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Pound stabilizes after sell-off, stocks rise on policy hopes, oil

Posted on February 26, 2016 at 2:36 pm GMT

Cable finds some support after Johnson-shock After some vicious selling at the beginning of the week, the pound found some support just below 1.40 versus the US dollar. True the pair dipped to as low as 1.3878 – a new 7-year low- in the aftermath of London Mayor Boris Johnson’s announcement that he was backing the ‘Leave’ campaign. The pound subsequently emerged back above 1.40 by Friday after spending Wednesday and Thursday below that key psychological level. The issue of [..]

Week Ahead – Busy week for Japan, Eurozone and US data; China PMI and RBA also eyed

Posted on February 26, 2016 at 1:32 pm GMT

It will be a data-packed week for Japan, the Eurozone and the United States in the next seven days with Japanese industrial production, Eurozone flash inflation and US NFP report among the major releases. Also headlining will be the latest manufacturing surveys out of China and the Reserve Bank of Australia’s March policy meeting. Japanese data will start the week on Monday with the release of industrial production and retail sales numbers for January. Industrial production is forecast to rebound [..]

Asian Session – Markets steady ahead of G20 as pressure mounts for global policy action

Posted on February 26, 2016 at 8:53 am GMT

Shares across Asia were mostly in positive territory on Friday following sharp gains on Wall Street and in Europe yesterday. China’s main indices were 1% higher after slumping by over 6% on Thursday. Markets took support from comments by the People’s Bank of China governor who tried to reassure world leaders at the G20 summit that China would not engage in competitive devaluation. Meanwhile, the OECD urged the G20 to press ahead with structural reforms and the IMF called for [..]

Technical Analysis – USDJPY stabilizes, bearish bias remains

Posted on February 26, 2016 at 8:05 am GMT

USDJPY is testing the 133 yen level today. There was an attempt to break above it briefly this morning but the pair has mostly traded below this level all week. However prices appear to have bottomed out and steadied since dropping to 16-month lows of 110.96 on February 11. The levelling off of the RSI at oversold levels around 30 suggests that downward pressure has eased and the market will likely consolidate in the short term. But the outlook remains [..]

European Session – Sterling steady after UK GDP, dollar buoyed by US data

Posted on February 25, 2016 at 3:35 pm GMT

The European session today was relatively subdued with little volatility. Risk was more on rather than off and the calmer European markets despite the sell off in China’s markets earlier today, meant there was less demand for safe havens. The yen was weaker and the euro was down as the dollar recovered after strong US durable goods data. The number of orders for goods lasting more than three years rose 4.9% in January, beating forecasts for a 2.5% rise and [..]

Dollar firmer after US durable goods orders bounce back in January

Posted on February 25, 2016 at 3:33 pm GMT

Total new orders for manufactured durable goods in the United States jumped by 4.9% in January, reversing December’s upwardly revised 4.6% drop. Consensus forecasts were for a monthly increase of 2.5%. The data follows better-than-expected industrial production figures from last week that showed output increasing by 0.9% month-on-month in January. US manufacturers have been struggling since the second half of last year amid weak global demand and a strong dollar, relying on domestic demand to sustain growth. The latest figures [..]

Technical Analysis – NZDJPY looking bearish below 75

Posted on February 25, 2016 at 11:14 am GMT

NZDJPY was struggling to reclaim the 75 handle today after dipping to a 2-week low of 73.53 yesterday. The pair has been drifting lower after its attempt to correct the December-January downtrend came to a halt at 79.37. It has since touched a fresh 6-month low of 73.16 and continues to face downside pressure. Both the RSI and the MACD remain in negative territory, although there appears to be some signs of levelling off in both charts. The nearest support [..]

Asian Session – Oil rebound helps dollar back above 112 yen

Posted on February 25, 2016 at 8:43 am GMT

The US dollar rebounded from yesterday’s lows following some weak economic data. A late rally in oil prices helped the greenback and US stocks to move higher. US crude futures jumped 5% after the latest US inventory data showed gasoline and distillate stocks declined more than expected even though crude oil inventories increased. However, on Thursday, prices moved back down again on lingering oversupply concerns. WTI futures were last trading 1.2% lower at $31.77 a barrel. The dollar fell below [..]

Technical Analysis – GBPCAD downside bias

Posted on February 25, 2016 at 8:13 am GMT

GBPCAD declined sharply this week. The double top trend reversal pattern was formed after the market broke the neckline support level at 1.9800. After a retest of this level, prices resumed their fall to reach 1.9050 on Wednesday, the lowest since June 2015. Technical indicators suggest GBPCAD has scope for further downside. MACD is below zero, while RSI is below 50 and trending down. The 50-day moving average recently crossed below the 100-day moving average, giving a bearish signal and [..]

European Session – Sterling hits fresh 7-year lows, gold rises on risk aversion

Posted on February 24, 2016 at 3:56 pm GMT

Risk aversion dominated today’s European session, helping gold prices advance by over $30 to rise above $1250. The yen outperformed due to safe haven flows as equity markets tumbled in response to a further decline in oil prices today. Oil prices extended Tuesday’s more-than 4% decline and this impacted market sentiment. Crude prices dropped below $31 a barrel today after falling on comments by Saudi Arabia’s oil minister Al Naimi yesterday. He ruled out any reduction in output any time [..]

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