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Asian Session – Pound steady ahead of BoE decision; Dollar edges higher as yen backtracks

Posted on August 4, 2016 at 8:11 am GMT

The pound held steady in a tight range on Thursday as investors await the Bank of England’s latest monetary policy decision later in the day. Most analysts are expecting a 0.25% cut in the Bank’s base rate to stimulate the UK economy following recent data pointing to the sharpest slowdown in growth since the financial crisis. There are also expectations that the Bank will announce other measures such as restarting its quantitative easing program or new ways to boost lending [..]

Technical Analysis – EURGBP maintains neutral bias above 0.83, bullish above 200dma

Posted on August 4, 2016 at 7:18 am GMT

EURGBP has been maintaining a neutral bias in the short term after the rally from 0.7600 to 0.8627 fizzled out. Prices have been pivoting around the 23.6% Fibonacci retracement level (0.8384) of this upleg from June 24 to July 6. Key support lies at the major 0.8300 psychological level and as long as this holds, then the neutral bias will continue. A break above the July 6 peak of 0.8627 would give further upside conviction for a resumption of the [..]

European Session – Dollar recovers following ADP jobs and ISM data; gold retreats

Posted on August 3, 2016 at 2:56 pm GMT

The US dollar trimmed some of yesterday’s losses especially against the euro and has stabilized against the yen. Despite stronger Eurozone PMI data, the euro was softer today, falling back below the key $1.12 level. Final July PMI figures showed slightly stronger services and composite readings than the preliminary estimates. The index for Services PMI came in at 52.9, higher than the 52.7 expectation and up from the preliminary 52.7 number. The final composite PMI printed a reading of 53.2 [..]

Germany leads Eurozone economic activity higher but France stagnates in July

Posted on August 3, 2016 at 2:52 pm GMT

Eurozone output edged higher last month as the final reading of the Markit composite PMI rose from 53.1 in June to 53.2 in July. The final reading is better than the flash estimate of 52.9 and confirms that Britain’s referendum vote to leave the EU had little impact on overall output in the euro area. Expectations were for the final reading to remain unrevised. The services sector expanded at a faster pace than the manufacturing sector but in an encouraging [..]

Kiwi down on rate cut expectations but maintains uptrend

Posted on August 3, 2016 at 11:45 am GMT

Muted wage growth data out of New Zealand today reinforced expectations that the country’s central bank will likely cut interest rates next week. The Reserve Bank of New Zealand is due to hold its latest policy meeting on August 11 and is widely expected to lower its official cash rate by 25bps to 2.0% as declining inflationary pressures continue to worry policymakers. Labour costs in the private sector rose by just 1.6% annually in the second quarter of the year, [..]

Asian Session – Dollar steadier but struggles to hold on to 101 yen

Posted on August 3, 2016 at 8:04 am GMT

The US dollar stabilized in Asian trading on Wednesday following another steep fall yesterday on growing doubts about the prospect of further rate increases by the Fed this year. The greenback hit a 3-week low of 100.67 yen yesterday but managed to rebound above the 101 level in today’s Asian session. The euro and the pound were also stuck near 3-week lows against the yen at 113.40 and 134.65 respectively. The Japanese currency continued to face upside pressure today due [..]

Technical Analysis – GBPUSD maintains neutral bias around key 1.33 level

Posted on August 3, 2016 at 7:29 am GMT

GBPUSD staged a strong rally on Tuesday to rise above the key 1.3300 level. After peaking at 1.3364, the market lost steam and upside momentum petered out. Consequently prices began falling towards 1.3300, falling through it in early European session trading today. In the medium term, the market maintains a neutral bias after stabilizing from the post-Brexit drop. The range is between 1.3050 and 1.3500. A break out of the lower range below support at 1.3050 would open the way [..]

European Session – Yen outperforms, pushing dollar to 3-week low

Posted on August 2, 2016 at 2:52 pm GMT

US dollar weakness dominated the currency markets, while the yen strengthened further in a risk averse European session. The dollar fell to a fresh 3-week low versus the yen to touch 100.97 yen. US data out today did not help support the greenback. The core PCE price index which is closely watched by the Federal Reserve did not change in June from the 1.6% year-over-year pace seen in May. This suggests that inflation pressure in the US is still low and [..]

Technical Analysis – NZDUSD back above 0.72 on increased upside bias

Posted on August 2, 2016 at 2:29 pm GMT

NZDUSD rallied sharply to 2½–week highs today, breaking above 0.7250 on increased upside momentum. This takes the total gains over the past week to 3.5%. The near-term bias is bullish with the MACD histogram reverting back above zero, though the stochastics are already deep in overbought territory, suggesting the current positive momentum could soon run out of steam. If prices continue to head higher, the 0.73 level comes in focus as the next key resistance level. However, if the pair [..]

RBA cuts rates to new record low but impact on aussie limited

Posted on August 2, 2016 at 11:21 am GMT

The Reserve Bank of Australia cut rates for the second time this year, lowering its cash rate by 25bps to a new record low of 1.50%. Although the move was widely expected, some analysts had doubted whether the RBA would cut rates this month after last week’s inflation data for the second quarter showed underlying inflation had not weakened by as much as had been expected. However, it appears that the bigger-than-expected drop in headline inflation and signs of a [..]

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