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European Session – PMI data disappoint in UK, Eurozone and US, dollar holds steady above 120 yen

Posted on October 5, 2015 at 2:42 pm GMT

The main news out of the European session was the UK services PMI release, which disappointed to show the weakest level since August 2013, causing sterling to give up all of its morning gains against the dollar. The Markit/CIPS services PMI dropped to 53.3 in September from August’s 55.6. The reading was sharply below estimates of 56.0, raising fears that the recent slowdown in global growth is spreading beyond the manufacturing and industrial sectors. Cable fell from a session high [..]

Technical Analysis – USDJPY still consolidating around 120

Posted on October 5, 2015 at 1:23 pm GMT

USDJPY continues to move in a narrowing range around 120, forming a pennant since the August 24 slump. This may signal a breakout is nearing for USDJPY to resume its downtrend, however prospects of further quantitative easing by the Bank of Japan would contradict this. With RSI and the stochastics both rising, the near term bias is positive, though the upward momentum is a weak one as RSI has yet to climb above 50. Prices are likely to find resistance [..]

Pound falls after soft services PMI; Eurozone PMI revised lower

Posted on October 5, 2015 at 11:51 am GMT

Activity in the UK’s services sector slowed to the lowest level since April 2013, with the Markit/CIPS services PMI dropping to 53.3 in September from August’s 55.6. The reading was sharply below estimates of 56.0, raising fears that the recent slowdown in global growth is spreading beyond the manufacturing and industrial sectors. There was a marked slowdown in the rate of growth for new business, which hit a 29-month low and future business expectations also fell, dropping to a 13-month [..]

Asian Session – Dollar attempts to recover from post NFP lows

Posted on October 5, 2015 at 7:31 am GMT

The dollar was steady in Monday’s Asian trading, having recovered late on Friday from the lows it hit after the weaker-than-expected nonfarm payrolls data. US nonfarm payrolls rose by 142,000 in September, which was short of the 203,000 expected by analysts. Average hourly earnings also disappointed, dampening expectations that the Fed would raise interest rates in the October meeting. Downward revisions to previous months’ data added to the gloom. Speaking in an interview on Saturday, Boston Fed President Eric Rosengren [..]

Technical Analysis – USDCAD falls into Ichimoku cloud, increasing risk of trend reversal

Posted on October 5, 2015 at 7:03 am GMT

USDCAD extended losses on Monday, falling for a fourth day in a row. Prices have now dipped into the daily Ichimoku cloud and have fallen below the tenkan-sen and kijun-sen lines. The RSI has fallen into bearish territory below 50. These factors increase the risk of a trend reversal. Looking at the MACD, there is a bearish divergence, as the oscillator was declining from August while prices were rising. Immediate support comes in at the key 1.3100 level and a [..]

Week Ahead – Services PMI and central bank meetings from UK, Japan and Australia in focus

Posted on October 2, 2015 at 2:45 pm GMT

The week ahead see some important data releases and central bank meetings. Monday begins with important PMI data out of the Eurozone and the UK. The final estimate of the Services PMI for the Eurozone is expected to remain unchanged at 54.0 in September. Meanwhile, the UK services PMI is expected to be revised to 56.0 from a prior estimate of 55.6 for the month of September. The UK will be in focus on Thursday when the Bank of England [..]

European Session – Dollar hammered by dismal US nonfarm payrolls report

Posted on October 2, 2015 at 2:10 pm GMT

The US dollar started the day strongly but this soon reversed rapidly after the dismal US jobs report. The nonfarm payrolls report showed that the US economy created 142,000 jobs in September. This was much worse than what the 201,000 economists had forecast – which was around 200,000 jobs. August was downwardly revised to 136,000 from 173,000. Average hourly earnings were flat month-on-month but were expected to rise 0.2%. Meanwhile, the unemployment rate stayed unchanged at 5.1%. Other US data [..]

Asian Session – Chinese holiday, anticipation of US employment report keeps currencies rangebound

Posted on October 2, 2015 at 7:27 am GMT

There was limited action during today’s Asian session, as traders seemed to focus more on the upcoming nonfarm payrolls report for September, which comes out later during the day. Overall the dollar managed to post some gains following modest selling pressure yesterday after weak business confidence survey readings. The September ISM manufacturing index in the US fell to 50.2 compared to expectations of 50.6, coming dangerously close to the 50 expansion / contraction line. The previous month’s reading was at [..]

Technical Analysis – USDCAD hits fresh 11-year high, consolidation in near-term

Posted on October 2, 2015 at 6:59 am GMT

USDCAD hit a fresh 11-year high of 1.3456 on September 29. Prices have since eased back down to test the kijun-sen line which is acting as key support at 1.3235. Thursday’s low of 1.3217 is now in focus. Below this level the bias would turn neutral but the Ichimoku cloud will likely provide support. A break into the cloud would weaken the bullish outlook. A move to the upside would target the 11-year high of 1.3456 and above this 1.3470 [..]

European Session – Dollar weakens on dismal US ISM manufacturing PMI, jobless claims

Posted on October 1, 2015 at 2:36 pm GMT

The euro was subdued during most of the European session, extending its decline from the Asian session as weakness was driven by an improvement in the broader market sentiment followed by mixed Eurozone PMI data. The euro tested a low of 1.1134 before bouncing back due to a softening dollar after disappointing US economic data. Manufacturing PMI numbers out of the Eurozone today were neutral to negative, with disappointment out of Germany, Spain and Italy, and a neutral final PMI [..]

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