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Forex News – ECB’s QE package beats expectations; euro falls sharply

Posted on January 23, 2015 at 1:20 pm GMT

The highly anticipated announcement of ECB’s Quantitative Easing package in the end surpassed expectations. The European Central Bank decided that it would buy 60 billion euros worth of securities every month – around 10 billion euros of mainly bank-issued debt such as Asset Backed Securities and Covered bonds and 50 billion of government and state institution bonds. The program will start on March of 2015 and continue until September of 2016. This would inject 1.08 trillion euros of liquidity into [..]

Technical Analysis – EURUSD resumes downtrend to target 1.12

Posted on January 23, 2015 at 8:17 am GMT

EURUSD touched a new 11-year low of 1.1313 today. After several tests of key resistance at 1.1650 the pair moved another leg lower to resume the downtrend it has been in since May 2014 (1.3992). There is scope to target the long term Fibonacci retracement level of 61.8% at 1.1209. This is of the upleg from 0.8225 to 1.6038. Any rebound would meet resistance at 1.1650. A break of this level would pause the downtrend in the near term, otherwise [..]

Asian Session – Euro languishes near new low post-Draghi; aussie breaks 80 cents

Posted on January 23, 2015 at 8:12 am GMT

The euro continued to struggle near a fresh 11-year low struck late in New York trading, after Draghi’s QE announcement surpassed market expectations. The euro made a fresh low of 1.1316 the previous day and this level managed to contain the euro’s selling for the time being in Asia. Draghi unveiled a bond buying program of 60 billion euros a month, which was set to continue into 2016. The size of the package was around 1.1 trillion euros against expectations [..]

European Session – Euro tumbles as ECB launches QE of 60 billion-a-month

Posted on January 22, 2015 at 2:57 pm GMT

The highlight of the day was the European Central Bank policy meeting. In the buildup to the policy announcement and ECB Chief Mario Draghi’s press conference, the euro was quiet. There was a slight move up after the ECB announced it left its key interest rate unchanged. The main refinancing rate was kept at 0.05% and the marginal lending facility was left at 0.30%. The rate on the deposit facility was held at -0.20%. The euro rose after the rate [..]

Technical Analysis – USDCAD rallies to above 1.2300, highest since 2009

Posted on January 22, 2015 at 8:38 am GMT

USDCAD rallied to a high of 1.2393 on Wednesday, the highest since April 2009. The bias remains strongly bullish, with many technical indicators suggesting this. The market is above the Ichimoku cloud and the tenkan-sen and kijun-sen lines are positively aligned and pointing north. RSI is rising although it has entered overbought levels, suggesting a pause in the upward momentum in the near term. Yesterday’s high of 1.2393 will act as immediate resistance. The next high the market would target [..]

Asian Session – Market awaits ECB; commodity currencies lower after Canadian rate cut

Posted on January 22, 2015 at 8:13 am GMT

The euro was impatiently waiting the verdict out of Frankfurt later in the day, while a surprise Canadian rate cut hit not only the loonie, but also other commodity currencies on fears that their respective central banks might follow suit. The unconfirmed report that had been circulating in the markets was that the European Central Bank’s Executive Board was going to recommend to today’s Governing Council meeting a sovereign bond QE program in the order of 50 billion euros a [..]

Forex News – UK employment report positive, but unanimous MPC on rates’ hold hurts pound

Posted on January 21, 2015 at 3:12 pm GMT

Positive news that UK unemployment dropped to 5.8% in November compared to expectations of a drop only to 5.9% from 6% the preceding period. This was the lowest rate since July of 2008. In addition, during the month of December, the claimant count of registered unemployed fell by 29.7 thousand compared to a drop of 25 thousand that economists expected. Importantly, the measure of wages, average weekly earnings, was in line with expectations at 1.7% year-on-year increase. Excluding bonuses, average [..]

European Session – Sterling falls as rate hike expectations delayed following unanimous MPC vote

Posted on January 21, 2015 at 2:57 pm GMT

Central banks took centre stage this week, with the Bank of Japan and the Bank of England being in focus today and the European Central Bank tomorrow. Noticeable movements were seen in the pound and the yen, both against the dollar. The euro was left alone today but with the BoE and BoJ out of the way, market players will likely shift their attention to the single currency. The Bank of England minutes showed all nine MPC members voted for [..]

Asian Session – Yen recovers recent losses following BoJ inaction

Posted on January 21, 2015 at 8:27 am GMT

The yen rallied sharply during today’s Asian, as dollar / yen’s failure to climb over 119 caused severe profit-taking after the pair’s recent rally. The fact that the Bank of Japan also failed to deliver new stimulus contributed to yen strength. Dollar / yen was last at 117.58, having traded as low as 117.28. The yen’s gains accelerated after the Bank of Japan kept policy unchanged and lowered its inflation forecast for the next fiscal year starting in April to [..]

Technical Analysis – GBPUSD pauses downtrend, bearish below cloud

Posted on January 21, 2015 at 8:04 am GMT

GBPUSD is consolidating just above the key 1.5000 psychological level. The recent downside momentum has stalled and the pair has been trading between 1.5033 and 1.5268 for the past week, waiting for a catalyst. The 1.5033 level is acting as immediate support and a break below this would expose the July 2013 low at 1.4811. Upon reaching this level GBPUSD would have retraced the entire move up from 1.4811 to 1.7190 (July 2014 high). The overall trend for GBPUSD is [..]

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