"EURUSD BEARISH While resistance holds at 1.3639, the risk is for resumption of downtrend as bearish conditions are in place. Support is at 1.3552 ahead of 1.3458.
USDJPY NEUTRAL The latest recovery suggests extension of the broader consolidation phase. Resistance is at 103.10 and 103.65. Support is at 100.76 ahead of 99.97.
As a reaction to the recent sharp sell-off which stalled just above main support at 1.6220, there’s scope for upside in the near-term.…
Added by Daologic on February 10, 2014 at 10:00am — No Comments
UBS - "In the week ahead Federal Reserve Chairwoman Yellen appears before Congress and Bank of England Governor Carney will present the February Inflation Report. (...) policymakers in both the US and UK are likely to signal interest rate increases will still only start from next year.
That will temper rallies in the dollar and pound. But we expect the greenback still to outperform this year as the Fed steadily cuts its pace of quantitative easing. The Fed's slowing balance sheet…Continue
Added by Francesc Riverola on February 10, 2014 at 9:33am — No Comments
"The Yen-Independence Mirage
Still exposed to FX after all
Japanese investors have been slow to embrace FX risk in the wake the BoJ's QQE program - at least that's the common interpretation of official portfolio flow data.
Sizeable flows into foreign bonds have so far failed to materialise. Japanese investors have even sold overseas stocks and ploughed the proceeds back into domestic equities. Flows into Toushin funds show where the money is headed, and…
Added by Daologic on February 5, 2014 at 8:34am — No Comments
UBS - "In the next three months the Federal Reserve, European Central Bank and the Banks of Japan and England will all publish new economic projections. The upcoming forecast rounds will be important for currencies as they have the potential to shift the course of monetary policy across the major economies.
(...) This week's key points for currencies are:
- stronger data challenging Fed's forecasts
- ECB to keep explicit easing bias in the week ahead
- Japanese CPI…
Added by Francesc Riverola on February 3, 2014 at 11:46am — No Comments
The bearish development on Friday was a close below retracement support at 1.3524. This suggests more downside in the near-term with next support at 1.3400 ahead of 1.3296. Resistance is at 1.3573.
USDJPY NEUTRAL The pair has been consolidating over the past few weeks, with support at 101.63 ahead of 99.96. Resistance is at 103.44 ahead of 104.84.
The pair has been correcting and downside should be limited as bullish conditions persist. Strong…
Added by Daologic on February 3, 2014 at 8:56am — No Comments
"Act III, Scene I
The FX market’s most liquid currency pair does not fall easily. In 2010, it took the threat of a Greek sovereign default to trigger a sharp decline in EURUSD. In 2012, the inconclusive outcome of the first of Greece’s two general elections did the damage. This time around, the threat of Eurozone deflation – and the policy response which might be provoked to avoid it – has the potential to push EURUSD closer to our end- 2014 forecast of 1.25. To be clear, UBS economics…
The ECB, BoE and RBA meet but no major changes are expected anywhere. We see the RBA sounding 'less easy' due to recent inflation readings, but the ECB may come under pressure to act again in light of the soft flash CPI result. US payrolls will be the key data release and jobs reports will also be out in New Zealand and Canada.
China's official PMIs will be the focus to start the week after HSBC PMI equivalent signalled a weakening outlook. EM jitters could be…
Added by Daologic on February 1, 2014 at 8:15am — No Comments
"EURUSD NEUTRAL MACD has breached the zero line in favour of the bulls. Potential test of resistance at 1.3746 ahead of 1.3893. Support is at 1.3623.
USDJPY NEUTRAL The much expected recovery has finally commenced as the pair tests resistance at 103.67, ahead of 104.84. Support is at 102.078.
As bullish conditions persist, there’s further upside potential to resistance at 1.6747. A break above which would open the way to 1.7043. Support is at 1.6447 ahead of…
Added by Daologic on January 29, 2014 at 7:29am — No Comments
"A question of when, not if.
There has not been a policy rate adjustment in New Zealand since March 2011, when a 50bp ‘insurance cut’ followed in the wake of the Canterbury earthquake.
A lot has changed since, and the case for a rate hike in the coming weeks seems compelling: CPI is moving back to target and rising fast; business confidence is running high; the terms of trade are still elevated. House prices continue to boom too, despite cooling measures introduced in October – and…
Added by Daologic on January 29, 2014 at 7:24am — No Comments
" EURUSD: Slightly net sold in aggregate, despite hedge funds changing tactics and turning buyers for a change.
USDJPY: Net sold overall, mainly by hedge funds and asset managers. The private client community provided some half-hearted upside interest.
USDCHF: Gentle net buying pressure seen from a broad mix of investor segments.
EURCHF: Modestly net bought overall. Asset managers, corporates and private clients joined forces to gently buy the cross, while hedge funds were…
Added by Daologic on January 28, 2014 at 11:18am — No Comments
UBS - "This week's key points for currencies are
- Fed tapering in the week ahead will push dollar higher
- Eurozone PMI keeping euro supported for now
- CPI inflation key in the week ahead for yen
- BoE to keep stressing no imminent need to hike rates
- EURCHF bulls should ignore bank capital buffer increase
- RBA comments keeping Australian dollar sell on rallies
- NZ dollar to rise into RBNZ meeting in the week ahead
- BoC concern on low inflation…
Added by Francesc Riverola on January 27, 2014 at 7:40pm — No Comments
UBS - "The search for inflation is becoming central to currency markets (...) In the week ahead, Canada, Australia and New Zealand all release their latest consumer price indices. The Bank of Canada also meets. We expect no change in policy but a weaker than consensus inflation print will increase expectations the BoC may cut its overnight rate from 1.00% later in the year. Australia's CPI release will also be closely followed after December's weaker than anticipated payrolls report. In…Continue
Added by Francesc Riverola on January 20, 2014 at 10:31am — No Comments
UBS - "The Federal Reserve meets in the week ahead. The FOMC could surprise by agreeing to taper asset purchases, by revising its forecasts higher as America's fiscal outlook improves, by lengthening its forward guidance to signal interest rates will remain on hold for longer or by cutting the interest the Fed pays on excess reserves held at the central bank. The range of possible outcomes presents upside and downside risks to the dollar in the near term. In the longer-term the strengthening…Continue
Added by Francesc Riverola on December 16, 2013 at 2:43pm — No Comments
UBS - "Financial markets expect the Federal Reserve will continue purchasing $85bn a month of assets until its March 18-19 Open Market Committee meeting. Friday's employment report showed November payrolls growth again exceeded 200k. But the dollar lost ground against the euro, pound, Swiss franc and commodity currencies while the S&P rose 1.1% to 1805. Stronger growth prospects supported the Australian and New Zealand dollars. Expectations the Fed will still delay tapering pushed the…Continue
Added by Francesc Riverola on December 10, 2013 at 12:26pm — No Comments
UBS - "This week we visited clients in the Middle East. Dollar diversification from the region continues to be limited in the wake of the Eurozone crisis and the Arab Spring. Investors tend to share our longer term bullish view on the greenback - so they are only likely to sell dollars more aggressively if the euro falls back towards 1.20-1.25 against the greenback.
Clients were also focused on Iran's interim agreement to curb nuclear activities in exchange for limited sanctions…Continue
Added by Francesc Riverola on December 2, 2013 at 11:28am — No Comments
UBS - "The November payrolls report due on December 6 is the key US release before the last Federal Open Market Committee meeting of the year on December 17-18. But in the week ahead the Eurozone's flash CPI estimate for November, Japan's monthly inflation data for October and Australia's quarterly capex report may also be pivotal releases. Both the yen and the Australian dollar are falling into year end. Expectations are rising that the Bank of Japan will undertake more easing in the next…Continue
Added by Francesc Riverola on November 25, 2013 at 10:31am — No Comments
UBS - "In the week ahead, most of the Fed's doves including Chairman Bernanke, New York Fed President Dudley, current FOMC voting members Evans, Rosengren and Bullard, and non-voting FOMC member Kocherlakota - are scheduled to speak. In addition, the October 29-30 FOMC meeting minutes will be released. Together, the upcoming communications will provide more insight into whether policymakers are willing to consider tapering as early as the December 17-18 FOMC meeting.
Added by Francesc Riverola on November 18, 2013 at 12:01pm — No Comments
UBS - "Our longer-term bullish dollar view has started to regain traction. October's payrolls report showed an increase of 204k payrolls. The European Central Bank cut interest rates and the Reserve Bank of Australia warned again its currency was too high. That made the euro end the week below 1.34 against the greenback and the Australian dollar below 0.94. Asian investors, however, expect the Federal Reserve will be slow to start tapering its asset purchases, making clients reluctant to put…Continue
Added by Francesc Riverola on November 10, 2013 at 3:24pm — No Comments
UBS - "The euro has peaked at 1.38 against the dollar for the year. First, October's very weak Eurozone inflation data has strongly increased the risk of the European Central Bank cutting interest rates. Second, the latest Federal Open Market Committee meeting did not rule out the Fed tapering asset purchases even as early as this year.
America's economy will need to bounce back from last month's government shutdown for the Fed to start lowering its pace of quantitative easing. That…
Added by Francesc Riverola on November 3, 2013 at 8:46pm — No Comments
UBS - "The Federal Reserve's decision to delay tapering its asset purchases is set to keep the dollar weak for the next three months. Once the central bank signals it will start cutting its bond purchases at the start of the new year, we expect the longer term uptrend for the greenback to resume. But for now we see position unwinding, uncertainty about the Fed's intentions and next month's US fiscal risks keeping the dollar at current levels close to its lows for the year against the euro,…Continue
Added by Francesc Riverola on September 23, 2013 at 3:08pm — No Comments