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European Session – Sterling soars on upside surprise to UK CPI, dollar up after US housing starts jump

Posted on August 18, 2015 at 1:40 pm GMT

The British pound was the strongest performer out of the major currencies today in the wake of better-than-expected UK inflation data. The consumer price index (CPI) in the UK rose to an annual rate of 0.1% in July, surprising markets that expected it to remain unchanged at 0%. The month-on-month rate fell 0.2% but it was less than the expected 0.3% fall that was forecast. The data today improved market expectations for a Bank of England rate hike to come [..]

Technical Analysis – EURGBP drops 1% below 50-day moving average

Posted on August 18, 2015 at 1:39 pm GMT

EURGBP fell sharply by 1% on Tuesday, hitting a one-week low of 0.7026 as it dropped below the 50-day moving average. Today’s losses have taken prices further below the moving averages and the Ichimoku cloud, deepening the bearish outlook in the medium term. The only positive signal is coming from the tenkan-sen and kijun-sen lines, with the tenkan-sen line just having crossed above the kijun-sen line. But this is likely to reverse in the coming days as RSI has dipped [..]

Pound rallies again as UK inflation picks up in July

Posted on August 18, 2015 at 11:54 am GMT

The consumer price index (CPI) in the UK rose to an annual rate of 0.1% in July, beating estimates that it would remain unchanged at 0%. The month-on-month rate fell by 0.2%, against estimates it would fall by 0.3%. Core CPI, which excludes volatile items such as food and energy, also accelerated, rising to 1.2% in July from 0.8% in the previous month. Forecasts were for a more modest rise to 0.9%. Falling food and fuel prices were the biggest [..]

RBA reveals no surprises in minutes; awaits Fed’s decision

Posted on August 18, 2015 at 9:53 am GMT

The Reserve Bank of Australia’s meeting minutes from its August meeting went largely unnoticed on Tuesday as there were no major surprises in the minutes, with the cash rate kept unchanged at 2%. The RBA has adopted a less dovish tone in recent weeks as the Australian dollar has continued to extend its two-year decline against the US dollar, reaching a new 6-year low of 0.7214 on August 12. The central bank’s board had been keen to highlight for much [..]

Asian Session – Aussie fails to gain support from RBA minutes; pound falls ahead of CPI

Posted on August 18, 2015 at 7:23 am GMT

The dollar edged higher in Asian trading, adding to Monday’s gains on the back of strong housing data. The National Association of Home Builders housing market index rose to the highest level in a decade in August. The US currency ignored weak manufacturing data from the New York Fed, which showed manufacturing activity falling to its lowest level since 2009. The dollar climbed to 124.50 against the Japanese yen before sliding to 124.35 in late Asian session. The euro drifted [..]

Technical Analysis – USDCAD bullish near 11-year highs

Posted on August 18, 2015 at 6:58 am GMT

USDCAD is hovering near an 11-year high of 1.3212. This peak was reached on August 5th. Currently prices are around 1.3110 in early Tuesday European session trading. Technical studies are quite bullish, with the tenkan-sen and kijun-sen lines being positively aligned and rising. Also the daily Ichimoku cloud is rising. RSI is in bullish territory above 50 although it has been trending lower recently, suggesting the market is consolidating in the near term. To the downside, immediate support is seen [..]

European Session – Dollar falls on weak Empire State Manufacturing Index, Rouble slides to 6-year low

Posted on August 17, 2015 at 2:30 pm GMT

The US dollar was broadly stronger during the European session on Monday but weakened sharply after some disappointing US economic data. The latest Empire State Fed Manufacturing Survey largely missed expectations to tumble to minus 14.92 in August from plus 3.86. The forecast was for a reading of 4.50 and today’s figure was the lowest since 2009. The main driver behind the weak number was a large drop in new orders and shipments. The dollar reversed gains against the yen [..]

Technical Analysis – EURJPY stuck in range; outlook is neutral

Posted on August 17, 2015 at 1:33 pm GMT

EURJPY remains in neutral territory as the recent rally fails to take it past its June 4 high of 141.04 and the Ichimoku cloud is moving sideways. Prices have met resistance just below 139 but would need to rise above the June 4 high to break out of its recent range. This would also strengthen the weakening bullish signals from the moving averages as the 50-day moving average is in danger of falling back below the 200-day moving average. In [..]

Japan’s economy shrinks in Q2 on lower exports and consumption

Posted on August 17, 2015 at 11:46 am GMT

Economic growth in Japan tipped back into negative territory in the second quarter of 2015, contracting by 0.4% quarter-on-quarter. The figure was slightly above estimates of -0.5% but is sharply down from the first quarter’s upwardly revised 1.1% growth. It also reverses two quarters of growth, when GDP bounced back after a hike in sales tax pushed the economy in recession in Q2 and Q3 of 2014. Second quarter growth was hurt by lower exports to the US, Europe and [..]

Asian Session – Yuan’s slide halted but Japan’s economy contracts in Q2

Posted on August 17, 2015 at 7:29 am GMT

Japan’s economy contracted by less than expected in the second quarter, shrinking by 0.4% quarter-on-quarter, against forecasts of a 0.5% contraction. This compares with growth of 1% in the first quarter and raises pressure on the Bank of Japan to expand its quantitative easing program amid the absence of any inflationary pressures. The drop in output in the second quarter came from weaker exports and a 0.4% fall in consumer spending. The yen was little impacted by the GDP data [..]

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