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Asian Session – Aussie down on weak inflation; Stimulus expectations push yen lower again

Posted on July 27, 2016 at 7:57 am GMT

Hopes of fiscal and monetary stimulus in Japan raised risk sentiment in Asian trading on Wednesday as the yen reversed yesterday’s gains to head lower again. Markets were boosted after Japan’s Prime Minister, Shinzo Abe, reportedly said today that the planned fiscal stimulus package will total more than 28 trillion yen. The figure is higher than earlier reports of 20 trillion yen and is said to include measures to counter the negative impact from Brexit. There were also rumours that [..]

Technical Analysis – USDCAD upside pressure weakens around 1.3240

Posted on July 27, 2016 at 7:08 am GMT

USDCAD remains bullish in the short term but upside pressure has weakened. The recent rally from the 1.27 area was curbed at 1.3241. Momentum has not turned negative yet and RSI is still in bullish territory above 50, while MACD is above zero. There is scope for prices to rise towards the 200-day moving average at 1.3307. This would be seen a strong resistance area though. Downside moves should find support in the 1.30 area and at the 50-day moving [..]

European Session – Dollar reclaims 104 yen handle after strong US home sales, consumer confidence data

Posted on July 26, 2016 at 2:55 pm GMT

Sterling made a big turnaround after it tumbled in the early European session against the dollar and rose from a 2-week low of $1.3055 to $1.3174. The pound weakened in reaction to an FT report that Bank of England MPC member Martin Weale was in favour of immediate stimulus to boost growth in the UK economy, changing his prior position from last week. The euro oscillated around the key $1.10 level versus the dollar. In the absence of Eurozone data, [..]

Crude oil under renewed downside pressure as oversupply worries resurface

Posted on July 26, 2016 at 2:25 pm GMT

Crude oil prices have come under increased selling pressure in recent days as worries about the oversupply in the market have resurfaced. Despite a series of disruptions to supply in recent months which pushed prices to fresh yearly highs in June, concerns that demand has not picked up as fast as had been expected have led analysts to re-assess their outlook. US crude fell to its lowest since 2003 back in February this year, touching a low of $26.05 a [..]

Asian Session – Yen gains in cautious trading ahead of FOMC

Posted on July 26, 2016 at 7:54 am GMT

The yen advanced higher in Asian trading on Tuesday as caution set in before the Fed’s two-day FOMC meeting gets underway later today. Reports about the possible size of the Japanese government’s fiscal stimulus package added to the risk-off sentiment today. Investors were disappointed with the size of direct public spending by the Japanese government into the economy, even though it has reportedly been doubled from 3 trillion yen to 6 trillion yen. The dollar sank against the yen after [..]

Technical Analysis – USDJPY reverses and resumes bearish bias

Posted on July 26, 2016 at 7:13 am GMT

USDJPY has fallen sharply early on Tuesday, heading towards support at 103.80, which is where the 21-day moving average lies. The market reversed back down from the peak of 107.48 reached last week. In the bigger picture, USDJPY maintains its bearish trend as prices continue to fall within the downward channel. RSI has broken below 50 and has dipped into bearish territory, indicating the downside bias of the market. There is scope to target the July 8 low of 99.98. [..]

European Session – Sterling pressured after discouraging CBI survey; weak oil prices weigh on loonie

Posted on July 25, 2016 at 2:46 pm GMT

There was little real direction in the currency markets during the European Session as a light economic calendar today and big central bank meetings later this week resulted in little activity. Investors were being cautious ahead of the scheduled policy meetings of the Fed and the Bank of Japan on Wednesday and on Friday respectively. During the European session the pound fell against the dollar from a session high of $1.3163 to touch a session low of $1.3093 following a gloomy CBI [..]

Technical Analysis – Gold stuck in neutral bias as momentum wanes

Posted on July 25, 2016 at 1:33 pm GMT

Gold has slowly drifted lower from its 1¼-year high of 1375 at the start of the month to move towards the 38.2% Fibonacci retracement level of the May-July upleg from 1199.64 to 1375.00. The 23.6% Fibonacci level has proven a key resistance area around 1335 in recent days, with prices struggling to make much headway above this level. Both the RSI and the MACD are pointing to continued waning of momentum, with the RSI dipping just below neutral ground, though [..]

German Ifo points to limited Brexit impact; euro spurred higher

Posted on July 25, 2016 at 10:14 am GMT

The Ifo business survey, which measures sentiment across Germany, beat expectations in July as business confidence deteriorated only slightly in the aftermath of the UK vote to leave the EU. The business climate index fell marginally from 108.7 in June to 108.3 in July, confounding expectations that it would drop to 107.5. The uncertainty created by Brexit appears to have cast some cloud over the future outlook as the Ifo expectations index dipped from 103.1 to 102.2 in July. But [..]

Asian Session – Markets steady ahead of key risk events; commodities weighed by strong dollar

Posted on July 25, 2016 at 7:47 am GMT

Market sentiment was mixed on Monday as there was still some risk appetite prevailing from last week but a light calendar day and cautiousness ahead of key central bank meetings kept traders on edge. A statement by G20 finance ministers over the weekend saying that they will use “all policy tools” to achieve stronger global economic growth helped support risk sentiment at the start of Asian trading on Monday. The dollar got off to a strong footing, climbing to a [..]

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