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Technical Analysis – AUDJPY stages strong rally to 3-week high

Posted on January 29, 2016 at 7:58 am GMT

AUDJPY is moving further off 3-year lows after bouncing from 79.20 and staging a rally to 86.28. The pair has now retraced 61.8% of the downleg from 90.71 (December 2015 to January 2016 fall). This Fibonacci level at 86.28 is now acting as resistance but if breached, prices have scope to move to the next Fibonacci level at 76.4% which lies at 88.38. This would result in the market rising above the daily Ichimoku cloud, which would shift the recent [..]

European Session – Euro rallies above $1.09, oil rises to $34

Posted on January 28, 2016 at 3:36 pm GMT

The US dollar was broadly weaker today, while sterling and the Australian dollar were one of the strongest performers. The pound advanced after reacting positively to as-expected UK fourth quarter GDP data. The preliminary estimates showed the British economy expanded by 0.5% between October to December of 2015 compared to the previous quarter. While being in line with estimates, it was an improvement on the third quarter’s 0.4% rate. Sterling gained 0.7% versus the dollar after hitting a session high [..]

Technical Analysis – US-500 index futures looking bearish below cloud

Posted on January 28, 2016 at 3:05 pm GMT

The US-500 index futures hit a near 2-year low of 1803.90 last week to break below the ‘Black Monday’ low of 1830.40 from August 2015. The index has fallen by about 8% so far this year. It has since bounced back to test the 1900 level today. Near term indicators are pointing to a slight upside bias with RSI attempting to climb towards 50 and the stochastics are holding above 50. In the medium term, the outlook appears increasingly bearish [..]

Pound firmer after UK growth picks up pace in Q4

Posted on January 28, 2016 at 11:42 am GMT

The preliminary estimates of UK GDP growth showed the British economy expanded by 0.5% in the fourth quarter of 2015 compared to the previous quarter. The figure is in line with consensus estimates and is an improvement on the third quarter’s 0.4% rate. After disappointing growth for much of the year, today’s data should disperse fears that the UK was heading for a sharper slowdown. However, looking at the year-on-year rate, growth was 1.9% in the fourth quarter – the [..]

Asian Session – Dollar rebounds after Fed but Kiwi slumps on dovish RBNZ

Posted on January 28, 2016 at 8:58 am GMT

Asian stocks started the day positive after the Fed’s slightly dovish statement but gave up earlier gains to turn negative in late Asian trading. China’s Shanghai Composite index closed lower for a third straight day, ending the day down 2.9%. The US dollar rebounded from yesterday’s lows when it dropped immediately after the FOMC statement. The Fed kept rates unchanged but said it is “closely monitoring” the developments in global financial markets and acknowledged that US growth had slowed towards [..]

Technical Analysis – Oil finds support at $30, bearish outlook remains

Posted on January 28, 2016 at 7:52 am GMT

Oil seems to have found a bottom around the key $30 level for now. But there is no sign of a shift in the current bearish trend. Since October 2015 prices have been falling in a descending channel from the key $50 level down to $27 – the lowest level in 13 years. In the bigger picture the market has a bearish outlook. Since mid-2014 prices have been making lower highs and lower lows. There was a sharp decline from [..]

Fed slightly more cautious as it keeps rates on hold

Posted on January 27, 2016 at 8:20 pm GMT

The Federal Open Market Committee concluded its two-day policy meeting today and kept interest rates unchanged as expected at its first policy decision of the year. In December, the FOMC decided to raise the federal funds rate for the first time since 2006, increasing it by 25bps to a range of 0.25-0.50%. A tightening labor market and a sustained economic recovery since the financial crisis had prompted the Fed to start the normalization of interest rates even as inflation remains [..]

European Session – Weak dollar ahead of FOMC, euro hits 1 year high versus Swiss Franc

Posted on January 27, 2016 at 3:30 pm GMT

The market’s attention was on the Federal Reserve today and the release of the Federal Open Market Committee (FOMC) statement after a policy meeting that began on Tuesday. In anticipation of the policy announcement, there was little risk off in the currency markets as there are expectations of a somewhat more dovish tone from the Fed today as it takes into account the turbulence in global markets since the start of the year. Such economic conditions would not give the [..]

Australian inflation edges higher in Q4, lifting aussie

Posted on January 27, 2016 at 11:28 am GMT

Inflation in Australia edged higher in the fourth quarter of 2015 as tobacco and travel costs rose sharply. CPI rose by 1.7% year-on-year in the final quarter of last year, beating expectations of a 1.6% annual rise and compares with a rate of 1.5% in the previous quarter. However, the figure was still below the Reserve Bank of Australia’s target of 2-3%. The RBA’s preferred measures, the weighted mean and the trimmed mean were more muted though, indicating that there [..]

Asian Session – Aussie up on strong inflation data; dollar steady ahead of FOMC

Posted on January 27, 2016 at 8:34 am GMT

Asian stocks were mixed on Wednesday with Tokyo gaining 2.7% following a strong close on Wall Street yesterday. But shares in China failed to rebound from Tuesday’s big slump to drop another 0.5% in today’s Asian session on fears of margin calls triggering further losses. The yen was firmer in Asian trading as risk sentiment weakened slightly on Wednesday. The dollar hit a low of 118.03 yen before rebounding slightly to 118.19 in late session. The euro also came off [..]

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