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Asian Session – Markets ignore weak data as oil surge boosts risk sentiment

Posted on February 15, 2016 at 8:27 am GMT

Asian equities followed European and US shares higher on Monday as risk appetite made a return at the start of the week. US stocks closed 2% higher on Friday, helping Tokyo’s Nikkei 225 index post a 7.2% rally. A weaker yen also helped Japanese stocks. The US dollar moved away from the 15-month low of 110.97 yen it touched last week to climb to 113.85 yen in late Asian session. Investors chose to ignore weaker-than-expected GDP data for the fourth [..]

Technical Analysis – EURUSD rally pauses after reaching overbought levels on RSI

Posted on February 15, 2016 at 8:01 am GMT

EURUSD staged a strong rally from early February after breaching the key resistance level at 1.1000. This allowed the pair to break out of a range that it has been trading in since early December 2015. A high of 1.1375 was reached on February 11 but since then there has been a pullback as the pair had approached overbought levels on the daily RSI. The indicator reached the 70-point level and gave a sell signal. But MACD is above zero [..]

Upbeat January retail sales data briefly lift dollar

Posted on February 12, 2016 at 3:43 pm GMT

Retail sales data out of the United States today showed consumer spending remained buoyant in the first month of the year. Total retail sales rose by 0.2% month-on-month in January, beating estimates of a 0.1% increase. The data is even more upbeat when considering the revision to December’s figure, which was revised up to 0.2% from -0.1%. On a year-on-year basis, retail sales were up 3.4%. The ‘control’ measure of retail sales, which excludes sales of volatile items, rebounded even [..]

European Session – Dollar stabilizes after jittery week

Posted on February 12, 2016 at 3:28 pm GMT

After a jittery week for the dollar, it has managed to stabilize against most of its major peers today, especially against the yen. The Japanese currency halted its rally after gaining over 3% this week against the greenback on safe haven demand. But the yen pared gains on speculation the Bank of Japan might intervene in the currency markets to halt the appreciation of the currency after both Bank of Japan Governor Haruhiko Kuroda and Finance Minister Taro Aso said [..]

Less divergent and not as safe: the US dollar rally stumbles

Posted on February 12, 2016 at 2:31 pm GMT

The most important theme of this week’s trading has been the sharp selloff in the US dollar. The dollar has been the favorite currency for traders to be long of since the first half of 2014. The dollar index, which measures the value of the greenback against a basket of 6 major currencies (the euro makes up more than half the basket), has fallen by more than 4% since the beginning of February. The index is currently at 95.80. Although [..]

Week Ahead – Spotlight on Japan GDP, China trade and US, UK inflation

Posted on February 12, 2016 at 1:00 pm GMT

Data out of Japan and China will be watched closely next week as investors will be anxious to see how well Asia’s two largest economies are riding the latest economic storm. The UK will also be in focus with the release of three key indicators, while inflation data and FOMC minutes out of the US will keep dollar traders busy. With US and Canadian markets closed on Monday for a national holiday, Japanese data will dominate the day with the [..]

Asian Session – Market turmoil intensifies but dollar reclaims 112 yen level

Posted on February 12, 2016 at 8:32 am GMT

The sell-off in global equities continues with US stocks closing down for a fifth straight day on Thursday. European shares also fell sharply yesterday and stock markets across much of Asia were in negative territory today. The US dollar hit a 15-month low 110.97 yen yesterday but had clawed back just above 112 yen in late Asian trading today. The euro and the pound were also firmer against the yen at 126.68 and 162.60 yen respectively. Attempts by Japanese officials [..]

Technical Analysis – USDCHF oversold after sharp decline

Posted on February 12, 2016 at 7:51 am GMT

USDCHF broke out of the ascending channel after rising within it for over a month (on the daily chart). At the beginning of February prices fell below the lower channel support line and this triggered a sharp decline to a 4-month low of 0.9659. This is the lowest since October 2015. Prices are now at a critical support level and are testing the 200-day moving average around 0.9720. Meanwhile, there is also important support at 0.9700 at the 50% Fibonacci [..]

European Session – Yen surges on risk aversion, gold at one-year high

Posted on February 11, 2016 at 3:24 pm GMT

Risk aversion spiraled again today, pushing investors to seek safe havens such as the yen and gold, while the US dollar and global equities tumbled. Today’s sell off from risky assets extends from Wednesday following Fed Chair Janet Yellen’s testimony to the US Congress and her acknowledgement of intensifying risks in the US and global economy, while also suggesting the Fed was in no rush to hike rates. Gold prices soared to a one-year high above $1240 on safe-haven demand, [..]

Technical Analysis – GBPJPY drifts deeper into bear territory

Posted on February 11, 2016 at 2:26 pm GMT

GBPJPY pulled back from the day’s low of 159.78 when it was 2.9% lower to rise back above the 161 level. However, the momentum indicators are still in negative territory. RSI is just below oversold level and the stochastics have been stuck below that level since the current descent started at the beginning of February. This indicates that some consolidation or a correction is possible. Prices breaking out of the lower Bollinger Band also adds to the likelihood of a [..]

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