New York Forex Report: BOE Disappoints Sterling Bulls

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

Fundamental: EURUSD traded sharply higher  over European trading as risk sentiment tempered following the release of disappointing German trade balance data which narrowed to 15.3b, undershooting the expected 19b. ECB monetary policy meeting minutes  highlighted the committee’s focus on downside risks from inflation, commodity prices, stronger Euro and weaker growth with higher uncertainties stemming from China. EURUSD retreated from session highs following the minutes release. Traders look ahead to the FOMC minutes release in the American session at 1900GMT1.

Technical: contracting range persists, near term levels to watch are for a close above 1.1290/­1.1310 area now the catalyst for renewed topside price action. In turn 1.1170 ­90 downside break can open up a move potentially to the key 1.1110 support level

Interbank Flows: Bids 1.1300/50 stops below. Offers 1.13 Stops above.
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now

eu2015-10-08 07_42_00-NetDania - NetStation

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

Fundamental: GBP was sharply higher after the London open as positions were squeezed ahead of the BOE meeting, with demand driven also by M&A flow. The BOE meeting passed as expected with rates unchanged but the Central Bank struck a more Dovish tone noting the downward pressure on inflation from the strong Pound, the presence of spare capacity in the economy and the likelihood of inflation remaining below 1% until spring 2016, a marked change from their previous view of inflation picking up into year end. GBPUSD retreated from session highs post-meeting.

Technical: The close above 1.53 opens 1.54 as the next upside objective. While intraday downside reactions are support towards .15240 near term upside remains in tact,  a failure here would target a retest of recent lows.

Interbank Flows: Bids 1.5230 stops below. Offers 1.54 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 1.5240 for 1.54

gu2015-10-08 07_43_03-NetDania - NetStation

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

Fundamental: Mixed flows over the European session with JPY benefiting slightly from risk aversion stemming from the reopening of the Shanghai stock exchange following the week long Chinese National Day holiday. Key focus over the American session will be on the release of the September FOMC minutes.

Technical: Continues to trade in contracting range, play range 121.50 the offer and 118.50 the bid until broken.

Interbank Flows: Bids 118.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Neutral to bullish
Trading Take-away: Sidelines for now

uj2015-10-08 07_43_34-NetDania - NetStation

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

Fundamental: EURJPY traded higher over the European session as EUR squeezed ahead of the ECB monetary policy meeting minutes release with JPY trading very quietly. Price retreated from session highs following the Dovish minutes release.

Technical: 134 intraday support to watch a failure here targets a retest of 133 bid. While 134 survives on a closing basis expect renewed upside pressure on 135.60 interim resistance. A close above 136 opens a retest of upper end of the recent range and a retest of offers at 137 next.

Interbank Flows: Bids 134 stops below. Offers 136 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Sidelines for now

ey2015-10-08 07_44_19-NetDania - NetStation

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

Fundamental: Profit taking saw AUDUSD retreat from it’s October high of .7233 yesterday though demand has been creeping back into the market over European trading, even with commodities weaker.  USD position adjustment ahead of FOMC minutes release key driver.

Technical: Offers above .72 stall advance on the initial test while .71 supports intraday downside reactions bulls target broader equality corrective objective at .73.

Interbank Flows: Bids .6850 stops below. Offers .7250 stops above
Retail Sentiment: Neutral to bearish
Trading Take-away: Buy pullback against .7100 targeting .7300

au2015-10-08 08_13_00-NetDania - NetStation

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

Fundamental: USDCAD has seen quiet trading over the European session as Oil remains range bound at Yesterday’s lows and traders await the FOMC minutes release later today .

Technical: Supported on primary test of symmetry objective at 1.30 which is pivotal for trend continuation, a failure below 1.30 suggests the potential for a more significant trend reversal. Near term bearish tend remains intact as offers towards 1.3130 caps corrective upside reactions

Interbank Flows: Bids 1.2950 stops below. Offers 1.3130 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now

uc2015-10-08 08_15_02-NetDania - NetStation

 

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