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USD/JPY drops after US data


 

 

FXstreet.com (Córdoba) - The dollar weakened broadly and fell to fresh lows against the yen after data showed US CPI rose modestly in December, while jobless claims edged lower last week.

 

Consumer prices rose 1.5% during 2013 in line with expectations but well below the 2.0% Fed's target. The USD/JPY cracked below the 104.50 zone and accelerated to a low of 104.27 in recent dealings. At time of writing, the USD/JPY is trading at the 104.35 zone, recording a 0.2% loss on the day.

 

USD/JPY technical levels

 

As for technical levels, the dollar-yen could find immediate supports at 104.27 (Jan 16 low), 104.08 (Jan 15 low) and 104.00 (100-hour SMA/psychological level). On the upside, resistances are now seen at 104.90 (Jan 16 high), 105.00 (psychological level) and 105.32 (Jan 10 high).

 

 

 


 

 

Jan 16, 2014

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USD/JPY struggles in trading above JPY104.40 without major drivers


 

 

FXstreet.com (London) - USD/JPY has had a mildly bullish session so far, but has struggled above JPY104.40 in the absence of any major drivers.

 

Building stats hit and miss

 

US building stats came in either side of consensus, with December building permits undershooting at 0.986m versus expectation of 1.015m. Housing starts in December came in at 0.999m, over the 0.990m expectation.

 

Industrial production is set for release at 14:15 GMT, with a consensus expectation of 0.3 percent versus last month’s 1.1 percent print.

 

FOMC expectations

 

With light data for the pair it is expected that it will continue its broad bullishness on diverging monetary policy expectations ahead of the Fed’s FOMC meeting on 24-25 January. At its last meeting, the Fed moved to cut its monthly asset purchases by USD10bn. Should the Fed continue with its tapering despite the knock-back from poor non-farm payroll jobs numbers on Friday, USD/JPY could challenge the three-and-a-half year highs reached at the beginning of January at JPY105.4415.

 

USD/JPY is currently trading at JPY104.3150 on choppy trading, down from a session high of JPY104.4750.

 

 

 


 

 

Jan 17, 2014

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USD/CAD consolidates ahead of Wednesday's BoC decision


 

 

FXstreet.com (London) - USD/CAD has consolidated through the morning on quiet trading after declines overnight. With US markets closed, the pair is likely to remain in its current trend.

 

CAD focus is on Wednesday’s important Bank of Canada meeting along with the updated monetary policy report and revisions of BoC forecasts.

 

Highly anticipated BoC meeting on Wednesday

 

CAD fortunes have declined alongside the improvements in US conditions. While the CAD was given support as an alternative during US volatility, the Canadian economy is now dogged by low inflation and a current account deficit. Friday’s consumer price index figures are expected to show a decline of 0.2 percent in December, bringing year-on-year inflation to 1.3 percent, however the market importance of the print will be reliant on the tone of the Bank of Canada’s press conference following its rate decision on Wednesday.

 

USD/CAD is currently trading at CAD1.0947, down 0.25 percent on the session, rebounding from an overnight low of CAD1.0931.

 

 


 

 

Jan 20, 2014

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Flash: EUR/USD extends afternoon recovery - FXstreet


 

 

 

 

FXstreet.com (Barcelona) - Valeria Bednarik, Chief Analyst at FXstreet.com comments that the EUR/USD extends its recovery in this European afternoon.

 

Key Quotes

 

“Trading at fresh daily highs above 1.3560, and maintaining a short term upward tone according to the hourly chart as price recovered above its 20 SMA that heads now slightly lower in the 1.3530 area, while indicators head also up right above their midlines.” 

 

“In the 4 hours chart, 20 SMA heads lower above current price, offering dynamic resistance around 1.3590, while indicators hold in negative territory.” With the US markets closed on holidays, markets will likely remain quiet, until the release of NZD CPI later on the day. The daily low of 1.3506 should keep the downside contained at least until Asian opening.”

“Support levels: 1.3520 1.3485 1.3440. Resistance levels: 1.3590 1.3620 1.3655.”

 

 


 

 

Jan 20, 2014

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IMF expected to raise growth forecast for the UK


 

 

 

 

FXstreet.com (Łódź) - According to Sky News, the International Monetary Fund should upgrade UK's growth forecast when it releases its updated World Economic Outlook on Tuesday. It is expected that the UK 2014 GDP projection will be raised from 1.9% to 2.4%.

 

Even though the forecast for the global economy is also to be upgraded from 3.6% indicated in October, the IMF seems to be especially optimistic about the recovery in the UK. Such a big growth projection increase would be positive for Chancellor George Osborne, boosting support for his economic policies. 

 

Still, it is important to remember that the IMF itself has been warning that UK economic growth is excessively dependent on consumer spending instead of on exports or investment.

 

 


 

 

Jan 20, 2014

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EUR/USD holds onto gains


 

 

 

 

FXstreet.com (Córdoba) - The EUR/USD continues to trade at daily highs above 1.3550 although unable to pick up fresh momentum to extend gains as the US markets remain closed due to the Martin Luther King's Day.

 

The EUR/USD managed to bounce off a 2-month low of 1.3506 and climbed toward a high of 1.3565 before losing momentum and settling in a range just below. With no economic events expected for the rest of the day, FX pairs may enjoy a phase of consolidation. At time of writing, the EUR/USD is trading at the 1.3560 area, recording a 0.2% gain Monday.

 

EUR/USD technical perspective

 

From a technical view, Valeria Bednarik, chief analyst at FXStreet commented that the EUR/USD maintains a short term upward tone although with the US holiday, markets will likely remain quiet. "The daily low of 1.3506 should keep the downside contained at least until Asian opening", the analyst commented.

 

As for technical levels, Bednarik locates next supports at 1.3520, 1.3485 and 1.3440, while she sees resistances at 1.3590, 1.3620 and 1.3655.

 

 


 

 

Jan 20, 2014

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Flash: GBP/USD will take its cue from rate spreads. – RBS


 

 

 

 

FXstreet.com (Guatemala) - RBS strategists at RBS said GBP/USD will take its cue from rate spreads.

 

Key Quotes:

 

“The follow-through from the initial post-payrolls squeeze in US rates markets has been a little disappointing, so we may have already established the conditions for another back-up in yields. This may see a somewhat stronger USD”. 

 

“The Euro area recovery is tepid at best. With CPI inflation set to remain consistently below 1% over a prolonged period given a combination of a strong exchange rate, weak commodity prices and sluggish wage growth, it's important that the recovery continues to build”. 

 

“This week sees the flash estimates of Euro area PMI for January. We'll be particularly watching the spread between France and Germany, given the apparent need for the competitiveness gap between the region's largest economies to close. The same is true for Italy”. 

 

“This is where the risks to the EUR, both through easier ECB monetary policy and political push-back on additional economic and fiscal reforms, ultimately lie. On balance, we see EUR/GBP trading lower this week”.

 

 


 

 

Jan 20, 2014

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NZD/USD making a come back


 

 

 

 

FXstreet.com (Guatemala) - NZD/USD has made a high of 0.8336 on a come back after a series of higher highs from below the 0.83 handle.

 

Senior Currency Strategist at Rabobank said that there is no argument over the fact that the RBNZ has been positioning itself for a rate hike in the coming months. “This morning’s release of Q1 CPI inflation rate reported inflation at 1.6% above the 1.4% rate that persisted in the September quarter. While today’s release was a little higher than market expectations, it is consistent with the warnings of the RBNZ last month that “inflation pressures are projected to increase”. 

 

NZD/USD Levels

 

The 20 DMA is 0.8253, the 50 DMA is 0.8245 and the 200 DMA is 0.8149. RSI (14) reads 65.35. Supports are ascending from 0.8180, 0.8207, 0.8256, 0.8272. Spot is 0.8322 while resistances are 0.8362, 0.8433, 0.8446 and 0.8518.

 

 


 

 

Jan 21, 2014

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USD/CAD loses some bullish momentum from stronger than expected data


 

 

 

 

FXstreet.com (London) - USD/CAD has lost some of the bullish momentum from stronger than expected manufacturing shipments data.

 

Positive shipments momentum

 

Canadian manufacturing shipments rose more than expected in November, up 1 percent month-on-month versus the consensus expectation for a 0.3 percent rise. While the downwards revision of October’s print to 0.7 percent translates to an inflation-adjusted 0.7 percent rise in November, it is still a positive sign of positive momentum. The report from the Canadian Imperial Bank of Commerce showed that transportation shipments were a “key driver”. Motor vehicle shipments gained 5 percent while machinery and equipment sales added 5.4 percent.

 

Bank of Canada MPR

 

But while the CIBC report has given the CAD some relief, markets may be reticent to push the Loonie too high ahead of tomorrow’s Bank of Canada monetary policy report and accompanying press conference.

 

Bank of Canada Governor Stephen Poloz has previously stated that he wouldn’t move to raise rates until there was an upturn in consumer spending and jobs growth. However, with weak jobs numbers and inflation falling a long way short of BoC target rates, any rate hike is unlikely to come until mid-2015.

 

While Poloz has abandoned his predecessor Mark Carney’s plans to steadily hike rates ,it may take a shift from neutral to a dovish stance in tomorrow’s MPR to put further pressure on an already battered CAD.

 

Fed could aid BoC


Poloz may be reticent to hike rates, however he may be given a helping hand by the Fed’s schedule of tapering its asset purchase programme down from its current USD75bn a month. As US bond yields rise, so will Canadian yields, rising Canadian long-term rates. Speaking in a television interview at the beginning of the month, Poloz stated that: “Those kinds of pressures are the positive ones – if the U.S. economy strengthens as we believe, those are very welcome market pressures.”

 

USD/CAD is currently trading at USD1.0975, with the CAD selling off from its recovery to CAD1.0967. The pair remains in short-term bullish territory, up 0.20 percent on the open.

 

 


 

 

Jan 21, 2014

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AUD/USD recovers ground, erases losses


 

 

 

 

FXstreet.com (Córdoba) - The AUD/USD managed to bounce from below 0.8800 and erased intraday losses during the American session, although the recovery has remained capped below the 100-hour SMA.

 

The AUD/USD bottomed out at 0.8775 earlier but found buyers and regained the 0.8800 mark as the dollar loses shine across the board, also helped by US stocks gains. At time of writing, the AUD/USD is trading at the 0.8805 area, virtually unchanged since opening.

 

AUD/USD technical perspective

 

From a technical view, Valeria Bednarik, chief analyst at FXStreet noted that the AUD/USD holds a neutral to bearish tone in short-term charts. "Recoveries are still seen as selling opportunities, with the market holding a pretty bearish stance in the pair, eyeing 0.8500, RBA Glenn Steven's target", said Bednarik.

 

 


 

 

Jan 21, 2014

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IMF hikes global growth forecast


 

 

 

 

FXstreet.com (Łódź) - The International Monetary Fund released its updated World Economic Outlook on Tuesday, in which it indicated that global growth would pick up speed in 2014, but that the recovery would remain fragile.

 

The IMF rose the global growth forecast from 3.6% seen in October to 3.7%. It urged advanced economies to maintain accommodative monetary policies in order to boost the slow growth. 

 

According to the IMF Chief Economist Olivier Blanchard: “The brakes to the recovery are progressively being loosened. The drag from fiscal consolidation is diminishing. The financial system is slowly healing. Uncertainty is decreasing.”

 

The UK GDP forecast was raised significantly from 1.9% to 2.4%, which confirmed yesterday´s reports. As far as the Eurozone is concerned, the IMF saw it growing by 1% this year. Blanchard emphasized that the recovery in the area was weak and uneven and urged the ECB to reduce its financial fragmentation as soon as possible. He also pointed to a 10-12% deflation risk in the Eurozone.

 

The growth outlook for the US was raised to 2.8% from 2.6%. The IMF Chief Economist said that the Fed policy framework and timing were reasonable and that he did not expect the FOMC to withdraw stimulus too soon.

 

Furthermore the IMF rose its 2014 growth forecast for Japan to 1.7% from 1.2% seen previously. It also projected that the Chinese economy would expand by 7.5% this year.

 

 


 

 

Jan 21, 2014

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EUR/USD flirting with 1.3560


 

 

 


FXstreet.com (Edinburgh) - The EUR/USD recovered the mid 1.35 region on Tuesday after bottoming below 1.3520, although still navigating in the red territory.

 

EUR/USD next big event, PMI prints

 

Not much happening around the shared currency today, as there are no data releases in the US and market participants have already digested the mixed prints from January’s ZEW Survey. In another direction, the Spanish Treasury managed to sell 3m and 6m Letras at lower yields, extending the positive momentum in the peripheral bond markets. However, the EUR may find support towards the second half of the week, as market consensus expects advanced manufacturing/services PMI prints in the euro area to have improved during January.

 

EUR/USD relevant levels

 

As of writing, the pair is losing 0.06% at 1.3555 with the next support at 1.3508 (2014 low Jan.20) would clear the way to 1.3490 (low Nov.25) and finally 1.3463 (low Nov.22). On the flip side, a break above 1.3563 (high Jan.21) would expose 1.3567 (high Jan.20) and then 1.3600 (psychological level).

 

 


 

 

Jan 21, 2014

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USD/CAD drifts lower on choppy trading ahead of BoC


 

 

 

 

FXstreet.com (London) - USD/CAD has drifted lower on choppy trading ahead of the Bank of Canada’s interest rate decision this afternoon.

 

BoC to hold rates, MPR in focus

 

The BoC will almost certainly hold rates at 1.0 percent, however, the main focus will be on the accompanying monetary policy report. The BoC is expected to again focus on Canada’s below-target inflation with a dovish bias. However, it is not expected that the central bank will move its stance towards further easing.

 

Poloz will not hike rates until conditions improve

 

Bank of Canada Governor Stephen Poloz has previously stated that he wouldn’t move to raise rates until there was an upturn in consumer spending and jobs growth. With Canadian employment falling by 45,000 jobs last month, the economy is a long way from Poloz’s stated conditions for rate hikes. However, he may be given a helping hand by the Fed’s schedule of tapering its asset purchase programme down from its current USD75bn a month. As US bond yields rise, so will Canadian yields, rising Canadian long-term rates.

 

USD/CAD is down 0.05 percent on the session on choppy trading. It is currently trading at CAD1.0963 after creeping to a high of CAD1.0979.

 

 


 

 

Jan 22, 2014

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Flash: GBP/USD continues its joyride - FXSTreet


 

 

 

 

FXstreet.com (Barcelona) - Valeria Bednarik, FXStreet Chief Analyst notes that GBP continues on its skyward surge.

 

Key Quotes

 

“Pound surge strongly across the board, boosted by UK employment data: the unemployment rate hit 7.1%, barely above BOE’s threshold of 7.0%.” 

 

“Although the Central Bank governor Mark Carney warned that 7.0% is not an automatic rate hike, investors run to price in the possibility, sending GBP/USD in a 10 minutes 100 pips ride towards 1.6550.”

 

“Holding nearby, the 4 hours chart shows a strong upward momentum as 20 SMA also gains upward slope below current price that holds well above past weeks high of 1.6510. As long as above this last, the pair should maintain the positive tone, with a break above mentioned high favoring a continuation towards 1.6601, this year high.” 

 

“Below 1.6510, the pair is exposed to a fall towards latest intraday resistance in the 1.6450/60 area, while further losses seem unlikely for today.”

 

 


 

 

Jan 22, 2014

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USD/CAD capped by 1.0980


 

 

 

 

FXstreet.com (Edinburgh) - The Canadian dollar is trading almost unchanged against its neighbour on Wednesday, taking the USD/CAD to the 1.0970/65 area ahead of the BoC meeting.

 

USD/CAD focus on BoC

 

The pair is extending its correction lower from multi-year highs beyond 1.10 posted yesterday, while investors wait for today’s BoC monetary policy meeting and next week’s FOMC gathering as the main catalysts for the pair. Sebastien Galy, Strategist at Societe Generale, commented, “The odds are low that the BoC will make a dovish statement, but the FX market is positioned for it and to a far lesser extent Canadian Fixed Income. The view seems to be that an overly bearish FX market will be squeezed as it doesn't get what it wants. While there is a risk of a minor consolidation, the money behind the bearish CAD move seems to have large pockets”.

 

USD/CAD levels to watch

 

At the moment the pair is losing 0.04% at 1.0965 with the immediate support at 1.0854 (38.2% Fibo retracement).

 

 


 

 

Jan 22, 2014

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Flash: JPY Bullish Percentage Index 60% bullish - FXStreet


 

 

 

 

FXstreet.com (Barcelona) - Goncalo Moreira, FXStreet Technical Analyst notes that the Yen Bullish Percentage Index has 60% of its components in a bullish mode, this means that the currency is trending up against a basket of more than 20 world currencies when measured in a Point and Figure chart.

 

Key Quotes

 

“In turn, Euro-based pairs have mostly been below the 50% mark since the start of the year.”

 

“The most recent trend change came with the 50% line crosses on the 17th January, when the EUR/JPY called to live a descending channel by rejecting the 142.80s. The pair is now dealing with this line, but it has to do it in a convincingly manner in order to get rid of the downside offensive.”

 

“The BPI oscillating above and below 50% without reaching the 70 or 30 levels, as is the case for the Euro is indicative of uncertainty about the prevailing trend. Things look but different for the quote currency which has revealed enough strength to abandon the 10% level and carry up through the central line.” 

 

“A firmer JPY has been also reflected in recent speculative futures positioning (see theCoT Positioning report for more details).”

 

 


 

 

Jan 22, 2014

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GBP/JPY reaching yearly highs


 

 

 

 

FXstreet.com (Guatemala) - GBP/JPY has reached a high of 173.14 from 171.50 on the day post Central Bank policy making activity.

 

“November, BoE minutes concede that u/rate may reach the 7% policy threshold “materially earlier” than the central bank had expected but there was no need to raise rates soon. The BoJ policy meeting ended with the current pace of monetary expansion maintained, as expected”, explained TD Securities strategists. Strategists at Brown Brothers Harriman explained “The BOJ left policy unchanged, with the current plan being to increase the monetary base by ¥60-70trn until the inflation target is achieved”.

 

GBP/JPY Levels

 

The 20 DMA is 171.90, the 50 DMA is 168.60 and the 200 DMA is 157.60. RSI (14) reads 65. Supports are ascending from 169.80, 170.10, 170.60, 171.10, 172.35, 172.75. Spot is while resistances are 173.15 and 173.95.

 

 

 


 

 

Jan 22, 2014

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AUD/USD rallies are being faded


 

 

 

 

FXstreet.com (Guatemala) - The AUD/USD rallies are being sold, post a soft China PMI reading last night. 

 

The Australian CPI figures gave flight to the pair but price action there became heavy and rallies are a fade, despite the weaker set of recent US data. Data wise, US weekly jobless claims rose 1k to 326,000 which came in slightly better than forecast . Markit US PMI 53.7 preliminary in January was weak. Economists had forecast a rise to 55.0 from 54.4. Existing homes sales printed 1.0% beating expectations of 0.4%.

 

AUD/USD Levels

 

The 20 DMA is 0.8901, the 50 DMA is 0.9015 and the 200 DMA is 0.9340. RSI (14) reads 41.11. Supports are ascending from 0.8720, 0.8737, 0.8756. Spot is 0.8780 while resistances are 0.8815, 0.8858, 0.8889, 0.8940 and 0.8956.

 

 


 

 

Jan 23, 2014

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