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European Session – Pound under pressure on Brexit uncertainty; Dollar tests 117 yen ahead of Yellen

Posted on December 19, 2016 at 3:39 pm GMT

The British pound came under pressure on Monday as markets grew increasingly concerned about the direction of the UK’s Brexit negotiations with the EU. UK politicians have been hinting recently that they are seeking a transitional agreement that would make it easier for British businesses to adjust to life outside the EU. But there were few signs of a quick settlement for such a deal at last week’s EU summit that was attended by UK PM Theresa May and other [..]

Technical Analysis – USDCAD turns bullish to target 1.35

Posted on December 19, 2016 at 9:17 am GMT

USDCAD turned bullish after rising from the key 1.3100 area. The pair’s decline from highs above 1.3500 soon found support just above the 200-day moving average. Following a brief dip below 1.3100, prices rose to a high of 1.3416 last week (December 15) but then USDCAD levelled off as the 50-day moving average acted as a barrier to further upside moves. Consolidation is expected in the near term as momentum has faded and the RSI has flattened around the 50-point [..]

Asian Session – Dollar eases from 10-month high against yen, focus turns to Bank of Japan

Posted on December 19, 2016 at 8:14 am GMT

The US dollar started the new trading week by retreated from a 10-month high against the yen due to some risk aversion in the markets today. China-US relations were put to the test over the weekend due to news late on Friday of the seizure of a US underwater drone by China in international waters in the South China Sea. Tensions between the two nations created some market jitters. The dollar fell below the key 118-yen level and touched an Asian [..]

European Session – Aussie and kiwi extend losses against broadly stronger greenback

Posted on December 16, 2016 at 3:21 pm GMT

The US dollar was consolidating gains against the yen, the euro and the pound and was trading a tight range after its Fed-driven surge earlier this week. The stall in the greenback’s rally today gave some relief for gold prices which recouped some of its post-Fed losses. The US currency however extended gains versus the loonie, the aussie and the kiwi. The Australian and New Zealand dollars are high yielders but despite this fact and due to narrower interest rate [..]

Week Ahead – Bank of Japan policy meeting and RBA meeting minutes in focus

Posted on December 16, 2016 at 1:40 pm GMT

After a busy week which was dominated by central bank meetings that included the Federal Reserve and Bank of England, markets will also await another major central bank meeting next week – the Bank of Japan. The Fed’s highly anticipated meeting culminated with a decision on Wednesday to raise the Fed funds rate by 25 basis points as expected but the US central bank surprised the markets with a revision to its rate hiking cycle and indicated it would raise [..]

Technical Analysis – USDJPY maintains bullish structure with scope to target 120

Posted on December 16, 2016 at 8:55 am GMT

USDJPY maintains its bullish bias despite being in overbought conditions. Prices hit a more-than 10-month high of 118.65 on Thursday and are now consolidating in the 118 handle. RSI is above the 70-point threshold and is in overbought territory but the market doesn’t seem to have lost its upside momentum. There was a crossover of the 50-day moving average above the 200-day moving average earlier this month on December 5. This gave a bullish signal. There is scope to target [..]

Asian Session – Dollar holds gains as markets digest Fed’s hawkish rate hike outlook

Posted on December 16, 2016 at 7:30 am GMT

The US dollar stalled its Fed-driven rally and consolidated against most of its major counterparts in a relatively quiet Asian session. The FOMC’s decision on Wednesday to hike rates and quicken its pace of hiking has taken the US dollar index to a 14-year high. A string of US economic releases on Thursday lent support to the dollar as improving data help reinforce more interest rate increases from the Fed next year. US CPI rose 1.7% year-on-year in the November, [..]

European Session – Euro tumbles to lowest since 2003; sterling falls after Bank of England

Posted on December 15, 2016 at 3:29 pm GMT

The euro fell to the lowest in more than a decade while the US dollar’s Fed-drive rally continued higher. Meanwhile, sterling extended losses after the Bank of England meeting. The BoE Monetary Policy Committee voted unanimously to leave policy unchanged at 0.25%. It also voted to keep its asset purchase program unchanged. The target amount for gilts will remain at 435 billion pounds a month and corporate bonds at 10 billion pounds. The UK central bank stated that policy can [..]

Technical Analysis – EURUSD strengthens bearish bias after fall below 1.0500

Posted on December 15, 2016 at 8:35 am GMT

EURUSD tumbled below the key 1.0500 level today to reach the lowest level this year. The pair touched a low of 1.0467 early in the Asian session, coming close to last year’s low of 1.0461. If the market falls below this level, it would be at the lowest level since March 2003. The overall market structure is bearish, and the falling moving averages highlight this fact. There was a bearish crossover of the 50-day moving average with the 200-day moving [..]

Asian Session – Dollar extends rally to fresh 10-month high against yen after Fed hikes rates

Posted on December 15, 2016 at 7:52 am GMT

The US dollar surged to a 10-month high against the yen as markets reacted to the news that the Federal Reserve raised interest rates and revised its forecast for next year’s pace of rate hikes. The Fed’s move indicated its confidence in the US economy and its belief that labour market conditions are tightening. The FOMC decided to lift the Fed funds rate by 25 basis points to a range of 0.5 to 0.75 percent after a two-day meeting and [..]

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