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Technical Analysis – Oil strengthens bearish bias as it tests 200-day MA

Posted on July 29, 2016 at 7:09 am GMT

WTI oil futures continue to extend lower today, dipping below the key $41 a barrel level. The outlook is bearish as a falling RSI below 50 supports further downside momentum. Prices are at a critical level, testing the 200-day moving average at the $41 mark. It provided support yesterday but if there is a close below it today this would open the way for a fall towards $38.76. This level is the 78.6% Fibonacci retracement of the recent upleg from $35.24 [..]

European Session – Gold rises to 2-week high on post-FOMC weakened dollar

Posted on July 28, 2016 at 1:51 pm GMT

The US dollar remained weak today after tumbling following the release of the FOMC statement late on Wednesday. The decision by the Federal Open Market Committee to keep interest rates on hold brought down the greenback. The only major currency weaker than the US currency was sterling. The pound fell versus its major counterparts on speculation of a rate cut by the Bank of England at its policy meeting next week. Cable slipped to a session low of $1.3136 after [..]

Technical Analysis – AUDUSD capped at 0.7550; struggles to hold to positive bias

Posted on July 28, 2016 at 1:38 pm GMT

AUDUSD headed higher today on increased upside momentum, however its gains were capped just below 0.7550, which has been acting as a key resistance area in recent weeks. This is also the 23.6 % Fibonacci retracement level of the May-July upleg from 0.7144 to 0.7676 and prices are likely to struggle to make significant headway above this level without stronger upside momentum. But with RSI barely above 50, the near-term outlook is looking neutral to positive. AUDUSD would need to [..]

Eurozone economic sentiment rises unexpectedly in July

Posted on July 28, 2016 at 11:08 am GMT

Economic sentiment across the Eurozone improved in July, defying expectations that it would suffer a drop as a result of the uncertainty created by Britain’s decision to leave the EU. According to the European Commission’s survey, the economic sentiment indicator for the euro area rose from 104.4 in June to 104.6 in July, beating estimates that it would decline to 103.7. Among the region’s largest economies, Italy saw the biggest improvement during the month, while France and Spain saw a [..]

Asian Session – Dollar slips despite upbeat Fed; Yen firms as markets await BoJ

Posted on July 28, 2016 at 7:59 am GMT

The Federal Reserve kept monetary policy unchanged yesterday as expected but delivered a slightly more upbeat view of the US economy. Members of the Federal Open Market Committee saw the risks to the economic outlook as having “diminished” since the June meeting in reference to the Brexit vote. However, the FOMC maintained its data-dependent policy, giving little indication to when the next rate hike would come. The dollar spiked up immediately after the Fed’s decision, hitting 106.04 yen, but traders [..]

Technical Analysis – USDJPY falls below key support of 105 yen

Posted on July 28, 2016 at 7:21 am GMT

USDJPY fell below the key 105 level which was previously acting as major support but has now turned into resistance. The failure of the market to make a sustained move higher from 105.00 would suggest that a top is now in place at 107.48 with a bias for further downside. Therefore, the rise from 99.98 to 107.48 (July 8 to July 21 rally) was probably a corrective move and the market could resume its downtrend that has been in place [..]

Fed keeps policy unchanged but sees diminished risks

Posted on July 27, 2016 at 7:46 pm GMT

The US Federal Reserve kept monetary policy unchanged at the end of its two-day meeting today but it left the door open for a possible rate rise this year as it described the near-term risks to the economic outlook as having “diminished”. Concerns over a potential ‘leave’ vote in the UK’s EU referendum and slowing jobs growth in the US in May prevented the Fed from taking action in June. However, those worries have now mostly abated as the labor [..]

European Session – Oil prices tumble after inventories data; Dollar weak on dismal durable goods data and caution ahead of FOMC

Posted on July 27, 2016 at 2:53 pm GMT

Currency markets were relatively quiet ahead of the FOMC outcome later today. The Federal Reserve will conclude a two-day policy-setting meeting and is widely expected to keep rates on hold. But investors will look at the statement for clues into when the Fed will hike interest rates next. The US dollar was broadly weaker against its major counterparts. It came under pressure following a bigger-than-forecast drop in US durable goods orders in June which may spur some concerns about the [..]

Australian dollar sticks to 75 cents – what’s next?

Posted on July 27, 2016 at 1:43 pm GMT

The Australian dollar has been on a downtrend versus the US dollar since 2011, although to be fair, most currencies have been losing ground against the greenback in the last 2 years as well. It has been tempting for some to call a bottom around the 68-71 cents level, as a sharp reversal rally to 78 cents was triggered when those levels were tested. The May rate cut however, together with speculation that an additional cut could take place soon, [..]

Australian inflation falls to 17-year low but August rate cut looking less decisive

Posted on July 27, 2016 at 12:16 pm GMT

The rate of inflation in Australia fell to the lowest since 1999 in the second quarter, figures out today showed, as price pressures in the country continued to ease. CPI declined to 1.0% year-on-year in the three months to June, falling slightly short of estimates of 1.1% and down from 1.3% in the previous three months. The quarter-on-quarter rate met expectations though as CPI rose by 0.4% between the first and second quarters, which more than reverses the 0.2% drop [..]

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