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Technical Analysis – USDCAD hits 5-year high

Posted on October 15, 2014 at 7:22 am GMT

USDCAD hit a new 5-year high today at 1.1343. The bullish trend remains intact. The pair has been making new highs since July. The market is above the 200-day moving average and the Ichimoku cloud is rising. The tenkan-sen and kijun-sen lines are positively aligned. Upside momentum is still strong as RSI is in bullish territory above 50. All these point to a bullish market structure. As long as there is a daily close above the key 1.1300 level, the [..]

Asian Session – US dollar continues modest rebound on economy’s outperformance

Posted on October 15, 2014 at 6:42 am GMT

Soft economic numbers from other major developed economies as well as some stabilization in risk assets helped the US dollar to continue to regain some of the ground it has lost recently. Overall the dollar seems to be going through a period of consolidation presently following its significant gains during the third quarter and it looking like trading in a range until fundamental developments – most probably in its favor – drive it outside this range. In particular, a sharp [..]

European Session – Pound plummets as UK inflation data shift BoE rate hike expectations

Posted on October 14, 2014 at 1:10 pm GMT

The US dollar has shifted course against the euro and the pound today, mainly driven by disappointing data out of the UK and the Eurozone. Sterling was one of the worst performing major currencies today versus the dollar after plummeting to a low of 1.5903. The catalyst for the fall was soft UK inflation data which would likely delay a rate hike by the Bank of England. Headline CPI fell to 1.2% year-on-year while core CPI printed at 1.5% year-on-year, [..]

Forex News – UK inflation drop takes sterling below 1.60 vs dollar

Posted on October 14, 2014 at 11:56 am GMT

The news that UK inflation was a smaller-than-expected 1.2% year-on-year during September caused the pound to tumble, as economists were expecting an inflation rate of 1.4%. The previous month’s inflation rate was 1.5%. The main reasons behind the drop in inflation were lower food prices that partly were the result of a price war between the main UK supermarkets and lower energy prices as the price of crude oil has fallen precipitously on international markets. It is interesting to note [..]

Asian Session – US dollar off lows on reaction following heavy selling

Posted on October 14, 2014 at 7:17 am GMT

The US dollar was struggling to regain some poise during Tuesday’s Asian trading following heavy losses overnight as risk assets such as stocks continued their decline. The benchmark US stock index S&P 500 posted a significant decline in excess of 1% during the previous day’s Wall Street trading, after it broke two important technical levels – the early August low of the previous correction and the 200-day moving average. The declines took place amid worries about global economic growth. Dollar [..]

Technical Analysis – USDJPY downside bias below 108.00

Posted on October 14, 2014 at 7:11 am GMT

The bullish market structure for USDJPY is at risk of weakening as the RSI has dipped into bearish territory below 50. The Stochastic is falling but has reached oversold levels which could give a bit of a pause in the downside momentum for now. USDJPY has scope for losses to 106.53 – this is the 38.2% Fibonacci retracement of the upleg from 100.81 to 110.08. This will stand as an important support level. A break below this would weaken the [..]

European Session – Currencies driven by central bank expectations

Posted on October 13, 2014 at 1:38 pm GMT

The main theme in currency markets today was the dollar’s weakness against most major counterparts as investors pared back bets of an earlier rate hike by the US central bank after some Fed speakers speaking at the IMF meetings this weekend suggested this delay in rate increases. In reference to slowing growth in the global economy, markets pushed back the expected timing of the first interest rate increase by the Fed. The safe haven yen benefited from uncertainty in the [..]

Forex News – Fed reluctant to raise interest rates if global slowdown intensifies

Posted on October 13, 2014 at 12:35 pm GMT

An array of Fed speakers in Washington for the IMF / World Bank meetings over the weekend have reinforced the argument that the Fed should be more cautious in raising interest rates and possibly delay any rate hike because of slower global growth and the disinflationary effect of a strong dollar. The most preeminent speaker was the Federal Reserve Vice President Stanley Fischer, who spoke at an IMF event on Saturday, October 11th. The important quote that the media used [..]

Technical Analysis – GBPUSD completes correction higher and reverses lower

Posted on October 13, 2014 at 7:11 am GMT

After making an attempt to correct higher, GBPUSD reversed back down from 1.6225 hit on October 9. The pair was capped by the kijun-sen line and the 50% Fibonacci retracement of the Sept 19 to October 3 downleg. This level stands at 1.6236. The bias is for the market is to head lower as trend indicators show. The tenkan-sen and kijun-sen lines on the daily chart are negatively aligned and the Ichimoku cloud is falling. The market remains below the [..]

Asian Session – Yen benefits from risk-off, while aussie rises after Chinese exports

Posted on October 13, 2014 at 7:08 am GMT

The yen was the main beneficiary of the selloff in risk assets around the world, gaining against both the US dollar and against the euro. Traders sought to buy back yen that was funding riskier trades and Japanese investors repatriated some funds as a result of the correction in risk assets. Dollar / yen traded as low as 107.06 while euro / yen fell to as low as 135.58 as a result of safe haven related yen strength. The US [..]

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