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Technical Analysis – EURGBP turns increasingly bearish below Ichimoku cloud

Posted on November 4, 2015 at 7:45 am GMT

EURGBP continues to decline and the bearish bias is strengthening after the fall below the daily Ichimoku cloud. Technical indicators are giving bearish signals – the tenkan-sen crossed below the kijun-sen line and the market is below the 200-day moving average. Also, the RSI is trending downwards and is in bearish territory below 50. EURGBP has retraced more than 61.8% of the upleg from 0.6935 to 0.7492 and there is scope to reach the 76.4% Fibonacci. These two levels correspond [..]

European Session – Stronger dollar, rising US Treasury yields on Fed rate hike expectations

Posted on November 3, 2015 at 3:27 pm GMT

The dollar strengthened broadly as US treasury yields rose on growing expectations of a Fed rate hike in December. Risk appetite was generally up today resulting in many investors moving away from the perceived safety of government bonds. A flow to riskier assets hurt safe haven currencies, leading to a weaker yen and euro. The euro weakened against the dollar also because of the widening interest rate differential and diverging monetary policies between the Fed and the ECB. The single [..]

Dollar waits for key data while risk assets ‘get over’ Chinese devaluation

Posted on November 3, 2015 at 3:10 pm GMT

The US dollar has been mostly waiting for confirmation from upcoming data that the US economy is strong enough and should be able to withstand marginally higher interest rates. Strong US data and a rate hike by the Federal Reserve in December could push the dollar to break outside some of its ranges. This could result in markets switching to ‘wait and see’ mode until such confirmation arrives. Two currencies that have tried to resist the dollar’s recent upmove have [..]

Technical Analysis – US oil futures hold above cloud; outlook neutral

Posted on November 3, 2015 at 2:11 pm GMT

US oil futures held within its four-day trading range after moving above the Ichimoku cloud following the strong rally seen on October 28. RSI remains neutral just above 50 but the stochastics are in overbought territory, indicating the current momentum is unlikely to hold in the near term. Prices have found support from the 50-day moving average, while the kijun-sen line is providing resistance at 46.74. In the broader picture, prices would need to challenge the 50% of the Fibonacci [..]

Australian dollar firms after RBA stands pat despite easing bias

Posted on November 3, 2015 at 10:14 am GMT

The Reserve Bank of Australia (RBA) kept its cash rate unchanged at its November meeting on Tuesday. The decision was widely expected by economists as the domestic economy has remained resilient in the face of ongoing slowdown in China, and the weaker Australian dollar has helped offset some of the impact of falling commodity prices. Interest rates have now been kept at 2.0% since the May meeting when rates were last cut. It followed another cut in February, bringing the [..]

Asian Session – Aussie up after RBA leaves rates unchanged; dollar edges lower

Posted on November 3, 2015 at 8:11 am GMT

The Reserve Bank of Australia left its cash rate unchanged at 2.0% on Tuesday at its latest policy meeting. The decision was in line with forecasts but the Australian dollar strengthened after the announcement on lowered expectations of a cut in December. In the accompanying statement, RBA Governor Glenn Stevens said that economic conditions “had firmed a little” in recent months. But he added that inflation is forecast to be a little lower than expected, which may give some scope [..]

Technical Analysis – AUDUSD rises above cloud, 0.72 a key barrier

Posted on November 3, 2015 at 7:45 am GMT

AUDUSD rose to 0.7118 early on Tuesday after the RBA held rates unchanged. Despite this rise above the Ichimoku cloud, the pair is still within a corrective pattern after the big decline from 0.8162 to 0.6906. Prices are testing the 23.6% Fibonacci retracement level of this downleg at 0.7206. A further move higher would bring the 38.2% Fibonacci into focus. This level at 0.7388 is the upper range of the corrective pattern. A break above this would be needed in [..]

European Session – Sterling lifted by manufacturing PMI, dollar sees little impact from ISM data

Posted on November 2, 2015 at 3:30 pm GMT

Currency markets were relatively quiet ahead of key events this week – central bank decisions from the Bank of England and Reserve Bank of Australia as well as the release of the all-important US nonfarm payrolls report. Movement in the major currencies was rather limited in today’s European session, with the exception of the pound which got a lift from UK manufacturing PMI data. There was an unexpected bounce in manufacturing activity in October with PMI rising to 55.5 last [..]

Turkish lira rallies after Erdogan’s AKP win in snap elections

Posted on November 2, 2015 at 2:56 pm GMT

The Turkish lira rallied on Monday to the highest level since August 11 after President Tayyip Erdogan’s AK party won a majority in Sunday’s elections, gaining 49.4% of the votes. Snap elections were called in August after the Prime Minister Ahmet Davutoglu failed to form a coalition with the opposition parties, MHP and CHP. The AK party lost its majority that it has enjoyed since 2002 in the June elections. The loss of the AKP’s majority had raised hopes for [..]

China manufacturing still weak but may be bottoming out; Eurozone and UK PMI improve

Posted on November 2, 2015 at 11:25 am GMT

Two separate manufacturing surveys for October confirm the headwinds still facing Chinese manufacturers, which are currently mired in a downturn. The official manufacturing PMI was unchanged at 49.8 in October against expectations it would rise to 50.0, figures released by the National Bureau of Statistics showed on Sunday. This was the third month in-a-row of a reading in contraction territory below 50. The non-manufacturing PMI fared better at 53.1, though this was slightly weaker than in September. The alternate measure [..]

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