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IFO index misses estimates, shows German economy steady; euro unmoved

Posted on April 25, 2016 at 10:09 am GMT

The release of the German IFO business confidence index for April was the main economic news piece of the European session. There was a slight drop in the current conditions index, but a rise in the business expectations component. Taken together, this resulted in a slight drop of the headline business climate index, as the drop in current conditions was a little more serious than the rise in expectations. Following a significant drop in expectations during January and February – [..]

Asian Session – Yen pulls back from lows on profit-taking ahead of important week

Posted on April 25, 2016 at 7:31 am GMT

The US dollar made a fresh 3-week high of 111.85 yen in early Asian trading on Monday but then pulled back to the 111.20 yen area as there was profit-taking on the yen’s more than 2% slide since Friday. The move was sparked by reports that the Bank of Japan would decide to apply negative interest rates on loans it makes to banks after its meeting on Thursday. These reports as well as the yen’s reaction will make Thursday’s meeting [..]

Technical Analysis – EURUSD turns more bearish after drop from 6-month high

Posted on April 25, 2016 at 7:09 am GMT

EURUSD has turned increasingly bearish in the short term after falling below the 21-day moving average and below the key 1.13 level last week. The pair has made another lower high after falling from the 6-month high of 1.1463 that was hit on April 12. This was when RSI reached overbought levels at 70 and then turned back down as upside momentum faded and consequently prices fell. RSI is currently below 50 in bearish territory and trending down, suggesting the [..]

European Session – Sterling rallies to 1-month high, loonie boosted after Canadian CPI and retail sales

Posted on April 22, 2016 at 2:51 pm GMT

The euro extended its decline against the US dollar today following a post-ECB dip below the key $1.13 level yesterday as investors saw the potential for more stimulus measures if the Bank deems it necessary. The euro edged down to a one-week low versus the dollar to touch $1.1244, after hitting a high of $1.1395 just yesterday. Data out of the Eurozone today had little impact on the euro as most currencies were mainly driven by headlines rather than fundamentals. [..]

Euro pressured as ECB gets defensive and goes into waiting mode

Posted on April 22, 2016 at 2:07 pm GMT

The ECB meeting was this week’s main event in financial markets as many awaited an evaluation of the overall situation by its President Mario Draghi. The central bank had surprised markets back in March by doing more stimulus than was expected, but the euro nevertheless rallied. No new measures were expected but some guidance as to the future intentions of the bank was anticipated. In a sense, the ECB, a little like the Federal Reserve, is perhaps less likely to [..]

Week Ahead – Fed and BoJ to set the tone; RBNZ and preliminary GPD also eyed

Posted on April 22, 2016 at 12:44 pm GMT

It will be a busy seven days in the coming week as the Fed and the Bank of Japan hold their respective monetary policy meetings. The US and Japan will also dominate the economic calendar with some key indicators expected next week, while UK GDP, Eurozone flash inflation and the RBNZ’s policy meeting will also be watched. Eurozone inflation in focus post ECB German Ifo data will start the week on Monday and after this week’s disappointing Markit PMI surveys, [..]

Asian Session – Euro reverses post ECB gains; Yen slides on BoJ speculation

Posted on April 22, 2016 at 8:05 am GMT

The yen slid against major currencies in Friday’s Asian session after reports emerged that the Bank of Japan may broaden its use of negative interest rates when it meets next week. Bloomberg reported today that Bank of Japan policymakers are considering applying negative rates on the Bank’s lending facilities which would in effect mean paying commercial banks to lend to the public. The news sent the yen tumbling in currency markets and boosted shares in Tokyo. The US dollar jumped [..]

Technical Analysis – EURGBP falls out of rising channel, support at 50-dma

Posted on April 22, 2016 at 7:25 am GMT

EURGBP has fallen out of a 5-month rising channel and found support at the 50-day moving average and at the 23.6% Fibonacci level around 0.7850. This retracement level is of the upleg from 0.6981 to 0.8116. (November to April rise). After reaching the high of 0.8116, (the highest since June 2014), there was a subsequent correction in the market since RSI reached overbought levels at 70. The RSI indicator has dipped below 50 into bearish territory suggesting the risk of [..]

ECB keeps policy unchanged; Draghi on the defensive of ECB measures

Posted on April 21, 2016 at 3:02 pm GMT

The European Central Bank concluded its two-day policy meeting today by keeping monetary policy unchanged. The move was widely expected given the comprehensive measures announced at the Bank’s last meeting in March when it cut all its main rates and expanded its bond buying program by €20 billion a month. In the accompanying statement, the ECB maintained that the risks to the outlook for growth remain to the downside. But it pointed to an improvement in financing conditions as a [..]

European Session – Euro tests $1.14 before dip below $1.13 after ECB, US jobless claims at 42-year low

Posted on April 21, 2016 at 2:47 pm GMT

The European Central Bank policy meeting was the session’s highlight today. The euro rose ahead of the meeting and jumped higher after the Bank’s rate announcement, to reach near $1.14. The euro experienced more volatility during ECB President Mario Draghi’s press conference and climbed to as high as $1.1395 as he was slightly less dovish than expected. The euro subsequently fell to dip below $1.1300. Monetary policy was left unchanged as anticipated, as it would have been unreasonable to expect [..]

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