New York Forex Report: As traders return following the long Easter weekend the key focus will be on Fed Chair Yellen, who is due to speak later today at the Economic Club in New York. Last week saw a raft of Hawkish comments from Fed members, with Fed’s Bullard saying that recovery in economic indicators suggests that policy tightening would avoid “overshooting on inflation” and as such policy makers should consider hiking in April amid positive outlook on inflation and the job market. However, PCE data on Monday was weak, which dampened hawkish sentiment somewhat. Traders will now be keen to hear what Fed Chair Yellen has to say.
EUR/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR traded slightly lower over the European morning weighed on by a stronger US Dollar ahead of Fed Chair Yellen’s speaking event later today.
Technical: 1.1220 intraday resistance, while this level contains upside reactions anticipate a move back to 1.1050 in broader range trade. A close over 1.1220 opens a move back to retest range highs at 1.1350
Interbank Flows: Bids 1.1150 stops below. Offers 1.13 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
GBP/USD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: Sterling flows remain light this morning as traders return from the Easter weekend. Positioning data shows short positions have once again increased in Sterling as concern that the UK will leave the EU clouds the outlook.
Technical: 1.4050 pivotal support provides a platform for technical rebound on 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 1.4200 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
USD/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY recorded broad losses recently and even underperformed a defensive USD, which dropped on the back of disappointing US economic figures. Japan’s figures came in downbeat on the whole, the rebound in February household spending overshadowed by the unexpected uptick in the February jobless rate.
Technical: The close over 113 neutralises the immediate downside threat, in the broader range of 110/114, a breach of either level is required to help define the next directional play.
Interbank Flows: Bids 110.50 offers below. Offers 114 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
EUR/JPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: Japanese data remained patchy. Overall household spending unexpectedly rebounded to increase 1.2% YoY in February. In line with this, retail trade also saw a rebound although retail sales recorded bigger than expected decline of 2.3% MoM during the month. Amid a gloomier growth backdrop, unemployment rate staged a surprising uptick to 3.3% in February.
Technical: Bids sub 125 supported the current advance to target a test of symmetry resistance at 128.15 as the immediate corrective objective. Failure at 124.50 suggests false upside break and opens retest of 123.
Interbank Flows: Bids 125 stops below. Offers 127.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Long
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: AUD comes under pressure over the early European session today as the US Dollar strengthens ahead of Fed Chair Yellen’s speaking event later today. Risk sentiment starts the week a little softer also with Oil and equities weaker into the US open today.
Technical: Only a failure at.7400 support threatens near term bullish bias. Expect consolidation above this level with intraday resistance sited at .7600.
Interbank Flows: Bids .7450 stops below. Offers .7700 stops above
Retail Sentiment: Bearish
Trading Take-away: Long
USD/CAD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish
Fundamental: The Canadian dollar strengthened against the US dollar as economic figures weighed on the USD, while Canada’s finance minister expressed optimism that deficit spending will spur domestic economic growth. The USD hit its lowest level after a deep downward revision to US consumer spending for January released yesterday. The Canadian government said, the stimulus budget combined with a modest recovery in oil and non-commodity exports, make it likely the Bank of Canada’s next move will be an interest rate hike rather than a cut.
Technical: While 1.3110 contains downside reactions expect a retest of symmetry swing objective at 1.33 resistance, a close over 1.34 negates near term bearish bias
Interbank Flows: Bids 1.3100 stops below. Offers 1.3300 stops above
Retail Sentiment: Neutral
Trading Take-away: Neutral
