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European Session – Euro tumbles to two-week low in $1.11 handle; sterling falls as Brexit risk weighs

Posted on June 16, 2016 at 2:46 pm GMT

Major central bank policy meetings were the main driver of currency market moves today. The dovish tone of the Federal Reserve statement after its policy meeting on Wednesday, combined with a steady Bank of Japan today, kept risk appetite damp and led to an impressive gain in the safe haven yen. The Bank of England and Swiss National Bank also met today and they too kept policy unchanged. The fact that all these central banks remained on hold was an [..]

A brief survival guide to trading FX during Brexit

Posted on June 16, 2016 at 2:03 pm GMT

Next week’s UK referendum on EU membership will be the defining risk event of the first half of the year. As such, market participants are readying themselves for a week of volatility and big moves in major asset classes and across financial markets. Central to this is Foreign Exchange, which is the world’s largest and most liquid market. Therefore, traders may find useful some suggestions of how markets might react in either a “leave” or “remain” outcome. First of all, [..]

Yen soars after Bank of Japan stands pat, raising odds of intervention

Posted on June 16, 2016 at 11:42 am GMT

The Bank of Japan kept monetary policy unchanged at its meeting today as it decided to continue assessing the impact of its massive asset purchase program and negative interest rates. The BoJ’s decision to hold policy steady comes despite the yen appreciating by 12% against the US dollar so far this year and inflation falling back to negative in recent months. In its statement, the Bank said Japan’s economy should continue on a “moderate expanding trend” as household and corporate [..]

Asian Session – Dollar slips below 104 yen after cautious Fed and steady BoJ

Posted on June 16, 2016 at 8:01 am GMT

The US dollar hit a 22-month low against the yen in Asian trading on Thursday as the Fed failed to signal a July rate hike, while the Bank of Japan held off from further easing. The greenback dropped to levels last seen in August 2014, touching a low of 103.54 yen. The euro was steadier though at around 1.1267 dollars. The Fed kept interest rates unchanged yesterday as expected, but sounded more dovish than in the last FOMC meeting in [..]

Technical Analysis – EURJPY tumbles to fresh 3-year low, tests 117

Posted on June 16, 2016 at 7:06 am GMT

EUR/JPY dropped to a new three-year low of 116.95 this morning. The long term trend has been clearly bearish since a year ago when prices started falling from the June 2015 peak of 141.04. The technicals are supporting a bearish bias as the 50-day moving average is below the 200-day moving average and both lines are falling. MACD is below zero in bearish territory. Currently the pair is testing the key 117.00 level. If there is a daily close below [..]

Fed keeps rates unchanged; still expects two hikes in 2016

Posted on June 15, 2016 at 8:39 pm GMT

The US Federal Reserve delivered no surprises today as it kept its benchmark interest rate unchanged at the end of its two-day policy meeting. As expected, the Federal Open Market Committee (FOMC) kept the federal funds rate unchanged at between 0.25%-0.50% for the fourth straight month. Market expectations of a rate hike in June had risen sharply after the release of the April meeting minutes in mid-May, which were surprisingly hawkish. However, expectations were pared back drastically after hugely disappointing [..]

European Session – Dollar slips below 106 yen as focus turns to Fed

Posted on June 15, 2016 at 3:11 pm GMT

Markets are steadier overall on the day and are now shifting their focus on the Federal Reserve which concludes a two-day meeting today with a policy announcement followed by a press conference with Chair Janet Yellen. There are no expectations of a rate hike at this FOMC meeting. The Fed raised its key overnight lending rate in December for the first time in nearly a decade to the current range of 0.25% to 0.50%. All eyes will be on the [..]

UK jobless rate falls to lowest since 2005 as wage growth edges up

Posted on June 15, 2016 at 12:46 pm GMT

The number of people unemployed in the UK fell by 20,000 to 1.67 million in the three months to April, the lowest since the three months to May 2008. The employment rate was unchanged at a record high of 74.2%. There were 31.59 million people in work in the three months to April – 55,000 more than the preceding three months. The drop in the number of jobseekers pushed Britain’s unemployment rate to 5.0% in the three months to April [..]

Asian Session – Yen pulls back as risk-off eases ahead of FOMC; euro pressured by negative bund yields

Posted on June 15, 2016 at 8:24 am GMT

Risk appetite improved in Asian trading on Wednesday, though Brexit fears continued to weigh on market sentiment. Asian equities attempted a rebound as most major indices shrugged off sharp losses in European stocks yesterday to turn positive in late Asian session today. The yen fell back against its peers as safe-haven demand eased but it remained not too far from Tuesday’s lows. The dollar edged up to 106.25 yen, having touched a low of 105.62 yen yesterday. Stronger-than-expected retail sales [..]

Technical Analysis – USDJPY pauses decline but bearish trend remains

Posted on June 15, 2016 at 6:59 am GMT

In the big picture USDJPY is bearish as the pair has made lower lows and lower highs since falling from the June 2015 peak of 125.84 to 105.54. The market is below the 50, 100 and 200-day moving averages, which are all downward sloping, and thus supporting the bearish bias. In the near term, the market is expected to pause its decline as downward momentum has weakened and the RSI has stopped sloping down and has approached oversold levels. To [..]

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