The Latest in Forex News & Analysis.

ECB press conference

By | July 20, 2017 10:59 am | 0 Comments

The ECB maintained the deposit rate at -0.4% and the refinancing rate at at 0%. In the statement, the Central Bank confirmed also its commitment to buy 60 Billion Euro/month for the rest of the 2017.

During the press conference, a cautious President Draghi tried to balance market expectations highlighting the ECB flexibility if things would turn bad for the Eurozone economy.

On one side, the economy is doing better and the risks of growth are balanced. On the other, the ECB reserves to right to continue with easing measures even after 2017 if needed. Mr Draghi pointed out that headline inflation is expected to remain subdued, while headline inflation should pick up as a result of the monetary policy measures. Wage growth will follow but it might take longer because many contracts were already negotiated and will need some time to be updated.

All eyes are now on the September meeting. President Draghi said that this fall the central bank will decide what to do next based on the state of the economy. even if September meeting was mentioned many time, the President was very clear in explaining that September anyway does not represent a deadline.

The market reacted buying Euro across the board, with the pair EUR/USD trading at 1.1630 at the time of this print. Gold up on a softer dollar and European equities down, all indicators that the market is expecting fireworks in the meetings to come.

USDJPY on 38% Fibonacci

By | 7:01 am | 0 Comments

Behind the fundamentals that have driven the dollar selling during the whole month of July, USDJPY 4H chart is showing prices at a crucial fibonacci  retracement of 38% level, as the picture below is showing.

The low of 108.8 has been the bottom of the uptrend, drawn from first weeks of June 2017, up to a gain of around 560points (up to area 114.4). The Major has then retraced back to its mean at 111.6. The MA200 has been braked recently and tested back, denoting a possible change of direction.

However, it is worth to notice the a possible break of 38% Fibonacci level could extend the gains up to the next resistence in area 113.10/30. On the other side, the Summer is a low volatility period for financial market, and such forecast are difficult to be confirmed, as well as negative figures for USD and JPY could push USD back to its 61% fibonacci.

38% is a crucial level that could define a new trend or confirm the one in place. It is worth to pay attention on that levels.

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Japan Trade

By | July 19, 2017 9:08 pm | 0 Comments

Japan’s June trade balance came out surplus of 439.9bio yen vs deficit of 20402bio yen prior month. Exports increased by 9.7% while imports increased 15.5%.

$JPY trading slightly lower to 111.76 from 111.88 NY close level. Earthquake hit northern Japan earlier but had little impact on the currency.

 

Coming up Australia Labor report at 2130 EDT.

 

BOJ 2-day MPC meeting is about to conclude anytime now, there is no set time for announcement, then followed by Governor Kuroda’s press conference at 0230 EDT.

No change in monetary policy is expected, possibly to lower inflation forecast in its quarterly economic assessment report.

 

Europe session should stay calm before ECB, the main event this week.

Asian morning session

By | July 18, 2017 7:32 pm | 0 Comments

July Reuters Tankan Manufacturers index +26 unchanged from June, Non-manufacturers +33 also unchanged from June.

$JPY unchanged hovering around 112.00, USTreasury yields continue to decline weighing on the Greenback across, especially $JPY which is sensitive to US Yields.

 

Bank of Japan 2-day Monetary policy meeting staring today, no change in rates is expected but likely to revise inflation forecast lower in its quarterly economy assessment report.

GBPUSD Fundamentals vs Political turmoils

By | 4:10 am | 0 Comments

Consumer Price Index measures the change in price of goods, therefore reflect the evolution of the inflation. It is the core indicator for BOE in order to hike the interest rate in Britain. In fact, rumors are talking about a possible increase of the interest rate from the BOE in order to contrast the high inflation, however, Carney and his staff haven’t t give any signal of a hike for the next meeting.

It is worth to mention that Britains are facing the Brexit debate with Europe. The news about the negotiation will push volatility higher for these currencies, without any concerns in fundamental data.

GBPUSD is trading at 1.3100 with the possibility to extend the gains up to 1.326. Will the CPI push Sterling at that target , or the market will give more weight to brexit negotiations, driving the Sterling at the bottom of the channel

Far East morning session

By | July 17, 2017 7:13 pm | 0 Comments

New Zealand Q2 CPI out lower than expected at 0.0% qoq vs 0.2%fcst, 1.0% previous quarter.

Kiwi dollar drops quick 60 pips from 0.7325 down to 0.7265.

 

AUD$ unaffected by NZD drop so far hovering just below 78 cents, $JPY staying relatively bid at 112.60 awaits firm opening in Nikkei after a holiday yesterday.

 

RBA minutes due out at 2130 EDT, AUD$ broke last year high of 0.7835 earlier in NY session but failed to rally further, ran out of steam and retraced back down to sub 0.77 handle for now.

 

 

Gold is back or will go back?

By | 9:37 am | 0 Comments

Further to a drop from its highest level of 1295, reached at the beginning of June, Gold price has registered the highest price of the month, going from its low 1204 to 1230.

The Heikin-Ashi chart has showed a clear uptrend on gold. However, Gold price hasn’t breached the strong Resistence at 1295 back in the first week of June. In fact, further to a test of it, price started to go down up to the end of the month, by extending the loss over the trend line. It technically means that uptrend has been broken and gold price must go down.

 

Will gold extend the gains over the 200MA or it is a result of a retracement?

Opening levels

By | July 16, 2017 5:44 pm | 0 Comments

Monday 7/17/2017 Sydney open levels  (Friday close)

  • $JPY 112.46   (112.50)
  • EUR$ 1.1472   (1.1466)
  • GBP$ 1.3102   (1.3104)
  • $CHF 0.9631   (0.9635)
  • $CAD 1.2648   (1.2650)
  • AUD$ 0.7824   (0.7822)
  • NZD$ 0.7342   (0.7347)

News over the weekend

  • -Germany PM Merkel vows to fight for EU in campaign drive against populism.
  • -China Xi Jinping said the central bank will play a stronger role in defending against risks, calling for a more work on safeguarding the financial system.

Looking ahead:

2200 EDT China Q2 GDP, June IP and Retail sales

The Greenback opening for the week at the lowest levels across the board following last Friday’s weak US CPI and retail sales number. Odds for Dec Fed rate hike decreased to below 40% now.

AUD$ in the meantime approaching 0.7835 highest level seen in April 2016.

Plenty of option gamma supply so far capping the EUR$ near 1.1500, but the level can be taken out before ECB monetary policy meeting this Thursday.

 

NZD PMI

By | July 13, 2017 7:42 pm | 0 Comments

New Zealand June Manufacturing came out touch weak PMI 56.2 vs 58.5 prior, little reaction in NZD holding onto its gain from last night.

0.7375 high seen in January should be the first and strong resistance, also Q2 CPI will be released next Monday which shall be monitored closely if 2% target inflation level is maintained or not.

RBA minutes will be out on Monday as well.

Asian session update

By | July 12, 2017 10:22 pm | 0 Comments

China June trade balance $42.44b surplus vs 40.8b prior, Exports rose 9.0% yoy vs 8.7% prior while Imports +13.1% vs 14.8% prior.

 

AUD$ up slightly on the back of this data currently trading around 0.7680, look to retest 0.7715 high seen last week.

 

Earlier, Bank of Korea left rate unchanged at 1.25%, statement says 2017 GDP growth to be higher than previous 2.6% projection.

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