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European Session – Sterling rallies on above-forecast manufacturing PMI

Posted on December 1, 2014 at 2:24 pm GMT

Sterling rallied off a 15-month low hit in Asia to reach a high of 1.5744 following an above-forecast survey of UK manufacturing purchasing managers. The PMI for November rose to 53.5 from 53.3 in October, reaching its highest level in 4 months and keeping well above the 50.0 level that expansion. From here the next risk events for the pound will be Wednesday’s autumn budget statement by UK finance minister George Osborne and then the Bank of England monetary policy [..]

Forex News – SNB commits to 1.20 EURCHF peg after referendum

Posted on December 1, 2014 at 1:54 pm GMT

A referendum was held on Sunday in Switzerland for a proposal to boost gold reserves. The “Save our Swiss gold” initiative was rejected by a “no” vote by 77% of Swiss voters. If the vote went through, the proposed measures would have required the Swiss National Bank (SNB) to hold 20% of its reserves in gold. The current level of gold reserves is 8%. A “yes” vote would have forced the SNB to buy gold alongside any currency interventions. The [..]

Technical Analysis – AUDUSD bearish below 0.8500

Posted on December 1, 2014 at 8:02 am GMT

AUDUSD opened the week with a gap lower at 0.8465 after closing on Friday above the key 0.8500 level. The trend is bearish and technical indicators suggest the downside bias is still in progress. The tenkan-sen and kijun-sen lines are negatively aligned while the market is below the falling Ichimoku cloud. RSI is in bearish territory below 50. To the upside the 0.8500 level has now become resistance. To the downside the 0.8400 level is seen as the next support [..]

Asian Session – Dollar / yen at fresh 7-year high; gold tumbles after Swiss ‘no’

Posted on December 1, 2014 at 7:28 am GMT

The week started with the news that the Swiss voted to reject a proposal to force the country’s central bank to raise the level of reserves it holds in gold to 20% of the total. The speculation in the run-up to the referendum had pushed the euro / franc exchange rate very close to the 1.20 floor that the SNB has vowed to protect. The rejection of the proposal led to selling of gold, which fell by around 2% to [..]

European Session – Euro relief rally after neutral Eurozone CPI, dollar firm as oil falls

Posted on November 28, 2014 at 2:44 pm GMT

The euro rose after Eurozone inflation data came out in line with expectations at 0.3% year-on-year. While this headline figure was down from October’s 0.4%, markets were relieved it was not worse considering Thursday’s German and Spanish inflation numbers were weak. So the fact the overall CPI number was in line provided some relief ahead of next week’s ECB meeting as it is unlikely that today’s number will spur any ECB action. The euro bounced from a low of 1.2428 [..]

Forex News – Week Ahead – Nonfarm payrolls and ECB are highlights of the week

Posted on November 28, 2014 at 1:51 pm GMT

The European Central Bank policy decision will be closely watched next Thursday and will be one of the main highlights of the week as investors are eager to see whether the ECB will take further steps to bolster the sluggish Eurozone economic recovery. The majority of analysts do not foresee any change in policy at this meeting as the ECB has only recently launched new stimulus measures which include the commencement of a new asset purchase scheme in October. ECB [..]

Technical Analysis – Oil crashes below $70

Posted on November 28, 2014 at 8:20 am GMT

Crude oil prices tumbled on Thursday, taking out the key psychological $70 level to hit a new 4-year low of $67.74. Prices found support at the base of the bearish channel. The market is oversold right now as indicated by the stochastic and RSI so consolidation or a short covering rally is expected before resuming the downtrend. Potential gains would be limited by resistance seen at 78.00. From there crude prices should be pushed further lower as the overall trend [..]

Asian Session – Dollar gains on commodity weakness

Posted on November 28, 2014 at 7:47 am GMT

The US dollar appeared to be the main beneficiary of weakness in commodity currencies, as the price of US crude oil dropped sharply to below $70 to $68 per barrel after OPEC decided not to reduce its oil output. This in turn hurt commodity currencies and particularly those of oil exporters such the Norwegian Crown and the Canadian dollar. The US dollar strengthened to 118.11 against the Japanese yen, while euro / dollar dropped to 1.2454. Data out of Japan [..]

Forex News – Oil tumbles as OPEC decides not to cut output

Posted on November 27, 2014 at 3:29 pm GMT

Oil prices tumbled below $75 dollars on news reports that ministers from the Organization of the Petroleum Exporting Countries (OPEC) decided to leave oil output unchanged. Brent crude oil dipped to a fresh 4-year low of $74.36 a barrel just before 15:00 GMT on Thursday following comments made by Saudi Oil Minister Ali al-Naimi who broke the news of OPEC’s decision after a 5-hour meeting in Vienna today. Meanwhile, US crude oil fell to $71.50. “That is right,” Naimi told [..]

European Session – Euro weighed by deflationary fears after soft inflation data

Posted on November 27, 2014 at 2:56 pm GMT

There was reduced liquidity in the currency markets today due to the US Thanksgiving holiday. The focus was on some regional inflation data out of Europe – particularly from Germany and from Spain. Weak inflation numbers weighed on the euro as deflationary fears arose and reinforced expectations that the European Central Bank will ease monetary policy more aggressively. Low inflation is a real concern as it is the core reason for ECB stimulus measures. So when Europe’s largest economy – [..]

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