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Technical Analysis – AUD/USD bounces back after recent decline

Posted on May 22, 2015 at 7:02 am GMT

AUD/USD retraced half of the upmove from 0.7532 to 0.8162. Prices bounced back up after approaching the 50% Fibonacci retracement level at 0.7847 but stopped before resistance at 0.7937, which is the March 24 high. Prices have been clustering around the 38.2% Fibonacci at 0.7921. There is scope for more upside momentum towards 0.8013 and 0.8162 since the RSI has turned back up after a brief dip below 50. Also the kijun-sen line is pointing upwards and prices are above [..]

Technical Analysis – EURGBP back in bear territory

Posted on May 21, 2015 at 2:34 pm GMT

EURGBP is heading for a fourth day of losses, moving further south of the Ichimoku cloud during the process. Having dropped below the April 23 low of 0.71166 takes it closer to the key support level of 0.70134, which is the trough it touched in March before consolidating. The Tenkan-sen line has crossed below the Kijun-sen line and slipped below the Ichimoku cloud but having crossed above the cloud weakens the bearish signal slightly. The sideways moving 50-day moving average [..]

European Session – Sterling outperforms as investors cheer strong UK retail sales numbers, dollar slips after weak US data

Posted on May 21, 2015 at 2:21 pm GMT

Sterling was the best performing major currency in Thursday’s European session as investors reacted to the upbeat UK retail sales numbers for April. There was a big rebound of 1.2%, which was three times higher than the forecast of 0.4% and reversed the 0.5% dip in March. The strong numbers would help ease concerns about the slowdown in the UK economy seen in the first quarter. GDP slowed to 0.3%, the slowest pace in three years and increased the likelihood [..]

Eurozone Flash PMI mixed but strong manufacturing sends euro higher

Posted on May 21, 2015 at 12:22 pm GMT

The Markit Flash Purchasing Managers’ Index (PMI) for May were published this morning, containing some surprises that reversed the euro’s earlier decline. First out was French PMI, showing an improvement in both the manufacturing and services PMI over the previous month. French Flash Manufacturing PMI remained in contraction but came in much stronger than expected at 49.3 versus estimates of 48.6. In April, the figure was 48.0. Flash Services PMI was weaker than expected at 51.6 versus estimates of 52.0 [..]

Fed Minutes Reveal June Rate Hike Unlikely

Posted on May 21, 2015 at 8:56 am GMT

The Federal Reserve published the minutes of its April FOMC meeting on Wednesday, which signalled that a June rate hike was unlikely. Markets had already discounted the low likelihood of a June increase as first quarter GDP growth was much weaker than expected and recent data were pointing to a soft start to the second quarter. The minutes showed that few of the FOMC participants expected that there would be sufficient improvement in the economic outlook by the time of [..]

Asian Session – US dollar maintains gains as Fed upbeat on future growth prospects

Posted on May 21, 2015 at 7:38 am GMT

The US dollar was holding on to the gains of the latest few sessions – particularly against the euro and the yen, as the Fed was relatively upbeat about the US economy while almost ruling out a June rate hike. The dollar was trying to push the euro below 1.11, while the greenback climbed above 121 against the yen (a new 2-month high was made at 121.47). Euro / dollar rose above 1.11 at 1.1109 after upbeat French PMI numbers, [..]

Technical Analysis – NZDUSD bearish below Ichimoku cloud

Posted on May 21, 2015 at 7:26 am GMT

NZDUSD closed below the Ichimoku cloud for three consecutive days, which favors further weakness. The bearish cross of the tenkan-sen below the kijun – sen line last week strengthened the downside bias. There is scope to retest the 4-year low of 0.7175 hit on February 3. The downside momentum is also confirmed by the falling RSI which is in bearish territory below 50. In the medium term, NZDUSD has no clear direction and is trapped in a range between 0.7175 [..]

European Session – Sterling rallies on BoE minutes, dollar stronger ahead of FOMC

Posted on May 20, 2015 at 2:08 pm GMT

Sterling was the main focus of the currency markets in the early European session as it surged following the publication of the Bank of England minutes of the May policy meeting. The minutes were more hawkish-than-expected. Even though all nine Monetary Policy Committee (MPC) members voted to leave rates unchanged, two policymakers were actually inclined to raising rates versus keeping them on hold and felt the decision was” finely balanced”. The news helped the pound claw back losses made after [..]

Technical Analysis – USDCAD maintains 4-week highs but bias is bearish

Posted on May 20, 2015 at 1:56 pm GMT

USDCAD dropped back from 4-week highs following four straight sessions of gains. The day’s high of 1.2255 was just short of the 38.2% Fibonacci retracement level at 1.2267 of the downleg from 1.2834 to 1.1919 between March and May, which would form the next resistance level. A break above this level would shift the near term bias to slightly bullish as the RSI is indicating a weak bullish signal just above 50. However, the downside signals are stronger as there [..]

Japan Q1 GDP rises faster than expected but economy still seen as lacking momentum

Posted on May 20, 2015 at 11:39 am GMT

Japan’s economy expanded at its fastest pace in a year during the first quarter of 2015. Quarter-on quarter growth was 0.6% between January-March, beating consensus estimates that it would grow by 0.4%. This exceeds the previous quarter’s growth of 0.3%, which was revised down from 0.4%, and is the second consecutive quarter of positive growth after contracting in both the second and third quarters of 2014. A breakdown of the quarter’s GDP shows that rising business inventories was the main [..]

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