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Technical Analysis – GBPUSD in descending channel, support at 1.41

Posted on January 27, 2016 at 7:59 am GMT

GBPUSD has been falling in a descending channel for a month. The lower channel line has provided support but prices have managed to rise outside the upper channel resistance line. The market is now testing 2-week highs and has found resistance at 1.4366. If prices continue to move up beyond 1.4380, then the 1.4500 level is the next barrier to the upside. If prices move down, there is important support at 1.4100, which if broken, would see another leg to [..]

European Session – Loonie bounces along with oil prices, sterling rallies

Posted on January 26, 2016 at 3:48 pm GMT

Risk sentiment turned in the European session, leading to a recovery in equity markets and a bounce in risk assets. Oil prices bounced back above the key $30 a barrel level, mainly due to hopes that a deal may be edging closer for OPEC and non-OPEC producers to cut the output of oil. This optimism came about after Iraqi Oil Minister Adel Abdel Mahdi said he saw “some flexibility” for a deal, suggesting that Saudi Arabia and Russia could be [..]

Technical Analysis – GBPAUD looking bearish after death-cross

Posted on January 26, 2016 at 2:14 pm GMT

GBPAUD is looking increasingly bearish after the 50-day moving average crossed below the 200-day moving average in the past week. The near term bias is to the downside as RSI remains below 50. The medium term outlook is also bearish as prices remain below the Ichimoku cloud and the moving averages. The pair is likely to stay in bearish mode unless it can cross back above the 50-day moving average. This could give it further upside momentum to target the [..]

Will Central Banks come to the rescue again?

Posted on January 26, 2016 at 11:53 am GMT

As risk assets have fared very badly at the beginning of 2016, there are hopes that some of the world’s top central banks will offer some more stimulus, which should help soothe investors’ nerves. Although a correction in stocks should normally be welcome given their near 7-year continuous assent (since 2009) without a bear market (at least in the US), there is quite a lot of nervousness among policymakers about the fragility of the global economy. Specifically, policymakers might become [..]

Attention turns to Fed and BoJ meetings amid market volatility and oil rout

Posted on January 26, 2016 at 11:44 am GMT

Two major central banks will hold their policy meeting this week, with the US Federal Reserve and Bank of Japan meeting for the first time in 2016. While the Fed is almost certain to keep rates steady on Wednesday, there’s been increased speculation in recent days that the BoJ might surprise with policy easing on Friday. The renewed slide in oil prices since the start of the year has brought back the threat of deflation. Crude oil prices were back [..]

Asian Session – Global growth fears trigger share sell-off; Oil drops below $30

Posted on January 26, 2016 at 8:30 am GMT

Concerns about the health of the global economy led to another sell-off in equities today with Asian stock markets following Wall Street’s lead on Monday to drop sharply. The S&P 500 closed 1.6% lower yesterday, the Nikkei 225 index was down 2.4% but shares in China were the most hit with the Shanghai Composite index plunging by 6.4%. The People’s Bank of China tried to allay fears of a liquidity crunch by pumping 440 billion yuan into the banking system. [..]

Technical Analysis – Gold rallies to 2-month high

Posted on January 26, 2016 at 7:55 am GMT

Gold has gained 1.7% since opening on Monday, reaching a 2-month high of 1117.56 in early European trading on Tuesday. The trend for today is bullish – on the hourly chart many technical indicators are bullish. Tenkan and kijun lines are positively aligned and the Ichimoku cloud is rising. But caution must be taken as the market is in overbought conditions, as the RSI and stochastic are in overbought territory. On the daily chart, prices are approaching a critical level [..]

European Session – Yen and gold rise on risk aversion, oil retreats from $32

Posted on January 25, 2016 at 3:44 pm GMT

There was mild risk aversion in the currency markets today due to the renewed weakness in oil prices. Overall the drop in commodities affected the oil-linked currencies, like the Canadian dollar which came under pressure after oil slipped from a two-week high of $32. Flows to safe havens helped lift gold, which was a strong performer today, rising to $1107. The euro was supported by the risk averse environment as the currency has tended to be used as a safe [..]

Technical Analysis – EURUSD remains neutral after recent losses

Posted on January 25, 2016 at 2:51 pm GMT

EURUSD dipped below the 50-day moving average last Thursday on hopes of further monetary easing but was back above it today. The pair has been consolidating in a tight range since December and despite some increased downside pressure in the last couple of trading days, the near term outlook remains mostly neutral. RSI is just below 50 while the signal line in the MACD chart is flat around 0. If today’s upside momentum is sustained, prices could find resistance around [..]

German confidence data points to weak start to the year

Posted on January 25, 2016 at 12:20 pm GMT

The Ifo business sentiment survey in Germany pointed to weakened growth at the start of 2016 as all three indicators of the survey declined in January. The Ifo business climate index dropped to 107.3 from a downwardly revised 108.6 in December and fell short of expectations of 108.4. The current conditions index, fell marginally to 112.5 from 112.8 and was below forecasts that it would stay unchanged. Meanwhile, the Ifo expectations index, which measures the outlook for the future, also [..]

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