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Forex News – Bank of Japan remains upbeat on inflation resulting in steady yen

Posted on July 15, 2014 at 10:53 am GMT

The Bank of Japan’s latest meeting delivered few surprises and hence mostly reaffirmed what the market knew already. The Bank left its monetary stimulus unchanged at a pace of 60-70 trillion yen a year. This has led to 10-year yields on Japanese Government Bonds dropping t0.54%. The Bank’s forecast that inflation would reach 1.9% during the year starting in April 2015 was unchanged from its previous meeting. This meant that the chances of additional stimulus during the year have diminished. [..]

Technical Analysis – EURGBP bearish

Posted on July 15, 2014 at 9:13 am GMT

EURGBP remains below the key 0.8000 level and the outlook is bearish on the daily chart. The tenkan-sen and kijun-sen are negatively aligned and the RSI is in bearish territory. The market is below the downtrend line from March. After the pair tested resistance at 0.7979 this level was rejected and prices fell. There is scope to target support at 0.7914, the July 7 low. The 0.7979 level is an important barrier since it is also the 78.6% Fibonacci retracement [..]

Technical Analysis – EURJPY bearish below cloud

Posted on July 15, 2014 at 6:53 am GMT

EURJPY remains bearish below the daily Ichimoku cloud. There is scope for further downside as the tenkan-sen and kijun-sen are negatively aligned and the RSI is in bearish territory. To the downside, immediate support is seen at 137.48. The target is the 2014 low at 136.21 hit in February. To the upside, the barrier is at 139.28, the July 3rd high. A break above this resistance could help shift momentum to the upside. [..]

Asian Session – BoJ, RBA provide no surprises; Yellen awaited

Posted on July 15, 2014 at 6:36 am GMT

The meeting of the Bank of Japan ended without any major surprises today, as the bank stuck to its target of injecting 60 to 70 trillion yen into the economy on an annual basis and forecast that inflation would rise to near 2% next year. This in turn reduces the chances there will be additional stimulus in Japan, which is supportive of the yen. The Bank did however trim its growth projections for the year that began on April 1, [..]

European Session – Euro stalls ahead of ECB Chief Draghi’s speech

Posted on July 14, 2014 at 1:17 pm GMT

There were no major economic data releases today to drive currencies and so most currency flows were based on markets anticipating central bank-related events. European Central Bank Mario Draghi’s speech is later today while Fed Chair Yellen will be testifying on Tuesday and Wednesday. The Bank of Japan holds a policy meeting tomorrow. The euro recovered from last week’s sharp drop against the dollar to rally up to a high of 1.3639 from 1.3596. Upbeat European equity markets helped as [..]

Forex News – Market shrugs off Banco Espirito Santo woes due to limited risk of contagion

Posted on July 14, 2014 at 1:11 pm GMT

The news of financial problems at the holding company that belongs to the founding family of Portugal’s largest listed bank, sent shockwaves through markets during the previous week. Specifically, the largest shareholder of Banco Espirito Santo, the Espirito Santo Group, faced problems with some of its bond repayments. This sparked speculation that the bank had exposure to the troubled group that would in turn lead to substantial losses. There was also the possibility that the bank would face legal challenges [..]

Technical Analysis – GBPUSD consolidates at 1.7100, scope for upside

Posted on July 14, 2014 at 7:04 am GMT

GBPUSD has been consolidating at a near 6-year high between key support as 1.7000 and capped at 1.7178. The pair has potential for more upside to 1.7208 which is the October 21 high. Support is seen at 1.7084 which was hit on Tuesday and is the 38.2% Fibonacci retracement level of the upleg from 1.6926 to 1.7178. Technicals are bullish – tenkan-sen and kijun-sen are positively aligned on the daily chart and prices are well above the Ichimoku cloud. The [..]

Asian Session – Major currencies steady as focus shifts to Yellen and Draghi

Posted on July 14, 2014 at 6:51 am GMT

The FX market was more or less quiet in anticipation of scheduled appearances by the world’s two most powerful central bankers; the Fed’s Janet Yellen on Tuesday and Wednesday and the ECB’s Mario Draghi later today. Yellen is appearing tomorrow as part of her semi-annual Humphrey-Hawkins testimony on monetary policy before the US congress. Twice a year, the President of the Federal Reserve appears before Senate and House committees to give an account of US monetary policy. The Federal Reserve [..]

European Session – Euro steadies at 1.3600 as Portugal banking crisis fears subside

Posted on July 11, 2014 at 2:02 pm GMT

The euro was steadier on Friday, following a brief tumble on Thursday that took the currency below the key 1.3600 level on concerns over banking troubles in Portugal. The nation’s largest bank, Espirito Santo caused a scare in the markets and brought back memories of the Eurozone credit crisis. These fears ebbed today as investors felt the case was isolated and would not cause contagion. Safe haven currencies were the main beneficiaries of the risk-off environment yesterday, with the yen [..]

Forex News – Week Ahead Focus on Yellen, Draghi and Carney

Posted on July 11, 2014 at 1:21 pm GMT

The coming week will be busier in terms of economic data releases compared to the past week, as there will be important speeches from central bankers, including Yellen, Draghi and Carney. Starting with the euro, the most important events of the week ahead for the currency will be a speech by European Central Bank President Mario Draghi on Monday. There will also be Industrial Production data that day although Tuesday’s German ZEW Economic Sentiment will be more important to watch. [..]

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