New York Forex Report: Risk Sentiment Improved On Better China Data
Littlefish FX | Oct 01, 2015 08:14AM ET
EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Month end flows have faded and the strong ADP data state side is weighing on the single currency alongside improved risk appetite on the back of better China data yesterday. EUR/USD recovered from its European session low of 1.1130 as trading remains mostly range-bound ahead of tomorrow’s NFP release. US ISM Manufacturing is the key data for the session at 1500GMT1 expected 50.6 vs 51.1 previous. A miss on today’s data could spur USD weakness as investors begin to reduce expectations of a 2015 rate hike.
Technical: Sustained breach of 1.12 sets up a retest of bids below the 1.11 handle. Intraday support sited at 1.1130 failure here sees 1.11 back in bears sites with stops below to be revisited
Interbank Flows: Bids 1.1150/30- 1.1080/60 stops below. Offers 1.12 -1.1250 Stops above.
Retail Sentiment: Long to neutral
Trading Take-away: Sidelines for now
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: A small beat on UK PMI Manufacturing data this month ( 51.5 vs 51.3 expected) saw Sterling better bid over European trading. The number however actually marks a 3-month low in the data and so further GBP weakness can’t be ruled out. US ISM Manufacturing is the key data for the session at 1500GMT1 expected 50.6 vs 51.1 previous.
Technical: Remains under pressure while capped by 1.52 resistance, next downside objective is a test of 1.50 psychological support.
Interbank Flows: Bids 1.5130/10 stops below Offers 1.5210/30 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell pullbacks against 1.52 targeting 1.50.
USD/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: JPY was better bid over European trading as yesterday’s 3Q Tankan Report surprised to the upside alleviating some of the pressure on JPY. US ISM Manufacturing is the key data for the session at 1500GMT1 expected 50.6 vs 51.1 previous.
Technical: Likely range bound trade persists ahead of Friday’s NFP release. 119 the bid 121 the offer for now, topside break targets 122.50 while a downside breach targets 118.
Interbank Flows: Bids 119/118.80, 118.50/30 stops below. Offers 120.50/80 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
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EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental:Cross flows continued to weigh on EUR/JPY across the European session with EUR weighed upon by positive Chinese PMI data yesterday and a stronger 3Q Tankan Report in Japan.
Technical: Interim support at 134 eroded next downside objective is a retest of bids at 132. A close above 135 opens a retest of upper end of the recent range and 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
Trading Take-away: Sidelines for now
AUD/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: AU/DUSD continued to strengthen over European trading benefiting from the better risk sentiment seen on the back of positive Chinese PMI’s yesterday. US ISM Manufacturing is the key data for the session at 1500GMT1 expected 50.6 vs 51.1 previous.
Technical: Relief rally as positions are pared into tomorrows headline risk event. While offers at .71 cap upside attempts bears targets new year to date lows.
Interbank Flows: Bids .6850 stops below. Offers .7080/.7100 stops above
Retail Sentiment: Bullish
Trading Take-away: Sidelines for now
USD/CAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish
Fundamental: Stronger oil prices and a weaker dollar (due to better risk sentiment & position squaring ahead of NFP’s tomorrow) has seen CAD trade higher over the European session. US ISM Manufacturing is the key data for the session at 1500GMT1 expected 50.6 vs 51.1 previous.
Technical: Despite the pullback, uptrend is still intact and pair has come off from overbought conditions. While 1.3260 supports intraday downside reactions expect new trend highs en route to test projected ascending trend line resistance at 138 next.
Interbank Flows: Bids 1.3250 stops below. Offers 1.35 stops above
Retail Sentiment: Bearish to Neutral
Trading Take-away: Sidelines for now
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