows: Bids 1.1330 stops below. Offers 1.1450 stops above.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: Latest ICM poll data from the UK demonstrates that 44% favour leaving the EU with 43% in favour of staying in the EU, while a YouGov poll sees 39% for status quo, 38% for Brexit 23% undecided. The continued political uncertainty weighs n the GBP and is likely to continue to do so in the near term.

Technical: A breach of 1.4120 exposes 1.4050 pivotal support to set the platform to test the topside of the broader 1.45/1.40 range. A failure to hold 1.4050 opens a retest of year to date lows at 1.38 ahead of 1.37 weekly swing objective.

Interbank Flows: Bids 1.4050 stops below. Offers 1.45 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: A senior Japanese official on Thursday condemned the yen’s rapid rise to a 17-month high versus the dollar, calling the ascent “one-sided”, and threatening to intervene against it. But Ex IMF Official and former top FX diplomat Shinohara pointed out that Tokyo unlikely to intervene as the Yen was not yet strong on a real effective basis. Japan might also find intervention difficult if not uncomfortable ahead of IMF / G20 meetings in April and hosting of G7 meetings in May.

Technical: The downside failure opens 105.50 as the next major downside objective. Near term look for upside reaction to fail 110.50 resistance for renewed weakness.

Interbank Flows: Bids 108.50 offers below. Offers 110.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: BoJ Governor Haruhiko Kuroda reiterated earlier today that the BoJ is willing to take action, be it further interest rate cuts or an expansion of the bank’s asset buying program if needed.

Technical: Failure at 126.50 suggests false upside break and opens retest of 123. Only a close over 126.80 eases immediate downside pressure.

Interbank Flows: Bids 123 stops below. Offers 125.50 stops above.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: IMF COFER data – “The sheer amount of Aussie dollars bought by foreign central banks makes clear just what the RBA is leaning against. Foreign exchange reserves data out last week on from the International Monetary Fund showed holdings of the Aussie surged 34 per cent in 2015 to reach roughly $US177 billion (A$232.8 billion). That compared with a rise of just 5 per cent over 2014. The Aussie made up 1.9 per cent of the world’s allocated reserves at the end of last year. That was up from 1.78 per cent in 2014 even as the US dollar climbed steadily in value, according to AFR.

Technical: Only a close below .7550 threatens the near term bullish bias, while this level supports intraday expect a grind higher to test .7770. A failure at .7550 opens pivotal .7450 support.

Interbank Flows: Bids .7500 stops below. Offers .7650 stops above
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: CAD managed to trim most of its intraday losses against the dollar after a report showed a sharp drawdown in stockpiles. Oil prices surged to their highest level in the week, with the US benchmark advancing beyond $37.00 a barrel after the country reported a large draw in domestic stockpiles.

Technical: The major hurdle to the upside remains the symmetry swing resistance sited at 1.3230, while this area continues to contain upside reactions anticipate a retest of 1.2830/50 level as we once again attempt to set a double bottom base to encourage a broader correction

Interbank Flows: Bids 1.30 stops below. Offers 1.3250 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral

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