EUR/USD fades the spike to 1.0820, back to 1.0780
After climbing as high as the 1.0820 region, EUR/USD bullish attempt lost momentum and has now receded to the 1.0780/75 band.The pair has managed to clinch fresh daily highs above 1.0800 the figure on Tuesday, although the bull run lacked of follow through around 1.0820, prompting the current knee-jerk.The initial softer tone around the greenback has allowed spot to rebound from yesterday fresh 2016 lows near the 1.0700 handle. However, EUR still remains under pressure as the weakness in the buck is seen as temporary only. Data wise in Euroland, German ZEW for the current month showed mixed results in Germany, with Current Conditions coming in below estimates while Economic Sentiment bettered expectations at 13.8. EMU’s Economic Sentiment has also surprised to the upside. Further data showed EMU’s advanced GDP figures pointing to an annualized expansion of 1.6% and 0.3% inter-quarter, both prints falling in line with consensus.Still in the data space, US October’s Retail Sales are due followed by the NY Empire State Manufacturing index. In addition, Boston Fed E.Rosengren (voter, dovish) and FOMC’s Vice Chairman S.Fischer (permanent voter, hawkish) are due to speak.According to the latest CFTC report, EUR speculative net short have decreased by around 8K contracts during the week ended on November 8, while Open Interest dropped by around 26K contracts.The pair is now advancing 0.36% at 1.0776 facing the next hurdle at 1.0817 (high Nov.17) followed by 1.0848 (low Oct.25) and finally 1.0941 (20-day sma). On the other hand, a breakdown of 1.0706 (2016 low Nov.14) would target 1.0538 (low Dec.3 2015) en route to 1.0519 (low Apr.13 2015).
GBP/USD testing lows near 1.2400 on CPI
The Sterling is now accelerating its daily downside, prompting GBP/USD to challenge daily lows in the 1.2400 neighbourhood.Spot lost further momentum after inflation figures tracked by the CPI rose less than expected during October. In fact, consumer prices rose at an annualized 0.9% and 0.1% on a monthly basis, while Core prices rose 1.2% over the last twelve months.Later in the session GBP will remain under pressure in light of the Inflation Report Hearing and testimonies by Governor Carney and MPC members Shafik, Saunders and McCafferty before the Treasure Select Committee.The pair is retreating for the second consecutive session so far today, coming down from last week’s tops just below the 1.2700 handle. It is worth mentioning that GBP has been recently boosted by expectations of a stronger trade links between the UK and US after Trump was elected president.On the positioning front, the CFTC reported that GBP speculative longs have dropped to 3-week lows, while net shorts have climbed to the highest level in the last three weeks during the week ended on November 8.As of writing the pair is losing 0.67% at 1.2412 facing the next support at 1.2397 (low Nov.15) followed by 1.2355 (20-day sma) and finally 1.2349 (low Nov.9). On the flip side, a breakout of 1.2675 (high Nov.11) would aim for 1.2684 (55-day sma) and then 1.2796 (low Jul.6).
USD/JPY building on momentum back above 108.00 handle
Having posted a session low at 107.77, the USD/JPY pair recovered majority of early losses and is now building on to its momentum further beyond 108.00 handle.Currently trading around 108.25-30 region, the pair regained control over 108.00 handle amid improving risk-appetite as depicted by positive sentiment surrounding European equity markets, which is denting the Japanese Yen's safe-haven appeal. Meanwhile, increasing bets of an eventual Fed rate-hike action at its December meeting continues to underpin the greenback and hence, Tuesday's retracement from five-month high could be categorized as consolidation or a minor correction from near-term overbought conditions.Later during NA session, US economic docket, featuring the release of monthly retail sales, Empire State Manufacturing Index and import prices, will be looked upon for short-term trading opportunities.Omkar Godbole, Editor and Analyst at FXStreet, notes, "Overall, the spot appears on track to test 109.13 (38.2% of 2015 high - 2016 low). The spot retreated from the weekly 200-MA level of 108.50. Also note, the weekly 200-MA and 50-MA could see a bearish crossover. Watch out for another failure in the range of 108.50-108.80 as that would heighten the odds of a more pronounced technical correction to sub-107.00 levels."
USD/CHF further gains seen on a close above 0.9979/1.00 Commerzbank
Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair should expect further gains on a close above the 0.9979/1.0000 band.“USD/CHF has reached the 2015-2016 resistance line at .9979 and the 1.00 level, this is key short term resistance and it is possible that we will see this hold the initial test. A close above here remains the break up point to the 1.0295/1.0328 2015 highs. There is very little above here until we reach the 1.0910 61.8% retracement of the move down from 2005”.“Intraday dips are indicated to hold .9885/25 ahead of the .9772 200 day ma and .9640 end of September low”.
EUR/JPY clings to gains to 117.00 neighborhood after EU data
After an initial drop to 116.00 neighborhood, the EUR/JPY cross regained its lost ground and is now building on its near-term bullish momentum.Currently trading around 116.80-85 band, the cross maintained its bid tone following the release of better-than-expected German ZEW economic sentiment that surpassed even the most optimistic estimates. German ZEW economic sentiment for current month jumped to 13.8 versus 8.1 expected and previous month's 6.2. Moreover, the release of in-line with expected composite Euro-zone GDP print further supported the bid tone surrounding the cross. Earlier on Tuesday, risk-off mood was seen boosting the Japanese Yen's safe-haven appeal and dragged the cross to session low. However, positive sentiment around European equity markets is indicative of improving inventor risk appetite and providing additional support to the cross. From current levels 117.00 round figure mark is likely to act as immediate resistance above which the cross is likely to aim towards 117.65-70 horizontal resistance ahead of 118.00 handle. On the downside, weakness below 116.40-35 immediate support seems to drag the pair back towards session low support near 116.00 handle before the cross eventually drops to 115.60-55 support area.
Oil extends rebound amid renewed OPEC cut hopes
Oil prices on both sides of the Atlantic extend previous rebound in Europe, as the sentiment remains underpinned on renewed expectations of an OPEC output cut action, while a broadly lower US dollar also supports.Currently, both crude benchmarks rally almost 2%, with Brent extending above $ 45 while WTI nears 44.50 levels. Oil prices extend its recovery mode into a second straight session this Tuesday, largely on the back of reports that the OPEC producers are reconsidering oil output cut proposals, refueling hopes of a deal in the OPEC's upcoming meeting later this month.Additionally, expectations of a major fall in the US shale oil production coupled in the upcoming months combined with the lowest level of Chinese oil output in seven years, boosts the ongoing recovery in the black gold.While a sharp correction seen in the US dollar against its major peers after the recent upsurge, also benefits the USD-sensitive oil. A weaker US dollar makes the USD denominated commodity cheaper for holders in foreign currencies and vice-versa.Attention now turns towards the weekly stockpiles reports from the US due today and tomorrow for fresh incentives on oil prices.
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