Markets did not go far in the last two sessions so our bias remains unchanged for the near-term. We see a nice upward reaction on USD Index from around 79.70 which is pointing for stronger USD if we consider a five wave rally and three wave retracement. That's an eight-wave cycle that signals for a move above 80.30 in this week while past week low is in place.
USD Index 30min…
Added by Gregor Horvat on October 8, 2013 at 9:42am — No Comments
UBS - "The dollar index DXY remains at the bottom of its 81-85 summer trading range. Ten year US Treasury yields have traded through 2.80% for the first time in two years as America's economy continues to recover. But stronger Eurozone and UK data at the same time is preventing the dollar benefiting from the dovish stance of the European Central Bank and the Bank of England.
Nevertheless, we think the Federal Reserve's policymaking remains the key driver of foreign exchange markets. With…
Added by Francesc Riverola on August 20, 2013 at 11:25am — No Comments
UBS - "The summer weakness of the dollar has extended further this month. The greenback ended the week around 1.33, 96, 1.55 and 0.92 against the euro, yen, pound and Swiss franc respectively. America's currency has been undermined by stronger data in the Eurozone, UK and China. But its current soft patch also reflects investors reducing positions and seasonally lower volumes in the currency markets. That suggests dollar weakness has been exaggerated. The Treasury market is also signaling…Continue
Added by Francesc Riverola on August 12, 2013 at 11:53am — No Comments
UBS - "Mansoor Mohi-uddin, Managing Director Head, Foreign Exchange Strategy at UBS Macro Research:
- During the course of this year our bullish view on the dollar has become more consensus as the Federal Reserve appears likely to be the first of the major central banks to exit unconventional monetary policy.
- But not all investors are long the greenback. American fund managers - the largest holders of dollar- denominated capital in the world - continue to have historically high…
Added by Francesc Riverola on August 7, 2013 at 3:30pm — No Comments
UBS - "Our bullish view on the dollar faces key tests in the week ahead. The Federal Open Market Committee meets. US GDP, ISM, payrolls and PCE inflation data are released. The European Central Bank holds its monthly meeting and the Bank of England Monetary Policy Committee also meets.
In the run up to next week's events, the greenback has weakened. US data remains mixed while Wall Street Journalist Hilsenrath suggested the Fed may sharpen its forward guidance. In contrast, Eurozone PMI…
Added by Francesc Riverola on July 29, 2013 at 2:36pm — No Comments
UBS - "Following Chairman Bernanke's semi-annual Congressional testimony, investors are likely to look ahead to the next Federal Open Market Committee meeting on July 30-31, manufacturing ISM data on August 1 and July's payrolls on August 2. In addition, the European Central Bank and the Bank of England will hold their next monthly meetings on August 1.
(...) Though financial markets interpreted Bernanke's testimony as dovish, the Fed remains on track to start tapering its asset…
Added by Francesc Riverola on July 22, 2013 at 2:42pm — No Comments
The FX market and commodities are still trapped in consolidation pattern while the US stocks futures are moving higher. A lot of USD pairs are showing very clean signs of a corrective price action, so it seems that USD will depreciate in the near future which means that EUR, GBP, CHF, AUD and CAD will most-likely gain.
On the EURUSD we are tracking two wave patterns, but both corrective. We however like the first wave count; straight move up to 1.3200. Intra-day traders/scalper will…Continue
Added by Gregor Horvat on July 16, 2013 at 8:13am — No Comments
Added by Francesc Riverola on July 13, 2013 at 1:22pm — No Comments
UBS - "The dollar is entering a perfect storm that should see the currency rallying this year to 1.20, 110, 1.41 and 1.03 against the euro, yen, pound and Swiss franc respectively.
First, June's payrolls shows the Federal Reserve is on track to start tapering its asset purchases from the September 17-18 Open Market Committee meeting. Second, the European Central Bank in contrast announced an important dovish shift in policy, signalling interest rates would remain at present levels or…
Added by Francesc Riverola on July 7, 2013 at 5:52pm — No Comments
Gold fell to a new low during Asian session with a delay reaction to strong US economic data released yesterday. Good US data means that FED is closer to tapering which is the reason for a sell-off on metals and stronger USD. EURUSD also reached new low at 1.3050 which could be wave five in 1 so corrective recovery may follow soon in wave 2 but remains unconfirmed as long as upper trend-line of a trading channel is in place. So for now pair remains in bearish mode for possible test of…Continue
Added by Gregor Horvat on June 26, 2013 at 8:42am — No Comments
EURUSD fell sharply lower last week from 1.3415 which we believe it represents impulsive decline. As we know, impulses show direction of a trend or change in trend, so we think that EURUSD has reached a top and that pair is headed lower, minimum in three waves even if decline will be corrective. As such, we labeled first leg down as wave 1 followed by wave 2 which may already be underway. Ideally wave 2 will find resistance around 1.3250.
Added by Gregor Horvat on June 25, 2013 at 7:00am — No Comments
UBS - "The bullish case for the dollar has been significantly boosted by Chairman Bernanke signaling the Federal Reserve is prepared to start slowing down its pace of asset purchases later this year and to freeze its balance sheet expansion altogether by the middle of next year. That is in line with our view that the Fed will be the first of the major central banks to exit unconventional monetary policy.
Unsurprisingly, higher yielding emerging market and commodity currencies have…
EURUSD reached new highs in this week around 1.3415 from where we have seen a sharp fall yesterday , clearly in impulsive fashion. As we know, impulses show direction of a trend or change in trend, so we think that EURUSD has reached a temporary top and that pair is headed lower, minimum in three waves even if decline will be corrective. We will be tracking A-B-C legs to the downside. Pair could hit 1.3150 in the next few trading days. …
EURUSD reached new high yesterday so we assume that wave 4 is already complete and that wave 5 is underway which has room for further gains, towards 1.3500 in sessions ahead. Meanwhile 1.3318 support must hold, otherwise we would assume that top is in place. From a larger perspective we need to keep in mind that wave 4 was a triangle and that triangle always occur prior to the final move of the larger pattern, which means that current leg up will sooner or later complete a bullish…Continue
Added by Gregor Horvat on June 19, 2013 at 7:51am — No Comments
UBS - "USDJPY remains the focus of the currency markets. Over the last two weeks the flush out of positions in the currency pair and the Nikkei has been savage, causing investors to unwind other dollar longs against the euro, pound and Swiss franc. In contrast, the fundamentals supporting a stronger dollar this year remain intact.
(...) most of the forty clients we met this week in France, Sweden and Switzerland also still favour the dollar this year. Longs have clearly been strongly…
UBS - "In the week ahead, UBS Economics forecasts stronger than expected US ISM and payrolls releases. That is set to make investors more fearful of carry trades being unwound. As a result the dollar is likely to continue rallying against emerging market and commodity currencies, rebound against the euro and pound, and should start to recover lost ground against the Swiss franc and yen. This week's key points for currencies are:
- firm US data to pressure risk trades, favour…Continue
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In this environment opening and closing positions quickly is a popular method which is known in extreme cases…Continue
UBS - "Despite the volatile moves suffered by financial markets particularly the Nikkei, we think the key trend in currency markets of a rising dollar remains intact.
(...) For now the focus of the currency markets will remain on Japan. Bank of Japan Governor Kuroda will speak on Sunday and again on Wednesday. In addition the central bank will meet investors also on Wednesday to discuss the Japanese bond and equity markets. If Kuroda and his officials succeed in lowering volatilty in…
Added by Francesc Riverola on May 26, 2013 at 8:00am — No Comments
UBS - "The dollar remains our favoured currency for 2013. The US economy is likely to expand more than its peers. The Federal Reserve is set to exit uncoventional monetary policy before other major central banks. Dollar diversification by central bank reserve managers and sovereign wealth funds is subdued, and America's shale energy revolution is cutting its current account deficit. Our bullish view on the greenback has become more consensus now. But if the dollar does embark on a multi-year…Continue
Added by Francesc Riverola on May 20, 2013 at 5:28pm — No Comments
Brown Brothers and Harriman - "The dramatic sell-off of the Australian dollar is the latest of a series of price developments that have surprised the market. (...) The Australian dollar was the market's darling. It was an accessible even if not perfect way to get exposure to China and its vociferous demand for commodities. It was one of the few triple-A rated countries left standing after the financial crisis. Its interest rates were relatively higher in an environment in which there was a…Continue
Added by Francesc Riverola on May 16, 2013 at 1:55pm — No Comments