Wednesday, April 27, 2016

London Forex Report: All Eyes On FOMC

London Forex Report: The rebound in US brought little cheer as it was driven by higher demand for defense aircraft and not an increase in capital spending, confirming that weak business spending will continue to keep a lid on growth prospects ahead. Consumer data was also less robust as index softened more than expected to 94.2 in April. house prices and manufacturing index also turned in softer. The only bright spot was that showed an uptick to 52.1 in April. The generally subdued data is expected to keep the Fed on a cautious stance in the upcoming . USD extended its losses on risk aversion going into FOMC policy decision. The tumbled to an intraday low of 94.20 before bouncing back to narrow losses to 0.28% to 94.57.


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

Fundamental: EUR was broadly stronger yesterday, surging to the intraday high of 1.1338, pulling further away from the trough of 1.1213 touched earlier this week. The US was far worse than the expectations, which was the main cause accounted for the surge of the Euro.

Technical: 1.1220 is the pivotal support zone ahead of this evening risk event while this area holds expect another test of offers towards 1.1400 a break higher here targets 1.1487 as the next upside objective. Failure at 1.1220 opens 1.1140.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

EUR/USD 4 Hourly Chart

EUR/USD 4 Hourly Chart


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

Fundamental: climbed to 12-week highs against the USD on Tuesday as the expectations that Britain will vote to remain in the European Union are rising. Nevertheless GBP has backed to the levels last seen before the setting of a date for the Brexit referendum. Sterling reached the intraday high of 1.4638 against a broadly weakening USD. It looks as if there has been a change of sentiment after the supportive speech from US President Obama

Technical: While 1.43 supports bulls target a broader symmetry swing objective at 1.4684. Failure at 1.43 opens a near term base test at 1.4240 next.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

GBP/USD Chart

GBP/USD Chart


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

Fundamental: USD edged up to 111.47 against the JPY yesterday as markets believe that the BoJ could ease further, while the US central bank would keep the interest rate at the current level. Markets believe the monetary easing would likely focus on boosting purchases of stock trust fund this time and BoJ also can combine other steps like more government bond purchase or even another cut in interest rates.

Technical: While 110 now acts as supports expect a test of 112 offers, breach of 110 support suggests false upside break and opens a move to retest year to date lows.
Retail Sentiment: Bearish
Trading Take-away: Long

USD/JPY Chart

USD/JPY Chart


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

Fundamental: Japan's GPIF, USD1.2tn ,national pension reserve fund – the largest pension fund in the world of its kind – doesn't need to change its basic allocations at this time as the country's government and central bank are still committed to lifting growth and inflation, the fund's head has said in an interview with the WSJ.

Technical: Bears now target weekly symmetry objective at 120.60, resistance is sited at 126. Only a close over 126.80 eases immediate downside pressure.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

EUR/JPY Chart

EUR/JPY Chart


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

Fundamental: Low gives RBA a green light for a pre-election rate cut . If the Reserve Bank is inclined to cut interest rates but is hesitant because of the election campaign, it now has the perfect excuse. The most widely quoted measure of underlying inflation is running at an annual rate of just 1.7%, which is below the RBA's target and well short of expectations

Technical: Failure at .7650 opens a move back to test .7470/90. .7700 now becomes intraday resistance
Retail Sentiment: Neutral
Trading Take-away: Neutral

AUD/USD Chart

AUD/USD Chart


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

Fundamental: CAD strengthened against the USD as oil prices rose, but the loonie jammed to a tight range as traders looked ahead to a rate decision from the Federal Reserve. Weaker-than-expected US figures weighed on the US dollar and traders were betting that the Fed will strike a dovish tone in its policy statement.

Technical: While prior support at 1.2740/60 acts as resistance expect a test of bids at 1.2560 as the next downside objective
Retail Sentiment: Bullish
Trading Take-away: Short

USD/CAD Chart

USD/CAD Chart



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London Forex Report: All Eyes On FOMC Rating: 4.5 Posted by: Unknown

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