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European Session – Sterling weak after UK unemployment rises

Posted on February 19, 2014 at 2:18 pm GMT

The dominant theme during the European session was sterling weakness as the currency was hit by an unexpected drop in the UK unemployment rate. The official ILO headline unemployment figure edged up to 7.2% in the October- December period from a previous reading of 7.1%. The reading was forecast to remain unchanged. Meanwhile, the claimant count, which is the number of people claiming unemployment benefits, fell by more than expected in January by 27,600, as economists expected a decline of [..]

Forex News – UK inflation and unemployment point to less need for early rate hikes

Posted on February 19, 2014 at 12:00 pm GMT

Tuesday’s weaker-than-expected inflation report for January as well as today’s higher-than-expected unemployment rate signaled that those looking for an interest rate hike by the end of the year could be disappointed. First of all, January’s inflation fell to its lowest since November 2009 at 1.9% against analyst expectations of inflation at 2.0%. The Bank of England expects inflation to fall further, according the forecasts contained in the Bank’s Quarterly Inflation Report, bottoming out at 1.7% during March before moving again [..]

Technical Analysis – EURJPY bullish above Ichimoku cloud

Posted on February 19, 2014 at 9:45 am GMT

EURJPY is in an uptrend since the February 4 low of 136.21 until today’s high of 141.02. Yesterday the pair breached the key psychological level of 140.00 to gain strong upward momentum. Adding to the bullish bias is the fact that the market action is above the Ichimoku cloud. After hitting 141.04, prices met resistance and have retraced with sights set on a test of next support around the 140.25/29 area (Tenkan –Sen line and February 11 high). Below this [..]

Asian Session – Euro hits 7-week high versus dollar on record EZ current account surplus

Posted on February 19, 2014 at 7:50 am GMT

The euro extended its rally to reach the highest level so far this year against the dollar, hitting a 7-week high of 1.3772 in Asia today. Data yesterday showing the Eurozone’s record current account surplus of 216 billion euros in 2013 helped buoy the euro. In contrast, the US posted a deficit of around $400 billion. Also weighing on the dollar was some weak US data yesterday. The Federal Bank of New York’s Empire State manufacturing index fell to 4.48 [..]

Forex News – Bank of Japan keeps loose stance; signals it may do more

Posted on February 18, 2014 at 2:51 pm GMT

The Bank of Japan’s regular monetary policy meeting contained few surprises as the bank retained its pace of asset purchases at around 60-70 trillion yen a year (589-687 billion dollars) or 6-8 trillion yen a month. What the Bank did decide was an increase in a bank lending facility to 7 trillion yen – roughly doubling it. It also extended existing loan facilities that were expiring in June by one year so as to convince banks to make additional loans [..]

Technical Analysis – GBPJPY uptrend intact

Posted on February 18, 2014 at 9:28 am GMT

GBPJPY was in a strong uptrend from June 2012 until January 2, 2014 when it hit a 5-year high of 174.74. The pair has since paused the rally and carved out some lower peaks and troughs. The pair has found support at its 50-day moving average around the key 170.00 level. A move lower will target the next support level at 169.00 which is where the 20-day moving average is found. Below this support is provided at 163.85 which is [..]

Asian Session – Yen drops following Bank of Japan policy announcement

Posted on February 18, 2014 at 7:46 am GMT

Currency markets were relatively quiet leading up to the Bank of Japan policy announcement today. The dollar initially fell against the yen in a knee-jerk reaction to news that the BOJ it left its monetary policy and economic assessment unchanged. Then as market participants heard that the central bank doubled a funding facility to 7 trillion yen and said individual banks could borrow twice as much low-interest money as previously, the dollar surged to a high of 102.73 yen. This [..]

European Session – Sterling pauses rally after hitting 4-year high

Posted on February 17, 2014 at 2:39 pm GMT

Monday’s European Session was relatively quiet since there were no key announcements and the US markets were closed for the Presidents Day holiday. The main theme of the currency markets was dollar weakness, as US data from last week continued to weigh on the greenback. The euro retained gains made against the dollar in the absence of new data, after being buoyed by Friday’s strong GDP data from France and Germany. The euro gained 0.31% against the pound to end [..]

Forex News – Japanese 4th quarter GDP growth misses estimates but news does not hurt yen

Posted on February 17, 2014 at 1:04 pm GMT

Japanese economic growth numbers disappointed earlier in the day, as expectations of quarter-on-quarter GDP growth of 0.7% weren’t met. Growth came out at a much lower 0.3%. For 2013, economic growth averaged slightly more than 1.5%. There were two key reasons for the lower-than-expected growth. First of all, private consumption underperformed by rising 0.5% against expectations of a 0.7% increase. Japanese consumers were expected to ramp up consumption ahead of this April’s sales tax hike from 5% to 8%. Secondly, [..]

Technical Analysis – GBPUSD bullish

Posted on February 17, 2014 at 10:13 am GMT

GBPUSD hit a new 4-year high of 1.6821 on Monday. Bullish sentiment on the 4-hour chart remains strong as prices crossed above the 20, 50 and 200 period moving averages. A buy signal was given February 12 when the 20-period moving average crossed above the 200-period moving average. MACD is rising and in bullish territory. The Stochastic still maintains its bullish sentiment although it has started to move away from extreme overbought levels and fell below the 80 level as [..]

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