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Technical Analysis – EURUSD maintains bearish trend after break below key 1.10 level

Posted on July 25, 2016 at 6:58 am GMT

EURUSD maintains a bearish outlook as its recent downside trajectory from 1.11 favours further downside. The break below the critical 1.10 level last week supports the bearish case with scope to target the June low of 1.0909. Technical indicators are also highlighting the bearish bias. RSI is trending down and is below 50 which indicates downside momentum in the market. The key psychological level at 1.10 is now acting as key resistance but above this level there is strong resistance [..]

European Session – Pound tumbles after PMI points to contraction in economic activity

Posted on July 22, 2016 at 2:44 pm GMT

The main news item in today’s European session was the release of the Markit PMI business surveys for a number of developed countries. The Eurozone PMI beat expectations on the composite level, as it fell to only 52.9 compared to 52.5 expected by economists. The previous month’s figure was 53.1. Therefore it appeared that Brexit had only a modest negative effect on Eurozone businesses. In Germany, services’ PMI was much stronger-than-expected, which showed solid domestic demand. Manufacturing did less well [..]

Week Ahead – Hopes high for BoJ stimulus; FOMC and Q2 GDP also eyed

Posted on July 22, 2016 at 1:48 pm GMT

Expectations have been mounting that the Bank of Japan will launch fresh stimulus measures next week but the Fed will likely stay put. It will also be busy on the data front for Japan and the US, while second quarter GDP data for the Eurozone, the UK and the US should also attract attention. Will the BoJ pull the trigger? Starting the week on Monday, trade figures for Japan are expected to show a further deterioration in exports in June. [..]

Technical Analysis – AUDJPY in neutral bias above 50-DMA

Posted on July 22, 2016 at 9:23 am GMT

AUDJPY has been stuck in a neutral range after being unable to make significant headway above 80.60. Prices have been moving within the Ichimoku cloud since the rebound from the June 24 low of 72.41 fizzled out. The neutral bias is underlined by the sideways moving 50-day moving average but with RSI just above neutral ground, there is still a slight positive momentum. If this positive momentum strengthens, AUDJPY will likely meet resistance at around 80.60 where it has struggled [..]

Asian Session – Dollar eases as risk rally cools; Kiwi and aussie steadier after recent slide

Posted on July 22, 2016 at 8:18 am GMT

The US dollar remained not too far from yesterday’s lows when it slid following reports that the Bank of Japan governor has ruled out helicopter money to ease Japan’s economic woes. Speculation that the Bank of Japan would engage in helicopter money had sent the yen lower in recent days and yesterday’s denial dampened expectations of any drastic measures being announced at the Bank’s policy meeting next week. The news also put a halt to the risk rally that had [..]

European Session – Euro see-saws after Draghi says Brexit shock ‘contained’; Yen up on Kuroda remarks

Posted on July 21, 2016 at 3:06 pm GMT

The euro saw some volatility in Thursday’s European session after the European Central Bank maintained its existing outlook on the Eurozone economy following its first policy meeting after June’s EU referendum outcome in the UK. Many analysts had expected the ECB to warn of a possible increase to the downside risks to the euro area as a result of Britain’s decision to leave the EU. However, speaking at today’s press conference after the meeting, ECB President Mario Draghi said financial [..]

Technical Analysis – GBPUSD supported by 10-DMA; bias still bearish

Posted on July 21, 2016 at 9:22 am GMT

GBPUSD has been losing momentum for the past week as indicated by the stochastics chart despite some upward attempts. Prices are being supported by the 10-day moving average with immediate support coming at around 1.3160. The near-term bias remains bearish with the MACD deep in negative territory. Following the June 24 plunge, prices have been unable to advance much past the 1.35 level. A break above this resistance level is needed to create a sustained positive momentum. With the stochastics [..]

Asian Session – Dollar breaks above 107 yen; Kiwi pressured by RBNZ outlook

Posted on July 21, 2016 at 8:18 am GMT

Improved risk sentiment helped the dollar higher against the yen, while stimulus talk continued to pressure the Japanese currency on Thursday. The dollar broke above 107 yen for the first time in six weeks as Japan’s government said today it is planning a fiscal stimulus package worth 20 trillion yen. The figure is double the initial sum of 10 trillion yen that was previously mentioned. Most analysts are now with the view that the Bank of Japan will accompany the [..]

Fed may rethink rate pause if stocks and data keep looking up

Posted on July 20, 2016 at 2:57 pm GMT

There has recently been some renewed optimism that the Federal Reserve could get up from the fence it has been sitting on since December of last year. As can be seen from the chart of the 2-year Treasury yield, a gauge of short-term interest rate expectations for the next 2 years, expectations have recovered to near pre-Brexit levels. The 2-year yield has managed to claw back to 70 basis points after dropping to around 0.5% in the immediate aftermath of [..]

European Session – Commodities sag as dollar extends gains; pound boosted by BoE survey

Posted on July 20, 2016 at 2:49 pm GMT

Commodity prices fell sharply in today’s European session as the US dollar continued its advance against most major currencies. Sentiment for the US currency appears to have turned bullish in recent days after a run of solid US data put the prospect of a Fed rate hike at some point in 2016 back on the table. The dollar rose to its highest since June 24 against the yen, reaching an intra-day high of 106.71 yen in late European session. This [..]

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