Daily Market Report: EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD
FX movement relatively sedate as US dollar outperforms, CAD lags
EURUSD: Hugging the lows ahead of Thursday’s ECB announcement
Although the euro didn’t underperform against the remaining FX majors, it could best the greenback which finished second-best, and with the dollar up this morning as well to send the pair’s price towards its 1st Support level as the pair suffers significant negative technical and fundamental bias ahead of this Thursday’s ECB announcement whereby expectations are for dovish tones to persist, and chances of easing later this year. And while there’s a dearth of eurozone data today, tomorrow’s PMI figures, a new UK PM in light of Brexit negotiations should keep both euro and pound lively. From a technical standpoint – and it means less in the face of clear potential fundamental forces – most of the technicals remain neutral, but its price is below all its main moving averages and showing clear short and long-term negative bias.
GBPUSD: Focus turns political as new UK PM set to emerge
For the UK, the focus is on the political and geopolitical front, with the former a key item today with respect to how Brexit negotiations will be handled, and whether the risk of a no-deal Brexit will rise prior to the October 31st deadline. As it stands, with the US dollar outperforming yesterday and the pound the second-worst performer amongst the FX majors, its bear trend that has been stalling at these levels remains intact, and whereby its price is below all its main moving averages and a negative DMI cross occurring yesterday. On the weekly chart, it stands at an important mid-term support level. Ahead of the event, retail bias has dropped 4% to a still heavy long 73%, while institutional bias is a near opposite heavy short 76%.
USDJPY: Relatively range-bound as greenback bests the yen
Equities enjoyed a day in the green with Asia up this morning as well, and the US dollar rose alongside it to finish higher against most of the FX majors. But with the gains relatively small and FX movement somewhat sedate, the higher finish hasn’t been able to dent the pair’s current technical overview that’s consolidatory and showing ongoing long-term negative bias. The gains are aiding retail traders whose majority long bias has dropped 6% with fresh longs quick to take profit on a rise. As for the BoJ’s Kuroda speech yesterday, he said that the Japanese central bank will closely monitor the rising global uncertainties.
USDCAD: Canadian dollar underperforms despite rising oil prices, bear trend stalls heavily
The Canadian dollar lagged the most yesterday amongst the FX majors, and with the US dollar outperforming it was an easy and significant finish higher for this pair’s price, taking it back above all its short-term moving averages and close to its short-term resistance level. This was despite a slight rise in oil prices on rising geopolitical tensions, and as a result its bear trend line is on the verge of breaking as more technical indicators turn bullish, putting its bear trend technical overview at risk of an overview shift, and enticing contrarian strategies over conformist ones. Retail traders have been the beneficiaries in this trade, with long profit-taking pushing its bias from what was a majority long 58% to nearly the middle, and testing institutional bias that’s majority short having shifted their bias recently. At this stage, USD weakness and a surge in oil prices aiding CAD’s energy underlying may be the only two items that can keep its bear trend technical overview intact.
AUDUSD: Pair’s price falls on USD strength but short-term bull trend channel still holding
Yesterday's drop against a strengthening greenback may have been limiting, but as of this morning it’s pushing the pair’s price down to its short-term support level. Most of its technical indicators are neutral, and a non-trending ADX makes its positive DMI less relevant. Furthermore, while the short-term outlook has turned slightly more positive from a technical standpoint, it’s running up against negative technical bias on the weekly level with its price below all its main weekly long-term moving averages. Retail bias is close to the middle for this pair with no clear beneficiaries, while institutional bias remains heavy short anticipating further downside bias.
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