EUR/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: EUR continued its downward trend against the USD following European Central Bank chief Mario Draghi’s comments in the ECB press conference that signaled further monetary easing could be on deck for the euro zone. Europe’s common currency traded below 1.10 overnight , hitting a low not seen since early August, it was the euro’s worst weekly fall since May.
Technical: Breaches 1.10 support, while 1.1080/1.11 caps intraday upside reactions expect bearish pressure to be maintained targeting 1.09 bids next. A close above 1.1122, targets 1.1240 next.
Interbank Flows: Bids 1.0950 stops below. Offers 1.1120 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell pullbacks against 1.1120 targeting 1.09
GBP/USD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: GBP fell for a fourth straight day, weakening another 0.52% to 1.5314 against the USD. Mirroring EUR, losses picked up after China’s easing news. Tuesday’s first estimate of Q3 GDP will be the main event in the UK, expected at 0.6% q/q, 2.4% y/y, a slight slowing from 0.7% and 2.4% respectively in Q2. Such an outcome should reinforce the market’s opinion that the BoE’s policy rate will likely hold steady at its current level of 0.5% for now
Technical: While 1.5300 supports downside reactions expect a grind higher to test 1.56 symmetry objective. A breach of 1.53 targets a retest of pivotal 1.52 support.
Interbank Flows: Bids 1.5300 stops below. Offers 1.54 stops above
Retail Sentiment: Neutral to bullish
Trading Take-away: Sidelines for now
USD/JPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: USD/JPY currently below the 121-mark, JPY slumped as bourses jumped, with the BoJ expected to be the next major central bank to embrace further easing, possibly as soon as this week. The BoJ monetary policy decision is on Friday and is accompanied by the publication of the semi-annual Outlook Report (“The Bank’s View”), followed by the usual post-decision press conference by BoJ Governor Kuroda.
Technical: Bulls target a sustained break of 121 to target range highs at 121.85 an intraday failure at 119.50 would suggest return to range.
Interbank Flows: Bids 119.50/30 stops below. Offers 121.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Buy pullbacks against 120.50 targeting upside range break
EUR/JPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish
Fundamental: Rally in the JPY and deterioration in the September trade data are likely to weigh on BoJ policymakers, and markets will keep their eyes on Japan’s industrial production and CPI figures due this week ahead of BoJ’s rate decision meeting scheduled this Friday. Pair heavily weighed by negative EUR cross flows last week.
Technical: 133.40 pivotal support test underway, while 134.50 caps intraday upside reactions expect a breach of 133.40 to target equality corrective objective at 131.20 next
Interbank Flows: Bids 133.00 stops below. Offers 134.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sell pullback against 134,50 targeting 131.20
AUD/USD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish
Fundamental: AUD edged higher overnight trading as proxy for the China rate cut. Overall the AUD continues to rotate in the upper end of the recent range as concerns surrounding the likelihood of an RBA interest rate cut at next month’s policy meeting remains in focus.
Technical: Bids ahead of .7200 continue to support , while this level holds on an intraday basis expect a retest of offers above .7300. A close back above .7300 targets a .7400 resistance next. Failure at .7200 targets .7160 symmetry objective.
Interbank Flows: Bids .7200 stops below. Offers .7400 stops above
Retail Sentiment: Neutral
Trading Take-away: Sidelines for now
USD/CAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish
Fundamental: CAD weakened to a fresh three-week low against US dollar after domestic inflation figures slipped more than expected. Canada’s annual inflation rate dipped to 1.0 percent in September on lower prices for gasoline, marking the 10th straight month it has been below the Bank of Canada’s 2.0 percent target. The figures suggested the central bank may likely keep interest rates low after two rate cuts earlier this year.
Technical: Near term bearish tend remains intact as intraday resistance at 1.3260 contains intraday upside reactions bears target a retest of bids below 1.2850. A breach of 1.3260 opens test of 1.3450 offers and potential broader bullish trend continuation
Interbank Flows: Bids 1.3090 stops below. Offers 1.32 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now
