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European Session – Sterling stabilizes as Theresa May likely to become Prime Minister

Posted on July 11, 2016 at 2:57 pm GMT

The broadly upbeat risk sentiment in the markets today led to a weaker yen and a decline in gold prices as demand for safe havens faded. The Japanese yen started weakening during the Asian session and continued falling throughout the European session to push the dollar up to a one – week high of 102.65 yen. The yen came under pressure on expectations of additional stimulus measures by Prime Minister Shinzo Abe after elections over the weekend resulted in Japan’s [..]

Abe election win boosts stimulus hopes; dollar back above 102 yen

Posted on July 11, 2016 at 11:20 am GMT

Japan’s ruling coalition between Prime Minister Abe’s Liberal Democratic Party and its allies won a near two-third majority in elections on Sunday for parliament’s upper house, giving the government a stronger mandate over its economic policies. The government already has a two-thirds majority in the lower house, and with the support of independents, is likely to secure two-thirds of the votes in the upper house too, which would help in passing constitutional changes. However, the government is expected to prioritise [..]

Asian Session – Dollar rallies to just below 102 yen on risk-on after Abe election win

Posted on July 11, 2016 at 8:05 am GMT

The dollar was back above the 101 yen level on Monday after briefly dropping below 100 yen on Friday following the US jobs report. There was a mixed reaction to the stronger-than-expected non-farm payroll numbers as the dollar initially rose after the data but quickly slipped back as traders resolved that the jobs rebound is unlikely to convince the Fed to raise rates in the near term. However, improved risk sentiment helped Asian equities post strong gains on Monday, while [..]

Technical Analysis – GBPUSD neutral in short term, downside bias remains

Posted on July 11, 2016 at 4:49 am GMT

GBPUSD remains under pressure since its big drop from 1.50 over two weeks ago. While the bigger picture is bearish, the pair is looking more neutral in the short term and is consolidating around 1.2950 after touching its lowest level in over 30 years at 1.2794 last Thursday. RSI is in oversold territory just under 30, which suggests that the market will likely consolidate at current levels or even see a correction to the upside before resuming its downtrend. Downside [..]

Week Ahead – First post-Brexit BoE meeting and slowing China GDP could signal fresh stimulus

Posted on July 8, 2016 at 2:52 pm GMT

The Bank of England will come in focus next week as it holds its first policy meeting following the shock referendum outcome when Britons voted to leave the EU. The Chinese economy will also come under the limelight once again as a flurry of data is released, including GDP growth figures for the second quarter. US inflation and retail sales data will also be watched. China GDP to slow further as exports continue to struggle China will start the week [..]

European session – Jobs number beats estimates but boost to dollar proves short-lived

Posted on July 8, 2016 at 2:46 pm GMT

The release of much better-than-expected jobs figures for June out of the United States put to rest fears that May’s weak report was the beginning of a serious slowdown in the US labor market. The net number of nonfarm jobs created reached 287 thousand during June against economists’ estimates of just 175 thousand. However, the previous month’s figure was revised down to 11 thousand from the original 38 thousand announcement. Unemployment climbed to 4.9% compared to the previous month’s 4.7%, [..]

Technical Analysis – NZDJPY looking less bearish but remains pressured below 50-DMA

Posted on July 8, 2016 at 9:30 am GMT

NZDJPY moved higher for a second day on Friday but its gains were not strong enough to shift the bias to positive. RSI is trending up but remains below 0 and the MACD is also in negative territory, suggesting the near-term bias remains negative, though weakened. Prices have been trading in a downward sloping channel since the beginning of the year and there was resistance today at the center of the regression channel at around 73.40. Further upside moves could [..]

Asian Session – Dollar slips towards 100 yen ahead of jobs reports; Oil slumps by 5%

Posted on July 8, 2016 at 8:29 am GMT

The US dollar came under pressure in Asian trading on Friday ahead of the all-important non-farm payrolls report out of the US later today. The June report is the first since the UK referendum to leave the EU and follows an unexpectedly weak report in May. Most analysts expect a strong rebound in June, which should help support the greenback. But in the meantime, the dollar remained confined below 101 yen and hit an earlier low of 100.24 yen. The [..]

European Session – Pound and dollar go into reverse; kiwi up sharply on RBNZ house price concerns

Posted on July 7, 2016 at 3:20 pm GMT

There was a modest improvement in risk appetite in Thursday’s European session but the pound and the dollar were unable to hold above key levels. European stocks however, bounced back strongly from yesterday’s sharp losses with many of the major indices up by over 1.5% in late session. Market sentiment was helped by the cautious tones of the US Federal Reserve and the European Central Bank. The Fed released its June meeting minutes yesterday, while the ECB published its June [..]

Technical Analysis – USDCAD consolidates after halting downtrend

Posted on July 7, 2016 at 9:04 am GMT

USDCAD has been consolidating since early May after breaking out of the downward trending channel. The downleg from 1.4689 to 1.2460 took prices below the 200-day moving average but with the recent move sideways, the medium-term outlook is looking increasingly neutral. The near-term bias is also neutral with the MACD flattening out around 0. The 23.6% Fibonacci level of the January-May downtrend capped prices at around 1.2980 earlier today. This is also where the 100-day moving average is converging, while [..]

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