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An eventful beginning to 2016

Posted on January 5, 2016 at 3:14 pm GMT

While the closing days of 2015 were a mostly quiet affair for financial markets, the beginning of 2016 has certainly seen some action. In risk assets such as stocks but for the foreign exchange market too, there have been some sizeable moves, which have provided a useful lesson in that market participants need to be ready for turbulence at any time – even during or right after seasonal holidays. In terms of major currencies, the Japanese yen appears to have [..]

Eurozone December inflation misses estimates, hurts euro

Posted on January 5, 2016 at 12:38 pm GMT

The announcement today of flash inflation for the Eurozone at 0.2% was lower than expectations that inflation would climb slightly to 0.3%. The reading stayed the same as the previous month’s 0.2% reading. The other key measure that is closely watched by the markets was core inflation, which excludes food and energy. Core inflation came in at 0.8%, against expectations it would stay at 0.9% – the same as the previous month’s rate. It was the second consecutive month that [..]

Asian Session – Dollar recovers following signs of stability in China

Posted on January 5, 2016 at 8:26 am GMT

The US dollar staged a modest recovery versus the Japanese yen while the euro was facing challenges both against the dollar and against the yen, as there were tentative signs that yesterday’s rout in the Chinese stock market was under control today. The euro from its part appeared to be under intense pressure following the release of weaker-than-expected preliminary German inflation numbers on Monday and ahead of today’s flash Eurozone inflation estimate. During Monday’s US session the euro traded as [..]

Technical Analysis – USDJPY stabilizes above 119 but bearish signals strong

Posted on January 5, 2016 at 7:32 am GMT

USDJPY stabilized on Tuesday after reaching 2-1/2 month lows on Monday at 118.69. Sustained trading below the 118.05 October low would expose the 116.11 August low for a retest. The technical indicators are giving bearish signals. The tenkan and kijun lines are negatively aligned and are both pointing south, meaning current downside momentum is very negative in the near term. The level of 119.27 is important – it is the 76.4% Fibonacci retracement of the 118.05-123.74 (October/November) rise. A close [..]

What to watch during the week: US employment and Eurozone inflation

Posted on January 4, 2016 at 1:43 pm GMT

Coming back from the New Year’s celebrations, investors and traders are likely to find their plates full this week with interesting economic releases from around the world as well as geopolitical developments and currency and stock market moves from China. First of all, Friday’s nonfarm payrolls will mark the first really important economic statistic of the New Year out of the United States. Economic data following the Fed’s first rate hike on December 16 have not exactly been stellar and [..]

Asian Session – Yen gains on geopolitics; aussie drops on Chinese news

Posted on January 4, 2016 at 8:24 am GMT

2016 started in a challenging way for financial markets, as Chinese stocks dropped by 7%, the Chinese currency’s mid-point was set at a fresh low by the People’s Bank and an index of manufacturing activity in the country showed contraction and was well below expectations during December. This of course had a negative effect on the Australian dollar, which fell by 1% against its US counterpart at 0.7216. China is the top destination for Australian exports. The US dollar itself [..]

Technical Analysis – EURJPY strengthens bearish bias below 130

Posted on January 4, 2016 at 7:11 am GMT

EURJPY dipped below 130.00 to touch 129.75 on the first trading day of 2016. The technical setup favors a retest of the November 2015 low of 129.65 and below this the April 2015 low 126.08. The market is below the daily Ichimoku cloud and also below the 200-day moving average, highlighting the bearish bias. The RSI is below 50 in bearish territory, suggesting there is downward momentum. Prices would have to rise back above the cloud and above the key [..]

Asian Session – Major currencies little changed ahead of New Year holiday

Posted on December 31, 2015 at 8:18 am GMT

The US dollar continued to move sideways in thin holiday trading ahead of the long New Year weekend. The dollar index has been stuck in a tight range between 98.0-98.5 since Tuesday and the currency has been steady against the euro, yen and the pound. Against the yen, the greenback gave up some of yesterday’s small gains when it hit a high of 120.65 yen and was down at 120.42 yen in late Asian session today. The Japanese currency looks [..]

Technical Analysis – AUDUSD ends year in consolidation mode above 0.7000

Posted on December 31, 2015 at 7:36 am GMT

AUDUSD bounced higher early on Thursday to test the key 0.7300 level but this appears to be acting as strong resistance and prices have been consolidating around this level. On the last trading day of 2015 it is unlikely that there will be any substantial moves. Looking at the bigger picture, AUDUSD has retraced more than half of the rise from 0.6008 (October 2008) to the all-time high of 1.1078 reached in July 2011. The pair is now consolidating around [..]

European Session – Canadian dollar and Norwegian crown weaken on renewed drop in oil prices

Posted on December 30, 2015 at 3:23 pm GMT

The European session was uneventful due to light trading volumes ahead of the New Year holiday. Most major currency pairs were stuck in ranges but the main underlying theme to market movement was the renewed drop in crude oil prices and pressure on the commodity currencies, such as the Canadian dollar and the Norwegian crown. The euro was confined to range between 1.0906 and 1.0943 against the dollar, consolidating losses after yesterday’s sharp drop to 1.0898 from 1.0990. Sterling also [..]

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