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Russian central banks expected to ease further – TDS

 

FXStreet (Edinburgh) - According to strategists at TD Securities, the CBR could lower its benchmark rate by 25 bp at this week’s meeting.

 

Key Quotes

 

“In Russia, on Friday, in line with the consensus, we expect the CBR to cuts its key rate by 50 bps to 11.0%”.

 

“At the June meeting the CBR cut by 100 bps, but said that the potential of monetary policy easing will be limited by inflation risks in the next few months“.

 

“The reason for the CBR’s concern is the expected move back up in July inflation due to tariff hikes”.

 

“We think that these concerns will slow down but not stop rate cuts”.

 

“We also do not think that recent moves higher in USDRUB will stop the CBR easing as the FX moves have largely matched falls in oil prices”. 

 

   

   

 

July 27,2015

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Oil drops to near six-month low

 

FXStreet (Mumbai) - Oil sell-off continued on Tuesday, with prices dropping to near six month low as renewed weakness in the Chinese equities has triggered concerns regarding the health of the world’s second largest economy. 

 

Brent fell to an intraday low of USD 53.28/barrel, its lowest since early February, before recovering to USD 52.63/barrel. WTI Crude also printed a low of USD 46.70/barrel, before recovering slightly to trade around USD 47.25/barrel.

 

China’s Shanghai Composite Index fell today, taking the cumulative losses for the first two sessions of the week to 10%. This triggered concerns that the Chinese economy may not be strong enough to counter the excess supply situation in the global economy. 

 

Investors now await the weekly data on US inventory levels to gauge the strength of demand. A preliminary Reuters poll of analysts suggested commercial crude oil stocks in the US likely slipped last week after crossing the five-year seasonal average build in the previous week. 

   

   

 

July 28,2015

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Oil makes a U-turn and climbs to fresh daily highs

 

FXStreet (Córdoba) - Crude oil bounced sharply from below $47 a barrel and rose more than a buck over the last minutes turning positive for the day.

 

The West Texas Intermediate crude posted its lowest level since March at $46.807bbl from where it rebounded toward fresh daily highs above $48.50. At time of writing, WTI was trading at $48.15 up 2% on Tuesday. The turnaround has put crude on track for its first gains after four session of losses. 

 

However, oil has been in a bearish trend over the last months, having lost more than $60 per barrel from 2014 highs amid global supply glut. The cycle low was set at $43.89 a barrel back on January 29. 

 

   

 

July 28,2015

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Gold downside persists - CB

 

FXStreet (Guatemala) - Analysts at Commerzbank noted that Spot Gold has met the 50% retracement of the entire bull move up from the 1999 low. 


Key Quotes:

 

"This was located at 1087 and represented a major long term downside target for us.

 

The low at 1077.25 was accompanied by a divergence of the RSI and this reflects a loss of downside momentum.

 

Rallies will find initial resistance at 1131/41 (50% retracement of last leg down), we can only assume while capped here a downside bias will persist.

 

Below 1077 will target the 1033 March 2008 high and the 1000 psychological support." 

 

 

   

 

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USD Index keeps gains around 96.70

 

FXStreet (Edinburgh) - The greenback, in terms of the USD Index, is giving away initial gains and is returning to the 96.70/65 band.

 

USD Index capped around 97.00

 

The daily upside in the index has lost momentum in levels just shy of the 97.00 mark during the European morning, deflating since then although still in the positive camp.

 

Mixed results from the US docket today saw Markit’s Services PMI coming in above expectations for the current month, while Consumer Confidence and the S&P/Case-Shiller index both have disappointed investors.


USD Index relevant levels

 

As of writing the index is advancing 0.19% at 96.68 and a breakout of 97.62 (high Jul.24) would aim for 98.46 (high Apr.21) and finally 99.36 (high Apr.15). On the flip side, the immediate support lines up at 96.29 (low Jul.27) ahead of 96.26 (low Jul.14) and then 95.63 (low Jul.13). 

 

 

 

   

 

July 28,2015

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Gold almost unchanged below $1,100

 

 

 

FXStreet (Edinburgh) - Prices for the yellow metal remains on the wrong footing on Tuesday, trading in a narrow range near $1,095 per ounce.

 

Gold weaker ahead of FOMC

 

The re-emergence of the bid tone around the US dollar has been weighing on Gold prices since early trade, prompting the metal to trade in a cautious tone ahead of tomorrow’s FOMC meeting.

 

In addition, the safe haven metal saw its demand diminishing following a better performance of the Chinese stock markets today in comparison with Monday’s sharp drop.

 

Gold levels to watch

 

Gold is down 0.20% at $1,094.70 with the immediate support at $1,072.30 (low Jul.24) followed by $1,045.20 (monthly low January 2010). On the other hand, a breakout of $1,131.70 (high Jul.20) would expose $1,144.00 (high Jul.17) and then $1,154.20 (high Jul.15). 

 

 

 

   

 

July 28,2015

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Expecting a breach of 0.65 in NZD/USD – Westpac

 

 

 

FXStreet (Edinburgh) - Strategists at Westpac believe a break below the 0.65 handle is likely in the medium term.

 

Key Quotes

 

“We maintain our negative multi-month outlook for NZD/USD, expecting the 0.6500 level to give way during the next few weeks”.

 

“Admittedly there’s a risk of a corrective bounce near term given speculative positioning is at record levels, according to the CFTC”.

 

“However we will only change our near term outlook if the downtrend channel is violated (i.e. above 0.6650)”.

 

“Note that last week’s RBNZ surprise to markets resulted in only a 1.25 cent rally on the day”.

 

“The key NZ event this week will be RBNZ Governor Wheeler’s speech on the economy on Wednesday, published at 9am NZ that day. There’s a decent chance the speech will be a “quasi-MPS” and clarify the message presented at last week’s OCR Review”. 

 

 

 

   

 

July 28,2015

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AUD/USD drifting towards offer territory

 

 

 

FXStreet (Guatemala) - AUD/USD is currently trading at 0.7337 with a high of 0.7345 and a low of 0.7257.

 

AUD/USD has managed a bid on the back of rising metals on the LME, with Copper bouncing back of yearly lows. Benchmark copper on the London Metal Exchange was up more than 1 percent at $5,255 a tonne at 1057 GMT. This was a vast improvement from $5,188 of the close on Monday, when the metal hit a six-year low at $5,164 on the back of the downside pressures in the Chinese stock market and economy.

 

Last week's weak manufacturing survey has also been reinforcing the unease. Meanwhile Gold is up from the weakest level since 2010 but it is not out of the woods yetas investors anticipate a rate hike from the Fed before the year is out, which could be a reason that the yellow metal isn't getting much love, despiteits usual safe haven status as the uncertainty mounts in a risk-off environment that surrouns China.

 

Meanwhile, the FOMC is coming up tomorrow and the dollar could continue to garner support on this given that markets are aligning to a rate hike in September from the Fed. However, this does not necessarily mean that this will be indicated as a certainty in tomorrow's accompanying statement and the dollar could come under pressure if overbought leading into the meeting and subsequent announcements.Markets will be looking for a bullish case for the US economy, despite today's disappointment in the consumer confidence numbers while yesterday's durable goods orders were robust and beat expectations. AUD/USD is up from 0.7257 but AUS/USD may be a sell on rallies with offers lined up through 0.7340/80 and above within a highly bearish downtrend.

 

AUD/USD technically bearish

 

Technically, the charts look gruesomely bearish for AUD/USD. Rabobank FX Strategy Team notes that the AUD/USD should remain vulnerable, lowering the forecast towards 0.71 by year-end.

 

Karen Jones, chief analyst at Commerzbank explained that AUD/USD held steady yesterday and the recent low has been accompanied with a divergence of the daily RSI. 

 

 

 

 

   

 

July 28,2015

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AUD/USD drifting towards offer territory

 

 

 

FXStreet (Guatemala) - AUD/USD is currently trading at 0.7337 with a high of 0.7345 and a low of 0.7257.

 

AUD/USD has managed a bid on the back of rising metals on the LME, with Copper bouncing back of yearly lows. Benchmark copper on the London Metal Exchange was up more than 1 percent at $5,255 a tonne at 1057 GMT. This was a vast improvement from $5,188 of the close on Monday, when the metal hit a six-year low at $5,164 on the back of the downside pressures in the Chinese stock market and economy.

 

Last week's weak manufacturing survey has also been reinforcing the unease. Meanwhile Gold is up from the weakest level since 2010 but it is not out of the woods yetas investors anticipate a rate hike from the Fed before the year is out, which could be a reason that the yellow metal isn't getting much love, despiteits usual safe haven status as the uncertainty mounts in a risk-off environment that surrouns China.

 

Meanwhile, the FOMC is coming up tomorrow and the dollar could continue to garner support on this given that markets are aligning to a rate hike in September from the Fed. However, this does not necessarily mean that this will be indicated as a certainty in tomorrow's accompanying statement and the dollar could come under pressure if overbought leading into the meeting and subsequent announcements.Markets will be looking for a bullish case for the US economy, despite today's disappointment in the consumer confidence numbers while yesterday's durable goods orders were robust and beat expectations. AUD/USD is up from 0.7257 but AUS/USD may be a sell on rallies with offers lined up through 0.7340/80 and above within a highly bearish downtrend.

 

AUD/USD technically bearish

 

Technically, the charts look gruesomely bearish for AUD/USD. Rabobank FX Strategy Team notes that the AUD/USD should remain vulnerable, lowering the forecast towards 0.71 by year-end.

 

Karen Jones, chief analyst at Commerzbank explained that AUD/USD held steady yesterday and the recent low has been accompanied with a divergence of the daily RSI. 

 

 

 

 

   

 

July 28,2015

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Brazil expected to hike rates today – Societe Generale

 

 

FXStreet (Edinburgh) - According to Strategist Kit Juckes at Societe Generale, the Brazilian central bank is expected to hike its benchmark rate to 14.25% at today’s meeting.

 

Key Quotes

 

“The most noteworthy event today though, won't be in G10 but rather, in Brazil where a hike in the Selic rate to 14.25% is widely expected”.

 

“The BRL has been hit by a combination of poor growth, political graft, weak balance of payments and falling commodity prices, and the currency's fall has been one (not the only) factor behind faster inflation. Hence the rate hike amidst weak growth”.

 

“If the FX market reacts by selling the currency with increased fervour (which is what our EM team expects) there's a risk the real's woes make more headlines and fuel the sense that an eventual Fed move can cause extended risk aversion. Which is a risk exacerbated, of course, by the fall in oil prices”. 

 

 

 

 

   

 

July 29,2015

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EUR/USD regains 1.1060 and beyond

 

 

FXStreet (Edinburgh) - After bottoming out in the 1.1030 area in early trade, a renewed buying interest has lifted EUR/USD back to the 1.1060/65 band.

 

EUR/USD capped by 1.1090

 

The pair has recovered the smile following a bout of weakness around the US dollar, dragging it to session lows when tracked by the USD Index (DXY). Absent releases in Euroland and with Greek developments momentarily in the back burner, the pair’s price action hinges almost exclusive on the risk appetite trends and USD-dynamics.

 

Later on in the session, the FOMC will conclude its 2-day meeting, with consensus amongst traders expecting the greenback could be supported by the Committee’s tone of the statement.

 

EUR/USD levels to watch

 

As of writing pair is up 0.01% at 1.1064 facing the next hurdle at 1.1085 (high Jul.29) followed by 1.1129 (high Jul.27) and then 1.1197 (high Jul.13). On the other direction, a breach of 1.1030 (low Jul.29) would target 1.1022 (low Jul.28) en route to1.0969 (low Jul.27). 

 

 

 

 

   

 

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EUR/JPY aims to break above 137.11 – Commerzbank

 


FXStreet (Edinburgh) - Karen Jones, Head of FICC Technical Analysis at Commerzbank, expects the cross could overcome the 137.11 levels in the near term.

 

Key Quotes

 

“EUR/JPY is probing the 200 day ma at 137.11. It continues to recover off the 3 month uptrend at 134.93. We will look for a break above the 200 day ma shortly - this will introduce scope to the 140.70/141.06 recent highs, which are again expected to act as tough resistance for the market”.

 

“Currently the Elliott wave count on the daily chart is suggesting that the market will fail in this vicinity”.

 

“Below the 134.93 uptrend, Key support lies at 133.57/10, the lows since May”. 

 

 

 

 

 

   

 

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GBP/USD: pushes through key fib resistance, will it sustain?


FXStreet (Mumbai) - The bulls have finally managed to push the GBP/USD spot through 1.5639 (38.2% Fib R of June rally), although it remains to be seen if it manages to sustain above the same till NY closing. 

 

Will it sustain above Fib level

 

The spot managed to rise above the said level on few occasions since July 1, but failed to witness a daily close. Consequently, the GBP bulls may have a hard time extending the gains, especially if the US new home sales data surprises on the positive side, while the Fed ignores the overseas turbulence in its policy statement.

 

The Fed is widely expected to reiterate that rate hike decision is data dependent, while expressing concerns regarding the situation in China. 

 

GBP/USD Technical Levels

 

The spot currently trades at 1.5640. The gains could be extended to 1.5670 (July 23 high). On the other hand, failure to sustain above 1.5639 (38.2% Fib R of June rally) could see the spot re-test 1.56 handle. 

 

 

 

 

 

 

   

 

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Commodity currencies drop ahead of the FOMC statement

 

 

 

FXStreet (Mumbai) - The commodity currency pack has weakened against the American dollar despite even though the Chinese equity markets stabilized and clocked 3% gains today. 

 

The Kiwi had strengthened earlier today after RBNZ governor said the economy is not weak enough for more aggressive rate cuts. However, the USD demand spiked in the early European session, pushing the NZD/USD pair below 0.67 handle. The pair now trades around 0.6670; down 0.10% on the day. 

 

Meanwhile, the weakness in the commodity prices continues to weigh over the Aussie. The AUD/USD pair fell 0.40% to trade around 0.7300 handle. The AUD was also a victim of a drop in the AUD/NZD cross after RBNZ governor’s comments. 

 

The Canadian dollar also trades moderately weak, tracking 0.5% fall in Crude prices in the US. The USD/CAD pair strengthened 0.20% to trade around 1.2950 levels. 

 

Investors remain focused on the FOMC statement due for release later today. It is widely expected that Fed would reiterate that “lift-off” is data dependent and express concerns regarding the turbulence in China and weakness in commodities. 

 

 

 

 

   

 

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GBP/JPY spikes to 193.50

 

 

 

FXStreet (Mumbai) - The GBP/JPY rose to 193.50 on Wednesday, in a move which appears to be an extension of Tuesday’s post-UK GDP rally in the GBP. 

 

Takes out key Fib resistance

 

The spot is back above 193.30, which is the 76.4% fib retracement of the fall from 195.876 to 184.987. The pair jumped from the 50-DMA support on Tuesday after the UK Q2 GDP showed the economy expanded 0.7%; its tenth straight expansion. 

 

The GBP/JPY could continue to rise ahead of the FOMC statement if the US desks ditch the USD in anticipation of a non-committal by the Fed. 

 

GBP/JPY Technical Levels

 

The spot currently trades around 193.45. The immediate resistance is seen at 194.37 (July 17 high), ahead of the major resistance at 195.87 (June 24 high). On the other hand, support is seen at 193.30 (76.4% fib of 195.876-184.987) and 191.75 (50-DMA). 

 

 

 

 

   

 

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Expect further easing by RBNZ, albeit at a slower pace – BBH

 

 

 

FXStreet (Edinburgh) - Analysts at BBH have assessed the recent speech by RBNZ’s Wheeler and its implications for the Kiwi dollar.

 

Key Quotes

 

“Governor Wheeler of the Reserve Bank of New Zealand pushed against expectations for dramatic rate cuts but did reiterate the need for a lower New Zealand dollar and scope for additional rate cuts”.

 

“The mini-tightening cycle was worth 100 bp and half of it has been unwound”.

 

“We look for the other half to be unwound in the coming months”.

 

“Kiwi initially rallied to $0.6740, a little more than three-quarters of a percent, but gave it all back in subsequent activity”. 

 

 

 

   

 

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Banxico to keep rates at 3.0% - BBH

 

 

 

FXStreet (Edinburgh) - The Research Team at BBH expects the Mexican central bank to stand put at today’s meeting.

 

Key Quotes

 

“Mexico central bank meets and is expected to keep rates steady at 3.0%”.

 

“Mid-July CPI came in lower than expected at 2.76% y/y vs. 2.87% consensus”.

 

“This was the lowest since at least 1989, and moves further below the 3% target”.

 

“Real sector data remains fairly soft. Under these conditions, we do not expect Banco de Mexico to make good on its intent to hike rates this year”.

 

“USD/MXN is making new all-time highs this week, yet there simply has been no inflation pass-through to date”. 

 

 

 

 

   

 

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German CPI prints lower than expected in July

 

 

 

FXStreet (Mumbai) - The preliminary data released by the Destatis revealed the inflation as measured by the consumer price index (CPI) rose 0.2% year-on-year, compared to the expectation of 0.3%. The CPI stood at 0.3% in June. 

 

Month-on-month CPI printed at 0.2%, slightly lower than the expected rise to 0.3% from the 0.2% contraction seen in June. The Harmonised Index of Consumer Prices (HICP) printed in line with the estimates at 0.3% month-on-month and 0.1% year-on-year. 

 

The slowdown in the inflation is mainly due to the sharp drop in the household energy and motor fuels prices (-6.2%). 

 

 

   

 

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USD/JPY moves beyond 124.50

 

 

 

FXStreet (Edinburgh) - The US dollar continues to appreciate vs. its Japanese counterpart on Thursday, now pushing USD/JPY to fresh tops near 124.60.

 

USD/JPY stronger on US data

 

The pair is gathering further traction despite the US GDP for the second quarter expanded at an annual pace of 2.3% vs. 2.6% initially forecasted. In addition, Initial Claims have beaten expectations once again at 267K in the week ended on July 24th and inflation tracked by the Personal Consumption Expenditures rose 2.2% QoQ – Core PCE at 1.8% inter-quarter. 

 

USD/JPY relevant levels

 

At the moment the pair is advancing 0.38% at 124.42 facing the next hurdle at 124.55 (high Jul.30) followed by 124.58 (high Jun.10) and then 125.05 (high Jun.1). On the other hand, a breakdown of 123.40 (low Jul.29) would open the door to 123.01 (low Jul.27) and finally 122.50 (low Jul.14). 

 

 

   

 

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US initial jobless claims rise less than expected

 

 

 

FXStreet (Mumbai) - The US labor department data released on Thursday showed the first time applications for unemployment benefits stayed near cyclical lows, a sign that the labor market continues to improve. 

 

Jobless claims stay below 300K for the 21st consecutive week

 

The initial jobless claims rose to 267K in the week ended July 24, compared to the estimated rise to 270K from previous week’s print of 255K. The four-week average of claims, which provides a more accurate picture of the labor market strength, fell 3,750 to 274,750 last week. 

 

The continuing claims rose 46,000 to 2.26 million in the week ended July 18. The so-called continuing claims covered the week during which the government surveyed households for July's unemployment rate. 

 

   

 

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USD Index retreats from highs, near 97.40

 

 

 

FXStreet (Edinburgh) - The USD Index, which gauges the greenback against a basket of its main rivals, is now back to the 97.40 area after hitting daily tops around 97.60.

 

USD Index bolstered by US docket

 

The greenback quickly clinched session highs in the 97.60 area following the results in the US docket, although the bull run proved to be short-lived and retreated to the current 97.40/45 band.

 

Data showed that the US economy has expanded 2.3% on a yearly basis between April and June, up from the 0.6% seen during the first quarter (revised up from -0.2%) albeit missing forecasts for a 2.6% expansion.

 

Adding to the positive tone, Initial Claims rose to 267K in the week ended on July 24th, beating expectations at 270K.

 

USD Index relevant levels

 

As of writing the index is up 0.47% at 97.42 and a breakout of 97.59 (high Jul.30) would aim for 97.62 (high Jul.24) and finally 98.46 (high Apr.21). On the flip side, the immediate support aligns at 96.29 (low Jul.27) ahead of 96.26 (low Jul.14) and then 95.63 (low Jul.13). 

   

 

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