New York Forex Report
A quiet European morning as markets await the release of the February US jobs report. NFPs are expected to print 195k from 151k previous with the unemployment rate expected to remain unchanged at 4.9%. Equities remain supported so far today with risk-sentiment firm following large overnight moves in Chinese equities which are said to be linked to official intervention ahead of a key policy meeting.
EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR remains strong over early European trading benefiting from a weaker US Dollar ahead of the jobs report later today.
Technical: While prior support at 1.0950/70 acts as intra day resistance bears target prior range support at 1.08. Only a close over 1.1080 eases immediate downside pressure.
Interbank Flows: Bids 1.08 stops below. Offers 1.10 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP continues to be supported by the ongoing recovery in risk sentiment, shrugging off weak domestic data. Yesterday the UK Markit Services PMI dropped to a three-year low of 52.7 as Brexit doubts remain on the table. This has showed that Britain’s recovery from the financial crisis is losing momentum and why policymakers from BoE have said they stand ready to boost the economy if needed.
Technical: While 1.4030 acts as intraday support expect a continued grind higher to test pivotal 1.4235 only a close over 1.4250 eases bearish bias.
Interbank Flows: Bids 1.40 stops below. Offers 1.4230 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: Despite risk appetite ticking up due to upbeat US stock markets and rebound in oil prices, USD/JPY dropped to a daily low of 113.28 overnight. JPY is currently trading within a 113.30 to 114.25 range. Unless there is a big discrepancy between the actual and expected nonfarm data due today, the pair is expected to trade in this range before the BoJ meeting.
Technical: Bulls will be looking for 112.50 to continues to support expect a further leg of corrective gains, to retest the broken neckline support at 115/116. Failure at 112 open 11 again.
Interbank Flows: Bids 112.50 offers below. Offers 114.50 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines
EUR/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: In Japan services PMI tumbled from 52.4 in Jan to 51.2 in Feb. Business activities in the sector lost steam last month albeit to a lesser extend compared to the manufacturing sector. Japan’s reading was the lowest since July 2015, dragged by the weakest increase in new business since last Nov.
Technical: While 123 offers intraday support expect a continued grind higher to test offers above 125. A failure at 123 refocuses bearish sights on the psychological 120 en route to a weekly downside objective at 118/117, only a close over 125.10 eases bearish bias.
Interbank Flows: Bids 123 stops below. Offers 125 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: AUD held near three-month highs against the USD, as a rally in commodities and supportive domestic figures provoked investors to pare back the chance of a future interest rate cut.The Aussie lifted after figures showing the economy grew at the fastest pace in almost two years, a hopeful sign the worst of the global commodity rout may be over.
Technical: While .7250 supports intraday expect further upside pressure targeting .7385 next a close over .7400 sets up a .7500 test next. Only a failure at.7100 pivotal support threatens bullish bias.
Interbank Flows: Bids .7250 stops below. Offers .7400 stops above
Retail Sentiment: Bearish
Trading Take-away: Long
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: CAD strengthened to a twelve-week high against the USD as base and precious metal prices rallied. The currency extended its recovery from a twelve-year low in January at 1.4689 as weaker US figures weighed on the USD ahead of today’s US jobs report. The implied probability of a rate cut this year fell when Canada’s Finance Minister Bill Morneau said the government would stick to plan to stimulate the economy in a 22 March federal budget.
Technical: While USDCAD trades sub 1.3510 downside pressure remains the driver with bears focusing on a AB=CD ultimate downside objective at 1.2966, the next interim support level to watch is is 1.3350.
Interbank Flows: Bids 1.3350 stops below. Offers 1.3550 stops above
Retail Sentiment: Bullish
Trading Take-away: Short
