EUR/USD Outlook
Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR was weaker over the European session as European equity markets recovered on the back of a raft of positive data this morning lead by Eurozone Economic Confidence printing 105.6 vs 104.1 previous, tempering the risk aversion we saw yesterday. German CPI is the headline data today at 1300GMT expected 0.0% vs 0.1% previous.
Technical: Breach of 1.1150 intraday resistance, resets focus on upper end of recent range, bulls now target stops above the 1.13 handle.
- Interbank Flows: Bids 1.12/1.1180, 1.1150/30 stops below. Offers 1.1310/30 1.1380 Stops above.
- Retail Sentiment: Neutral
- Order Flow: Bullish
- Trading Take-away: Buy pullbacks against 1.12 targeting 1.1380.
GBP/USD Outlook
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Sterling saw some initial strength over the European session as the latest UK lending data shows British households received the highest monthly lending (August) in over seven years, though month-end flows seem to have GBP under pressure with the move higher in EUR/GBP adding weight. BOE Governor Mark Carney speaks today at 2040GMT.
Technical: Remains under pressure while capped by 1.52 resistance, first test of 1.5150 support attracts buyers/profit takers on the initial test. While 1.5250 caps intraday upside reactions expect stops below 1.5150 to be pressured as 1.50 psychological support is targeted next.
- Interbank Flows: Bids 1.5130/10 stops below Offers 1.5250/1.53 stops above.
- Retail Sentiment: Bullish
- Order Flow Indicators: Bearish
- Trading Take-away: Sell pullbacks against 1.5250 targeting 1.50.
USD/JPY Outlook
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: A reprieve in safe-haven inflows saw USD/JPY recover some of yesterday’s losses during European trading, still maintaining the tight range we have held since the spike low on August 24th. US Consumer Confidence at 1500GMT is the headline data set for the session expected 96 vs 101.5 previous.
Technical: Sharp reversal from test of the upper end of the recent range sees price retesting range support towards 119. Failure below 119 opens test of stops below the September low of 118.58 next.
- Interbank Flows: Bids 119/118.80, 118.50/30 stops below. Offers 120.50/80 stops above.
- Retail Sentiment: Bullish
- Order Flow Indicators: Bearish
- Trading Take-away: Sidelines for now.
EUR/JPY Outlook
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR/JPY saw a sharp reversal in European trading having spiked higher amidst lower risk-aversion and positive eurozone data only to recede immediately.
Technical: 135 offers contained the upside reaction suggesting a rotation back to 132 through interim support at 134. A close above 135 opens a retest of offers at 137 next.
- Interbank Flows: Bids 133.80/50 stops below. Offers 135.10/30. 135.50 stops above.
- Retail Sentiment: Neutral
- Order Flow Indicators: Bullish but stalling.
- Trading Take-away: Sidelines for now.
AUD/USD Outlook
Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Declining commodity prices coupled with further data weakness in China have kept AUD pressured in recent days fueled also by the ferocious sell-off in Glencore (OTC:GLNCY) (LONDON:GLEN), the world’s largest supplier of copper. A slight rebound in the price of Glencore’s share price today have allowed the Aussie some respite though spot is looking very heavy here.
Technical: Downside pressure persists stops below year to date lows of .6893 are likely tested. Potential for daily double bottom to set up dependent on today’s close.
- Interbank Flows: Bids .6850 stops below. Offers .7080/.7100 stops above.
- Retail Sentiment: Bullish
- Order Flow Indicators: Bearish
- Trading Take-away: Sidelines for now.
USD/CAD Outlook
Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: The Canadian dollar was weaker over the European session as oil prices softened on the session also. The sharp devaluation in Glencore has fueled continued commodity weakness with markets now looking cautiously ahead to China’s PMI release on Thursday
Technical: Retesting 2015 highs, while 1.33 supports intraday downside reactions expect a breach of highs en route to test projected ascending trend line resistance at 138 next.
- Interbank Flows: Bids 1.33 stops below. Offers 1.3450 stops above.
- Retail Sentiment: Bearish
- Order Flow Indicators: Bullish but stalling.
- Trading Take-away: Sidelines for now.
