"The BoE decision on Thursday will probably be a non event as the BoE has already played several 'tightening' cards over the past month with the quarterly inflation report and FLS tweaks; better to focus on the Autumn Statement instead. However, with sterling advancing on all fronts to multi-year highs and persistent doubts over the economy's ability to continue outperformance, some investors are starting to look for exit strategies. We have some sympathy with this view, but caution against…Continue
Added by Daologic on December 5, 2013 at 6:30am — No Comments
"FX Set-up: The Canary in the Taper “Coal Mine”
Fed taper concerns continue to simmer. This is evident in the fact that US 10-year yields continue to hold…Continue
Added by Daologic on December 4, 2013 at 12:41pm — No Comments
Wed’s strong rejection of the 13 day moving average deepened yesterday. But although a 2nd down day in a row was posted, selling pressure slowed however and was unable to test this month’s base, or the key 50% correction point.
Rallies remain temporary but the bounce from above .8300, and modest Asian demand, means intraday sentiment is assessed as positive with potential for a bounce to .8352/70 area.…Continue
Added by Alan Collins on November 29, 2013 at 7:20am — No Comments
Tuesday’s report highlighted the stalling of Monday’s setback at a Marabuzo line created Thursday. This pattern again proved its worth as it became a platform for renewed buying. Although the extent of the resulting upside was not enough to produce a new weekly high, it was enough, coupled with the support of the 13 day moving average and positive momentum, to turn sentiment positive. The market has potential to 1.6240, 1.6260 and 1.6307.…Continue
"(...) The euro-yen and sterling yen crosses capture the theme. Both are trading at multi-year highs, even though the dollar remains a few percentage points below the high it set against the yen in May.
The euro traded down to almost the support near GBP0.8300, but sterling is at 3-year highs…Continue
Added by Daologic on November 25, 2013 at 5:35am — No Comments
EURUSD BEARISH With bearish conditions intact, any recovery will be limited to resistance at 1.3579. Support is at 1.3400, a break below this would expose 1.3293.
USDJPY BULLISH Further support developed on Thursday and the pair is trading within striking distance of the resistance at 101.53, a break through which would open 103.74. Support is at 99.57.
GBPUSD NEUTRAL There is an important resistance at 1.6260, a break through which would be positive as it would indicate more upside…
" There are four main forces that continue to shape the investment climate: Fed tapering, further action by the ECB, Japan’s third arrow, and China’s economic stabilization
- Japan reported a much larger than expected trade deficit
- Bernanke's comments late…
Added by Daologic on November 20, 2013 at 12:06pm — No Comments
"EURUSD BEARISH As long as resistance holds on closing basis at 1.3501, there's scope for resumption of weakness to test the support at 1.3293 and then 1.3166. Only a close above 1.3501 would prolong the recovery to 1.3564.
USDJPY BULLISH The pair extends its strength approaching resistance at 100.61, a break above which would open 101.53. Support is at 99.11 ahead of 97.62.
GBPUSD NEUTRAL The next main resistance is at 1.6260. Support is at 1.5989.
USDCHF BULLISH While support…
"The euro has recorded higher lows for six consecutive sessions It tested the $1.35 in the second half of last week, but did not manage to close about it. This corresponds to a retracement objective of the nearly 5.5 cent decline beginning Oct 25. Assuming this level is convincingly breached, we see scope for the euro to rise 1% next week toward $1.3630. A move below $1.34…Continue
Added by Daologic on November 18, 2013 at 7:47am — No Comments
Although the sequence of 2 down weeks ended last week, it is the weakness of the rally that is assessed as more important. Profit taking demand over the 1st two days of last week took EURGBP to the top of the weekly Ichimoku Cloud, back inside the daily Cloud and above the key 13 day m.a.
But this proved temporary with selling renewed in the last 3 days and only minor net gains posted by the close. This price action leaves sentiment mildly negative and we're looking for a…Continue
Added by Alan Collins on November 18, 2013 at 7:09am — No Comments
Yesterday saw initial downside attract buyers. The resulting improvement kept GBPUSD above the key 13 day moving average but lacked the momentum to sustain levels beyond the Marabuzo line created on Oct 29th. With the highs given up, minor net movement reflects a degree of investor uncertainty but intraday signals indicate scope for the upside failure to deepen with potential for 1.6049 or even 1.6018.…Continue
Added by Alan Collins on November 15, 2013 at 7:17am — No Comments
"Dollar strength has extended into the European session, as the retracement after the pre-release of Yellen’s speech yesterday—and the related spike in EUR/USD—continues. The euro, however, is managing to outperform all other G10 currencies, while the market continues to be focused on US events.…Continue
Added by Daologic on November 14, 2013 at 12:05pm — No Comments
"There are two large cross-currents impacting sterling at the moment. Here's our assessment of each and ultimate implications for GBP.
On the positive side, the economy is outperforming even the highest of expectations. There's been little payback to the unusually warm…Continue
Added by Daologic on November 13, 2013 at 10:05am — No Comments
"(...)On balance, we see risk that the dovish October inflation data reported yesterday could have thrown the market off the scent. While it remains the case that the BoE will be in no rush to hike interest rates, we expect that the combination of a wobble in inflation expectations, stronger than expected activity data and the better tone of labour data will allow the Bank to hint that the first rate hike will come a…Continue
Added by Daologic on November 13, 2013 at 10:00am — No Comments
(...)The BoE's Forward Guidance will be important for GBP's reaction to today's events. This will be most obvious in the press conference. Crucial here is the fact that the policy stance in the UK is driving a domestic recovery that's countercyclical to an apparently weak global business cycle. This points to a tightening of monetary conditions, a stronger currency and a deteriorating Balance of Payments position. This is a problem if it's not driven by supply-side reforms and restructuring.…Continue
Added by Daologic on November 13, 2013 at 9:10am — No Comments
"For sterling, it appears that Wednesday's inflation report could only offer surprises to the upside. The ongoing data surge is becoming rather difficult to ignore and any minor hints at an adjustment to forward guidance would be enough to encourage the currency to rebound. Even if the BoE stands still, given the broader direction most other central banks are headed, GBP will likely remain resilient in the short-term. The exception of course remains GBPUSD, where the market appears to be…Continue
Added by Daologic on November 13, 2013 at 6:30am — No Comments
Markets became more active after yesterday’s partial holiday in North America, and more USD gains has been the broad theme that’s been helped along by a number of different factors. From a macro perspective soft inflation data out of Sweden and the UK pressured the SEK and GBP, and the surge in the Nikkei helped lift the dollar…Continue
Added by Daologic on November 12, 2013 at 1:00pm — No Comments
FX: Our US economics team estimates that the fiscal episode will trim growth slightly, but should not have a more direct persistent impact. However, the indirect impact has been USD-negative for FX markets
in helping to push off Fed tapering that much longer. We remain fairly optimistic about the medium-term prospects for the U.S. economy, which we believe will be positive for USD.
Rates: The market has already pushed out tapering expectations and priced in a dovish…Continue
Added by Daologic on November 11, 2013 at 11:37am — No Comments
After the downward moves on Friday,the market appeared gaining levels during early japanese session.Suddenly EURO made the extended downward move below initial low and confused the traders that there could be further sell off.But in 30 min they gained the levels to initial low 1.3480 and stayed there for another 1:30 Hrs and gained above initial low .A perfect example of extended move.This has to be alternate with upward intentional move - so we can predict their moves before…Continue
Added by Dr. Sivaraman on November 4, 2013 at 7:12am — No Comments
"(...)Overall, the acceleration in UK economic growth reinforces the sense that a more sustainable recovery is taking root. 2013 has brought something of a normalisation in the data, in contrast to the previous period between 2011-12 where there were short bursts of growth but expansion was rarely sustained. The Q3 outturn leaves the UK on track for full-year expansion of close to 1½%, still a sub-trend pace but the fastest expansion since 2010 (1.6%) and the first year where all four…Continue
Added by Daologic on October 25, 2013 at 9:55am — No Comments