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Week Ahead – ECB meeting in focus after taper talk; China GDP eyed

Posted on October 14, 2016 at 2:08 pm GMT

The coming week looks set to be a busier one in terms of data but the European Central Bank’s meeting may take most of the attention given the recent rumours of QE tapering. UK inflation and retail sales figures may provide some support to the battered pound, while Chinese GDP data will also come in focus. It will be a lighter week for the US economic calendar, which will be dominated by housing data. Markets look at ECB for QE [..]

Asian Session – US dollar gains ahead of retail sales, Yellen

Posted on October 14, 2016 at 8:51 am GMT

The US dollar managed to strengthen against its peers during today’s Asian session, on anticipation that upcoming data as well as a speech by Fed Chair Janet Yellen will reinforce the case for a December rate hike. Dollar / yen climbed above the 104 level once more to 104.05, while euro / dollar fell back to 1.1021. During the previous day, the euro had managed to rebound to around 1.1060 after briefly falling just below the 1.10 mark. Sterling also [..]

Technical Analysis – GBPUSD in steep drop but oversold near-term

Posted on October 14, 2016 at 8:37 am GMT

Sterling has fallen rapidly since the beginning of October (October 3 was the month’s first trading day), as it broke through its post-Brexit low of 1.2795 on October 4th. Currently the pair is oversold as indicated by the RSI which has been below 30 for almost a week now. The current low for the pair is 1.2088 and there will probably be some upside correction or consolidation before an attempt to break lower is made again. Price action has been [..]

European Session – Dollar remains subdued while Brexit legal challenge caps sterling

Posted on October 13, 2016 at 1:06 pm GMT

The market mood remained risk-off in European trading on Thursday as disappointing trade numbers out of China earlier in the day dampened the outlook for the world’s second largest economy. Meanwhile, expectations that the Fed is on course to raise rates in December weighed on global equities. The September FOMC minutes published yesterday indicated that the decision not to raise rates in September was a close call, and given the recent strong set of data for the US, the Fed [..]

Technical Analysis – USDJPY 4-hour chart looks promising for dollar

Posted on October 13, 2016 at 9:21 am GMT

USDJPY hit a 2 ½ month high today at 104.63 – surpassing the early September 104.3 high and perhaps opening the way for a test of the July high of 107.48. The Ichimoku analysis looks favorable for the US dollar. Indeed, since testing the 100 level two times in the second half of September, the greenback has not looked back as it has posted significant gains in the last 2 ½ weeks. USDJPY is above the cloud and the Tenkan-sen [..]

Asian Session – Yen makes comeback following weak Chinese data

Posted on October 13, 2016 at 8:41 am GMT

The yen managed to recover its US session losses versus the greenback as a bout of risk aversion hit the markets following weak Chinese trade numbers. The yen had lost ground earlier as the dollar climbed to around 104.65 following the release of Fed minutes that showed that the arguments for and against a rate hike in September had been finely balanced. In the end, the argument that won the day and interest rates were left unchanged was that there [..]

European Session – Dollar extends gains but sterling retreats from highs

Posted on October 12, 2016 at 3:14 pm GMT

The US dollar resumed its uptrend in European trading on Wednesday as traders made a bullish bet ahead of the release of the FOMC minutes of the Fed’s September meeting later in the day. The odds of a Fed rate hike have been strengthening over the past week following some solid US data. The dollar index, which measures the US currency against those of its major trading partners, hit a fresh 7-month high of 97.97, sending gold to a three-day [..]

Asian Session – Sterling rebounds on reports that parliament to be consulted on Brexit

Posted on October 12, 2016 at 8:01 am GMT

The pound managed to rebound from the 1.20 level following reports that the British Prime Minister would consult parliament on Brexit. The Australian dollar also performed well after the country’s government successfully sold a long-term bond to investors. In other currencies, euro / dollar looked set to challenge the 1.10 mark due to recent optimism about the Fed raising rates in December while the ECB is set to continue with its present policy of asset purchases and negative rates. The [..]

Technical Analysis – EURGBP consolidates after 7-year high of 0.9140

Posted on October 12, 2016 at 7:56 am GMT

EURGBP recently broke the psychologically important 90 pence level during the previous Friday’s pound ‘flash crash’ but retreated back below that level when trading subsequently normalized. The levels reached during the ‘flash crash’ (0.9260) are best kept out of the analysis for now, as they do not reflect normal market conditions; they might be the result of very few trades and the nearly complete absence of bids. Euro / pound appears to be in an uptrend in the short-term but [..]

European Session – Euro and pound pushed lower as dollar climbs to 11-week high

Posted on October 11, 2016 at 2:44 pm GMT

Rising expectations that the Fed is on course to raise rates at its December meeting drove the US dollar to an 11-week high against a basket of currencies on Tuesday. The dollar index hit 97.49 in today’s European session as Fed Funds Futures pointed to a 70% probability of a rate hike in December. A slump in the polls for US Presidential hopeful Donald Trump provided additional support to the greenback. The next big focus for the US currency is Friday’s [..]

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