FXStreet (Edinburgh) - The softer tone around the single currency is prompting EUR/GBP to deflate to daily troughs in the 0.7410 area.
EUR/GBP focus on UK, EMU releases
The European cross is managing quite well to keep the trade above the key 0.7400 barrier so far, coming down from yesterday’s multi-week tops near 0.7440. Ahead in the session, another revision of the UK GDP during the second quarter will put the sterling under some pressure.
Back to the euro area, German Retail Sales and Unemployment figures are also due, followed by the more relevant inflation figures in the region. Consensus sees core consumer prices to have risen at an annual pace of 0.9% during the current month, matching August’s numbers.
EUR/GBP relevant levels
As of writing the cross is losing 0.14% at 0.7414 and a break below 0.7403 (low Sep.29) would open the door to 0.7335 (low Sep.28) and then 0.7303 (low Sep.25). On the flip side, the next hurdle lines up at 0.7436 (high Sep.29) followed by 0.7449 (high May 6) and finally 0.7483 (high May 7).
For more information, read our latest forex news.
Wednesday, September 30, 2015
Stay long USD/JPY ahead of Tankan – Deutsche Bank
FXStreet (Delhi) – Robin Winkler, Strategist at Deutsche Bank, suggests to long USD/JPY pair as even a marginal decline in TANKAN' inflation expectations could trigger a dovish step change in the BoJ’s policy stance and a rebuilding of speculative shorts over growing BoJ event risk in October could lift USD/JPY well above the September highs.
Key Quotes
“Kuroda and other BoJ policy-makers have argued that inflation expectations, and thus trend inflation, should be unaffected by transiently low energy prices. Falling core CPI—turning negative in August--has thus been seen as less important than core-core inflation. If inflation expectations dipped in Q3, however, this would be strong evidence that energy prices are dragging on trend inflation after all. As a result, the BoJ’s optimism on reaching the 2% inflation target in the first half of 2016 would appear increasingly complacent.”
“Last October, it was a concern over declining inflation expectation—at the time 1.7% for five years--that led BoJ to expand QQE. As the minutes noted, slippery inflation expectations are particularly problematic as corporates approach into year-end wage negotiations. The seasonal pattern to the transmission from inflation expectations to wages could therefore be an incentive for the BoJ to take steps to re-anchor inflation expectations rather sooner than later. Stay long USD/JPY.”
For more information, read our latest forex news.
Key Quotes
“Kuroda and other BoJ policy-makers have argued that inflation expectations, and thus trend inflation, should be unaffected by transiently low energy prices. Falling core CPI—turning negative in August--has thus been seen as less important than core-core inflation. If inflation expectations dipped in Q3, however, this would be strong evidence that energy prices are dragging on trend inflation after all. As a result, the BoJ’s optimism on reaching the 2% inflation target in the first half of 2016 would appear increasingly complacent.”
“Last October, it was a concern over declining inflation expectation—at the time 1.7% for five years--that led BoJ to expand QQE. As the minutes noted, slippery inflation expectations are particularly problematic as corporates approach into year-end wage negotiations. The seasonal pattern to the transmission from inflation expectations to wages could therefore be an incentive for the BoJ to take steps to re-anchor inflation expectations rather sooner than later. Stay long USD/JPY.”
For more information, read our latest forex news.
EUR/USD hits fresh lows at 1.1240 in early moves, EZ data eyed
FXStreet (Mumbai) - The EUR/USD pair continues to trade around a flat-line heading towards early European hours, as EUR bulls remain on the back-foot amid improving risk-appetite while awaiting the crucial EZ inflation figures.
EUR/USD supported above hourly 50-MA
The EUR/USD pair trades modestly flat at 1.1246, finding major resistance at 1.1260 levels. The main currency pair appears to have met fresh sellers in the early dealings in anticipation of a flat reading for the Euro zone inflation data.
EUR/USD stalled its recovery near 1.1260-1.1265 region, from below 1.12 barrier after rebounding Asian stock markets boosted the risk-on flows, thus diminishing the bids for funding currency in the euro.
Later in the day, a batch of economic data from the Euro zone and Germany will be reported, which is likely to have major impact on the EUR/USD pair. While US employment data and Yellen’s speech will be also closely eyed.
EUR/USD Technical Levels
The pair has an immediate resistance at 1.1296 (Sept 24 High), above which gains could be extended to 1.1331 (Sept 21 High) levels. On the flip side, support is seen at 1.1200 (Psychological levels) below which it could extend losses to 1.1163 (Sept 24 Low) levels.
For more information, read our latest forex news.
EUR/USD supported above hourly 50-MA
The EUR/USD pair trades modestly flat at 1.1246, finding major resistance at 1.1260 levels. The main currency pair appears to have met fresh sellers in the early dealings in anticipation of a flat reading for the Euro zone inflation data.
EUR/USD stalled its recovery near 1.1260-1.1265 region, from below 1.12 barrier after rebounding Asian stock markets boosted the risk-on flows, thus diminishing the bids for funding currency in the euro.
Later in the day, a batch of economic data from the Euro zone and Germany will be reported, which is likely to have major impact on the EUR/USD pair. While US employment data and Yellen’s speech will be also closely eyed.
EUR/USD Technical Levels
The pair has an immediate resistance at 1.1296 (Sept 24 High), above which gains could be extended to 1.1331 (Sept 21 High) levels. On the flip side, support is seen at 1.1200 (Psychological levels) below which it could extend losses to 1.1163 (Sept 24 Low) levels.
For more information, read our latest forex news.
China: Industrial profits slump continues in August – Nomura
FXStreet (Delhi) – Research Team at Nomura, see more signs of Chinese economy weakening, as their industrial profits declined by 8.8% y-o-y in August from -2.9% in July which has resulted in year-to-date profit growth of -1.9% y-o-y from -1.0% in July, owing to smaller investment gains, deeper price deflation and RMB depreciation.
Key Quotes
“The deterioration in profit growth continued to be weighed down by 1) the equity market selloffs and 2) deeper price deflation, and more recently 3) the depreciation of RMB.
“The producer price index fell deeper into negative territory in August, which resulted in a y-o-y reduction in profits of RMB156.6bn in August, RMB20.2bn more than July’s fall.”
“The RMB’s depreciation since 11 August has also increased financing costs of external-oriented enterprises, with financial expenditure growth in industrial enterprises up 23.9% y-o-y from -3.0% in July.”
“The negative industrial profit growth reinforces our call for fiscal stimulus to play a larger role in boosting growth in H2, and monetary policy to remain accommodative with one more 50bp reserve requirement ratio cut in Q4.”
For more information, read our latest forex news.
Key Quotes
“The deterioration in profit growth continued to be weighed down by 1) the equity market selloffs and 2) deeper price deflation, and more recently 3) the depreciation of RMB.
“The producer price index fell deeper into negative territory in August, which resulted in a y-o-y reduction in profits of RMB156.6bn in August, RMB20.2bn more than July’s fall.”
“The RMB’s depreciation since 11 August has also increased financing costs of external-oriented enterprises, with financial expenditure growth in industrial enterprises up 23.9% y-o-y from -3.0% in July.”
“The negative industrial profit growth reinforces our call for fiscal stimulus to play a larger role in boosting growth in H2, and monetary policy to remain accommodative with one more 50bp reserve requirement ratio cut in Q4.”
For more information, read our latest forex news.
Platinum prices tumble to lowest in nearly seven years – Commerzbank
FXStreet (Delhi) – Research Team at Commerzbank, note that the Platinum prices are under more pressure than gold and shed a good 3% yesterday. The downswing is continuing this morning as platinum has dropped in price below $900 per troy ounce, hitting its lowest level since December 2008 and is under continuing pressure from the Volkswagen scandal.
Key Quotes
“The heavy losses suffered by platinum have widened the price differential between gold and platinum to over $220 per troy ounce, its highest level since exchange trading of platinum began in 1987, since which time platinum has generally been more expensive than gold.”
“The considerable discount on platinum as compared with gold is likely to prompt the jewellery industry to resort increasingly to platinum, which should cushion any potentially lower demand from the automotive industry. By contrast, the platinum to palladium price ratio has narrowed noticeably: at 1.4, it is at its lowest level since March. The previous time it was this low was in April 2002.”
For more information, read our latest forex news.
Key Quotes
“The heavy losses suffered by platinum have widened the price differential between gold and platinum to over $220 per troy ounce, its highest level since exchange trading of platinum began in 1987, since which time platinum has generally been more expensive than gold.”
“The considerable discount on platinum as compared with gold is likely to prompt the jewellery industry to resort increasingly to platinum, which should cushion any potentially lower demand from the automotive industry. By contrast, the platinum to palladium price ratio has narrowed noticeably: at 1.4, it is at its lowest level since March. The previous time it was this low was in April 2002.”
For more information, read our latest forex news.
Aussie rebounds in Asia, UK GDP, EZ CPI – In focus
FXStreet (Mumbai) - Re-emergence of risk sentiment was the main theme in Asia today, with the riskier assets such as the equities and higher yielding – Antipodean currencies benefiting the most. While the yen was offered on the back of weak Japanese fundamentals.
Key headlines in Asia
Growing pressure for Japan to finance its debt - Moody's
Australia Building Permits (MoM) came in at -6.9% below forecasts (-2%) in August
NZ Sept business confidence stopped free-falling - ANZ
Dominating themes in Asia - centered on JPY, AUD, NZD
Asian equities bounced-back in full swing in Asia, recovering from Tuesday’s massive sell-off, on favorable sentiment towards risky assets. However, the US dollar remained subdued against its major competitors as markets remain cautious ahead of the key employment report and Fed Yellen’s speech due later today.
The Japanese yen lost ground and edged lower versus the US dollar as weak Japanese retail sales and industrial production data weighed on the yen. USD/JPY now trades 0.13% higher at 119.90 levels. Japan’s retail sales were up 0.8% y/y in August, missing expectations for an increase of 1.2%, against a 1.8% jump in July. While the industrial output fell 0.5% m/m in August, missing estimates of a 1.0% rise in output.
Antipodeans remained strongly bid in Asia, with the Aussie staging a solid rebound from fresh multi-week lows struck on Tuesday. AUD/USD swung back higher into the positive territory amid ripening risk-sentiment, gaining 0.44% at 0.7016. While the Kiwi also tracked its OZ counterpart higher after the NZ business confidence gauge halted its free-fall in September.
On the equities space, Asian markets rebounded higher, with Japan’s Nikkei emerging the biggest gainer, up 2.78% to 17,400. Australia’s S&P ASX index rallies 1.38% to 4,986. While the Chinese indices, the Shanghai Composite advances 0.70% to 3,059. While Hong Kong’s markets advance 1.70% at 20,903.
Heading into Europe - centered on EUR, GBP
A busy European session on Wednesday for the EUR, GBP traders as the crucial macro data are lined up release in the session ahead.
The German retail sales data will kick-start an action-packed EUR calendar, with the markets predicting a 0.4% gain on a monthly basis, following the 1.4% gain in July, and a 3.4% rise y/y after rising 3.3% in July.
Subsequently, Germany will report employment data for September, with the unemployment rate expected to remain at 6.4%, after the same rate recorded in August.
The UK 3rd GDP estimate for Q2 will be followed with expectations of a 0.7% growth in Q2 q/q while annual GDP growth is expected to show 2.6% expansion, the same as in the 2nd estimate.
Next in line, the euro zone will publish its August inflation data estimate, with CPI expected to show a flat reading y/y. In August, consumer price growth in the euro zone reached a 0.2% annual level.
The euro zone will also report its August labor data. The unemployment rate is expected to stay unchanged at 10.9% in August.
The North American session ahead holds key economic news from the US and Canada, which will be closely eyed. Canada is due to report its GDP m/m with markets is expecting a softer reading for July, with an estimate of a 0.2% gain.
The US calendar as the crucial ADP employment change and Chicago PMI reports ahead of the much-awaited Fed Chair Yellen’s speech. Yellen is scheduled to deliver opening remarks at the Federal Reserve's annual community banking conference, in St. Louis.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet noted, “The short term picture is mild bearish, given that the price is hovering around a horizontal 20 SMA in the 1 hour chart, whilst the technical indicators head lower below their mid-lines, yet as long as above the 1.1200 level, the declines should remain limited.”
“In the 4 hours chart, the technical stance is bullish, as the price is above its 20 SMA that anyway lacks directional strength, whilst the technical indicators are turning slightly higher in neutral territory. In this last time frame, the price is now around its 100 and 200 SMAs, both together and horizontal, reflecting the lack of directional strength.”
For more information, read our latest forex news.
Key headlines in Asia
Growing pressure for Japan to finance its debt - Moody's
Australia Building Permits (MoM) came in at -6.9% below forecasts (-2%) in August
NZ Sept business confidence stopped free-falling - ANZ
Dominating themes in Asia - centered on JPY, AUD, NZD
Asian equities bounced-back in full swing in Asia, recovering from Tuesday’s massive sell-off, on favorable sentiment towards risky assets. However, the US dollar remained subdued against its major competitors as markets remain cautious ahead of the key employment report and Fed Yellen’s speech due later today.
The Japanese yen lost ground and edged lower versus the US dollar as weak Japanese retail sales and industrial production data weighed on the yen. USD/JPY now trades 0.13% higher at 119.90 levels. Japan’s retail sales were up 0.8% y/y in August, missing expectations for an increase of 1.2%, against a 1.8% jump in July. While the industrial output fell 0.5% m/m in August, missing estimates of a 1.0% rise in output.
Antipodeans remained strongly bid in Asia, with the Aussie staging a solid rebound from fresh multi-week lows struck on Tuesday. AUD/USD swung back higher into the positive territory amid ripening risk-sentiment, gaining 0.44% at 0.7016. While the Kiwi also tracked its OZ counterpart higher after the NZ business confidence gauge halted its free-fall in September.
On the equities space, Asian markets rebounded higher, with Japan’s Nikkei emerging the biggest gainer, up 2.78% to 17,400. Australia’s S&P ASX index rallies 1.38% to 4,986. While the Chinese indices, the Shanghai Composite advances 0.70% to 3,059. While Hong Kong’s markets advance 1.70% at 20,903.
Heading into Europe - centered on EUR, GBP
A busy European session on Wednesday for the EUR, GBP traders as the crucial macro data are lined up release in the session ahead.
The German retail sales data will kick-start an action-packed EUR calendar, with the markets predicting a 0.4% gain on a monthly basis, following the 1.4% gain in July, and a 3.4% rise y/y after rising 3.3% in July.
Subsequently, Germany will report employment data for September, with the unemployment rate expected to remain at 6.4%, after the same rate recorded in August.
The UK 3rd GDP estimate for Q2 will be followed with expectations of a 0.7% growth in Q2 q/q while annual GDP growth is expected to show 2.6% expansion, the same as in the 2nd estimate.
Next in line, the euro zone will publish its August inflation data estimate, with CPI expected to show a flat reading y/y. In August, consumer price growth in the euro zone reached a 0.2% annual level.
The euro zone will also report its August labor data. The unemployment rate is expected to stay unchanged at 10.9% in August.
The North American session ahead holds key economic news from the US and Canada, which will be closely eyed. Canada is due to report its GDP m/m with markets is expecting a softer reading for July, with an estimate of a 0.2% gain.
The US calendar as the crucial ADP employment change and Chicago PMI reports ahead of the much-awaited Fed Chair Yellen’s speech. Yellen is scheduled to deliver opening remarks at the Federal Reserve's annual community banking conference, in St. Louis.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet noted, “The short term picture is mild bearish, given that the price is hovering around a horizontal 20 SMA in the 1 hour chart, whilst the technical indicators head lower below their mid-lines, yet as long as above the 1.1200 level, the declines should remain limited.”
“In the 4 hours chart, the technical stance is bullish, as the price is above its 20 SMA that anyway lacks directional strength, whilst the technical indicators are turning slightly higher in neutral territory. In this last time frame, the price is now around its 100 and 200 SMAs, both together and horizontal, reflecting the lack of directional strength.”
For more information, read our latest forex news.
USDJPY: Range trade between 119 and 121 - Nomura
FXStreet (Delhi) – Research Team at Nomura, suggest that after temporarily breaking 117 on 24 August, USD/JPY has been trading within a narrow range from 119 to 121 and before the October FOMC meeting and the second BOJ meeting in October (28 and 30 October respectively), USD/JPY may not break its recent high and low.
Key Quotes
“Deterioration in risk sentiment has been pressuring USD/JPY, but we see three factors limiting the downside risk to USD/JPY. First, market expectations for BOJ easing into the 30 October meeting may rise further if USD/JPY and the Nikkei trade weakly. Given weaker economic fundamentals, a decline in USD/JPY and equity prices will likely increase market expectations for BOJ easing in October, which should limit USD/JPY depreciation ahead of the second October meeting.”
“Second, dip-buying demand among Japanese investors, especially pension funds and retail investors, remains strong.”
“Third, Janet Yellen’s speech confirmed that the likelihood of a December lift-off remains high. The market is still pricing a below 50% probability of lift-off by year-end, which suggests USD appreciation is likely as the market starts pricing a higher possibility.”
“At the same time, the short-term acceleration of USD/JPY appreciation will automatically lower BOJ easing expectations again. Japanese investment in foreign assets may also slow again, as JPY weakness helps pension funds to reach their target portfolios without actual purchases.”
For more information, read our latest forex news.
Key Quotes
“Deterioration in risk sentiment has been pressuring USD/JPY, but we see three factors limiting the downside risk to USD/JPY. First, market expectations for BOJ easing into the 30 October meeting may rise further if USD/JPY and the Nikkei trade weakly. Given weaker economic fundamentals, a decline in USD/JPY and equity prices will likely increase market expectations for BOJ easing in October, which should limit USD/JPY depreciation ahead of the second October meeting.”
“Second, dip-buying demand among Japanese investors, especially pension funds and retail investors, remains strong.”
“Third, Janet Yellen’s speech confirmed that the likelihood of a December lift-off remains high. The market is still pricing a below 50% probability of lift-off by year-end, which suggests USD appreciation is likely as the market starts pricing a higher possibility.”
“At the same time, the short-term acceleration of USD/JPY appreciation will automatically lower BOJ easing expectations again. Japanese investment in foreign assets may also slow again, as JPY weakness helps pension funds to reach their target portfolios without actual purchases.”
For more information, read our latest forex news.
RMB: Ready for inclusion in IMF’s SDR basket – ANZ
FXStreet (Delhi) - Khoon Goh, Senior FX Strategist at ANZ, notes that the RMB’s chances of inclusion in the IMF’s SDR basket have been boosted by the US’s conditional support.
Key Quotes
“The Chinese authorities’ focus will therefore be on ensuring that the RMB can meet the IMF’s criteria.”
“With USD/CNH now trading below USD/CNY, we believe the stage is set for an easing back in intervention activity, likely after the week-long National Day holidays and as we get closer towards the SDR decision in November.”
“We still expect the RMB to depreciate should the Chinese authorities allow the currency to be more market-determined, but the extent of RMB decline will be more measured.”
For more information, read our latest forex news.
Key Quotes
“The Chinese authorities’ focus will therefore be on ensuring that the RMB can meet the IMF’s criteria.”
“With USD/CNH now trading below USD/CNY, we believe the stage is set for an easing back in intervention activity, likely after the week-long National Day holidays and as we get closer towards the SDR decision in November.”
“We still expect the RMB to depreciate should the Chinese authorities allow the currency to be more market-determined, but the extent of RMB decline will be more measured.”
For more information, read our latest forex news.
AUD/USD off-highs, holding above 0.7000
FXStreet (Mumbai) - The AUD/USD pair stalled its recovery path from 0.6980 region and now wavers above 0.70 handle, despite risk-on trades dominating the Asian markets, as traders digest the latest Australian data which missed estimates.
AUD/USD supported at hourly 20-MA
Currently, the AUD/USD pair trades 0.29% higher at 0.7006, retreating from fresh session highs reached at 0.7021 in last hours. The Aussie trimmed gains as the overnight recovery loses steam, after the latest poor Australia’s building consents data weighs on investors’ sentiment.
The total number of building permits issued in Australia declined a seasonally adjusted 6.9% in August, missing forecasts for a decline of 2.0% following the upwardly revised 7.9% increase in July.
However, the Aussie remains well bid and enjoys gains on the back of re-emergence of demand for riskier/ higher yielding assets such as the Australian dollar, following solid recovery seen in the Asian indices, with the Australian S&P ASX 200 rallying 1.40% backed by banking and mining stocks.
Meanwhile, markets turn their focus towards the upcoming US ADP employment change data and Fed Chair Yellen’s speech due later in the day for further momentum.
AUD/USD Levels to watch
The pair has an immediate resistance at 0.7042 (Sept 8 High) levels, above which gains could be extended to 0.7096 (Sept 23 High) levels. On the flip side, support is seen at 0.6984 (Sept 23 Low) levels from here it to 0.6943 (Sept 10 Low).
For more information, read our latest forex news.
AUD/USD supported at hourly 20-MA
Currently, the AUD/USD pair trades 0.29% higher at 0.7006, retreating from fresh session highs reached at 0.7021 in last hours. The Aussie trimmed gains as the overnight recovery loses steam, after the latest poor Australia’s building consents data weighs on investors’ sentiment.
The total number of building permits issued in Australia declined a seasonally adjusted 6.9% in August, missing forecasts for a decline of 2.0% following the upwardly revised 7.9% increase in July.
However, the Aussie remains well bid and enjoys gains on the back of re-emergence of demand for riskier/ higher yielding assets such as the Australian dollar, following solid recovery seen in the Asian indices, with the Australian S&P ASX 200 rallying 1.40% backed by banking and mining stocks.
Meanwhile, markets turn their focus towards the upcoming US ADP employment change data and Fed Chair Yellen’s speech due later in the day for further momentum.
AUD/USD Levels to watch
The pair has an immediate resistance at 0.7042 (Sept 8 High) levels, above which gains could be extended to 0.7096 (Sept 23 High) levels. On the flip side, support is seen at 0.6984 (Sept 23 Low) levels from here it to 0.6943 (Sept 10 Low).
For more information, read our latest forex news.
USD/JPY capped below hourly 200-MA
FXStreet (Mumbai) - The USD/JPY pair once again failed at 120 barrier and pared gains in the mid-Asian trades, as the greenback was unresponsive to the improving risk-on moods amid rebounding Asian equities.
US employment data in focus
Currently, the USD/JPY pair trades 0.08% higher at 119.83, hovering close to session lows struck at 119.71 in early moves. The USD bulls struggle to benefit from the rebounding appetite for risky assets and hence unable to extend beyond hourly 200-MA located just ahead of 120 handle.
A strong pull-back in the Asian stocks, with Japan’s Nikkei rallying as much as 1.80%, Australia’s ASX advancing 1.40% and the Chinese Shanghai Composite index gaining 0.35% so far, was largely ignored by the USD/JPY pair.
While, dismal Japan’s retail sales data weighed on the yen somewhat, thereby supporting the USD/JPY.
Looking ahead, the major will be influenced by the broader market sentiment while the crucial US employment data along with the Chicago PMI report will also play a significant role.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.64 (Sept 22 High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 119.22 (Sept 29 Low) below that at 118.83 (Sept 8 Low) levels.
For more information, read our latest forex news.
US employment data in focus
Currently, the USD/JPY pair trades 0.08% higher at 119.83, hovering close to session lows struck at 119.71 in early moves. The USD bulls struggle to benefit from the rebounding appetite for risky assets and hence unable to extend beyond hourly 200-MA located just ahead of 120 handle.
A strong pull-back in the Asian stocks, with Japan’s Nikkei rallying as much as 1.80%, Australia’s ASX advancing 1.40% and the Chinese Shanghai Composite index gaining 0.35% so far, was largely ignored by the USD/JPY pair.
While, dismal Japan’s retail sales data weighed on the yen somewhat, thereby supporting the USD/JPY.
Looking ahead, the major will be influenced by the broader market sentiment while the crucial US employment data along with the Chicago PMI report will also play a significant role.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.64 (Sept 22 High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 119.22 (Sept 29 Low) below that at 118.83 (Sept 8 Low) levels.
For more information, read our latest forex news.
Growing pressure for Japan to finance its debt - Moody's
FXStreet (Bali) - A Moody's headline is crossing the wires, noting that they sees growing pressure for Japan to finance its debt.
For more information, read our latest forex news.
For more information, read our latest forex news.
Asian stocks rebound as risk sentiment seeps back
FXStreet (Mumbai) - Stocks on the Asian bourses stages a solid come-back on Wednesday tracking the positive Wall Street close and rebounding risk sentiment, reversing heavy losses booked yesterday.
Nikkei leads Asia higher
The Japanese benchmark, the Nikkei reversed previous losses and rallied as yen weakened versus the US dollar amid re-emerging risk-appetite and weak Japan’s retail sales data, thereby offering support to the export-oriented stocks. Japan’s retail sales were up 0.8% y/y in August, missing expectations for an increase of 1.2%, against a 1.8% jump in July. At the moment, USD/JPY trades 0.04% higher at 119. 77 while the Nikkei climbs 1.84% to 17,243.
The benchmark Australian S&P/ASX 200 mirrors gains from its other Asian counterparts, despite downbeat Australia’s fundamental released earlier on the day. The rebounding banking and resource stocks drive the index to 4,979 points, up 1.24% so far.
The Chinese markets are breaking higher, with the Shanghai Composite advancing 0.18% to 3,043 points. While Hong Kong markets rebounded sharply and now gains over 1% to 20,778.
For more information, read our latest forex news.
Nikkei leads Asia higher
The Japanese benchmark, the Nikkei reversed previous losses and rallied as yen weakened versus the US dollar amid re-emerging risk-appetite and weak Japan’s retail sales data, thereby offering support to the export-oriented stocks. Japan’s retail sales were up 0.8% y/y in August, missing expectations for an increase of 1.2%, against a 1.8% jump in July. At the moment, USD/JPY trades 0.04% higher at 119. 77 while the Nikkei climbs 1.84% to 17,243.
The benchmark Australian S&P/ASX 200 mirrors gains from its other Asian counterparts, despite downbeat Australia’s fundamental released earlier on the day. The rebounding banking and resource stocks drive the index to 4,979 points, up 1.24% so far.
The Chinese markets are breaking higher, with the Shanghai Composite advancing 0.18% to 3,043 points. While Hong Kong markets rebounded sharply and now gains over 1% to 20,778.
For more information, read our latest forex news.
AUD/NZD: testing support of daily channel; where are the bulls?
FXStreet (Guatemala) - AUD/NZD is currently trading at 1.0023 with a high of 1.1034 and a low of 1.0994.
AUD/NZD downside was playing out until demand supported the cross in the vicinity of 1.10 the figure. We have had some data from Australia in the previous 30 minutes, with building approvals offering a higher revision to July's numbers, and at the same time we had mixed data in private sector credit with a gain y/y and a slow down m/m.
Earlier, for New Zealand, the ANZ activity outlook was stronger than previous coming out at 16.7% vs 12.2% prev while business confidence was still quite low, despite a recovery in Fonterra's prices, albeit scoring an improvement of -18.9 vs -29.1 prev.
AUD/NZD due a reversal within sideways channel?
Technically, AUD/NZD remains in slightly highly negative territory, despite the consolidation. However, the cross remains above the 200 DMA, consolidating the recovery from April lows.
The 20/50 DMAs remain in the middle of the channel while price is testing the downside of the same formation and potentially due a reversal as the price continues to range between resistance and support of the sideways pattern on the daily sticks.
For more information, read our latest forex news.
AUD/NZD downside was playing out until demand supported the cross in the vicinity of 1.10 the figure. We have had some data from Australia in the previous 30 minutes, with building approvals offering a higher revision to July's numbers, and at the same time we had mixed data in private sector credit with a gain y/y and a slow down m/m.
Earlier, for New Zealand, the ANZ activity outlook was stronger than previous coming out at 16.7% vs 12.2% prev while business confidence was still quite low, despite a recovery in Fonterra's prices, albeit scoring an improvement of -18.9 vs -29.1 prev.
AUD/NZD due a reversal within sideways channel?
Technically, AUD/NZD remains in slightly highly negative territory, despite the consolidation. However, the cross remains above the 200 DMA, consolidating the recovery from April lows.
The 20/50 DMAs remain in the middle of the channel while price is testing the downside of the same formation and potentially due a reversal as the price continues to range between resistance and support of the sideways pattern on the daily sticks.
For more information, read our latest forex news.
NZ Sept business confidence stopped free-falling - ANZ
FXStreet (Bali) - Philip Borkin, Senior Economist at ANZ, provides a summary on the latest NZ business confidence, noting that the indicator finally stopped free-falling in September.
Key Quotes
"Key survey indicators that more closely correlate to GDP growth also lifted a tad."
"Our composite indicator for economic activity is still soft, but the stabilisation in survey components is welcome."
"Some good news! The economy found a bungy cord attached, with the downward slide in business confidence being arrested in September."
"It’s still a negative zip-line though, with a net 19% of businesses pessimistic about the general economy."
"However, after five successive months of declines in the headline figure – and substantial declines at that – the turnaround is welcome."
"Sentiment remained in negative territory across all five sub-sectors."
"Agriculture remains the most pessimistic, whilst manufacturing and services are the least downbeat."
"Cord recoil was apparent across the broad survey, and importantly, in key survey indicators that more closely correlate to GDP growth.
For more information, read our latest forex news.
Key Quotes
"Key survey indicators that more closely correlate to GDP growth also lifted a tad."
"Our composite indicator for economic activity is still soft, but the stabilisation in survey components is welcome."
"Some good news! The economy found a bungy cord attached, with the downward slide in business confidence being arrested in September."
"It’s still a negative zip-line though, with a net 19% of businesses pessimistic about the general economy."
"However, after five successive months of declines in the headline figure – and substantial declines at that – the turnaround is welcome."
"Sentiment remained in negative territory across all five sub-sectors."
"Agriculture remains the most pessimistic, whilst manufacturing and services are the least downbeat."
"Cord recoil was apparent across the broad survey, and importantly, in key survey indicators that more closely correlate to GDP growth.
For more information, read our latest forex news.
EUR/JPY minor recovery headed for failure yet again?
FXStreet (Guatemala) - EUR/JPY is currently trading at 134.93 with a high of 135.12 and a low of 134.65.
EUR/JPY is recovering on the daily sticks and is up to the test the vicinity of the 200 DMA at 135.08 having already penetrated this target area once in today's session as risk sentiment is cautiously back into play. There was a recovery in share prices in the European sessions and a mixed feel on Wall Street, but the Nikkei has opened in the green and has been making tracks while the S&P futures are also trading positively.
China will be out as of tomorrow for a week and this may allow a continuation of a recovery, although Nonfarm Payrolls is looming and poses a risk to equities if the number is strong and sentiment tips to a higher percentage balance in favour of a rate hike from the Fed as soon as the same month.
EUR/JPY risks from EZ data
Tomorrow brings CPI's for the EZ first, "EurozoneSep CPI is expected to print flat after rising 0.2%y/y in Aug though core should remain at 0.9%y/y. German Sep inflation, which we saw yesterday, was lower than expected," explained analyst at Westpac Banking Corporation.
EUR/JPY double top emerging?
Technically, despite the advance to the 200 DMA, failures here again will be a double top and the downside will come back into vogue. "We still view the market as having topped and look for a slide back to the 132.24/131.80 recent low and 61.8% retracement," explained Karen Jones, chief analyst at Commerzbank. "Initial support is the uptrend at 133.26."
For more information, read our latest forex news.
EUR/JPY is recovering on the daily sticks and is up to the test the vicinity of the 200 DMA at 135.08 having already penetrated this target area once in today's session as risk sentiment is cautiously back into play. There was a recovery in share prices in the European sessions and a mixed feel on Wall Street, but the Nikkei has opened in the green and has been making tracks while the S&P futures are also trading positively.
China will be out as of tomorrow for a week and this may allow a continuation of a recovery, although Nonfarm Payrolls is looming and poses a risk to equities if the number is strong and sentiment tips to a higher percentage balance in favour of a rate hike from the Fed as soon as the same month.
EUR/JPY risks from EZ data
Tomorrow brings CPI's for the EZ first, "EurozoneSep CPI is expected to print flat after rising 0.2%y/y in Aug though core should remain at 0.9%y/y. German Sep inflation, which we saw yesterday, was lower than expected," explained analyst at Westpac Banking Corporation.
EUR/JPY double top emerging?
Technically, despite the advance to the 200 DMA, failures here again will be a double top and the downside will come back into vogue. "We still view the market as having topped and look for a slide back to the 132.24/131.80 recent low and 61.8% retracement," explained Karen Jones, chief analyst at Commerzbank. "Initial support is the uptrend at 133.26."
For more information, read our latest forex news.
NZD/USD recovering through the 20 DMA
FXStreet (Guatemala) - NZD/USD is currently on the bid between the 20 and 50 DMA having scored a high of 0.6369 and a low of 0.6376.
NZD/USD has been better bid in the Asian session and has continued its recovery from the lows of the downtrend from the 0.64 handle of last week. The lows were some 100 pips lower and with a better risk-sentiment appearing throughout global markets, albeit still very mixed and far from bullish, the pair has attracted some demand again with profit taking turning into a full on minor recovery up to aforementioned highs today so far.
The ANZ activity outlook was stronger than previous coming out at 16.7% vs 12.2% prev while business confidence was still quite low, despite a recovery in Fonterra's prices, albeit scoring an improvement of -18.9 vs -29.1 prev. we now turn to Nonfarm Payrolls in the US on Friday for further impetus while China leaves the FX space for a week.
NZD/USD levels
NZD/USD bulls have penetrated the first major hurdle in the recovery through the 200, 50 and 20 SMA's on the hourly chart. Price is supported by the 20 SMA on the 4hr charts and the 20 DMA on the daily sticks a little further out while MACD on the 4hr chart is also turning more positive.
For more information, read our latest forex news.
NZD/USD has been better bid in the Asian session and has continued its recovery from the lows of the downtrend from the 0.64 handle of last week. The lows were some 100 pips lower and with a better risk-sentiment appearing throughout global markets, albeit still very mixed and far from bullish, the pair has attracted some demand again with profit taking turning into a full on minor recovery up to aforementioned highs today so far.
The ANZ activity outlook was stronger than previous coming out at 16.7% vs 12.2% prev while business confidence was still quite low, despite a recovery in Fonterra's prices, albeit scoring an improvement of -18.9 vs -29.1 prev. we now turn to Nonfarm Payrolls in the US on Friday for further impetus while China leaves the FX space for a week.
NZD/USD levels
NZD/USD bulls have penetrated the first major hurdle in the recovery through the 200, 50 and 20 SMA's on the hourly chart. Price is supported by the 20 SMA on the 4hr charts and the 20 DMA on the daily sticks a little further out while MACD on the 4hr chart is also turning more positive.
For more information, read our latest forex news.
AUD/USD keeps bullish momentum, solid break through 0.70
FXStreet (Bali) - AUD/USD keeps its bullish momentum in early Tokyo, having broken the 0.70 handle in the last hour, now printing session highs around the 0.7020 area.
Australian data ahead
Looking ahead at today's Asian calendar, Australia releases housing and credit data at 1.30GMT, events unlikely to affect price action. Sentiment in the commodity space will continue to play a major role in the pair. It is also worth mentioning that the Australian government announced a change in its Iron-ore forecast this morning, now expected at 51.2/ton in 2016. The news didn't seem to weigh on the AUD sentiment for now.
AUD/USD technicals
Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "The 1 hour chart shows that the price stands a handful of pips above its 20 SMA, whilst the technical indicators are turning lower, with the RSI indicator anticipating additional declines, as it stands around 48."
"In the 4 hours chart the price has been unable to advance beyond its 20 SMA, whilst the technical indicators are retreating from their mid-lines, pointing for a bearish continuation, particularly on a break below 0.6955, the immediate support", Valeria adds.
For more information, read our latest forex news.
Australian data ahead
Looking ahead at today's Asian calendar, Australia releases housing and credit data at 1.30GMT, events unlikely to affect price action. Sentiment in the commodity space will continue to play a major role in the pair. It is also worth mentioning that the Australian government announced a change in its Iron-ore forecast this morning, now expected at 51.2/ton in 2016. The news didn't seem to weigh on the AUD sentiment for now.
AUD/USD technicals
Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "The 1 hour chart shows that the price stands a handful of pips above its 20 SMA, whilst the technical indicators are turning lower, with the RSI indicator anticipating additional declines, as it stands around 48."
"In the 4 hours chart the price has been unable to advance beyond its 20 SMA, whilst the technical indicators are retreating from their mid-lines, pointing for a bearish continuation, particularly on a break below 0.6955, the immediate support", Valeria adds.
For more information, read our latest forex news.
USD/JPY breaking to the upside to test 50 SMA
FXStreet (Guatemala) - USD/JPY is currently trading at 119.92 with a high of 119.95 and a low of 119.74.
Nikkei is up 2% for the session and USD/JPY is up to test the vicinity of the 50 SMA on the hourly chart at 119.96. A break of 120 would put the major in the region of the 200 SMA and bring back a bullish plan for the 200 DMA that has been a pivotal level for the past number of weeks now while the pair trade between that as a major resistance and the 119.20 supporting area.
Data was mixed, mostly negative for Japan. Retails trade y/y 0.8% vs 1.2% expected and vs pre 1.6%. m/m 0% vs 0.5% and 1.2% prev. However, large retailers improved on expectations m/m 1.8% vs 1.3% but lower than prev 2.1%. Industrial production were also lower than both expectations and previous.
USD/JPY key levels
Technically, USD/JPY has been unable to break its consolidation range during September, as noted by analysts at Westpac Banking Corporation who have suggested that a break of 119.25/35 or 120.95/05 is key to direction.
For more information, read our latest forex news.
Nikkei is up 2% for the session and USD/JPY is up to test the vicinity of the 50 SMA on the hourly chart at 119.96. A break of 120 would put the major in the region of the 200 SMA and bring back a bullish plan for the 200 DMA that has been a pivotal level for the past number of weeks now while the pair trade between that as a major resistance and the 119.20 supporting area.
Data was mixed, mostly negative for Japan. Retails trade y/y 0.8% vs 1.2% expected and vs pre 1.6%. m/m 0% vs 0.5% and 1.2% prev. However, large retailers improved on expectations m/m 1.8% vs 1.3% but lower than prev 2.1%. Industrial production were also lower than both expectations and previous.
USD/JPY key levels
Technically, USD/JPY has been unable to break its consolidation range during September, as noted by analysts at Westpac Banking Corporation who have suggested that a break of 119.25/35 or 120.95/05 is key to direction.
For more information, read our latest forex news.
Major crosses in a snapshot - Westpac
FXStreet (Guatemala) - Analysts at Westpac Banking Corporation offered a snapshot into the major currencies for this Asian session.
Key Quotes:
"AUD/USD: Momentum holds a strong negative bias across ST to LT time frames. ST rallies should fail this week ahead of new trend lows.
NZD/USD: Neutral bias as the downtrend pauses. Break above 0.6417 / below 0.6254 will provide the next clue to multi-week directional bias.
AUD/NZD: Multi-week triangle support at 1.0950/60 is key to the MT uptrend. Price has found balance above this key level and lacks momentum.
USD/JPY: Price has been unable to break its consolidation range during September. Break of 119.25/35 or 120.95/05 is key to direction.
EUR/USD: The bounce from key support last week has failed to hold its gains. Momentum is lacking, leaving us with a low level of ST conviction."
For more information, read our latest forex news.
Key Quotes:
"AUD/USD: Momentum holds a strong negative bias across ST to LT time frames. ST rallies should fail this week ahead of new trend lows.
NZD/USD: Neutral bias as the downtrend pauses. Break above 0.6417 / below 0.6254 will provide the next clue to multi-week directional bias.
AUD/NZD: Multi-week triangle support at 1.0950/60 is key to the MT uptrend. Price has found balance above this key level and lacks momentum.
USD/JPY: Price has been unable to break its consolidation range during September. Break of 119.25/35 or 120.95/05 is key to direction.
EUR/USD: The bounce from key support last week has failed to hold its gains. Momentum is lacking, leaving us with a low level of ST conviction."
For more information, read our latest forex news.
Mixed to bearish metals market overnight - ANZ
FXStreet (Guatemala) - Analysts at ANZ noted the conditions in the commodities sector and summarized the metals sector.
Key Quotes:
"Base and precious metal prices were mixed.
Gold prices fell with US growth looking more resilient.
Base metals recovered following a weak start, with copper prices rebounding after testing USD4,915 per tonne.
Copper was also supported by further supply side issues. Peru declared a state of emergency in areas surrounding MMG’s copper mine project after clashes left three people dead. About USD22bn of mine projects have been delayed in Peru, the world’s third largest copper producer. In Chile, operators of Collahuasi (the world's biggest copper mine) cut annual production by 30kt due to weak prices.
Iron ore prices were weaker. Weaker steel prices continue to negatively impact the iron ore price.
Chinese domestic HRC prices slipped below CNY2,000 per tonne from CNY3,000 per tonne a year before. However the supply side remains robust, with BHP recently awarding a contract to build an additional primary crusher at its Jimblebar iron ore mine in the Pilbara region."
For more information, read our latest forex news.
Key Quotes:
"Base and precious metal prices were mixed.
Gold prices fell with US growth looking more resilient.
Base metals recovered following a weak start, with copper prices rebounding after testing USD4,915 per tonne.
Copper was also supported by further supply side issues. Peru declared a state of emergency in areas surrounding MMG’s copper mine project after clashes left three people dead. About USD22bn of mine projects have been delayed in Peru, the world’s third largest copper producer. In Chile, operators of Collahuasi (the world's biggest copper mine) cut annual production by 30kt due to weak prices.
Iron ore prices were weaker. Weaker steel prices continue to negatively impact the iron ore price.
Chinese domestic HRC prices slipped below CNY2,000 per tonne from CNY3,000 per tonne a year before. However the supply side remains robust, with BHP recently awarding a contract to build an additional primary crusher at its Jimblebar iron ore mine in the Pilbara region."
For more information, read our latest forex news.
AUD/JPY upside capped and bearish below MA's
FXStreet (Guatemala) - AUD/JPY is currently trading at 83.73 with a high of 83.76 and a low of 83.57.
AUD/JPY has settled back after a recovery from the lows of the downside in Asia yesterday that scored 82.87 before the Europeans managed to gather themselves out of risk-off mode and investors took up equities allowing the price to rally to reach highs of 84.30 in London.
The price has been a range between the 20 and 50 SMA on the hourly chart at 83.58 and 83.98 respectively. The US was mixed-risk and left the pair to trade sideways in a narrower range until the Asian handover and close on Wall Street. Today, we have some second tier data from Australia but Japan delivers a handful of key releases, including industrial production and retail sales ahead of the Q3 Tankan sentiment survey.
AUD/JPY levels
Technically, the price is stabilising with MACD turning less positive on the hourly sticks although trades with a bearish bias below RSI (14) 50 and EMA 100 at 84.04 and SMA 200 84.93 while below the pivot of 84.08. Classic supports are 83.41, 83.01 nd 82.34. Classic resistances are 84.48, 85.15 and 85.55.
For more information, read our latest forex news.
AUD/JPY has settled back after a recovery from the lows of the downside in Asia yesterday that scored 82.87 before the Europeans managed to gather themselves out of risk-off mode and investors took up equities allowing the price to rally to reach highs of 84.30 in London.
The price has been a range between the 20 and 50 SMA on the hourly chart at 83.58 and 83.98 respectively. The US was mixed-risk and left the pair to trade sideways in a narrower range until the Asian handover and close on Wall Street. Today, we have some second tier data from Australia but Japan delivers a handful of key releases, including industrial production and retail sales ahead of the Q3 Tankan sentiment survey.
AUD/JPY levels
Technically, the price is stabilising with MACD turning less positive on the hourly sticks although trades with a bearish bias below RSI (14) 50 and EMA 100 at 84.04 and SMA 200 84.93 while below the pivot of 84.08. Classic supports are 83.41, 83.01 nd 82.34. Classic resistances are 84.48, 85.15 and 85.55.
For more information, read our latest forex news.
EUR/JPY: neutral stance below MA's - FXStreet
FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the EUR/JPY pair has shown little progress this Tuesday, as both currencies traded in tandem against its American rival and following market's sentiment.
Key Quotes:
"Having held within Monday's range, the daily chart shows that the price continues hovering around the 200 DMA, while the technical indicators stand un negative territory, maintaining the risk towards the downside. In the short term, the price was unable to advance beyond its 200 SMA, now around 134.90, while the technical indicators turn lower around their mid-lines."
"In the 4 hours chart, the price is below its moving averages, but the technical indicators present a neutral stance, flat around their mid-lines, giving little directional clues for the upcoming hours."
For more information, read our latest forex news.
Key Quotes:
"Having held within Monday's range, the daily chart shows that the price continues hovering around the 200 DMA, while the technical indicators stand un negative territory, maintaining the risk towards the downside. In the short term, the price was unable to advance beyond its 200 SMA, now around 134.90, while the technical indicators turn lower around their mid-lines."
"In the 4 hours chart, the price is below its moving averages, but the technical indicators present a neutral stance, flat around their mid-lines, giving little directional clues for the upcoming hours."
For more information, read our latest forex news.
AUD/USD supported on hourly 20 SMA
FXStreet (Guatemala) - AUD/USD is currently trading at 0.6985 with a high of 0.7024 and a low of 0.6936.
AUD/USD is settling back after a good display on the bid as markets began to turn less negative in the European session, and the major commodity currency rallied from the lows of 0.6942 up to test the vicinity of the 50 SMA on the hourly chart at 0.6997. It was breaching there to score a high of 0.7023 and is now supported on the 20 SMA at 0.6979.
There was a better risk environment on Wall Street as well, but only temporarily and the day was mixed.
AUD/USD data before Nonfarm Payrolls
AUD/USD has data releases for tonight from the Australian economy ahead of key data from China tomorrow. We have the building permits and private sector credit from Australia as second tier data while Caixin manufacturing and services PMI's as well as NBS manufacturing and non-manufacturing will be released tomorrow. Then we have Nonfarm Payrolls in the US on Friday.
AUD/USD levels
Technically, analysts at UOB Group explained that the outlook on a 1-3 week basis remains Bearish. "But any down-move will likely struggle near 0.6895. AUD continues to edge lower and there is no change to the current bearish view. The target is at 0.6895, but based on the current momentum, a sustained break below this level appears unlikely for now (profit-taking recommended). Stop-loss has been moved lower to 0.7055 from 0.7090 previously even though 0.7020 is already a strong resistance."
For more information, read our latest forex news.
AUD/USD is settling back after a good display on the bid as markets began to turn less negative in the European session, and the major commodity currency rallied from the lows of 0.6942 up to test the vicinity of the 50 SMA on the hourly chart at 0.6997. It was breaching there to score a high of 0.7023 and is now supported on the 20 SMA at 0.6979.
There was a better risk environment on Wall Street as well, but only temporarily and the day was mixed.
AUD/USD data before Nonfarm Payrolls
AUD/USD has data releases for tonight from the Australian economy ahead of key data from China tomorrow. We have the building permits and private sector credit from Australia as second tier data while Caixin manufacturing and services PMI's as well as NBS manufacturing and non-manufacturing will be released tomorrow. Then we have Nonfarm Payrolls in the US on Friday.
AUD/USD levels
Technically, analysts at UOB Group explained that the outlook on a 1-3 week basis remains Bearish. "But any down-move will likely struggle near 0.6895. AUD continues to edge lower and there is no change to the current bearish view. The target is at 0.6895, but based on the current momentum, a sustained break below this level appears unlikely for now (profit-taking recommended). Stop-loss has been moved lower to 0.7055 from 0.7090 previously even though 0.7020 is already a strong resistance."
For more information, read our latest forex news.
Wall Street closing: a little better but still quite mixed
FXStreet (Guatemala) - Wall Street was a mixed session Stocks with choppy price action across the main three indices after yesterday's sharp bearish action towards the August and 2015 lows.
Stocks enjoyed the Conference Board's consumer confidence index that rose to 103.0 from 101.3 in August while consensus was for a drop to 97.
However, apart from that, there was little in respect of data as markets keenly await this week's and next month's Nonfarm Payrolls data that will guide us for the meantime as to whether the Fed are likely to act this month/ this year around or not.
Meanwhile, the S&P index is on track for its worst quarter since the third quarter of 2011. A break of the August lows in the S&P, 1867.61, would open up the next targeted supporting levels. For the mean time, today, the Standard & Poor's 500 index ended up 0.1% after yesterday's losses of 2.6% to 1881.77. The Nasdaq's lost 0.6% and sunk further into the red for 2015. The Dow Jones industrial average finished up 47 points, or 0.3%, after gains of 118 points earlier in the session.
For more information, read our latest forex news.
Stocks enjoyed the Conference Board's consumer confidence index that rose to 103.0 from 101.3 in August while consensus was for a drop to 97.
However, apart from that, there was little in respect of data as markets keenly await this week's and next month's Nonfarm Payrolls data that will guide us for the meantime as to whether the Fed are likely to act this month/ this year around or not.
Meanwhile, the S&P index is on track for its worst quarter since the third quarter of 2011. A break of the August lows in the S&P, 1867.61, would open up the next targeted supporting levels. For the mean time, today, the Standard & Poor's 500 index ended up 0.1% after yesterday's losses of 2.6% to 1881.77. The Nasdaq's lost 0.6% and sunk further into the red for 2015. The Dow Jones industrial average finished up 47 points, or 0.3%, after gains of 118 points earlier in the session.
For more information, read our latest forex news.
Latin currencies suffer heavy losses - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted the conditions for Latin America currencies.
Key Quotes:
"Latin America currencies have suffered heavy losses of late but given the global environment, as well as some specific domestic woes, this theme is unlikely to change in the near term.
Of course, periods of correction can be expected but these are likely to offer better levels for re-instating Latin America shorts rather than signaling a reversal of fortunes. Given this view, we look to the findings in our Vulnerability Heat Map and LFPG to help us differentiate between individual Latin America currencies and, as such, we remain bearish on BRL. "
For more information, read our latest forex news.
Key Quotes:
"Latin America currencies have suffered heavy losses of late but given the global environment, as well as some specific domestic woes, this theme is unlikely to change in the near term.
Of course, periods of correction can be expected but these are likely to offer better levels for re-instating Latin America shorts rather than signaling a reversal of fortunes. Given this view, we look to the findings in our Vulnerability Heat Map and LFPG to help us differentiate between individual Latin America currencies and, as such, we remain bearish on BRL. "
For more information, read our latest forex news.
Carney does not mention monetary policy
FXStreet (Guatemala) - Carney, who is making a speech at the Lloyd's of London on climate change and financial stability, did not make a reference to monetary policy. GBP/USD traders will have to look to the UK GDP and end of week Nonfarm Payrolls.
In respect to the GDP data, analysts at TD Securities explained, "The Q2 GDP numbers on Wednesday will fully incorporate major historical revisions to the UK GDP which are highly academic, but may generate a lot of chatter about how the UK economy is faring better than first reported.
We already know that GDP growth from 2011 to 2013 will be revised up significantly (by up to 0.5% per year), which will undoubtedly generate some hawkish headlines. However, barring any major changes to the 2015 numbers, the MPC will see the revisions as purely structural, and won’t even entertain the idea of changing their policy stance."
For more information, read our latest forex news.
In respect to the GDP data, analysts at TD Securities explained, "The Q2 GDP numbers on Wednesday will fully incorporate major historical revisions to the UK GDP which are highly academic, but may generate a lot of chatter about how the UK economy is faring better than first reported.
We already know that GDP growth from 2011 to 2013 will be revised up significantly (by up to 0.5% per year), which will undoubtedly generate some hawkish headlines. However, barring any major changes to the 2015 numbers, the MPC will see the revisions as purely structural, and won’t even entertain the idea of changing their policy stance."
For more information, read our latest forex news.
EUR/USD lacking directions strength - FXStreet
FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that EUR/USD is ending the day pretty much unchanged around the 1.1240 region, in what has been a quite choppy day across financial markets in Europe and the US.
Key Quotes:
"Risk sentiment dominated the previous Asian session, leading to some EUR and JPY gains across the board. But the negative sentiment eased with London opening, leading to an intraday decline in those currencies, as stocks recovered ground. European indexes, however, closed slightly lower whilst Wall Street ended the day mixed, and not far from Monday's close, and so did the EUR/USD pair. There was plenty of macroeconomic releases all through the day, but investors pay no attention to them. Among the most relevant were German inflation that fell 0.2% in September, resulting in a 0.0% year-on-year reading. In the US, consumer confidence in the same month jumped to 103.0 against expectations of 96.1.
The short term picture is mild bearish, given that the price is hovering around a horizontal 20 SMA in the 1 hour chart, whilst the technical indicators head lower below their mid-lines, yet as long as above the 1.1200 level, the declines should remain limited. In the 4 hours chart, the technical stance is bullish, as the price is above its 20 SMA that anyway lacks directional strength, whilst the technical indicators are turning slightly higher in neutral territory. In this last time frame, the price is now around its 100 and 200 SMAs, both together and horizontal, reflecting the lack of directional strength."
For more information, read our latest forex news.
Key Quotes:
"Risk sentiment dominated the previous Asian session, leading to some EUR and JPY gains across the board. But the negative sentiment eased with London opening, leading to an intraday decline in those currencies, as stocks recovered ground. European indexes, however, closed slightly lower whilst Wall Street ended the day mixed, and not far from Monday's close, and so did the EUR/USD pair. There was plenty of macroeconomic releases all through the day, but investors pay no attention to them. Among the most relevant were German inflation that fell 0.2% in September, resulting in a 0.0% year-on-year reading. In the US, consumer confidence in the same month jumped to 103.0 against expectations of 96.1.
The short term picture is mild bearish, given that the price is hovering around a horizontal 20 SMA in the 1 hour chart, whilst the technical indicators head lower below their mid-lines, yet as long as above the 1.1200 level, the declines should remain limited. In the 4 hours chart, the technical stance is bullish, as the price is above its 20 SMA that anyway lacks directional strength, whilst the technical indicators are turning slightly higher in neutral territory. In this last time frame, the price is now around its 100 and 200 SMAs, both together and horizontal, reflecting the lack of directional strength."
For more information, read our latest forex news.
EUR/USD consolidates modest gains
FXStreet (Córdoba) - EUR/USD approached daily highs but after reaching 1.1266 lost strength and pulled back. From 1.1230 rose back to 1.1255/60 where currently trades, 15 pips above yesterday’s closing price.
The forex market remains quiet ahead of busy days in terms of data. EUR/USD so far moved in a range of less than a hundred pips. It peaked at 1.1281 during the Asian session and bottomed on European hours at 1.1194.
The euro is about to post the fourth daily gain out of the last five trading days as it continues to rise from level slightly above 1.1100. Price is back above the daily 20-SMA and holds a minor bullish tone.
Data ahead
Tomorrow in Germany retail sales and unemployment rate data will be released and from the Eurozone the preliminary CPI reading for September. On Tuesday, the German CPI dropped more than expected.
In the US the key data tomorrow will be the ADP employment report for September, that is expected to show a rise of 195.000 in private payrolls. On Friday the official NFP report will be released.
For more information, read our latest forex news.
The forex market remains quiet ahead of busy days in terms of data. EUR/USD so far moved in a range of less than a hundred pips. It peaked at 1.1281 during the Asian session and bottomed on European hours at 1.1194.
The euro is about to post the fourth daily gain out of the last five trading days as it continues to rise from level slightly above 1.1100. Price is back above the daily 20-SMA and holds a minor bullish tone.
Data ahead
Tomorrow in Germany retail sales and unemployment rate data will be released and from the Eurozone the preliminary CPI reading for September. On Tuesday, the German CPI dropped more than expected.
In the US the key data tomorrow will be the ADP employment report for September, that is expected to show a rise of 195.000 in private payrolls. On Friday the official NFP report will be released.
For more information, read our latest forex news.
USD/JPY: bullish hammer formation on 120 handle
FXStreet (Guatemala) - USD/JPY is currently trading at 119.64 with a high of 120.16 and a low of 119.24.
USD/JPY is flat with a familiar range. Price is subject to risk-on or risk-off themes as we progress through the sessions. The 200 DMA remains the key resistance at 120.88 today while the downside key support stays with 119.20 today. Stocks picked up in the European shift while the US is performing a little better as well albeit still mainly in the red.
Commodities have picked up and there is a general stabilization in today's US sessions while we await key data with the Nonfarm Payrolls at the end of the week. From Japan, we will see industrial production and retail sales ahead of the Q3 Tankan sentiment survey.
USD/JPY levels
Technically, Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that USD/JPY short-term technicals are neutral-bullish who explained that the risks are shifting to the upside as we note the formation of a hammer around 120.00. "Signals are muted, conflicted, and provide little in terms of information about the near-term bias. We look to support at 119.20 and consider the potential for gains toward the 200 day MA at 120.89."
For more information, read our latest forex news.
USD/JPY is flat with a familiar range. Price is subject to risk-on or risk-off themes as we progress through the sessions. The 200 DMA remains the key resistance at 120.88 today while the downside key support stays with 119.20 today. Stocks picked up in the European shift while the US is performing a little better as well albeit still mainly in the red.
Commodities have picked up and there is a general stabilization in today's US sessions while we await key data with the Nonfarm Payrolls at the end of the week. From Japan, we will see industrial production and retail sales ahead of the Q3 Tankan sentiment survey.
USD/JPY levels
Technically, Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that USD/JPY short-term technicals are neutral-bullish who explained that the risks are shifting to the upside as we note the formation of a hammer around 120.00. "Signals are muted, conflicted, and provide little in terms of information about the near-term bias. We look to support at 119.20 and consider the potential for gains toward the 200 day MA at 120.89."
For more information, read our latest forex news.
Gold fails to hold above $1130/Oz
FXStreet (Córdoba) - Gold price is falling for the third day in a row and continues to decline from $1157/Oz (Sept 24 high). After Wall Street opening bell the value of the ounce rose above $1130 and reached $1134 but failed to hold above $1130.
Currently it trades at $1128, back into negative territory, but still above Asian session lows that lie at $1123.75. The yellow metal continues to move with a bearish bias in the short term, approaching last week lows located at $1121.50.
Gold is falling despite a steady US dollar. Crude oil is rising 1.90% and stocks in Wall Street are posting mix results. The Dow Jones was unchanged around 16.000 points while the Nasdaq was falling 0.55%.
For more information, read our latest forex news.
Currently it trades at $1128, back into negative territory, but still above Asian session lows that lie at $1123.75. The yellow metal continues to move with a bearish bias in the short term, approaching last week lows located at $1121.50.
Gold is falling despite a steady US dollar. Crude oil is rising 1.90% and stocks in Wall Street are posting mix results. The Dow Jones was unchanged around 16.000 points while the Nasdaq was falling 0.55%.
For more information, read our latest forex news.
USD/CAD hits a new 11-year high
FXStreet (Córdoba) - USD/CAD rebounded at 1.3370 and jumped to 1.3457 hitting a fresh 11-year high. The pair then pulled back and it was trading at 1.3420/26, headed toward the highest close since June 2004.
The pair is about to post the eighth daily gain out of the last nine trading days as the loonie continues to decline against the US dollar. Not even today’s recovery in crude oil prices and stocks helped the Canadian dollar. The WTI barrel is rising 2.40% and trades above $45.40.
The loonie is the worst performer among commodity currencies on Tuesday while the US dollar is mostly lower in the market.
USD/CAD technical levels
To the downside, support levels might now lie at 1.3415, 1.3375 and 1.3345. On the other direction, resistance could be seen at 1.3455 (daily high), 1.3475 and 1.3495.
For more information, read our latest forex news.
The pair is about to post the eighth daily gain out of the last nine trading days as the loonie continues to decline against the US dollar. Not even today’s recovery in crude oil prices and stocks helped the Canadian dollar. The WTI barrel is rising 2.40% and trades above $45.40.
The loonie is the worst performer among commodity currencies on Tuesday while the US dollar is mostly lower in the market.
USD/CAD technical levels
To the downside, support levels might now lie at 1.3415, 1.3375 and 1.3345. On the other direction, resistance could be seen at 1.3455 (daily high), 1.3475 and 1.3495.
For more information, read our latest forex news.
USD/JPY: flat in 200DMA/119.20 range; awaiting data impacts - Scotiabank
FXStreet (Barcelona) - Eric Theoret, CFA, CMT FX Strategist at Scotiabank noted that USD/JPY is flat.
Key Quotes:
"Its Asian session gains fading steadily from the European open on the back of an improvement in the broader market tone. Domestic risks are likely to provide an added influence as we consider the near term release of industrial production and retail sales ahead of the Q3 Tankan sentiment survey."
"USDJPY short-term technicals: neutral-bullish—risk shifting to upside as we note the formation of a hammer around 120.00. Signals are muted, conflicted, and provide little in terms of information about the near-term bias. We look to support at 119.20 and consider the potential for gains toward the 200 day MA at 120.89."
For more information, read our latest forex news.
Key Quotes:
"Its Asian session gains fading steadily from the European open on the back of an improvement in the broader market tone. Domestic risks are likely to provide an added influence as we consider the near term release of industrial production and retail sales ahead of the Q3 Tankan sentiment survey."
"USDJPY short-term technicals: neutral-bullish—risk shifting to upside as we note the formation of a hammer around 120.00. Signals are muted, conflicted, and provide little in terms of information about the near-term bias. We look to support at 119.20 and consider the potential for gains toward the 200 day MA at 120.89."
For more information, read our latest forex news.
NZD/USD recovery may have more to go to test 200 SMA
FXStreet (Guatemala) - NZD/USD is currently trading at 0.6351 with a high of 0.6394 and a low of 0.6288.
NZD/USD has been recovering from the lows seen last week down at 0.6240 and has penetrated the 200 SMA on the hourly, but remains in a better offered trend below the 200 DMA and capped by the 50 DMA at 0.6464 today.
Asian risk-off mood kept the kiwi subdued, but an early pick up in the European markets lent support to the bird while at the same time, a recovery in commodity created demand in the commodity bloc currencies.
NZD/USD awaits data
There has been a lack of data from the NZ economy this week so far, with only building permits and ANZ Business Confidence to come from tonight's Asian market.
However, there is the possibility of a pick-up in business confidence die to the re-bound in dairy prices. We await the main event at the end of the week for a decent impact on price and that should come from Nonfarm Payrolls.
NZD/USD levels
Technically, the 200 SMA on the hourly and the 20 DMA have been key areas at 0.6334 and 0.6332 respectively. A break of the 4hr 200 SMA at 0.6403 would stand the bird in good stead for a continuation of the recovery and it will be the first time the 200 SMA on the same time frame has been breached since late August.
MACD on the same time frame is less negative back to the mid point turning positive with RSI (14) breaching 50 and headed north allowing for further upside.
For more information, read our latest forex news.
NZD/USD has been recovering from the lows seen last week down at 0.6240 and has penetrated the 200 SMA on the hourly, but remains in a better offered trend below the 200 DMA and capped by the 50 DMA at 0.6464 today.
Asian risk-off mood kept the kiwi subdued, but an early pick up in the European markets lent support to the bird while at the same time, a recovery in commodity created demand in the commodity bloc currencies.
NZD/USD awaits data
There has been a lack of data from the NZ economy this week so far, with only building permits and ANZ Business Confidence to come from tonight's Asian market.
However, there is the possibility of a pick-up in business confidence die to the re-bound in dairy prices. We await the main event at the end of the week for a decent impact on price and that should come from Nonfarm Payrolls.
NZD/USD levels
Technically, the 200 SMA on the hourly and the 20 DMA have been key areas at 0.6334 and 0.6332 respectively. A break of the 4hr 200 SMA at 0.6403 would stand the bird in good stead for a continuation of the recovery and it will be the first time the 200 SMA on the same time frame has been breached since late August.
MACD on the same time frame is less negative back to the mid point turning positive with RSI (14) breaching 50 and headed north allowing for further upside.
For more information, read our latest forex news.
Mixed calls from Fed officials - UOB
FXStreet (Guatemala) - Analysts at UOB Group explained recent and mixed commentary from some of the Fed officials.
Key Quotes:
"New York Fed President William Dudley was relatively hawkish, suggesting liftoff was likely to occur before year-end, at the same time, noting that financial conditions and global growth as recent considerations for monetary policy."
"Meanwhile, Chicago Fed President Charles Evans surprised nobody with his especially dovish commentary, noting that he was unlikely to support a rate hike before mid-2016 at the earliest."
For more information, read our latest forex news.
Key Quotes:
"New York Fed President William Dudley was relatively hawkish, suggesting liftoff was likely to occur before year-end, at the same time, noting that financial conditions and global growth as recent considerations for monetary policy."
"Meanwhile, Chicago Fed President Charles Evans surprised nobody with his especially dovish commentary, noting that he was unlikely to support a rate hike before mid-2016 at the earliest."
For more information, read our latest forex news.
EUR/GBP: headed for a sell-off?
FXStreet (Guatemala) - EUR/GBP remains in a robust position above the 200 DMA, recovered from the lows of 0.6932 seen in July's business on the long-term downtrend from the 0.84 handle.
The cross has somehow managed to garner demand despite the disparity between the Central Banks and the ECB potentially embarking on further QE while sentiment is for the BoE and Fed to start increasing interest rates, with the Fed likely to begin before the year is out and the BoE sighted to commence at some stage in the first half of next year.
Risk-off flows had been supporting the single currency while equities and risky asset classes that were funded using the euro carry were unwound, but that correlation has started to moderate now according to analysts at Scotiabank.
EUR/GBP bid for how long?
Nevertheless, the euro continues to garner strength and visa-versa in this week's performance in stocks, evident in Glencore's recovery and a slump in the direction of the single currency in the European shift today.
The euro has gathered pace again in the US shift as has the cross, targeting 0.7436 highs while 0.7380 and the 50 SMA on the hourly offers near term support. The Nonfarm Payrolls, UK GDP and Carney are all risk factors that may instigate a pause the the cross's bid.
For more information, read our latest forex news.
The cross has somehow managed to garner demand despite the disparity between the Central Banks and the ECB potentially embarking on further QE while sentiment is for the BoE and Fed to start increasing interest rates, with the Fed likely to begin before the year is out and the BoE sighted to commence at some stage in the first half of next year.
Risk-off flows had been supporting the single currency while equities and risky asset classes that were funded using the euro carry were unwound, but that correlation has started to moderate now according to analysts at Scotiabank.
EUR/GBP bid for how long?
Nevertheless, the euro continues to garner strength and visa-versa in this week's performance in stocks, evident in Glencore's recovery and a slump in the direction of the single currency in the European shift today.
The euro has gathered pace again in the US shift as has the cross, targeting 0.7436 highs while 0.7380 and the 50 SMA on the hourly offers near term support. The Nonfarm Payrolls, UK GDP and Carney are all risk factors that may instigate a pause the the cross's bid.
For more information, read our latest forex news.
India stands to outperform within EM - BBH
FXStreet (Córdoba) - According to Win Thin, Global Head of Emerging Market Currency Strategy at Brown Brothers Harriman, India has a solid growth outlook, inflation is falling and external accounts in good shape creating an environment for the county to outperform within Emerging Markets (EM).
Key Quotes:
“The RBI surprised the markets with a 50 bp cut in policy rates, yet the rupee firmed. India stands to outperform within EM in the current environment. The growth outlook is solid, inflation is falling, and the external accounts are in good shape. Structural reforms have stalled, but markets have adjusted their expectations somewhat.”
“Exports account for only 15% of GDP, making India fairly resistant to the global growth slowdown.”
“The fiscal numbers are India’s weak spot, but even here, improvement has been seen. (…) The consolidated public sector deficit is seen by the IMF at around -7.2% of GDP this year and -7.1% next year. Strong growth will help these numbers, but structural reforms are clearly needed.
“India’s external debt metrics are solid, and compare well to other major EM countries.”
“The rupee is one of the best performers in EM, -4% YTD against the dollar. This is second only to CNY at -2.5% YTD (…) We expect INR to weaken with the rest of EM, but its outperformance to continue. USD/INR is likely to test the all-time high near 68.85 from August 2013.”
“With inflation likely to remain low and the RBI in the midst of an easing cycle, we think Indian bonds are likely to continue outperforming.”
For more information, read our latest forex news.
Key Quotes:
“The RBI surprised the markets with a 50 bp cut in policy rates, yet the rupee firmed. India stands to outperform within EM in the current environment. The growth outlook is solid, inflation is falling, and the external accounts are in good shape. Structural reforms have stalled, but markets have adjusted their expectations somewhat.”
“Exports account for only 15% of GDP, making India fairly resistant to the global growth slowdown.”
“The fiscal numbers are India’s weak spot, but even here, improvement has been seen. (…) The consolidated public sector deficit is seen by the IMF at around -7.2% of GDP this year and -7.1% next year. Strong growth will help these numbers, but structural reforms are clearly needed.
“India’s external debt metrics are solid, and compare well to other major EM countries.”
“The rupee is one of the best performers in EM, -4% YTD against the dollar. This is second only to CNY at -2.5% YTD (…) We expect INR to weaken with the rest of EM, but its outperformance to continue. USD/INR is likely to test the all-time high near 68.85 from August 2013.”
“With inflation likely to remain low and the RBI in the midst of an easing cycle, we think Indian bonds are likely to continue outperforming.”
For more information, read our latest forex news.
EUR's correlations moderating - Scotiabank
FXStreet (Guatemala) - Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that the EUR’s correlation to both gold prices and risk assets is moderating.
Key Quotes:
"The 30 day rolling correlation to gold fading to 0.3 from its recent summer highs above 0.80."
"EUR has also softened its ties to the S&P 500, with the negative correlation moderating to -0.54 from late August levels at -0.92."
"The softening suggests a shift in focus from broader market sentiment back toward fundamentals, with relative policy considerations likely to provide near-term pressure on EUR as market participants look to an increasing probability of greater ECB accommodation."
For more information, read our latest forex news.
Key Quotes:
"The 30 day rolling correlation to gold fading to 0.3 from its recent summer highs above 0.80."
"EUR has also softened its ties to the S&P 500, with the negative correlation moderating to -0.54 from late August levels at -0.92."
"The softening suggests a shift in focus from broader market sentiment back toward fundamentals, with relative policy considerations likely to provide near-term pressure on EUR as market participants look to an increasing probability of greater ECB accommodation."
For more information, read our latest forex news.
EUR/USD rises toward 1.1250
FXStreet (Córdoba) - EUR/USD was rejected from levels under 1.1200 and is now attempting to rise on top of 1.1250. Currently it trades at 1.1235/38, facing the hourly 20-SMA. Price action continues to be limited across the board, particularly in European crosses.
The euro is back at the level it had at the beginning of the day against the US dollar. Economic data from the Euro zone showed two sides: improving confidence and inflation trending lower. The Economic Confidence survey showed an improvement in September while inflation in Germany showed a lower-than-expected reading, with the annual CPI index, back to negative territory.
In the US, a reading of consumer confidence also showed numbers above expectations. The report from The Conference Board improved from 101.3 to 103.00 in September; analysts were expecting a decline.
EUR/USD bounces back to 1.1240
The economic numbers had little impact on the EUR/USD pair that is trading around 1.1240, moving away from the lows and approaching daily highs. During the Asian session it reached 1.1281, before reversing. At the beginning of trading in Wall Street bottomed at 1.1194 but quickly bounced back above.
For more information, read our latest forex news.
The euro is back at the level it had at the beginning of the day against the US dollar. Economic data from the Euro zone showed two sides: improving confidence and inflation trending lower. The Economic Confidence survey showed an improvement in September while inflation in Germany showed a lower-than-expected reading, with the annual CPI index, back to negative territory.
In the US, a reading of consumer confidence also showed numbers above expectations. The report from The Conference Board improved from 101.3 to 103.00 in September; analysts were expecting a decline.
EUR/USD bounces back to 1.1240
The economic numbers had little impact on the EUR/USD pair that is trading around 1.1240, moving away from the lows and approaching daily highs. During the Asian session it reached 1.1281, before reversing. At the beginning of trading in Wall Street bottomed at 1.1194 but quickly bounced back above.
For more information, read our latest forex news.
GBP/USD awaits Carney while bearish below 200 DMA
FXStreet (Guatemala) - GBP/USD is currently trading in recovery mode at 1.5158 with a high of 1.5206 and a low of 1.5127.
There has been a bit of a flurry withe the London fix and end of month flows starting to come through, although the better offered bias remains while cable trades below the 200 DMA at 1.5331 and EUR/GBP remains firmly in demand, riding the 50 SMA and 50 DMA with the 200 DMA breached yesterday and trading at daily highs again today. However, EUR/USD is falling back onto the 200 DMA, so when the greenback finally garners some demand, and if focus shifts back to the Central Banks, cable may find support again as it has done before in such an environment. Key near term supports are 1.5106 and 1.5055.
GBP/USD and Carney
We have Carney taking the spotlight later today as we progress through the US session on Wall Street. "The key focus there will be whether he provides us with any sense of the MPC’s assessment of the fallout from the financial market volatility and EM growth slowdown seen over the last couple of months onto the UK’s domestic economy," as explained by analysts at TD Securities. Attentions will then turn to UK GDP and Nonfarm Payrolls that are both released later in the week.
For more information, read our latest forex news.
There has been a bit of a flurry withe the London fix and end of month flows starting to come through, although the better offered bias remains while cable trades below the 200 DMA at 1.5331 and EUR/GBP remains firmly in demand, riding the 50 SMA and 50 DMA with the 200 DMA breached yesterday and trading at daily highs again today. However, EUR/USD is falling back onto the 200 DMA, so when the greenback finally garners some demand, and if focus shifts back to the Central Banks, cable may find support again as it has done before in such an environment. Key near term supports are 1.5106 and 1.5055.
GBP/USD and Carney
We have Carney taking the spotlight later today as we progress through the US session on Wall Street. "The key focus there will be whether he provides us with any sense of the MPC’s assessment of the fallout from the financial market volatility and EM growth slowdown seen over the last couple of months onto the UK’s domestic economy," as explained by analysts at TD Securities. Attentions will then turn to UK GDP and Nonfarm Payrolls that are both released later in the week.
For more information, read our latest forex news.
USD/JPY hits fresh daily highs and reverses
FXStreet (Córdoba) - USD/JPY rose after the release of US consumer confidence data and peaked at 120.15, reaching a fresh daily high but it quickly reversed and dropped back below 120.00. At the moment is trading at 119.75/80 where the hourly 20-SMA is located and also where it closed yesterday.
According to the report elaborated by The Conference Board, consumer confidence in the US rose in September. The index climbed from a revised number of 101.3 to 103.00; considerably above market consensus of a reading of 96.1.
Stocks in Wall Street are rising after falling sharply yesterday. The Dow Jones tested briefly levels under 16.000 but is now up 30 points or 0.18%. US government bonds erased earlier losses and are pointing higher. The 10-year yield it at 2.07% after hitting 2.11%.
USD/JPY range persists
On a wider perspective, the pair continues to move sideways, with traders still expecting a break of the range that is on place since the beginning of the current month. The upper limit of the range is located around 121.40 while the downside limit could be seen between 118.75 and 119.00.
For more information, read our latest forex news.
According to the report elaborated by The Conference Board, consumer confidence in the US rose in September. The index climbed from a revised number of 101.3 to 103.00; considerably above market consensus of a reading of 96.1.
Stocks in Wall Street are rising after falling sharply yesterday. The Dow Jones tested briefly levels under 16.000 but is now up 30 points or 0.18%. US government bonds erased earlier losses and are pointing higher. The 10-year yield it at 2.07% after hitting 2.11%.
USD/JPY range persists
On a wider perspective, the pair continues to move sideways, with traders still expecting a break of the range that is on place since the beginning of the current month. The upper limit of the range is located around 121.40 while the downside limit could be seen between 118.75 and 119.00.
For more information, read our latest forex news.
USD/CHF continues to consolidate, around 0.9710
FXStreet (Córdoba) - USD/CHF is moving sideways in range around 0.9700, on a quiet day for European currencies. Among them, the Swiss franc is the best performer.
USD/CHF and a known area
The pair peaked during the Asian session at 0.9749 and then moved to the downside and bottomed at 0.9686, the lowest since last Thursday. Then recovered and approached daily highs but lost strength above 0.9730. To the downside, the area around 0.9700 is offering support.
The pair is consolidating after falling 60 pips on Monday. It continues to trade sideways above 0.9670 like it has been the case during September.
The US dollar is about to end the month with modes gains versus the Swiss franc. USD/CHF ended August and July around 0.9650 and 0.9750 and is about to do the same again as the pair continues to consolidate.
For more information, read our latest forex news.
USD/CHF and a known area
The pair peaked during the Asian session at 0.9749 and then moved to the downside and bottomed at 0.9686, the lowest since last Thursday. Then recovered and approached daily highs but lost strength above 0.9730. To the downside, the area around 0.9700 is offering support.
The pair is consolidating after falling 60 pips on Monday. It continues to trade sideways above 0.9670 like it has been the case during September.
The US dollar is about to end the month with modes gains versus the Swiss franc. USD/CHF ended August and July around 0.9650 and 0.9750 and is about to do the same again as the pair continues to consolidate.
For more information, read our latest forex news.
Buy DXY on dips towards 95.00 – Westpac
FXStreet (Edinburgh) - In the view of strategists at Westpac, pullbacks in the greenback (in terms of DXY) towards the 95.00 area remain a buying opportunity.
Key Quotes
“The global milieu remains toxic for risk taking - key EM anchor currencies such as BRL and CNH remain under heavy pressure, export orders for global trade bellwethers like Taiwan are in freefall (-8.3% y/y vs expectations for -4.7% y/y), the US manufacturing slowdown seems to be gathering pace with the Philly, Empire and Richmond Fed surveys all slipping into negative territory (flagging risks of a sub-50 ISM this week) while corporate malfeasance at one of the largest auto makers in the world threatens to damage German growth prospects”.
“Risk averse markets should keep the USD well supported vs the likes of dollar bloc/EM for some time yet. Beyond that a probable Dec Fed hike - heavily underpriced by markets - should offer more sustained medium term USD support”.
“While US manufacturing looks very soft right here progress on both sides of the Fed’s dual mandate should be apparent by year end. For one there is the seasonal propensity for the US data to beat expectations across the board late in the calendar year while base effects from the fall in energy prices should begin to wash out of the CPI/PCE data. USD index a buy into 95”.
For more information, read our latest forex news.
Key Quotes
“The global milieu remains toxic for risk taking - key EM anchor currencies such as BRL and CNH remain under heavy pressure, export orders for global trade bellwethers like Taiwan are in freefall (-8.3% y/y vs expectations for -4.7% y/y), the US manufacturing slowdown seems to be gathering pace with the Philly, Empire and Richmond Fed surveys all slipping into negative territory (flagging risks of a sub-50 ISM this week) while corporate malfeasance at one of the largest auto makers in the world threatens to damage German growth prospects”.
“Risk averse markets should keep the USD well supported vs the likes of dollar bloc/EM for some time yet. Beyond that a probable Dec Fed hike - heavily underpriced by markets - should offer more sustained medium term USD support”.
“While US manufacturing looks very soft right here progress on both sides of the Fed’s dual mandate should be apparent by year end. For one there is the seasonal propensity for the US data to beat expectations across the board late in the calendar year while base effects from the fall in energy prices should begin to wash out of the CPI/PCE data. USD index a buy into 95”.
For more information, read our latest forex news.
AUD/USD bounces and rises back above 0.7000
FXStreet (Córdoba) - AUD/USD managed to erase losses and rose back above 0.7000 as the US dollar extended losses versus commodity currencies.
AUD/USD finds support at 0.6930/35 (again)
The pair dropped during the Asian session and bottomed at 0.6933, 1 pip below yesterday’s lows and hit the weakest level since September 8. The area around 0.6930/35 offered support again and from there the Aussie started to recover.
Initially climbed to 0.6975 and then broke above and gained further momentum. Recently printed a fresh daily high at 0.7016. Currently it trades at 0.7012/15, near the highs, holding a bullish tone in the short term.
AUD/USD levels to watch
The mentioned support at 0.6930/35 remains an important level a break below could open the doors for a decline toward 0.6900, where 2015 lows area located.
On the opposite direction, the immediate key resistance could be seen at 0.7040, that limited the upside on Thursday and Friday. A break higher could push the pair toward 0.7100. Above, the key resistance level might be the 0.7200 zone. AUD/USD traded above 0.7200 during September but it failed to post a daily close on top.
For more information, read our latest forex news.
AUD/USD finds support at 0.6930/35 (again)
The pair dropped during the Asian session and bottomed at 0.6933, 1 pip below yesterday’s lows and hit the weakest level since September 8. The area around 0.6930/35 offered support again and from there the Aussie started to recover.
Initially climbed to 0.6975 and then broke above and gained further momentum. Recently printed a fresh daily high at 0.7016. Currently it trades at 0.7012/15, near the highs, holding a bullish tone in the short term.
AUD/USD levels to watch
The mentioned support at 0.6930/35 remains an important level a break below could open the doors for a decline toward 0.6900, where 2015 lows area located.
On the opposite direction, the immediate key resistance could be seen at 0.7040, that limited the upside on Thursday and Friday. A break higher could push the pair toward 0.7100. Above, the key resistance level might be the 0.7200 zone. AUD/USD traded above 0.7200 during September but it failed to post a daily close on top.
For more information, read our latest forex news.
USD/CAD drops to lows near 1.3370
FXStreet (Edinburgh) - After posting fresh 11-year tops near 1.3440, USD/CAD has quickly lost nearly 70 pips to print session lows in the 1.3375/70 band.
USD/CAD lower on oil recovery
The sudden spike in crude oil prices – testing the mid-$45.00 as of writing – is lending further support to the Canadian dollar, collaborating with the leg lower at the same time.
The outlook on the pair remains on the bullish side nonetheless, supported by the divergence between the Federal Reserve and the Bank of Canada, as well as the bearish prospects surrounding crude oil prices.
According to strategists at TD Securities, “We think a washout towards the 1.3150/1.3200 will be necessary to resume a more sustainable uptrend that we expect over the next several months”.
USD/CAD levels to consider
The pair is now losing 0.06% at 1.3388 and a break below 1.3370 (low Sep.29) would open the door to 1.3303 (low Sep.25) and finally 1.3233 (low Sep.23). On the other hand, the initial hurdle lies at 1.3435 (high Sep.29) followed by 1.3495 (high Jun.29 2004) and then 1.3500 (psychological level).
For more information, read our latest forex news.
USD/CAD lower on oil recovery
The sudden spike in crude oil prices – testing the mid-$45.00 as of writing – is lending further support to the Canadian dollar, collaborating with the leg lower at the same time.
The outlook on the pair remains on the bullish side nonetheless, supported by the divergence between the Federal Reserve and the Bank of Canada, as well as the bearish prospects surrounding crude oil prices.
According to strategists at TD Securities, “We think a washout towards the 1.3150/1.3200 will be necessary to resume a more sustainable uptrend that we expect over the next several months”.
USD/CAD levels to consider
The pair is now losing 0.06% at 1.3388 and a break below 1.3370 (low Sep.29) would open the door to 1.3303 (low Sep.25) and finally 1.3233 (low Sep.23). On the other hand, the initial hurdle lies at 1.3435 (high Sep.29) followed by 1.3495 (high Jun.29 2004) and then 1.3500 (psychological level).
For more information, read our latest forex news.
WTI firmer, advances beyond $45.00
FXStreet (Edinburgh) - Crude oil prices are recovering on Tuesday, with the barrel of West Texas Intermediate managing to surpass the $45.00 mark per barrel.
WTI rebound from $44.30
Prices for the WTI keep meandering the broader $44.00-$48.00 range amidst the omnipresent concerns over the global supply glut. However, crude oil prices are deriving some support today on hopes that the US output could extend its recent downtrend.
Ahead in the week, market participants will remain vigilant on the weekly report on crude stockpiles by the EIA (Wednesday) and the US oil rig count by driller Baker Hughes.
WTI levels to consider
At the moment the barrel of WTI is advancing 1.73% at $45.20 facing the next up barrier at $45.50 (high Sep.28) followed by $46.38 (high Sep.25) and finally $46.54 (high Sep.23). On the flip side, a break below $44.30 (low Sep.28) would aim for $43.71 (low Sep.24) and then $43.36 (low Sep.10).
For more information, read our latest forex news.
WTI rebound from $44.30
Prices for the WTI keep meandering the broader $44.00-$48.00 range amidst the omnipresent concerns over the global supply glut. However, crude oil prices are deriving some support today on hopes that the US output could extend its recent downtrend.
Ahead in the week, market participants will remain vigilant on the weekly report on crude stockpiles by the EIA (Wednesday) and the US oil rig count by driller Baker Hughes.
WTI levels to consider
At the moment the barrel of WTI is advancing 1.73% at $45.20 facing the next up barrier at $45.50 (high Sep.28) followed by $46.38 (high Sep.25) and finally $46.54 (high Sep.23). On the flip side, a break below $44.30 (low Sep.28) would aim for $43.71 (low Sep.24) and then $43.36 (low Sep.10).
For more information, read our latest forex news.
US stocks cheer the rise in US consumer confidence figure
FXStreet (Mumbai) - The US stocks climbed their way back to positive territory after the US consumer confidence figure printed well above estimates.
At the time of writing, the Dow Jones Industrial Average (DJIA) advanced 74 points and the S&P 500 strengthened 12.38 points. The Nasdaq strengthened 37 points.
The stock prices received a boost after the Conference Board’s index of consumer confidence printed at 103 in September from 101.3 a month earlier. Another report showed the S&P/Case-Shiller index of property values rose 5% in the 12 months ended in July after a 4.9%year-over-year gain in the previous three months.
Stock markets in Europe and the stock futures in the US were slammed earlier today on fresh concerns over China’s slowing growth after a dismal reading on industrial profits.
For more information, read our latest forex news.
At the time of writing, the Dow Jones Industrial Average (DJIA) advanced 74 points and the S&P 500 strengthened 12.38 points. The Nasdaq strengthened 37 points.
The stock prices received a boost after the Conference Board’s index of consumer confidence printed at 103 in September from 101.3 a month earlier. Another report showed the S&P/Case-Shiller index of property values rose 5% in the 12 months ended in July after a 4.9%year-over-year gain in the previous three months.
Stock markets in Europe and the stock futures in the US were slammed earlier today on fresh concerns over China’s slowing growth after a dismal reading on industrial profits.
For more information, read our latest forex news.
Bullish stance persists around USD/CAD – Scotiabank
FXStreet (Edinburgh) - In the view of Eric Theoret, Currency Strategist at Scotiabank, the perspective for the pair remains bullish.
Key Quotes
“Measures of CAD volatility are climbing and options prices hint to a rise in demand for downside protection, with an ongoing divergence to its key drivers (oil, relative central bank policy expectations) highlighting a considerable influence from flows driven by sentiment and positioning”.
“Near-term CAD risk lies with the broader market tone ahead of Wednesday’s monthly GDP for July”.
“Momentum indicators are suggestive of acceleration, with the MACD joining an increasingly bullish RSI at 65”.
“We remain concerned by the lack of confirmation from momentum, with signs of negative divergence as both the MACD and RSI fail to confirm fresh highs in spot”.
“USDCAD is quickly approaching 1.3467, the 61.8% Fibonacci retracement level of the 2002-2007 decline from 1.6193 to 0.9058”.
For more information, read our latest forex news.
Key Quotes
“Measures of CAD volatility are climbing and options prices hint to a rise in demand for downside protection, with an ongoing divergence to its key drivers (oil, relative central bank policy expectations) highlighting a considerable influence from flows driven by sentiment and positioning”.
“Near-term CAD risk lies with the broader market tone ahead of Wednesday’s monthly GDP for July”.
“Momentum indicators are suggestive of acceleration, with the MACD joining an increasingly bullish RSI at 65”.
“We remain concerned by the lack of confirmation from momentum, with signs of negative divergence as both the MACD and RSI fail to confirm fresh highs in spot”.
“USDCAD is quickly approaching 1.3467, the 61.8% Fibonacci retracement level of the 2002-2007 decline from 1.6193 to 0.9058”.
For more information, read our latest forex news.
Gold recovers as US stocks waver
FXStreet (Mumbai) - Gold prices recovered losses to trade moderately positive on haven demand in the NY session as US stocks swing between gains and losses.
Risk-off in the US
The early losses in the US equities indicated the risk averse mood remains intact. The European stock markets too are erasing gains, tracking the nervous mood on the Wall Street. Consequently, the traditional safe haven assets like Gold, Treasuries, JPY are on the rise.
The metal was offered heavily since Monday’s Asian session after Fed’s Yellen talked up rate hike bets last Thursday. However, markets seem unconvinced that a rate hike could indeed happen this year.
Meanwhile, the uptick in the September consumer confidence (actual 103.00, expected 96.1) has failed to have a sizeable impact on the metal. Heading into the NY closing, the metal traders are likely to track the movement in the US stock markets.
Gold Technical Levels
The metal currently trades around USD 1133/Oz. The immediate resistance is seen at 1141.73 (Sep 18 high), above which the metal could target 1148.35 (100-DMA). On the other side, support is seen at 1127.93 (previous day’s low) and 1124.20 (daily low).
For more information, read our latest forex news.
Risk-off in the US
The early losses in the US equities indicated the risk averse mood remains intact. The European stock markets too are erasing gains, tracking the nervous mood on the Wall Street. Consequently, the traditional safe haven assets like Gold, Treasuries, JPY are on the rise.
The metal was offered heavily since Monday’s Asian session after Fed’s Yellen talked up rate hike bets last Thursday. However, markets seem unconvinced that a rate hike could indeed happen this year.
Meanwhile, the uptick in the September consumer confidence (actual 103.00, expected 96.1) has failed to have a sizeable impact on the metal. Heading into the NY closing, the metal traders are likely to track the movement in the US stock markets.
Gold Technical Levels
The metal currently trades around USD 1133/Oz. The immediate resistance is seen at 1141.73 (Sep 18 high), above which the metal could target 1148.35 (100-DMA). On the other side, support is seen at 1127.93 (previous day’s low) and 1124.20 (daily low).
For more information, read our latest forex news.
EUR/USD: technicals point to a neutral bias – Westpac
FXStreet (Edinburgh) - Strategists at Westpac have reiterated the neutral outlook on the pair in the near term.
Key Quotes
“EUR understandably running into some short term demand into the 1.1085-1.1100 technical support level”.
“A tough call here, the risk averse backdrop on the one hand likely to underpin EUR but relative growth and policy vs the US still decidedly tilted in the USD’s favour”.
“For the time being we stick with a positive one week EUR view - higher energy prices in the month tip the risks in favour of a firmer Sep advance EZ CPI while regional US PMIs flag sub-50 ISM risks this week”.
“Beyond that a Dec Fed hike still looks like a good bet and we stick with a negative 3mth EUR outlook”.
“The optics look much more favourable for a Dec Fed hike amid what is likely another year of “seasonally” stronger US activity data - as has been custom into in recent years - while the base effects from the fall in energy prices drop out of the US CPI calculations through Q4”.
“Reversal from 1.1460/80 has been aggressive, keeping pressure on the downside in the short term. Strong support expected at 1.1120/50. Neutral bias”.
For more information, read our latest forex news.
Key Quotes
“EUR understandably running into some short term demand into the 1.1085-1.1100 technical support level”.
“A tough call here, the risk averse backdrop on the one hand likely to underpin EUR but relative growth and policy vs the US still decidedly tilted in the USD’s favour”.
“For the time being we stick with a positive one week EUR view - higher energy prices in the month tip the risks in favour of a firmer Sep advance EZ CPI while regional US PMIs flag sub-50 ISM risks this week”.
“Beyond that a Dec Fed hike still looks like a good bet and we stick with a negative 3mth EUR outlook”.
“The optics look much more favourable for a Dec Fed hike amid what is likely another year of “seasonally” stronger US activity data - as has been custom into in recent years - while the base effects from the fall in energy prices drop out of the US CPI calculations through Q4”.
“Reversal from 1.1460/80 has been aggressive, keeping pressure on the downside in the short term. Strong support expected at 1.1120/50. Neutral bias”.
For more information, read our latest forex news.
EUR/USD sustains above 1.12 as US stocks struggle
FXStreet (Mumbai) - The EUR/USD pair hovers above 1.12 handle as the US stocks are struggling hard to maintain the positive tone in the early session.
Stuck between hourly 100-MA and 200-MA
The pair is trading between the hourly 100-MA and hourly 200-MA currently located at 1.1202 and 1.1230 respectively. Euro found fresh bids around hourly 100-MA as the stock markets in the US began the day on a nervous note. The Dow Jones futures earlier today were indicating the index could open moderately higher.
However, the index opened on a flat note and is working hard to stay positive on the day. Consequently, the EUR found support around 1.12 handle and recovered to trade around 1.1225 levels. The focus now shifts to the US consumer confidence figure due for release later today.
EUR/USD Technical Levels
At 1.1206, the immediate resistance is located at 1.1230 (hourly 200-DMA), followed by a major hurdle at 1.13 levels. On the other hand, support is seen at 1.1182 (200-DMA) and 1.1145 (100-DMA).
For more information, read our latest forex news.
Stuck between hourly 100-MA and 200-MA
The pair is trading between the hourly 100-MA and hourly 200-MA currently located at 1.1202 and 1.1230 respectively. Euro found fresh bids around hourly 100-MA as the stock markets in the US began the day on a nervous note. The Dow Jones futures earlier today were indicating the index could open moderately higher.
However, the index opened on a flat note and is working hard to stay positive on the day. Consequently, the EUR found support around 1.12 handle and recovered to trade around 1.1225 levels. The focus now shifts to the US consumer confidence figure due for release later today.
EUR/USD Technical Levels
At 1.1206, the immediate resistance is located at 1.1230 (hourly 200-DMA), followed by a major hurdle at 1.13 levels. On the other hand, support is seen at 1.1182 (200-DMA) and 1.1145 (100-DMA).
For more information, read our latest forex news.
Tuesday, September 29, 2015
GBP/USD recovers ahead of European opening bell
FXStreet (Mumbai) - The GBP/USD pair recovered moderate losses ahead of the European opening bell, but the gains remain muted as investors wait to see if the European stocks extend risk aversion or trade positive.
Back above key support
The cable is trading few pips above 1.5170 (Sep 1 low) levels. The Asian markets turned risk averse today, pushing the Sterling and other risk assets slightly lower. However, the bid tone improved once around the key support at 1.5170 levels.
The investors now look towards the European stock markets. The major equity futures are pointing to a weak opening. Meanwhile, the UK mortgage approvals and net consumer credit could also influence the pair.
GBP/USD Technical Levels
At 1.5180, the immediate resistance is located at 1.52, above which the spot could target 1.5248 (50% of Apr-June rally). On the other side, support is seen at 1.5170 (Sep 1 low) and 1.5135 (Sep 25 low).
For more information, read our latest forex news.
Back above key support
The cable is trading few pips above 1.5170 (Sep 1 low) levels. The Asian markets turned risk averse today, pushing the Sterling and other risk assets slightly lower. However, the bid tone improved once around the key support at 1.5170 levels.
The investors now look towards the European stock markets. The major equity futures are pointing to a weak opening. Meanwhile, the UK mortgage approvals and net consumer credit could also influence the pair.
GBP/USD Technical Levels
At 1.5180, the immediate resistance is located at 1.52, above which the spot could target 1.5248 (50% of Apr-June rally). On the other side, support is seen at 1.5170 (Sep 1 low) and 1.5135 (Sep 25 low).
For more information, read our latest forex news.
USD/JPY keeps falling along with Asian stocks, near 119.50
FXStreet (Mumbai) - The USD/JPY pair ran through fresh offers around 119.70 levels in the late-Asian trades and knocked-off the major to fresh session lows ahead of Europe open.
USD/JPY trades below 5-DMA
Currently, the USD/JPY pair trades -0.37% lower at 119.47, quickly recovering from fresh four-day lows reached at 119.38 in last hours. The Japanese currency found fresh bids and strengthened further versus the US dollar in early moves as the Asian equities sell-off intensified, thus hitting hard investors’ sentiment.
The Japanese benchmark, the Nikkei extended the drop and finished over -4% lower while China’s Shanghai Composite tanks -2%. Hong Kong’s benchmark, Hang Seng remains deep in the red, down -3.36%.
Markets now await the European opening bells for further direction on the pair as risk-off sentiment is likely to extend further amid a data-dry European session ahead.
Looking ahead, the NY session offers consumer confidence and goods trade balance data which may have major influence on the pair.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120 (Today’s High) levels and above which it could extend 120.64 (Sept 22 High). To the downside immediate support might be located at 119.21 (Sept 24 Low) below that at 119.03 (Sept 18 Low) levels.
For more information, read our latest forex news.
USD/JPY trades below 5-DMA
Currently, the USD/JPY pair trades -0.37% lower at 119.47, quickly recovering from fresh four-day lows reached at 119.38 in last hours. The Japanese currency found fresh bids and strengthened further versus the US dollar in early moves as the Asian equities sell-off intensified, thus hitting hard investors’ sentiment.
The Japanese benchmark, the Nikkei extended the drop and finished over -4% lower while China’s Shanghai Composite tanks -2%. Hong Kong’s benchmark, Hang Seng remains deep in the red, down -3.36%.
Markets now await the European opening bells for further direction on the pair as risk-off sentiment is likely to extend further amid a data-dry European session ahead.
Looking ahead, the NY session offers consumer confidence and goods trade balance data which may have major influence on the pair.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120 (Today’s High) levels and above which it could extend 120.64 (Sept 22 High). To the downside immediate support might be located at 119.21 (Sept 24 Low) below that at 119.03 (Sept 18 Low) levels.
For more information, read our latest forex news.
EUR/USD forecast: attention to German CPI – Commerzbank and OCBC
FXStreet (Edinburgh) - The risk-off sentiment continues to dominate the session on Tuesday, allowing EUR/USD to test daily tops near 1.1270 ahead of the opening bell in Euroland.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair “has recovered but also started to erode cloud support at 1.1260 and the near term risk remains on the downside for a re-visit of the current September lows at 1.1105/1.1088 . Failure at 1.1088 would trigger a move to 2015 uptrend at 1.0957”.
Furthermore, FX Strategist at OCBC Bank Emmanuel Ng, suggested “Look to the slew of EZ confidence indicators and German CPI for any potential macro cues today. Meanwhile, renewed risk aversion may continue to underpin the EUR-USD, with the 200-day MA (1.1188) acting as near term support. A break above 1.1260 would also light the way to 1.1300”.
For more information, read our latest forex news.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair “has recovered but also started to erode cloud support at 1.1260 and the near term risk remains on the downside for a re-visit of the current September lows at 1.1105/1.1088 . Failure at 1.1088 would trigger a move to 2015 uptrend at 1.0957”.
Furthermore, FX Strategist at OCBC Bank Emmanuel Ng, suggested “Look to the slew of EZ confidence indicators and German CPI for any potential macro cues today. Meanwhile, renewed risk aversion may continue to underpin the EUR-USD, with the 200-day MA (1.1188) acting as near term support. A break above 1.1260 would also light the way to 1.1300”.
For more information, read our latest forex news.
Euro: Set to bounce before the ECB – SocGen
FXStreet (Delhi) – Research Team at Societe Generale, suggest that there are several factors suggesting that the next three weeks could offer the opportunity to trade a EUR/USD tactical rebound towards 1.14-1.15. The technical picture is asymmetrical on the bullish side, Eurozone PMIs are resilient, the dovish ECB is certainly discounted, the risk of a US government shutdown won’t help the dollar, and the EM sell off is prompting investors to put cash in safe currencies.
Key Quotes
“We recommend a 3W topside exotic trade to get leverage between 1.13 and 1.1550.”
“Volkswagen’s woes should not be a lasting euro engine: The scandal certainly has weighed on the euro lately, via the threat that the crisis hitting the world’s second-largest carmaker could hit the German economy. After a dramatic 30% fall to 2012 lows, Volkswagen shares seem to have stopped falling and traded volumes are now diminishing.
“Dovish ECB probably in the price: The ECB stance is certainly the main bearish euro factor for the coming weeks. Our economists expect the ECB to be dovish (weaker inflation outlook), but with still ample evidence of resilience in the euro area economy, as witnessed by resilient September PMIs, it is still too early for the ECB to act. Fed inaction and China weakness are not necessarily a signal for the ECB to do more.”
For more information, read our latest forex news.
Key Quotes
“We recommend a 3W topside exotic trade to get leverage between 1.13 and 1.1550.”
“Volkswagen’s woes should not be a lasting euro engine: The scandal certainly has weighed on the euro lately, via the threat that the crisis hitting the world’s second-largest carmaker could hit the German economy. After a dramatic 30% fall to 2012 lows, Volkswagen shares seem to have stopped falling and traded volumes are now diminishing.
“Dovish ECB probably in the price: The ECB stance is certainly the main bearish euro factor for the coming weeks. Our economists expect the ECB to be dovish (weaker inflation outlook), but with still ample evidence of resilience in the euro area economy, as witnessed by resilient September PMIs, it is still too early for the ECB to act. Fed inaction and China weakness are not necessarily a signal for the ECB to do more.”
For more information, read our latest forex news.
EUR/GBP extends beyond 0.7400, UK data eyed
FXStreet (Edinburgh) - The upbeat tone in the single currency has helped EUR/GBP to break above the 0.7400 handle once again, currently around 0.7430, or session tops.
EUR/GBP focus on UK, EMU data
The cross keeps the buoyant tone during the first half of the week, extending the upside for the second week in a row and looking to challenge May peaks in the 0.7480 area.
Ahead in the session, Mortgage Approvals and Consumer Credit will take centre stage in the UK docket, followed by EMU’s confidence and sentiment gauges and German preliminary inflation figures for the current month.
EUR/GBP relevant levels
As of writing the cross is up 0.21% at 0.7426 with the next resistance at 0.7449 (high May 6) followed by 0.7483 (high May 7) and finally 0.7500 (psychological level). On the other hand, a break below 0.7403 (low Sep.29) would open the door to 0.7335 (low Sep.28) and then 0.7303 (low Sep.25).
For more information, read our latest forex news.
EUR/GBP focus on UK, EMU data
The cross keeps the buoyant tone during the first half of the week, extending the upside for the second week in a row and looking to challenge May peaks in the 0.7480 area.
Ahead in the session, Mortgage Approvals and Consumer Credit will take centre stage in the UK docket, followed by EMU’s confidence and sentiment gauges and German preliminary inflation figures for the current month.
EUR/GBP relevant levels
As of writing the cross is up 0.21% at 0.7426 with the next resistance at 0.7449 (high May 6) followed by 0.7483 (high May 7) and finally 0.7500 (psychological level). On the other hand, a break below 0.7403 (low Sep.29) would open the door to 0.7335 (low Sep.28) and then 0.7303 (low Sep.25).
For more information, read our latest forex news.
RBI unexpectedly slashes the key rate by 50bps to 6.75%
FXStreet (Mumbai) - In a surprising move, the Reserve Bank of India (RBI) cut the benchmark repo rate by 50 basis points to 6.75% at its latest Monetary Policy Review meeting on Tuesday. Markets had predicted a 25bps rate cut.
The central bank left the cash reserve ratio (CRR) unchanged at 4%. While the reverse repo rate under the LAF was slashed to 5.75% and the marginal standing facility (MSF) rate and the Bank Rate to 7.75%.
For more information, read our latest forex news.
The central bank left the cash reserve ratio (CRR) unchanged at 4%. While the reverse repo rate under the LAF was slashed to 5.75% and the marginal standing facility (MSF) rate and the Bank Rate to 7.75%.
For more information, read our latest forex news.
EUR/USD swings higher to 1.1270, risk-aversion deepens
FXStreet (Mumbai) - The EUR/USD pair extends its upward trajectory into the early European trades, brushing away a temporary drop seen on Friday, as worsening risk-sentiment triggered by China-led global equities sell-off favours the safe-haven status of the euro.
EUR/USD firmer above 1.1250
The EUR/USD pair trades 0.19% higher at 1.1265, having posted fresh four-day highs at 1.1271 levels some minutes ago. The bid tone around the EUR/USD pair keeps growing bigger as the increased demand for safe-haven assets amid wide-spread risk-aversion, sparked a fresh bout of buying interest for the euro.
EUR/USD keeps pushing and now targets the 1.13 handle as concerns over China slowdown resurfaced, with markets casting doubts over the global economic outlook, thus sending equities and commodities sharply lower across the globe.
Moreover, growing uncertainty over the timing of the Fed rate hike after the recent speeches by Fed officials also dampens the sentiment around the US dollar.
On Tuesday, New York Fed President Dudley and San Francisco Fed Chief Williams endorsed a rate-hike this year while Chicago Fed President Evans sounded more dovish and noted that the Fed should wait with the rate lift-off.
Later in the day, German CPI will be closely watched for further cues on the major while US consumer confidence data will be key for the USD moves. Also, the pair is likely to get influenced by the risk conditions dominating the markets.
EUR/USD Technical Levels
The pair has an immediate resistance at 1.1296 (Sept 24 High), above which gains could be extended to 1.1331 (Sept 21 High) levels. On the flip side, support is seen at 1.1200 (Psychological levels) below which it could extend losses to 1.1163 (Sept 24 Low) levels.
For more information, read our latest forex news.
EUR/USD firmer above 1.1250
The EUR/USD pair trades 0.19% higher at 1.1265, having posted fresh four-day highs at 1.1271 levels some minutes ago. The bid tone around the EUR/USD pair keeps growing bigger as the increased demand for safe-haven assets amid wide-spread risk-aversion, sparked a fresh bout of buying interest for the euro.
EUR/USD keeps pushing and now targets the 1.13 handle as concerns over China slowdown resurfaced, with markets casting doubts over the global economic outlook, thus sending equities and commodities sharply lower across the globe.
Moreover, growing uncertainty over the timing of the Fed rate hike after the recent speeches by Fed officials also dampens the sentiment around the US dollar.
On Tuesday, New York Fed President Dudley and San Francisco Fed Chief Williams endorsed a rate-hike this year while Chicago Fed President Evans sounded more dovish and noted that the Fed should wait with the rate lift-off.
Later in the day, German CPI will be closely watched for further cues on the major while US consumer confidence data will be key for the USD moves. Also, the pair is likely to get influenced by the risk conditions dominating the markets.
EUR/USD Technical Levels
The pair has an immediate resistance at 1.1296 (Sept 24 High), above which gains could be extended to 1.1331 (Sept 21 High) levels. On the flip side, support is seen at 1.1200 (Psychological levels) below which it could extend losses to 1.1163 (Sept 24 Low) levels.
For more information, read our latest forex news.
China: On a FX reserves selling spree – Commerzbank
FXStreet (Delhi) – Research Team at Commerzbank, note that after China had been hoarding foreign reserve assets for years, it has been selling them for a year at accelerating pace in order to support the renminbi which is suffering from massive capital outflows.
Key Quotes
“A decade-long trend has turned. From their peak in mid-2014 through to August 2015, the Peoples’ Bank of China’s (PBoC’s) FX reserves continuously declined – by a total of 11% or $436 billion. Even more disturbing is the fact that the pace of reserve reduction seems to have accelerated recently.”
“This new situation has been triggered by net capital outflows, which have been enabled by continuous financial account liberalization. To prevent crisis-like depreciation episodes, the PBoC will likely have to continue the policy of reserve drainage for quite a while. A reversal of capital-flow liberalization would only be a measure of last resort.”
“The PBoC has lost 11% of its reserves in the past 14 months; in August alone its reserves shrank by 2.6%. This can continue for some time, but if net capital outflows were to continue at their current pace, even the PBoC’s huge reserve portfolio might at some point appear to be insufficient, creating even more motivation for capital outflows.”
For more information, read our latest forex news.
Key Quotes
“A decade-long trend has turned. From their peak in mid-2014 through to August 2015, the Peoples’ Bank of China’s (PBoC’s) FX reserves continuously declined – by a total of 11% or $436 billion. Even more disturbing is the fact that the pace of reserve reduction seems to have accelerated recently.”
“This new situation has been triggered by net capital outflows, which have been enabled by continuous financial account liberalization. To prevent crisis-like depreciation episodes, the PBoC will likely have to continue the policy of reserve drainage for quite a while. A reversal of capital-flow liberalization would only be a measure of last resort.”
“The PBoC has lost 11% of its reserves in the past 14 months; in August alone its reserves shrank by 2.6%. This can continue for some time, but if net capital outflows were to continue at their current pace, even the PBoC’s huge reserve portfolio might at some point appear to be insufficient, creating even more motivation for capital outflows.”
For more information, read our latest forex news.
AUD: Round tripping but risks remain to the downside - NAB
FXStreet (Delhi) – Research Team at NAB, suggest that the Aussie has been on a four cent round trip from 0.68 to 0.72 in the last two weeks but presently remains under pressure as the global environment has deteriorated for the AUD and the worsening outlook for commodity competitors introduces a new factor.
Key Quotes
“The volatility and interest rate outlook are also factors keeping AUD in check. As it becomes clear that the Fed hasn’t taken a hike off the table altogether, we are back worried about global demand, a rise in risk aversion, and lower commodity prices.”
“The unwinding of short positions has been a near term benefit, but it is not enough to push AUD through the topside support that has been in place from August.”
“However, if the Fed decide to remain on hold, it is likely to be because the global environment is not stable enough to ensure the Fed is comfortable starting the normalisation process. That would weigh on Australian yields and likely raise market risk indicators. Both of these would suggest the risk adjusted differential was also in favour of a weaker AUD/USD. Given this, we continue to see the risks to the AUD to the downside.”
For more information, read our latest forex news.
Key Quotes
“The volatility and interest rate outlook are also factors keeping AUD in check. As it becomes clear that the Fed hasn’t taken a hike off the table altogether, we are back worried about global demand, a rise in risk aversion, and lower commodity prices.”
“The unwinding of short positions has been a near term benefit, but it is not enough to push AUD through the topside support that has been in place from August.”
“However, if the Fed decide to remain on hold, it is likely to be because the global environment is not stable enough to ensure the Fed is comfortable starting the normalisation process. That would weigh on Australian yields and likely raise market risk indicators. Both of these would suggest the risk adjusted differential was also in favour of a weaker AUD/USD. Given this, we continue to see the risks to the AUD to the downside.”
For more information, read our latest forex news.
NZ: Expect pick up in Sep business confidence – Westpac
FXStreet (Delhi) – Research Team at Westpac, suggest that even though the business confidence in Kiwi economy is likely to remain at low levels, but it won’t be surprising to see some pick-up in confidence in September supported by the rebound in dairy prices in recent weeks.
Key Quotes
“Business confidence has fallen sharply in recent months, with firms noting concern about the general economic outlook and their own trading conditions. Confidence has fallen particularly sharply in the agricultural sector, but is low across all sectors of the economy.
“We’ll be closely watching the survey’s inflation gauges to see how firms’ pricing intentions are evolving in the wake of the fall in the NZD.”
For more information, read our latest forex news.
Key Quotes
“Business confidence has fallen sharply in recent months, with firms noting concern about the general economic outlook and their own trading conditions. Confidence has fallen particularly sharply in the agricultural sector, but is low across all sectors of the economy.
“We’ll be closely watching the survey’s inflation gauges to see how firms’ pricing intentions are evolving in the wake of the fall in the NZD.”
For more information, read our latest forex news.
Risk-off in full swing, Yen strongest in Asia, German CPI – Up next
FXStreet (Mumbai) - A volatile Asian session, despite an empty macro-calendar, as risk-aversion hit Asia and diminished the demand for riskier assets. The safe-havens such as the yen, the Swiss franc, the euro and bonds emerged the biggest beneficiaries of the intensifying risk-off flows.
Key headlines in Asia
Asian stocks tumble, global sell-off extends on China fears
Fed's Williams: Economy can handle start of rate hike process
Dominating themes in Asia - centered on JPY, AUD, NZD
Equity sell-off hit Asia, with Asian stock markets in the deep red following heavy losses on Wall Street and European indices. Markets turned highly risk-averse as Monday’s Chinese industrial profits data re-ignited China slowdown fears, thus sending riskier assets sharply lower across the board. While the uncertainty over the Fed rate hike timing also weighed on the investors’ sentiment.
Although, the ongoing global rout boosted the demand for safe-haven assets as investors flock to safety-asset in times of turmoil and uncertainty. The Japanese yen was the biggest gainer amongst the safe-havens, with USD/JPY losing -0.34% to 119.50, notwithstanding 120 handle. While EUR/USD rises 0.16% to 1.1260, the Swiss franc is gaining 0.18% against the greenback. While gold remains almost unchanged near $ 1131, unresponsive to the risk-off market profile.
Riskier/ higher yielding currencies such as the Antipodeans were heavily sold-off, with the Aussie outperforming its NZ rival. The sell-off across the commodities space also weighed on the resource-linked OZ currencies. The Aussie drops -0.47% to 0.6956 while the NZD/USD pair follows suit, recording a -0.32% loss so far, struggling above 0.63 barrier.
On the equities space, Asian markets extended the global rout, with Japan’s Nikkei emerging the biggest loser, down -3.7% to 16,987. Australia’s S&P ASX index plunges -2.70% to 4,975. While the Chinese indices, the Shanghai Composite tanks -1.84% to 3,043. While Hong Kong markets re-opened in the red after the Mid-Autumn festival holiday and now trades with size-able losses, down -3.57% at 20,431.
Heading into Europe - centered on EUR, GBP
A data-thin EUR calendar extends for the second straight session on Tuesday, with a couple of economic releases from the UK and Germany on the cards.
Germany will release its prelim CPI data for September, with deflation expected to resurface on monthly basis (-0.1% expected after a flat result reported a month ago), while adding 0.1% annually, compared to 0.2% in August.
Looking ahead, the NA session will offer goods trade balance and consumer confidence data from the US while a set of economic data from Canada will also be reported. Besides, the main highlight later tonight is expected to be BOE Governor Carney speech at Lloyds of London, which may spur some volatility and have major influence on the pound.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet noted, “The short term picture for the EUR/USD pair has turned slightly positive, although the pair stalled its intraday advance around a key static resistance level. But the 1 hour chart shows that the price is hovering around its 200 SMA after accelerating above the 100 and 20 SMAs, whilst the Momentum indicator heads slightly higher above the 100 level and the RSI indicator advances slowly around 64.”
“In the 4 hours chart the price advanced above its 20 SMA, now offering an intraday support around 1.1200, whilst the RSI indicator turned north and advanced beyond 50 supporting additional advances towards the 1.1335 region for this Tuesday, on renewed demand beyond the mentioned daily high.”
For more information, read our latest forex news.
Key headlines in Asia
Asian stocks tumble, global sell-off extends on China fears
Fed's Williams: Economy can handle start of rate hike process
Dominating themes in Asia - centered on JPY, AUD, NZD
Equity sell-off hit Asia, with Asian stock markets in the deep red following heavy losses on Wall Street and European indices. Markets turned highly risk-averse as Monday’s Chinese industrial profits data re-ignited China slowdown fears, thus sending riskier assets sharply lower across the board. While the uncertainty over the Fed rate hike timing also weighed on the investors’ sentiment.
Although, the ongoing global rout boosted the demand for safe-haven assets as investors flock to safety-asset in times of turmoil and uncertainty. The Japanese yen was the biggest gainer amongst the safe-havens, with USD/JPY losing -0.34% to 119.50, notwithstanding 120 handle. While EUR/USD rises 0.16% to 1.1260, the Swiss franc is gaining 0.18% against the greenback. While gold remains almost unchanged near $ 1131, unresponsive to the risk-off market profile.
Riskier/ higher yielding currencies such as the Antipodeans were heavily sold-off, with the Aussie outperforming its NZ rival. The sell-off across the commodities space also weighed on the resource-linked OZ currencies. The Aussie drops -0.47% to 0.6956 while the NZD/USD pair follows suit, recording a -0.32% loss so far, struggling above 0.63 barrier.
On the equities space, Asian markets extended the global rout, with Japan’s Nikkei emerging the biggest loser, down -3.7% to 16,987. Australia’s S&P ASX index plunges -2.70% to 4,975. While the Chinese indices, the Shanghai Composite tanks -1.84% to 3,043. While Hong Kong markets re-opened in the red after the Mid-Autumn festival holiday and now trades with size-able losses, down -3.57% at 20,431.
Heading into Europe - centered on EUR, GBP
A data-thin EUR calendar extends for the second straight session on Tuesday, with a couple of economic releases from the UK and Germany on the cards.
Germany will release its prelim CPI data for September, with deflation expected to resurface on monthly basis (-0.1% expected after a flat result reported a month ago), while adding 0.1% annually, compared to 0.2% in August.
Looking ahead, the NA session will offer goods trade balance and consumer confidence data from the US while a set of economic data from Canada will also be reported. Besides, the main highlight later tonight is expected to be BOE Governor Carney speech at Lloyds of London, which may spur some volatility and have major influence on the pound.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet noted, “The short term picture for the EUR/USD pair has turned slightly positive, although the pair stalled its intraday advance around a key static resistance level. But the 1 hour chart shows that the price is hovering around its 200 SMA after accelerating above the 100 and 20 SMAs, whilst the Momentum indicator heads slightly higher above the 100 level and the RSI indicator advances slowly around 64.”
“In the 4 hours chart the price advanced above its 20 SMA, now offering an intraday support around 1.1200, whilst the RSI indicator turned north and advanced beyond 50 supporting additional advances towards the 1.1335 region for this Tuesday, on renewed demand beyond the mentioned daily high.”
For more information, read our latest forex news.
US: Slowdown in job growth is on the cards – Danske Bank
FXStreet (Delhi) – Research Team at Danske Bank, expect slowdown in US job growth in September to 180,000 and even though this is slower than the recent trend, it is still solid job growth and enough, if sustained, to put additional downward pressure on the unemployment rate.
Key Quotes
“Job growth has been running at an impressive pace since early last year, pushing the unemployment rate to 5.1% - very close to the assumed level of NAIRU (around 5.0%). The rapid job growth has been helped along by a combination of solid GDP growth and slow labour productivity growth.”
“Over the past three months, the US economy has added, on average, 221,000 jobs per month - a pace that cannot be sustained in an economy where potential labour force growth, under a positive assumption about a rebound in the labour participation rate, is only around 150,000 per month.”
“In our view, job growth will need to drop below the 160,000 mark before the Fed will see it as an obstacle to starting the tightening cycle later this year. In terms of the unemployment rate, we expect the rate to stay unchanged at 5.1% in September but to head below 5% by year-end.”
For more information, read our latest forex news.
Key Quotes
“Job growth has been running at an impressive pace since early last year, pushing the unemployment rate to 5.1% - very close to the assumed level of NAIRU (around 5.0%). The rapid job growth has been helped along by a combination of solid GDP growth and slow labour productivity growth.”
“Over the past three months, the US economy has added, on average, 221,000 jobs per month - a pace that cannot be sustained in an economy where potential labour force growth, under a positive assumption about a rebound in the labour participation rate, is only around 150,000 per month.”
“In our view, job growth will need to drop below the 160,000 mark before the Fed will see it as an obstacle to starting the tightening cycle later this year. In terms of the unemployment rate, we expect the rate to stay unchanged at 5.1% in September but to head below 5% by year-end.”
For more information, read our latest forex news.
AUD/JPY drops amid risk aversion in Asia
FXStreet (Mumbai) - The offered tone on the AUD/JPY gathered pace on Tuesday, pushing it to a session low of 83.05 as the Asian markets turned risk averse.
Second day of losses
The pair is down for the second day as confusion regarding the timing of lift-off in the US, coupled with global growth slowdown spooked investors. The safe haven Japanese Yen strengthened amid risk aversion, while Aussie; a proxy for China; declined.
Among the regional indices, the Nikkei index in Japan fell 3.7%, pushing the S&P futures in the US lower as well. Heading into the European session, the pair is likely to track the activity in the major European equity futures.
AUD/JPY Technical Levels
At 83.13, the immediate support is located at 82.99 (Sep 24 low), under which the pair could extend losses to 82.12 (Sep 4 low). On the other side, resistance is seen at 83.80 (daily high) and 84.43 (5-DMA).
For more information, read our latest forex news.
Second day of losses
The pair is down for the second day as confusion regarding the timing of lift-off in the US, coupled with global growth slowdown spooked investors. The safe haven Japanese Yen strengthened amid risk aversion, while Aussie; a proxy for China; declined.
Among the regional indices, the Nikkei index in Japan fell 3.7%, pushing the S&P futures in the US lower as well. Heading into the European session, the pair is likely to track the activity in the major European equity futures.
AUD/JPY Technical Levels
At 83.13, the immediate support is located at 82.99 (Sep 24 low), under which the pair could extend losses to 82.12 (Sep 4 low). On the other side, resistance is seen at 83.80 (daily high) and 84.43 (5-DMA).
For more information, read our latest forex news.
BOJ Tankan: Expect decline in business conditions and inflation expectations – Goldman Sachs
FXStreet (Delhi) – Research Team at Goldman Sachs, expect that this week’s BOJ September Tankan survey is likely to show deterioration in the business conditions DI in addition to decline in inflation expectations.
Key Quotes
“The FY2015 capex plan is likely to remain unchanged but, considering the seasonal moves, this can be interpreted as companies growing more cautious on their capex plans. We also expect a downward revision to corporate price expectations. We note the importance of the upcoming Tankan survey in the BOJ’s policy decision.”
“Inventory cycle is deteriorating, especially in the production and capital goods areas, partly reflecting sluggish business in China as well as stagnation of the Japanese economy. We expect flat industrial production in August, following a large -0.8% mom decline in July, confirming stagnant production activity.”
“Household spending has been weak for the past few months, but we expect some improvement in August partly due to favorable weather conditions. We expect real household spending to remain weak, however, rising only +0.1% yoy in August.”
For more information, read our latest forex news.
Key Quotes
“The FY2015 capex plan is likely to remain unchanged but, considering the seasonal moves, this can be interpreted as companies growing more cautious on their capex plans. We also expect a downward revision to corporate price expectations. We note the importance of the upcoming Tankan survey in the BOJ’s policy decision.”
“Inventory cycle is deteriorating, especially in the production and capital goods areas, partly reflecting sluggish business in China as well as stagnation of the Japanese economy. We expect flat industrial production in August, following a large -0.8% mom decline in July, confirming stagnant production activity.”
“Household spending has been weak for the past few months, but we expect some improvement in August partly due to favorable weather conditions. We expect real household spending to remain weak, however, rising only +0.1% yoy in August.”
For more information, read our latest forex news.
JPY downside and CHF upside in the offering – Danske Bank
FXStreet (Delhi) - Christin Tuxen, Senior Analyst at Danske Bank, notes that the latest IMM data that covers the week from 16 September to 22 September 2015 is indicating that there is a room for JPY downside and CHF upside.
Key Quotes
“Some JPY shorts were unwound last week and, on the whole, yen positioning is close to neutral. This highlights the room for JPY downside should markets accelerate speculation that the Bank of Japan may be forced to deliver more easing following the recent stream of dire news on both the domestic and Chinese economy.”
“In contrast, CHF longs were unwound and non-commercial positioning is now marginally net short the Swissie (neutral territory). We stress that the franc could see support vis-a-vis the single currency if markets become more aggressive on pricing more easing in from the ECB given the SNB’s lack of effective instruments to fight EUR/CHF downside.”
For more information, read our latest forex news.
Key Quotes
“Some JPY shorts were unwound last week and, on the whole, yen positioning is close to neutral. This highlights the room for JPY downside should markets accelerate speculation that the Bank of Japan may be forced to deliver more easing following the recent stream of dire news on both the domestic and Chinese economy.”
“In contrast, CHF longs were unwound and non-commercial positioning is now marginally net short the Swissie (neutral territory). We stress that the franc could see support vis-a-vis the single currency if markets become more aggressive on pricing more easing in from the ECB given the SNB’s lack of effective instruments to fight EUR/CHF downside.”
For more information, read our latest forex news.
Asian stocks tumble, global sell-off extends on China fears
FXStreet (Mumbai) - Stocks on the Asian bourses plunged on Tuesday, tracking the negative lead from Wall Street overnight and the European markets, amid escalating worries over the health of the Chinese economy. While the sell-off in the commodity space also weighed on the resource stocks.
Moreover, markets also digest the latest Fed speeches with majority of the Fed officials favouring a rate-hike this year. Meanwhile, Fed Chairwoman Yellen’s speech due tomorrow is eagerly awaited.
Nikkei – the main laggard
The Japanese benchmark, the Nikkei keeps falling as the yen continues to strengthen versus the greenback on risk-aversion, dragging the exports’ stocks sharply lower. At the moment, USD/JPY trades -0.25% lower at 119.63 while the Nikkei drops -3.60% to 17,011.
The benchmark Australian S&P/ASX 200 reversed previous rally and dives deep in the red, with mining and oil stocks driving the index lower. The index now tanks -2.88% to 4,967 points.
The Chinese markets followed suit, with the Shanghai Composite dropping -1.84% at 3,043 points. While Hong Kong markets re-opened in the red after the Mid-Autumn festival holiday, losing -3.45% to 20,420.
For more information, read our latest forex news.
Moreover, markets also digest the latest Fed speeches with majority of the Fed officials favouring a rate-hike this year. Meanwhile, Fed Chairwoman Yellen’s speech due tomorrow is eagerly awaited.
Nikkei – the main laggard
The Japanese benchmark, the Nikkei keeps falling as the yen continues to strengthen versus the greenback on risk-aversion, dragging the exports’ stocks sharply lower. At the moment, USD/JPY trades -0.25% lower at 119.63 while the Nikkei drops -3.60% to 17,011.
The benchmark Australian S&P/ASX 200 reversed previous rally and dives deep in the red, with mining and oil stocks driving the index lower. The index now tanks -2.88% to 4,967 points.
The Chinese markets followed suit, with the Shanghai Composite dropping -1.84% at 3,043 points. While Hong Kong markets re-opened in the red after the Mid-Autumn festival holiday, losing -3.45% to 20,420.
For more information, read our latest forex news.
USD/JPY: Offered tone intact amid Asian stocks sell-off
FXStreet (Mumbai) - After bottoming near 119.50 levels in early Asian hours, the USD/JPY pair recovers partial losses and keeps range around 119.70 as the Japanese yen remains well bid on the back of falling Asian equities.
USD/JPY capped below 120 handle
Currently, the USD/JPY pair trades -0.22% lower at 119.66, unable to resist 120 barrier. The major remains heavy mainly driven by yen strength, boosted by increased safe-haven bids as Asian stocks market tumble on intensifying global growth concerns.
Among the major Asian indices, the Japanese benchmark, the Nikkei plunges -2.77% to 17,155 points while China’s Shanghai Composite drops -1.76% to 3,046. Hong Kong’s Hang Seng re-opened sharply lower, now sinking over -3% at 20,465.
The global stocks rout was triggered by mounting China slowdown concerns and a massive fall in Glencore stocks on Monday, which deepened the recent sell-off witnessed across the board.
Looking ahead, the pair is likely to track the broader market sentiment amid lack of fresh fundamental triggers until the NY session. Consumer confidence and goods trade balance data from the US will be released later today.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120 (Today’s High) levels and above which it could extend 120.64 (Sept 22 High). To the downside immediate support might be located at 119.21 (Sept 24 Low) below that at 119.03 (Sept 18 Low) levels.
For more information, read our latest forex news.
USD/JPY capped below 120 handle
Currently, the USD/JPY pair trades -0.22% lower at 119.66, unable to resist 120 barrier. The major remains heavy mainly driven by yen strength, boosted by increased safe-haven bids as Asian stocks market tumble on intensifying global growth concerns.
Among the major Asian indices, the Japanese benchmark, the Nikkei plunges -2.77% to 17,155 points while China’s Shanghai Composite drops -1.76% to 3,046. Hong Kong’s Hang Seng re-opened sharply lower, now sinking over -3% at 20,465.
The global stocks rout was triggered by mounting China slowdown concerns and a massive fall in Glencore stocks on Monday, which deepened the recent sell-off witnessed across the board.
Looking ahead, the pair is likely to track the broader market sentiment amid lack of fresh fundamental triggers until the NY session. Consumer confidence and goods trade balance data from the US will be released later today.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120 (Today’s High) levels and above which it could extend 120.64 (Sept 22 High). To the downside immediate support might be located at 119.21 (Sept 24 Low) below that at 119.03 (Sept 18 Low) levels.
For more information, read our latest forex news.
EUR/USD attacking the upside, eyes on Sep highs
FXStreet (Guatemala) - EUR/USD is currently trading at 1.1260 with a high of 1.1265 and a low of 1.1227.
EUR/USD was supported overnight while equities were running with the bearish trend of late in risk-off markets, along with bonds, the Yen and safe havens. We have seen a further display of risk aversion while the Nikkei continues to fail and the euro presses on making fresh highs.
EUR/USD data risks
EUR/USD sees a number of data release this week including consumer confidence later today that is expected as unchanged at -7.1. we also have the ECB's Coene and German CPI for September that is expected -0.1% m/m and 0.0% y/y. The ECB's Weidmann will be speaking late afternoon in Germany. Yellen hits the wires again and then we are looking for ADP ahead of the Nonfarm Payrolls.
EUR/USD levels
The major has run up from the top of the cloud at 1.1136 and has eyes on 1.1332, the September 1st high. Up ahead lies further resistance between the 1.1332/73 early and mid-September highs. Karen Jones, chief analyst at Commerzbank suggested that EUR/USD should ideally remain capped by the 1.1440/68 region, where the May, June and current September highs were made.
For more information, read our latest forex news.
EUR/USD was supported overnight while equities were running with the bearish trend of late in risk-off markets, along with bonds, the Yen and safe havens. We have seen a further display of risk aversion while the Nikkei continues to fail and the euro presses on making fresh highs.
EUR/USD data risks
EUR/USD sees a number of data release this week including consumer confidence later today that is expected as unchanged at -7.1. we also have the ECB's Coene and German CPI for September that is expected -0.1% m/m and 0.0% y/y. The ECB's Weidmann will be speaking late afternoon in Germany. Yellen hits the wires again and then we are looking for ADP ahead of the Nonfarm Payrolls.
EUR/USD levels
The major has run up from the top of the cloud at 1.1136 and has eyes on 1.1332, the September 1st high. Up ahead lies further resistance between the 1.1332/73 early and mid-September highs. Karen Jones, chief analyst at Commerzbank suggested that EUR/USD should ideally remain capped by the 1.1440/68 region, where the May, June and current September highs were made.
For more information, read our latest forex news.
AUD/USD bears running the show to test key support
FXStreet (Guatemala) - AUD/USD is currently trading at 0.6950 with a high of 0.6991 and a low of 0.6946.
AUD/USD continues on the offer and is now down to test territory at the first major support at 0.6940 while changing hands just above the midpoint of the handle currently. A break here exposes the 0.6905 recent lows. The sentiment and technical levels are leading the way on the downside with investors seeking safer havens away from risk.
We are light on data in Asia and will be turning to China for a likely confirmation of the downside in Global equities and a run-off from Wall Street and European bourses overnight. We will have further clues on the state of the Chinese economy this week when the nation will release the Caixn Manufacturing PMI's along with NBS Manufacturing while a reading below 50 is expected in both cases in suit of the neighboring EM economies.
AUD/USD major event and levels
However, the main event for the week will stay with the Nonfarm Payrolls in light of the forthcoming FOMC meeting in October. The main target to the downside comes as the 0.6774 2004 lows while 0.7200 would alleviate immediate downside pressures.
For more information, read our latest forex news.
AUD/USD continues on the offer and is now down to test territory at the first major support at 0.6940 while changing hands just above the midpoint of the handle currently. A break here exposes the 0.6905 recent lows. The sentiment and technical levels are leading the way on the downside with investors seeking safer havens away from risk.
We are light on data in Asia and will be turning to China for a likely confirmation of the downside in Global equities and a run-off from Wall Street and European bourses overnight. We will have further clues on the state of the Chinese economy this week when the nation will release the Caixn Manufacturing PMI's along with NBS Manufacturing while a reading below 50 is expected in both cases in suit of the neighboring EM economies.
AUD/USD major event and levels
However, the main event for the week will stay with the Nonfarm Payrolls in light of the forthcoming FOMC meeting in October. The main target to the downside comes as the 0.6774 2004 lows while 0.7200 would alleviate immediate downside pressures.
For more information, read our latest forex news.
EUR/JPY downside hit below 135.00 as recovery fails
FXStreet (Guatemala) - EUR/JPY is currently trading at 134.58 with a high of 134.94 and a low of 134.52.
EUR/JPY has followed suit of the Yen crosses losing out to the risk-off mood in the current climate and the Nikkei opening lower as investors scramble for safe havens and away from equities as seen in the European market overnight and Wall Street.
EUR/JPY has dropped from the region of the 134.80 level having failed at the upside to the highs of 134.93 and is currently threatening the mid-point of the handle with 133.18 as next stop and technical indicators supporting a bearish bias with plenty downside to go.
For more information, read our latest forex news.
EUR/JPY has followed suit of the Yen crosses losing out to the risk-off mood in the current climate and the Nikkei opening lower as investors scramble for safe havens and away from equities as seen in the European market overnight and Wall Street.
EUR/JPY has dropped from the region of the 134.80 level having failed at the upside to the highs of 134.93 and is currently threatening the mid-point of the handle with 133.18 as next stop and technical indicators supporting a bearish bias with plenty downside to go.
For more information, read our latest forex news.
USD/JPY: drops sharply below 120 handle as bears take control
FXStreet (Guatemala) - USD/JPY is currently trading on the offer at 119.64 with a high of 120.03 and low of 119.57 at time of writing.
USD/JPY is playing out the downside in risk-off markets as uncertainties intensify and investors scramble to safe havens which have been bonds the euro and the Yen overnight while the European and US bourses finished negative again, while the Nikkei opens lower and weighs on USD/JPY.
USD/JPY downside opening up
Glencore was leading the way in the FTSE and Wall Street was following suit with a continuation in the bearishness in the Biotechnology and commodity sectors along with concerns over China while the Fed is also expected to raise rates this year.
USD/JPY will continue to be pressured on uncertainties and the divergence between the BoY and Fed. Analysts at ANZ summed up and explained, "In Japan, we see a number of factors culminating to signal a cyclical turn. An improving current account, a peak in the policy divergence between the BoJ and the Fed, as well as the rising importance of the JPY's safe haven status will all drive the JPY to strengthen from here."
USD/JPY levels
Technically, this sharp drop is exposing 119.30 (1 month support line) ahead of 118.75 to the downside and this is supported on the 4 hours chart with the price back below a bearish 20 SMA. The momentum indicators are also offering a bearish bias with room in the RSI at 40. Karen Jones, chief analyst at Commerzbank explained that below 119.30, they will target the 118.33 March low en route to the 116.15/115.85 2015 low and the recent low.
For more information, read our latest forex news.
USD/JPY is playing out the downside in risk-off markets as uncertainties intensify and investors scramble to safe havens which have been bonds the euro and the Yen overnight while the European and US bourses finished negative again, while the Nikkei opens lower and weighs on USD/JPY.
USD/JPY downside opening up
Glencore was leading the way in the FTSE and Wall Street was following suit with a continuation in the bearishness in the Biotechnology and commodity sectors along with concerns over China while the Fed is also expected to raise rates this year.
USD/JPY will continue to be pressured on uncertainties and the divergence between the BoY and Fed. Analysts at ANZ summed up and explained, "In Japan, we see a number of factors culminating to signal a cyclical turn. An improving current account, a peak in the policy divergence between the BoJ and the Fed, as well as the rising importance of the JPY's safe haven status will all drive the JPY to strengthen from here."
USD/JPY levels
Technically, this sharp drop is exposing 119.30 (1 month support line) ahead of 118.75 to the downside and this is supported on the 4 hours chart with the price back below a bearish 20 SMA. The momentum indicators are also offering a bearish bias with room in the RSI at 40. Karen Jones, chief analyst at Commerzbank explained that below 119.30, they will target the 118.33 March low en route to the 116.15/115.85 2015 low and the recent low.
For more information, read our latest forex news.
NZD/USD: risk-off flows and bears attacking the downside
FXStreet (Guatemala) - NZD/USD is currently trading at 0.6311 with a high of 0.6332 and a low of 0.6309.
NZD/USD is subject to supply in the risk-off mood in the markets. The bird is falling away from the 0.64 handle and is threatening an advance to the downside to test last session lows below 0.6300.
Equities have taken a hit again and commodities, especially the mining sector on the Glencore news, are all bearing the brunt of the bears and global uncertainties, as investors scramble to bonds, euro and the Yen, leaving the greenback to fend for itself and the antipodean currencies out to dry. The main focus in this respect today will the Chinese stock performances while we await further impetus from the data in the US and China later this week.
NZD/USD levels
Technically, the 200 SMA on the hourly and the 20 DMA at 0.6332 are key areas, while 0.6350 and 0.6380 are strong resistance levels. Daily MACD remains strong above the mid-line while supports below come at 0.6293 and 0.6250/77.
For more information, read our latest forex news.
NZD/USD is subject to supply in the risk-off mood in the markets. The bird is falling away from the 0.64 handle and is threatening an advance to the downside to test last session lows below 0.6300.
Equities have taken a hit again and commodities, especially the mining sector on the Glencore news, are all bearing the brunt of the bears and global uncertainties, as investors scramble to bonds, euro and the Yen, leaving the greenback to fend for itself and the antipodean currencies out to dry. The main focus in this respect today will the Chinese stock performances while we await further impetus from the data in the US and China later this week.
NZD/USD levels
Technically, the 200 SMA on the hourly and the 20 DMA at 0.6332 are key areas, while 0.6350 and 0.6380 are strong resistance levels. Daily MACD remains strong above the mid-line while supports below come at 0.6293 and 0.6250/77.
For more information, read our latest forex news.
Key events: AUD/USD headed for last weeks low? - Westpac
FXStreet (Guatemala) - Sean Callow, analyst at Westpac Banking Corporation explained that considering the poor risk mood, AUD/USD’s losses were not dramatic, slipping from 0.7030 to 0.6980 early Sydney.
Key Quotes:
"But with Asian markets likely to take their cue from Europe and the US, AUD/USD seems at risk of re-testing last week’s 0.6939 low. Spot iron ore is holding up fairly well, -0.2% to $56.86/tonne but Dalian futures closed London trade -2.3% and copper, gold and oil all weakened.
South Korea is again on holiday. The Reserve Bank of India is expected by most forecasters to reduce rates by 25bp to 7.0% on optimism that inflation is low enough to allow a cut which would benefit both bonds and equities.
BoE governor Carney speaks in London in the evening local time. In the US, we have Sep consumer confidence. This has been volatile in recent months, but has been around highs back to 2007. Consensus for Sep is a fall back to 97.0 from 101.5. The Jul S&P/Case-Shiller house prices should show a small rise of 0.1%m/m. Growth has been more modest lately but still solid."
For more information, read our latest forex news.
Key Quotes:
"But with Asian markets likely to take their cue from Europe and the US, AUD/USD seems at risk of re-testing last week’s 0.6939 low. Spot iron ore is holding up fairly well, -0.2% to $56.86/tonne but Dalian futures closed London trade -2.3% and copper, gold and oil all weakened.
South Korea is again on holiday. The Reserve Bank of India is expected by most forecasters to reduce rates by 25bp to 7.0% on optimism that inflation is low enough to allow a cut which would benefit both bonds and equities.
BoE governor Carney speaks in London in the evening local time. In the US, we have Sep consumer confidence. This has been volatile in recent months, but has been around highs back to 2007. Consensus for Sep is a fall back to 97.0 from 101.5. The Jul S&P/Case-Shiller house prices should show a small rise of 0.1%m/m. Growth has been more modest lately but still solid."
For more information, read our latest forex news.
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