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Forex News – Weekly Review – Euro underperforms on expectations of ECB easing in June

Posted on May 16, 2014 at 1:10 pm GMT

The euro was one of the worst performing major currencies against the US dollar this week after weakening on remarks made by European Central Bank Chairman Mario Draghi that suggested that the central bank would possibly take some sort of monetary action as early as next month as a measure against deflationary pressure. The euro fell to as low as 1.3647 after reaching as high as 1.3992, a more-than 2-year high. Adding to the bad news was that the euro [..]

Technical Analysis – EURCHF attempts to move higher

Posted on May 16, 2014 at 7:49 am GMT

EURCHF has risen above the Ichimoku cloud and the RSI has broken above the 50 level into bullish territory, offering some upside potential. The pair is hugging the 38.2% Fibonacci retracement level at 1.2212 of the downleg from 1.2393 (January 8 high) to 1.2102 (March 3 low). A successful close above this would open the path for a move towards 1.2247 which is the April 4 peak and the 50% Fibonacci level. A break above 1.2247 will unmask 1.2281, which [..]

Asian Session – Dollar under pressure as US Treasury yields fall on weak US data

Posted on May 16, 2014 at 6:55 am GMT

The dollar remained under pressure today as the benchmark US Treasury yield fell to six-month lows. Weak US manufacturing data yesterday dented demand for the dollar. Industrial output fell at its fastest rate in more than 1-1/2 years in April as factory production slumped. Upbeat US jobless claims data and consumer prices released prior to the manufacturing data did little to help support the dollar. The greenback traded in Asia at 101.46 yen, just off a two-month low of 101.31 [..]

European Session – Euro hits 11-week low, US jobless claims fall

Posted on May 15, 2014 at 1:25 pm GMT

Eurozone data released today added to the view that the European Central Bank would likely adjust interest rates at its next policy meeting and this weighed on the euro. Disappointing Eurozone growth figures and soft inflation raised expectations that the ECB would take action next month in an effort to stimulate the sluggish economic recovery in the euro-area and fight deflation. Euro zone GDP missed forecasts and grew half than expected in the first quarter by only 0.2% on the [..]

Forex News – Eurozone economy grows half than expected in Q1

Posted on May 15, 2014 at 12:15 pm GMT

The euro fell to an 11-week low against the dollar at 1.3650 after coming under pressure on soft GDP data, signaling that the recovery in the Eurozone is not that strong. Three major economies contracted, including France, the Netherlands and Portugal, while the overall Eurozone economic growth was much weaker than expected in the first quarter, growing by only half of what was forecast. The weak economic growth would likely increase pressure on the European Central Bank to loosen monetary [..]

Technical Analysis – GBPUSD reverses recent rally

Posted on May 15, 2014 at 7:55 am GMT

GBPUSD has retraced almost 23.6% of the upleg from 1.5825 (12 November) to 1.6995 (6 May). The pair failed to breach the key 1.7000 level and reversed its recent rally to 1.6995 (a more-than-4-year high) after reaching overbought levels on the daily RSI. The indicator has crossed back below 50 into bearish territory, signaling further downside potential. Key support is the 23.6% Fibonacci at 1.6726, which is also where the lower Bollinger Band is located. Prices have broken below the [..]

Asian Session – Yen jumps immediately after strong Japanese GDP

Posted on May 15, 2014 at 6:33 am GMT

The yen was lifted by surprisingly strong Japanese first quarter GDP numbers. The stronger yen pressured the dollar, keeping it below the key 102 yen level in the Asian session today. Japan’s economy grew at a seasonally adjusted annual rate of 5.9% in the first quarter, with growth being boosted by a surge in demand ahead of a sales-tax increase last month. Economists had estimated on average that GDP increased at an annualized rate of 4% in the three months [..]

European Session – Sterling under pressure after BoE indicates no rush to raise rates

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

Sterling suffered big losses against the dollar after the UK April claimant count change showed a smaller drop than expected. Despite the jobless rate coming in lower at 6.8% in the three months ended in March (versus a previous 6.9%), the claimant count recorded a decrease of 25,100 versus 30,000 expected. The pound fell to a session low 1.6757 after the data from a session high of 1.6873 beforehand. The subsequent Bank of England Quarterly Inflation Report also weighed on [..]

Forex News – UK jobless rate drops to 5-year low

Posted on May 14, 2014 at 10:30 am GMT

The UK unemployment rate ticked lower in the 3-month period from January to March, falling to 6.8% from 6.9% as expected. The April claimant count change reflected a drop of 25,100 compared with expectations of 30,000. This disappointed markets, leading sterling to fell against the dollar. Data also showed that wage growth was lower than expected, thereby reducing the pressure on the Bank of England to raise interest rates. Recently there was growing speculation that BoE policy makers could raise [..]

Technical Analysis – EURGBP strong bearish bias

Posted on May 14, 2014 at 8:09 am GMT

EURGBP is bearish on the weekly chart. Prices are below the 200-period moving average and below the downtrend line. The pair came under pressure after breaking below the key 0.8400 level and prices are currently just below the 61.8% Fibonacci retracement level (0.8155) of the upleg from July 2012 (0.7750) to February 2013 (0.8813). Technical indicators such as the RSI and stochastic are pointing to further downside. The next important support level is at 0.8000, close to the 78.6% Fibonacci [..]

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