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Asian Session – Strong yen continues to raise eyebrows in Japan as dollar still in retreat

Posted on April 11, 2016 at 8:00 am GMT

It was a mixed start to the week in Monday’s Asian trading as the strong yen continued to weigh on Tokyo stocks but higher oil prices boosted equities elsewhere. Shares in China’s main indices were up over 1.5%, buoyed by weaker-than-expected inflation figures, which raised expectations of looser monetary policy. Annual CPI in China rose by 2.3% in March, less than the expected rate of 2.5% and the first time in five months that inflation has not accelerated. Producer prices [..]

Technical Analysis – GBPJPY bearish at 2 ½ year low

Posted on April 11, 2016 at 7:12 am GMT

GBPJPY fell to its lowest level since August 2013 last week on Thursday, to reach 151.63. Prices have since stabilized and paused the decline as momentum reached oversold levels – RSI dipped just below 30. This suggests that there will be some consolidation and a possible pullback in the near term before heading lower. The technical picture looks bearish, with all three moving averages sloping down (50,100 and 200-day moving averages). Prices have been making lower highs and lower lows [..]

European Session – Yen rally takes a breather; loonie soars on strong jobs data

Posted on April 8, 2016 at 2:45 pm GMT

Risk appetite improved today and as a result the yen stabilized after appreciating most of the week to the strongest level since 2014 versus the dollar. The dollar/yen pair bounced up to 109.09 on Friday after stalling its decline at 107.65 yesterday. Speaking today, Japan’s Finance Minister Taro Aso remarked that rapid movement in the yen was undesirable, prompting some liquidation in the currency. But the risk of a Bank of Japan market intervention is low at this point. Sterling [..]

Week Ahead – Big week for Chinese data with GDP in focus

Posted on April 8, 2016 at 12:36 pm GMT

Looking ahead to the coming week, data out of China dominates the economic calendar with key indicators such as GDP and trade. US and UK inflation will also be watched closely but policy meetings by the Bank of England and the Bank of Canada are unlikely to be market movers. All eyes on China GDP Chinese inflation data will start the week on Monday. Annual CPI is forecast to head higher for a fourth straight month to increase to 2.5% [..]

Asian Session – Dollar firmer on Fed remarks; Yen eases on intervention talk

Posted on April 8, 2016 at 8:16 am GMT

The US dollar came off Thursday’s lows as several Fed policymakers, including Chair Yellen, reiterated that the Fed is on course for further rate hikes. Speaking in a panel discussion in New York on Thursday, Yellen said she didn’t think December’s rate rise was a mistake, adding that inflation would not be held down for much longer by transitory factors. Also speaking on Thursday at separate events were Kansas City Fed President Esther George and San Francisco Fed President John [..]

Technical Analysis – EURJPY risk to the downside after breaking below 124

Posted on April 8, 2016 at 7:07 am GMT

EURJPY accelerated its downside momentum after breaking below the 50-day moving average on April 5 at 126.85. Prices subsequently extended lower, falling below key levels such as the 50% Fibonacci retracement (125.14) of the 122.06 to 128.21 rise (the March rally), and then below the key 124.00 level. On Thursday there was a dip to a one-month low of 122.53. Prices have rebounded slightly on Friday but 124.00 remains a key resistance level now. Risk remains to the downside as [..]

European Session – Dollar extends losses versus yen; euro slides on dovish ECB officials

Posted on April 7, 2016 at 2:46 pm GMT

The dollar fell to fresh lows reaching levels not seen since October 2014, and erased all gains made after the rally driven by the Bank of Japan’s October 31, 2014 surprise expansion in QQE. The dollar touched a low of 107.90 yen, as it remained under pressure following yesterday’s release of FOMC minutes. The minutes confirmed the cautious US rate hike outlook which Fed Chair Janet Yellen spoke of recently. The euro benefited from the broadly weaker dollar and hit [..]

Asian Session – Dollar falls to 6-month low after FOMC minutes

Posted on April 7, 2016 at 8:03 am GMT

The minutes of the Fed’s March policy meeting showed signs of a split emerging within the FOMC as two committee members argued for a rate hike. However, only one member voted for a rate increase in March, while the majority of participants preferred to take a “cautious approach” to raising rates. Concerns about the prospects for global growth, disinflationary pressures from overseas and uncertainty about the Fed’s own forecasts for the US economy were cited as the main reasons for [..]

Technical Analysis – AUDJPY falls to one-month low

Posted on April 7, 2016 at 7:17 am GMT

AUDJPY has made repeated attempts to break above the 86.50 – 86.70 levels, making this a strong resistance area. The 200-day moving average is also acting as resistance as was evident on March 31 when prices tested this level at 86.69 and fell back down. A break below the 100 and 50-day moving averages accelerated the fall and prices consequently fell to a one-month low of 82.68 today. The market is approaching the 38.2% Fibonacci retracement level of its December [..]

European Session – Dollar falls to fresh 17-month lows versus yen as markets eye FOMC minutes

Posted on April 6, 2016 at 3:04 pm GMT

Sterling was one of the worst performing major currencies today as Brexit concerns weigh, while the yen continued to outperform due to risk aversion. The focus was also on the dollar, as investors await the FOMC minutes due at 2 pm ET. Attention will also be paid to Cleveland Fed President Loretta Mester who is scheduled to speak about the economic outlook later today. The minutes of the March 15-16 Fed policy meeting are expected to be dovish and will [..]

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