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European Session – Pound extends gains to $1.47, euro touches 2-month low, oil hits 7-month high

Posted on May 25, 2016 at 3:05 pm GMT

The pound extended gains versus the dollar again today to reach the $1.47 handle. The main catalyst behind sterling strength is the latest Brexit poll by Survation which showed 44% of respondents would vote to stay in the EU compared with 38% who would seek to leave. Recent polls have been indicating a rise of those in favour in remaining in the bloc and this diminished concern of a Brexit vote at the June 23 referendum and this has been [..]

Bank of Canada keeps rates on hold but expects GDP hit from wildfires

Posted on May 25, 2016 at 2:57 pm GMT

The Bank of Canada kept its overnight rate target unchanged at 0.5% today at its May policy meeting in a widely expected move. The Bank has held rates at 0.5% since July 2015 even though Canada’s economy has been struggling to adjust to the collapse in oil prices. The Canadian economy, which was among the few advanced economies to escape the global financial crisis of 2008 mostly unscathed, has been hit hard by the plunge in crude oil prices. The [..]

Technical Analysis – EURGBP looking increasingly bearish as it tests 0.76

Posted on May 25, 2016 at 9:41 am GMT

EURGBP hit a near 4-month low of 0.7601 earlier today as momentum turns increasingly bearish for the pair. RSI has recovered slightly after hitting oversold level but the MACD chart points to further downwards pressure to come for EURGBP in the near term. Prices have retraced about 44% of the November-April upleg from 0.6982 to 0.8116 and further downside moves would take the pair towards the 50% Fibonacci level at 0.7550. A break below this level would threaten the longer-term [..]

Asian Session – Dollar pares sharp gains; Oil approaching $50 at 7-week high

Posted on May 25, 2016 at 8:16 am GMT

The US dollar pared some of yesterday’s sharp gains when it rose on the back of solid US housing data. The dollar index climbed to a two-month high of 95.66 at the start of today’s Asian trading before easing to around 95.55 in late session. Strong gains in European and US equities on Tuesday helped risk appetite and Asian equities were also in positive territory today. The yen fell back as risk aversion faded but the currency was also weighed [..]

Technical Analysis – EURJPY tests key Fibonacci level, downside pressure persists

Posted on May 25, 2016 at 7:21 am GMT

EURJPY failed to sustain the break above the key 124 yen level. The correction from 121.47 (which was the lowest level since March 2013) was brief and prices reversed back down into the 122 handle. RSI is in bearish territory below 50, suggesting further downside risk. MACD also remains in bearish territory. Apart from resistance at 124.00, the market is being capped by the 50-day moving average. As long as prices remain below this, then downward pressure will likely persist, [..]

Technical Analysis – GBPJPY attempts to break above cloud

Posted on May 24, 2016 at 2:51 pm GMT

GBPJPY reversed the previous day’s losses to rise sharply on Tuesday as it attempted to break above the Ichimoku cloud for the first time since December. The near-term bias is positive as RSI is trending up and with further scope for gains as it’s still below 70 (overbought level). If prices continue to head higher, there’s likely to be resistance from the 100-day moving average at around 161.40. A break above the 100-day moving average would strengthen the upside momentum. [..]

European Session – Sterling outperforms on new Brexit poll, dollar firms up on Fed rate hike expectations

Posted on May 24, 2016 at 2:39 pm GMT

The British pound was the top performing G10 currency so far today, making a notable move higher as the “remain” camp gains momentum. The latest Daily Telegraph poll showed supporters of the UK remaining in the EU has a 13 percentage-point lead over those favouring Brexit. Sterling rallied against the dollar to reach a high of $1.4621 while the euro fell to a 3-1/2 month low against the pound at 76.32 pence. Aside from the favourable Brexit polls, the pound [..]

German growth highest since 2014 but may not hold according to ZEW survey

Posted on May 24, 2016 at 11:15 am GMT

Germany’s economy expanded at the fastest pace in two years in the first three months of the year. GDP growth was confirmed at 0.7% quarter-on-quarter during the January-March period according to the second estimate released today. This represents a marked improvement on the average rate of 0.3% seen in 2015. Growth was led by private consumption and construction investment, which contributed 0.2% each to the GDP growth in the first quarter. Also making a strong contribution was higher government spending [..]

Asian Session – Dollar steady as yen holds on to gains; commodity currencies slip

Posted on May 24, 2016 at 8:07 am GMT

Commodity-linked currencies slipped in Asian trading on Tuesday as commodity prices were weighed down by the strong dollar. The Australian dollar was one of the worst performers as it was further weighed by comments by the RBA Governor Glenn Stevens earlier today. Speaking in Sydney, Stevens reiterated the central bank’s commitment to the inflation target band of 2-3%, adding that inflation in Australia is currently “a bit too low”. The comments increased the prospects of further rate cuts, sending the [..]

Technical Analysis – USDCAD rises to 7-week high

Posted on May 24, 2016 at 7:13 am GMT

USDCAD rose to a fresh 7-week high early on Tuesday at 1.3176. RSI is trending upwards and has not entered overbought territory yet, so there is room for further upside. The market is close to the April 4 high of 1.3217. If it is surpassed, there is scope to target 1.3310, which is the 38.2% Fibonacci retracement level of the downleg from 1.4689-1.2460. From here, the aim will be the 200-day moving average at 1.3355. Alternatively, if the market reverses [..]

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