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Asian Session – Dollar and oil stage a late rebound; aussie soars above 0.73

Posted on March 3, 2016 at 9:11 am GMT

Market sentiment remained broadly positive on Thursday as the US dollar bounced off yesterday’s lows and oil reversed a sharp slide to end the day higher. The dominating data in today’s Asian session were the services PMI for China and Japan. Services activity slowed in both China and Japan in February according to the latest PMI readings. Market reaction was muted though as traders were more focused on signs of a rebound in commodity prices. Oil prices posted a late [..]

Technical Analysis – EURUSD pauses decline, bearish bias remains

Posted on March 3, 2016 at 8:04 am GMT

EURUSD has re-entered into the recent 1.07-1.10 range it has been trading in for the past three months. After rising above the 200-day moving average in early February, the market was unable to sustain the rally that took prices to 1.1375. A break below the 200MA accelerated a decline towards a key level at 1.0850 where the market has found support in the past three days. Failure for support to hold at this level would encourage a bearish view with [..]

European Session – Euro falls to fresh 1-month low, oil crashes below $34 on rising inventories

Posted on March 2, 2016 at 3:51 pm GMT

The euro weakened further against the dollar today to touch a fresh one-month low of 1.0828. Eurozone PPI data (producer price index) released today highlighted the effects of falling oil prices on inflation. The monthly PPI reading fell in January to come in at -1%. Comments from Bank of France Governor Francois Villeroy de Galhau today, who is on the ECB’s Governing Council, said that it has tools that it is ready to use. He was testifying at the French [..]

Technical Analysis – USDCAD extends correction to below 1.34

Posted on March 2, 2016 at 1:51 pm GMT

USDCAD continued to retreat from the January high of 1.4689 to hit a 3-month low of 1.3385 on Tuesday. Prices bounced back above 1.34 today but the bias remains to the downside. The momentum indicators are all pointing to a bearish bias for the near term. RSI is slightly above oversold territory, while the MACD maintains a descending trend. Further losses would take prices towards the 200-day moving average, which is the only remaining bullish indicator. The 200-DMA also corresponds [..]

Australian economy resilient to global slowdown as GDP beats estimates…again

Posted on March 2, 2016 at 11:37 am GMT

The Australian economy showed no sign of losing steam in the face of global headwinds as GDP growth maintained a healthy momentum in the fourth quarter of last year. According to the Australian Bureau of Statistics, the economy expanded by 0.6% quarter-on-quarter in the final three months of 2016, beating forecasts of 0.4% growth. Adding to the upbeat data was an upward revision to the third quarter’s already robust growth rate from 0.9% to 1.1%. This pushed annual growth up [..]

Asian Session – Dollar and aussie surge on strong data

Posted on March 2, 2016 at 8:43 am GMT

The US dollar surged past 114 yen yesterday as US data continued to surprise on the upside. The ISM manufacturing and the Markit manufacturing PMI both beat expectations in February, raising the likelihood of more rate hikes later this year. The greenback was last trading around 114.20 yen in late Asian session, representing a gain of almost 2% since Monday against the Japanese currency. The Australian dollar was also boosted after GDP data showed the Australian economy grew more than [..]

Technical Analysis – AUDUSD retains neutral outlook around 0.72

Posted on March 2, 2016 at 8:03 am GMT

AUDUSD retains a neutral long term outlook as the pair pivots around the key 0.7200 level. After declining sharply from the May 2015 high of 0.8162, the market has stalled and traded sideways since September. The range is defined by the January low of 0.6826 and the December high of 0.7384. The 50 and 100-day moving averages have levelled off which also highlights the lack of direction in the market for now. Looking at the short term, AUDUSD staged quite [..]

European Session – Euro falls to 1-month low, dollar rallies on ISM data

Posted on March 1, 2016 at 3:51 pm GMT

The euro fell to a fresh one-month low versus the dollar today below $1.0840 as it came under pressure due to expectations of more ECB stimulus next week. Recent Eurozone inflation data and today’s PMI data heightened the chances the Bank will take action at its March 10 policy meeting. Eurozone manufacturing activity expanded at its weakest pace in a year as indicated by the final PMI reading for February at 51.2, down from 52.3 in January. On Monday, Headline [..]

Canadian GDP posts surprise growth in Q4; loonie rises to 3-month high

Posted on March 1, 2016 at 3:47 pm GMT

Canada’s economy posted surprise growth in the final three months of 2015, expanding by 0.2% quarter-on-quarter and beating estimates of zero growth. This still represents a slowdown from the previous quarter though, when GDP rose by an upwardly revised 0.6% rate. On an annual basis, GDP was up by just 0.5% due to the two consecutive quarters of negative growth reported in the first half of 2015. Canada’s economy has been struggling since 2015, mainly as a result of the [..]

Searching for the one-eyed currency

Posted on March 1, 2016 at 3:27 pm GMT

It is very rare these days to meet a policymaker in an advanced economy who is after a strong currency. A weaker currency can help revitalize a country’s export sector without the need for painful reforms or boosting competitiveness through other measures. This was again evident in the first two months of 2016, particularly because manufacturing was weak across many countries and some policymakers believed that a weaker currency might provide some relief to this problem. As aggressively easy monetary [..]

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