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Week Ahead – ECB meets amid wobbling confidence in Eurozone; trade and industrial data in focus

Posted on September 2, 2016 at 2:07 pm GMT

It will be a busy week for central banks as the ECB, RBA and Bank of Canada hold their scheduled policy meetings. But there is also plenty of data for investors to eyeball, ranging from Australian and Japanese GDP, UK services PMI, German and UK industrial production data, and trade figures for China, Germany and the UK. The US will take a backseat over the next 7 days with markets closed on Monday for Labor Day. ECB under pressure on [..]

Asian Session – Dollar holds losses after post-ISM data tumble; focus turns to nonfarm payrolls

Posted on September 2, 2016 at 7:59 am GMT

The US dollar held onto losses made after the disappointing ISM manufacturing PMI data on Thursday which was a setback for those hoping for a rate hike by the Federal Reserve soon. The surprise drop in the ISM index showed that factory activity in the US fell in August into contraction territory for the first time since February. This does not bode well for the US economic growth outlook. The dollar did attempt to recover some of yesterday’s losses early [..]

Technical Analysis – NZDUSD uptrend capped at 0.73 resistance

Posted on September 2, 2016 at 5:08 am GMT

NZDUSD has been in an uptrend since early January 2016. Prices have been steadily rising from the January 20 low of 0.6346 and reached a new multi-month high of 0.7379 on August 26. The pair faces strong resistance at the key psychological level of 0.7300 as this level has been tested a few times. After breaking above it, prices quickly reversed back below it. In the near term, support is provided by another key psychological level at 0.7200. The overall [..]

European Session – Sterling jumps on strong manufacturing PMI while dollar reverses on weak ISM manufacturing data

Posted on September 1, 2016 at 3:01 pm GMT

US jobless claims data today helped the dollar climb to a fresh one-month high but its gains were capped just below the key 104 yen level after the greenback reversed back down on disappointing ISM manufacturing data. The initial jobless claims report showed the number of Americans seeking unemployment benefits last week, rose less – than – expected. Any upbeat data, especially on the job market, will be closely watched by the Federal Reserve as it could push the US [..]

Technical Analysis – EURJPY climbs to 1-month high on strengthening upside bias

Posted on September 1, 2016 at 2:29 pm GMT

EURJPY rose to a fresh one-month high today as the week-long rally showed no sign of abating. RSI continues to climb but has yet to reach overbought levels so there is scope for further gains in the near term. If the rally holds, prices are likely to find resistance at the 116 level which is also the bottom of the Ichimoku cloud. EURJPY has been stuck below the cloud since April and a break into it would help shift the [..]

UK manufacturing PMI posts surprise rebound as weaker pound lifts export orders

Posted on September 1, 2016 at 11:18 am GMT

Manufacturing activity in the UK rebounded sharply in August following the post-Brexit dip in July that saw the manufacturing PMI plunge to a three-year low. The Markit/CIPS manufacturing PMI rose at the fastest month-on-month pace on record, increasing from 48.2 in July to a 10-month high of 53.3 in August. Expectations were for a much smaller rebound to 49.0. The data suggests that the immediate negative impact of the shock vote to leave the EU was short-lived and British manufacturers [..]

Asian Session – Dollar softer on profit taking; Strong China PMI lifts commodities

Posted on September 1, 2016 at 8:01 am GMT

The US dollar eased off yesterday’s one-month highs against the yen in today’s Asian session as investors took profits from a week-long rally. The greenback was boosted on Wednesday from strong ADP employment and housing data and the focus now moves to the ISM manufacturing PMI due later today. The dollar peaked at 103.52 yen yesterday and was trading slightly lower at around 103.30 yen in today’s Asian session. Against other currencies, the greenback was mixed as the Australian and [..]

Technical Analysis – USDCAD maintains short term bullish bias

Posted on September 1, 2016 at 5:26 am GMT

USDCAD maintains the bullish bias in the short term after bouncing from 1.2762 on August 18. Prices rose to a high of 1.3144 on Wednesday but have found resistance in this area.The market is also currently at an important psychological level at 1.3100, which is just below the 23.6% Fibonacci retracement level (1.3112) of the upleg from 1.2653 to 1.3252. (June 8 – July 27 rise). These levels act as barriers to the upside. The market’s upside momentum was quite [..]

European Session – Dollar boosted by strong ADP jobs data; loonie falls after Canada GDP and oil inventories

Posted on August 31, 2016 at 3:03 pm GMT

The euro slipped to a new 3-week low of $1.1122 against the dollar after being weighed down by disappointing Eurozone inflation data. The August flash estimate remained stable at 0.2% year-on-year, which was below estimates for an increase to 0.3%. Unemployment for the region was also somewhat disappointing at 10.1% versus 10.0% expected but remained unchanged. These numbers will likely be taken into consideration by the ECB at their monetary policy meeting next week. The Canadian dollar was a notable [..]

Eurozone inflation rises less than expected, keeping prospect open of further ECB easing

Posted on August 31, 2016 at 2:36 pm GMT

Inflation in the euro area remained muted in August according to Eurostat’s flash estimate with headline CPI unchanged at 0.2% year-on-year. A majority of economists surveyed had been expecting inflation to edge up to 0.3% but today’s data underlines the view that the ECB has a long journey ahead before it meets its 2% inflation target. The weaker-than-expected reading comes even as energy prices continue to fall at a smaller rate. Energy prices were down 5.7% in the 12 months [..]

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