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European Session -Flat US retail sales push dollar index to 3-month low, euro and pound rally

Posted on May 13, 2015 at 2:03 pm GMT

There was a barrage of economic data today that caused a lot of volatility in the currency markets. The first focus of the European session was on UK employment data and the Bank of England inflation report, followed by Eurozone first quarter GDP data and finally US retail sales. The pound surged to a 5-month high of 1.5746 against the dollar in reaction to data that showed UK unemployment fell to its lowest level since July 2008. Data showed a [..]

Sterling volatile after BoE cut in growth outlook takes shine off strong employment data

Posted on May 13, 2015 at 11:40 am GMT

The pound was sent in opposite directions today as strong employment and wage growth data was overshadowed by the Bank of England’s lowering of growth forecasts for the next three years. UK unemployment fell to its lowest level since July 2008 to 5.5% in March from 5.6% in February, in line with forecasts. The claimant count change was also down but it dropped by less than expected to 12,600 in April, against forecasts of 20,000. The employment rate increased to [..]

Eurozone economy expands in Q1 but Germany slows down

Posted on May 13, 2015 at 10:53 am GMT

The Eurozone grew at its fastest pace in two years in the first quarter of 2015 as indicated by the flash estimate for GDP from Eurostat. Better-than-forecast growth in France and Italy, the second and third largest economies in the Euro area, helped the overall Eurozone GDP figure come in at 0.4% q/q in Q1 up from 0.3% in Q4 of 2014. However, the data missed forecasts made by economists polled by Reuters for a 0.5% growth rate. Year-on-year, GDP [..]

Technical Analysis – EURJPY stuck in range but maintains bullish bias

Posted on May 13, 2015 at 9:18 am GMT

EURJPY remained stuck in its daily range of between 133.08 and 136.00 yen since the start of May. The indicators remain bullish with prices ranging above the Ichimoku cloud, as well as above the 20-, 50- and 100-day moving averages. The Tenkan-sen line has also trended strongly above the Ichimoku cloud. The RSI indicator has weakened from its peak of 73 but has started shifting slightly upwards again so the near-term bias is bullish. Should the positive momentum pick up [..]

Asian Session – Sterling, euro shine ahead of busy data day

Posted on May 13, 2015 at 7:29 am GMT

The UK pound and the euro were the currencies that were either making gains or maintaining their gains from the previous day’s sessions, as the US dollar found itself again under pressure. The euro found support from the resurgence of German 10-year Bund yields, which were last trading around 0.66%. In contrast, US 10-year yields backed off from earlier highs yesterday to trade around 2.25%. The move of German 10-year yields away from zero has been an important factor that [..]

Technical Analysis – EURUSD bullish above 1.1200

Posted on May 13, 2015 at 7:05 am GMT

EURUSD closed above the key 1.1200 level on Tuesday and remains above this level in early Wednesday trading after rising for a second day. Upside momentum appears to be supported by the rising tenkan-sen line and also prices are above the daily Ichimoku cloud. RSI is in bullish territory above 50. However, prices are being capped by the 100-day moving average. Also the 23.6% Fibonacci retracement level of 1.1293 of the downleg from 1.3992 to 1.0461 will act as a [..]

European Session – Sterling outperforms after surprise jump in UK industrial production, euro benefits from rising German bund yields

Posted on May 12, 2015 at 2:19 pm GMT

Sterling was one of the best performing major currencies today after rallying on better-than-expected UK industrial output figures. The pound surged to a 5-month high versus the dollar to reach 1.5709 after data showed March industrial output increased 0.5% m/m from 0.1% in the previous month compared to a forecast of a 0.1% decrease. The upbeat data suggested that first quarter GDP data could be revised higher. Meanwhile, Wednesday’s UK jobs report is forecast to show a drop in the [..]

Greece makes progress on talks but Eurogroup urges more action

Posted on May 12, 2015 at 10:25 am GMT

Monday’s Eurogroup meeting of European finance ministers ended on a more positive note than the last gathering in April where there was a complete breakdown of talks between the Greek finance minister and his European counterparts. The Eurogroup statement at the conclusion of the meeting struck a more conciliatory note and acknowledged that progress had been made in the talks between Greece and its creditors. The Greek Finance Minister, Yanis Varoufakis was quoted as saying that there had been “considerable [..]

Asian Session – Progress towards Greek deal fails to lift euro, pound keeps gains

Posted on May 12, 2015 at 7:06 am GMT

The relatively positive outcome of the Eurogroup meeting of Finance Ministers provided some support but failed to lift the single currency, as it continued to trade below the 1.12 mark against the US dollar. Eurozone Finance Ministers acknowledged that progress had been made during the negotiations with Greece, but said that more had to be done. Greece also repaid 750 million euros it owed to the IMF a day earlier than the deadline. On the negative side, despite the more [..]

Technical Analysis – EURGBP bearish in lower Bollinger Band

Posted on May 12, 2015 at 6:55 am GMT

EURGBP fell below its 20-day moving average on Monday to a low of 0.7140. The downside bias remains strong after the pair failed to close above the upper Bollinger band and fell back after peaking at 0.7482 last Thursday. The RSI is back in bearish territory with a reading below 50, which also highlights the downside bias. There is scope to test the March 11 low of 0.7013 especially if there is a break of immediate support at 0.7116 (April [..]

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