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European Session – Sterling breaks at 2-month low following new Brexit poll

Posted on June 14, 2016 at 2:49 pm GMT

Sterling fell below $1.4100 and touched a new 2-month low today from risks of a Brexit as recent polls show support for the UK to leave the European Union. The referendum vote is just nine days away. Meanwhile, the UK’s best selling “Sun” newspaper indicated today that it backs the “leave” campaign. The pound dipped to $1.4095, the lowest level since April 14 as the latest TNS poll today showed 47% for “leave” versus 40% for “remain”. The weaker pound [..]

Solid US retail sales fail to move the dollar

Posted on June 14, 2016 at 2:24 pm GMT

Retail sales in the United States rose more than expected in May, easing fears that the surge seen in April would be a short-lived improvement. May retail sales were up 0.5% month-on-month according to the advance report, beating estimates of 0.3%. It follows a jump of 1.3% in the previous month, which broke a series of weak readings since the end of 2015. On a 12-month basis, sales were 2.5% higher than in May 2015. The biggest monthly gain came [..]

Technical Analysis – Gold rally pauses but holds positive bias

Posted on June 14, 2016 at 10:08 am GMT

Gold has retraced almost 80% of the May decline from its year-to-date high of 1303.6 to 1199.64, finding resistance around the 78.6% Fibonacci level. Prices have rallied by around 7% from the May 30 low of 1199.64, shifting the near-term bias back to positive. Looking at the momentum indicators, RSI has dipped slightly downwards after today’s pause but remains firmly in positive territory. The MACD also suggests there is scope for further gains with the histogram rising back above 0 [..]

Asian Session – Yen extends gains on Brexit fears as pound slides

Posted on June 14, 2016 at 8:08 am GMT

The yen extended its gains on Tuesday as uncertainty over key upcoming risk events continued to attract flows to safe havens. The yen’s strength prompted Japan’s finance minister to again issue a fresh warning to the markets against speculative moves, saying that the government will respond “firmly” if necessary. Further supporting the Japanese currency today was an upward revision to April’s industrial output. Industrial production was revised up from the preliminary estimate of 0.3% month-on-month to 0.5% in the final [..]

Technical Analysis – GBPCHF falls to one-month low, turning increasingly bearish

Posted on June 14, 2016 at 7:32 am GMT

GBPCHF fell to the lowest level in a month on Tuesday to reach 1.3598. The market has retraced almost all of the recent bounce from 1.3413 to 1.4611 (April to May rise). After briefly breaching the 200-day moving average to peak at 1.4611 on May 26, prices fell back down. The fall below the 50-day and 50% Fibonacci at 1.4014 accelerated a decline and prices have now broken below the 78.6% Fibonacci level of 1.3672. The daily RSI is bearish [..]

European Session – Sterling see – saws on Brexit concerns, swings from $1.41 to $1.43

Posted on June 13, 2016 at 2:47 pm GMT

A growing sense of uneasiness ahead of key risk events has dominated markets today, as the Federal Reserve and Bank of Japan meet this week. However, the biggest event that would likely impact markets the most and one that is causing a lot of risk aversion would be the EU referendum vote in the UK that is due in ten days. The pound has been under pressure lately due to uncertainty over the outcome of the vote. Sterling volatility jumped [..]

Technical Analysis – GBPAUD turns bearish, dropping below moving averages

Posted on June 13, 2016 at 1:33 pm GMT

GBPAUD hit a one-month low of 1.9065 earlier today but has since rebounded back above the 61.8% Fibonacci level. The pair has now retraced just less than 61.8% of the April-May upleg from 1.8292 to 2.0533, dropping below the moving averages and shifting the bias to negative in the process. The 61.8% Fibonacci level at around 1.9145 is the immediate support area for prices. But holding above this support may prove difficult as RSI is fast approaching oversold levels and [..]

Fog of Brexit could get thicker before it lifts if “leave” wins the day

Posted on June 13, 2016 at 1:03 pm GMT

It is a well-known rule that markets dislike uncertainty. The June 23 referendum whether or not Britain should remain in the European Union, represents a major risk event in itself. However, it is possible that should the “leave” campaign prevail, it will open up a big range of options for the United Kingdom. Of course the UK economy is a resilient, flexible one and in the long-run a new stable equilibrium will emerge. The short- and medium-run could be messy [..]

Chinese stocks tumble over 3% after investment slows to lowest since 2000

Posted on June 13, 2016 at 11:38 am GMT

Shares in China posted their sharpest daily drop since February as concerns over slowing growth, as well as heightened fears of a UK exit from the European Union weighed on the stock market today. The health of China’s economy was back in focus on Monday following the release of key economic indicators. Fixed-asset investment in urban areas rose by 9.6% on an annual basis between January and May, the lowest since 2000 and below expectations that it would stay unchanged [..]

Asian Session – Yen soars on Brexit fears as Asian equities slump

Posted on June 13, 2016 at 8:28 am GMT

Risk aversion dominated the market mood on Monday as Brexit fears intensified and as investors geared up for central bank meetings by the Fed and the Bank of Japan later in the week. Asian stock markets suffered sharp losses today with Australia’s ASX 200 index closing down 0.9% and China’s Shanghai SE Composite down 1.6%. However, Japan’s Nikkei 225 index was one of the worst performers as it ended the day 3.5% lower. The soaring yen and disappointing data out [..]

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