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Technical Analysis – GBPAUD bullish at 6-year highs

Posted on July 17, 2015 at 7:22 am GMT

GBPAUD maintains a bullish bias. The pair hit a fresh 6-year high this week to peak at 2.1248. The tenkan-sen is above the kijun-sen and both lines are rising, so this supports the upside momentum. The Ichimoku cloud and the 200-day moving average are both rising as well, which are supportive of a bullish trend. Only a break below the key 2.0000 level would weaken the bullish bias. In the near-term we could see some consolidation as the RSI has [..]

European Session – Euro falls to 8-year low versus pound, recovers on news of Greece bridge financing

Posted on July 16, 2015 at 2:52 pm GMT

The euro fell to a new eight-year low against the pound today to reach 0.6962 ahead of the European Central Bank policy meeting but bounced as ECB President Mario Draghi began a press conference. The euro was also pressured against the dollar and touched a low of 1.0854 before bouncing to 1.0925. There was not much impact from final Eurozone CPI data which came in as-expected with headline flat at 0.2% y/y and core at 0.8% y/y. The decline in [..]

ECB keeps monetary policy unchanged but raises ELA to Greece

Posted on July 16, 2015 at 2:51 pm GMT

The European Central Bank kept interest rates unchanged and its asset purchase program at €60 billion per month as expected. Recent developments and greater uncertainty in financial markets have not altered the ECB’s Governing Council’s assessment that the Eurozone’s economic recovery is broadening and inflation is rising gradually. In the press conference, ECB President Mario Draghi reiterated the full implementation of monetary policy measures to achieve inflation of close but below 2% in the medium term. Draghi sounded confident that [..]

Yellen reiterates expectations of rate hike this year in Congressional testimony

Posted on July 16, 2015 at 11:32 am GMT

Federal Reserve Chair, Janet Yellen, provided an upbeat assessment of the US economy in her semi-annual testimony before the Committee on Financial Services in the US House of Representatives on Wednesday. There were no surprises in the speech as much of the outlook was unchanged from that provided in the Fed’s June meeting minutes. Yellen said that the pace of economic growth should be moderate in the second quarter, mostly due to higher consumer spending and a recovering housing market. [..]

Asian Session – Euro unmoved from Greek vote approving bailout; dollar firms after Yellen testimony

Posted on July 16, 2015 at 7:32 am GMT

The Greek parliament overwhelmingly approved the latest austerity measures in a late-night vote clearing the way to start negotiations on the third bailout. Prime minister Alexis Tsipras’ leadership suffered a blow though as 38 members of his Syriza party voted or abstained against the deal. The euro was little moved after the vote as focus now shifts onto the European Central Bank, which will meet today to decide whether to raise the cap on the emergency liquidity funding to Greek [..]

Technical Analysis – EURUSD: fall below cloud strengthens bearish bias

Posted on July 16, 2015 at 7:04 am GMT

EURUSD remains below the key 1.1000 level and the fall below the lower Ichimoku cloud yesterday has strengthened the downside momentum. The cross of the tenkan-sen below the kijun-sen on July 3rd supports the bearish bias. Other indicators are also bearish, such as the RSI below 50. The market is below the 200-day moving average. However the recent sideways consolidation pattern remains in place and we would need to see a break below 1.0818 for a move out of the [..]

European Session – Dollar surges as Yellen signals rate hike this year; loonie tumbles after BoC rate cut

Posted on July 15, 2015 at 2:18 pm GMT

The dollar gained across the board after Fed Chair Janet Yellen’s slightly hawkish comments on the US economy and indicated that the Federal Reserve is on course to raise interest rates this year. She said that if the economy evolves as the Fed expects, economic conditions would likely make it appropriate at some point this year to raise the federal funds rate. Despite some recent weak data and still some labor market slack, Yellen indicated that the weakness was attributed [..]

Pound loses momentum after surprise rise in UK unemployment

Posted on July 15, 2015 at 1:20 pm GMT

Unemployment showed an unexpected rise in the UK for the three months to May as the Labor Force Survey measure rose by 15,000 to 1.85 million. The unemployment rate moved up to 5.6% in the three months to May from 5.5% previously, versus expectations it would stay unchanged. This was the first rise in unemployment since December 2013. The claimant count also rose with 7,000 more people claiming unemployment benefit but the small change meant the claimant rate stayed unchanged [..]

Positive China data eases concerns over economy but shares take a dive

Posted on July 15, 2015 at 10:33 am GMT

China’s GDP growth expanded by more than expected in the second quarter, rising by 7% year-on-year, in-line with the government’s own target and above consensus estimates that it would slow to 6.8%. With the recent troubles in China’s property market and slowing exports, some analysts raised doubts on the reliability of the official figures. However, an official from China’s National Bureau of Statistics defended the improved figures saying they were “hard won”. The better-than-expected growth was underlined by improved industrial [..]

Asian Session – Strong Chinese data fails to lift shares; Dollar eyes Yellen testimony

Posted on July 15, 2015 at 7:38 am GMT

The dollar was mostly flat in Asian trading having steadied after Tuesday’s disappointing retail sales data. Focus has now shifted to Fed Chair Janet Yellen’s semi-annual testimony to Congress. Markets will be looking for further clues on the Fed’s rate outlook as mixed US data continues to put a September rate rise in doubt despite strong indications by the Fed of a rate increase at some point this year. Stronger-than-expected GDP data in China did little to boost Chinese equities [..]

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