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GBP/USD slightly bid; Yellen takes the seat


 

 

 

FXStreet (Guatemala) - GBP/USD spiked up to 1.6473 the high before meeting conservative supply on the way back to the mid point of the handle. Yellen’s Semiannual Monetary Policy Report to the Congress was published and now she speaks.

 

The new Fed Chair Janet Yellen said in her first semi-annual testimony on monetary policy and the economic outlook to the US Congress that the situation on the labor market had improved but that the economic recovery still had a long way to go, sending the market mixed signals. 

 

Yellen speech insight:

 

Steve Ruffley, chief market strategist at InterTrader. Explained that “Yellen will not be able to make any real sweeping statements or flick a switch to fix the fragile state of the US economy. The US economy is like a huge container vessel travelling at speed, set on its course by Captain Bernanke. He has left in the only life raft available and is sipping cocktails in the Soggy Dollar bar with one eye on the horizon. Yellen however, being the new captain, has the unenviable task of deciding what comes next. You can’t just stop QE or ‘drop anchor’ completely at this speed, nor can you just set a totally new course. Yellen in real terms has very little room for manoeuvre metaphorically or economically. What the most concerning part of all is is that she knows it, I know it and so does everyone else in the market. This means that rife speculation and volatility has once again entered the markets. Although Bernake did the best he could under testing conditions, he was less than decisive with his message to the markets on forward guidance (likely under the knowledge that he was due to step down.) Yellen now has to be clear on forward guidance and let the market know in no uncertain terms when QE will end. Only after the FED move on rates will the bond and stock markets be able to efficiently able to price this in, and once again return to trading in ‘normal’ conditions.”

 

 

GBP/USD Levels

 

The 20 DMA is 1.6445, the 50 DMA is 1.6419 and the 200 DMA is 1.5844. RSI (14) reads 59.73. Supports are ascending from 1.6295, 1.6325, 1.6348, 1.6384, 1.6420. Spot is 1.6455 and resistances are 1.6460, 1.6471 and1.6500.

 

 

 

 

 

 


 

 

Feb 11, 2014

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USD/JPY back on the bid on Yellen


 

 

 

FXStreet (Guatemala) - USD/JPY has seen a series of spikes of late only to be sent right back to where the pair came from in the same moments. In this event, the pair is volatile around Yellen.

 

USD/JPY, on this occasion, flew from 102.28 to reach a high of 102.69 on the five minute chart but met fierce supply there which took the pair on course to the 102 handle within the following hour. Yellen released her Semiannual Monetary Policy Report to the Congress was published. The new Fed Chair Janet Yellen said in her first semi-annual testimony on monetary policy and the economic outlook to the US Congress that the situation on the labor market had improved but that the economic recovery still had a long way to go, sending the market mixed signals. She has been speaking and that has lifted the pair again.

 

USD/JPY Levels

 

The 20 DMA is 102.96, the 50 DMA is 103.47 and the 200 DMA is 100.13. RSI (14) reads 49.51. Supports are ascending from 101.35, 101.77, 101.89, 101.99. Spot is 102.25 while resistances are 102.46, 102.65, 102.77 and 102.94.

 

 

 

 

 

 


 

 

Feb 11, 2014

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Flash: Has the AUD bottomed? - Rabobank


 

 

 

FXStreet (Guatemala) - Jane Foley, Senior Currency Strategist at Rabobank looked into AUD/USD, concerned about the Australian economy being vulnerable to negative shocks from China.

 

Key Quotes:

 

“The expectation of steady policy should help lend some support to AUD/USD going forward. The recent change in language from the RBA on the outlook for the AUD should also add support”. 

 

“Although the softer prices of commodities has weakened the country’s terms of trades, volumes of exports has recently surprised on the upside with iron ore shipments to China continuing at a record pace in December and unexpectedly lifting the trade balance to a surplus”. 

 

“On the back of recent developments we have revised up our 1 to 3 mth AUD/USD modestly and now expect a 0.89 to 0.91 range to hold most activity in this period”. 

 

“That said, the Australia’s economy is still vulnerable to negative shocks from China and based on our concerns for Chinese growth we are maintaining are 12 mth AUD/USD forecast at 0.86”.

 

 

 

 

 

 


 

 

Feb 11, 2014

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EUR/JPY regains 139.00


 

 

 

FXStreet (Edinburgh) - The weakness around the single currency is now taking a toll on the EUR/JPY, dragging it to weekly lows in sub-139.00 levels.

 

EUR/JPY softer on B.Coeure’s comments

 

The EUR is getting hammered following ECB’s B.Coeure’s comments regarding the European central bank would be considering negative deposit rates ‘very seriously’. The cross nose-dived 60+ pips soon after the news hit the wires, although the decline seems to have found support near 138.80. Earlier on, EMU’s Industrial Production figures came in short of estimates during December, albeit the EUR remained indifferent.

 

EUR/JPY levels to watch

 

At the moment the cross is losing 0.70% ay 139.01 with the next support at 138.45 (daily cloud base) followed by 138.17 (low Feb.7) and then 138.00 (psychological level). On the flip side, a break above 140.05 (21-d MA) would target 140.09 (high Feb.11) en route to 140.33 (low Jan.20).

 

 

 

 

 

 


 

 

Feb 12, 2014

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Flash: RBA can still cut rates this year - BTMU


 

 

 

FXStreet (Barcelona) - The recent worsening of the labour market in Oz could prompt the RBA to cut the refi rate later this year, according to Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ.

 

Key Quotes

 

"The Australian dollar has weakened sharply following the release of the weaker than expected Australian employment report for January,, with the AUD/USD rate falling back below the 0.90- level. The report revealed that employment in Australia unexpectedly declined by 3.7k in January and the unemployment rate increased by 0.2 point to 6.0% reaching its highest level since July 2003."

 

"The only piece of encouraging news within the report was that hours worked increased by 1.3% in January consistent with strengthening economic growth potentially pointing to stronger employment growth ahead. Still employment growth in Australia continues to prove disappointing despite the improving outlook for economic growth as evident by stronger retail sales growth and the rising housing market."

 

 

"Over the last six months the Australian economy has shed 15.6k jobs and added only 1.3k jobs over the last twelve months. The weak employment report supports our view that the RBA will not begin to raise its key policy rate until at least well into 2015, and if the labour market does not show signs of improvement it will likely encourage investor expectations of further monetary easing later in 2014. In these circumstances, we continue to believe that the scope for the Australian dollar to strengthen in the near-term on the back of the improving domestic economic outlook is only modest."

 

 

 

 

 

 


 

 

Feb 13, 2014

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GBP/USD toying with 1.6650


 

 

 

FXStreet (Edinburgh) - The sterling continues its relentless march north on Thursday, with the GBP/USD extending its rally near 1.6650.


GBP/USD in 3-week highs

 

The pair is thus extending its bounce off sub-1.6300 levels in early February, looking to challenge ytd peaks in the vicinity of 1.6670 (January 24th) backed by the recent upbeat tone from the BoE’s Quarterly Inflation Report. In the opinion of BBH Global Currency Strategy Team, “The bottom line is that while the general view remains of a risk of a BOE rate hike in Q1 2015, many observers and investors see heightened risk of an earlier hike, as in late 2014. The market went into this week thinking that it was a close call who would raise rates first the Fed of the BOE, Yellen seemed ultimately more convincing than Carney”.

 

GBP/USD levels to consider

 

At the moment the pair is gaining 0.30% at 1.6643 with the next up-barrier at 1.6668 (2014 high Jan.24) ahead of 1.6700 (psychological level). On the downside, a breach of 1.6425 (low Feb.12) would aim for 1.6392 (low Feb.11) and then 1.6384 (low Feb.10).

 

 

 

 

 

 


 

 

Feb 13, 2014

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Flash: GBP/USD has scope to test 1.6745 - FXStreet


 

 

 

FXStreet (Barcelona) - Valeria Bednarik, FXStreet Chief Analyst notes that GBP/USD flirted with this year high, reaching 1.6653 so far today, amid a general weakness of the greenback particularly against its European rivals. 

 

Key Quotes

 

“With no headlines behind the move, the pair stands around 1.6640 with the 4 hours chart showing indicators maintaining a strong upward momentum despite in extreme overbought levels, with no signs the pair may pull lower at the time being.” 

 

“Immediate support stands at current daily low around 1.6590 and approaches to the level should be seen as buying opportunities towards this year high of 1.6666.”

 

“A price acceleration beyond 1.6670, should see the pair extending its rally up to next big resistance, the 1.6745 price zone, monthly high for April and May 2011.”

 

 

 

 

 

 


 

 

Feb 13, 2014

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Session Recap: USD softer, EUR advances


 

 

 

FXStreet (Córdoba) - The dollar came under broad pressure during the European session for no apparent reason, falling against major competitors.

 

The EUR/USD spiked to a fresh 2-week high of 1.3685 in a sudden move that wasn't news driven. The GBP/USD also advanced to a 3-week peak of 1.6653 while the USD/JPY broke below 102.00. Currencies linked to commodities are nearly flat with the AUD underperforming in the wake of disappointing Australian jobs data.

 

During the New York session, the US will release jobless claims, Jan retail sales and Dec business inventories data.

 

Main Headlines in Europe:

 

Germany: Annual HICP inflation up 1.2% in January, as expected

 

 

Switzerland: Producer and Import Prices flat in January

 

Flash: What’s the perspective for the EUR/USD today? – Commerzbank and Societe Generale

 

Europe open: Focus on ECB monthly report on increasing intervention expectations

 

ECB lowers inflation forecasts for this and next year in its February Monthly Report

 

ECB's Coeure warns Eurozone recovery still weak

 

 

 

 

 

 


 

 

Feb 13, 2014

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USD/JPY resistance sighted 102.42


 

 

 

FXStreet (Guatemala) - USD/JPY is just below the 102 handle after climbing higher after the Japan GDP figures disappointed.

 

The global currency strategy team at Brown Brothers Harriman explained and note that the disappointing Q4 GDP figures spurred speculation that maybe the BOJ will have to do more after all. “This saw the greenback climb back to the JPY102 area…It renews concerns about a flagging economy as April 1 retail sales tax looms”. As far as the calendar from here, the US is out today but later in the week the real sector data is largely confined to the housing market and the FOMC minutes. However, after Yellen’s Q & A’s last week, the minutes are unlikely to contain many surprises.

 

Technically, Karen Jones, Head of FICC Technical Analysis and Alex Rudolph, Senior Technical Analyst, explained that USD/JPY rallies will find stronger resistance at 102.42, 103.45 (20 day ma day ma and 29th Jan high). This guards 104.45 en route to the more important 105.45/50 recent high and long term Fibo”.

 

USD/JPY Levels

 

The 20 DMA is 102.55, the 50 DMA is 103.46 and the 20 DMA is 100.18. RSI (14) reads 51.07. Supports are ascending from ,100.76, 101.07, 101.25 and 101.38. Spot is 101.90 while resistances are 101.99, 102.13 and 102.41.

 

 

 

 

 

 


 

 

Feb 17, 2014

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EUR/GBP bounces off 1-year low


 

 

 

FXStreet (Córdoba) - The EUR/GBP found support and managed to bounce off a 1-year low scored at the beginning of the Asian session amid broad GBP strength.

 

The EUR/GBP fell to its lowest level since January 2013 at 0.8156 but it recovered ground during the European trading turning intraday positive. However, with the recovery being capped by the 0.8200 psychological level, the EUR/GBP was confined to a phase of consolidation.

 

EUR/GBP levels to watch

 

At time of writing, the pair is trading at the 0.8190 zone, up 0.2% on the day, with immediate resistances lining up at 0.8200 (psychological level) and 0.8218 (100-hour SMA). Meanwhile, supports are seen at 0.8175 (Feb 14 low) and 0.8156 (Feb 17 low).

 

 

 

 

 

 


 

 

Feb 17, 2014

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Flash: IMM positions; Sterling on the up - Rabobank


 

 

 

FXStreet (Guatemala) - Strategists at Rabobank reported the International Monetary markets positions in some of the G10's that are covered.

 

"EUR shorts halved. The impetus for the move was likely the news that ECB President Draghi did not step up his dovish rhetoric at the February ECB meeting. Better than expected Q4 Eurozone GDP data may lend a little further support this week". 

 

"USD longs continued to creep higher potentially in continued response to the exit from emerging markets. Continued weak US economic data could lead to some hesitation from USD bulls".

 

"The level of JPY shorts increased slightly after the recent sharp falls. There has been a significant degree of yen short covering in recent weeks which has pulled the level of JPY shorts back from the extraordinary levels that persisted between Nov2013 and January 2014". 

 

"Sterling long positions held steady after the previous week’s drop. Sterling rallied in the spot market during the latter part of last week in response to the upward revision to growth from the BoE. This could lead to an additional upward extension in longs in the next set of data". 

 

"Net CHF positions fell back but remain in positive territory".

 

"Short-covering pushed CAD shorts slightly lower for the third consecutive week".

 

"AUD short-covering is also evidence as the market adjusts to a less dovish RBA".

 

 

 

 

 

 

 


 

 

Feb 17, 2014

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Flash: EUR/GBP broke below key support - BTMU


 

 

 

FXStreet (Guatemala) - Lee Hardman, currency analyst at The Bank of Tokyo-Mitsubishi UFJ, Ltd explained that the pound continues to strengthen following the release last week of the BoE’s latest Quarterly Inflation Report and updated forward guidance which has served to reinforce investor expectations that the BoE will begin to raise its key policy rate ahead of the other major central banks. 

 

Key Quotes:

 

“EUR/GBP has broken below key support at around the 0.8200-level encouraging accelerated pound strength in the near-term”. 

 

“The release of the latest Rightmove house price survey which revealed a further solid monthly increase of 3.3% in February has also provided support for the pound".

 

"BoE Governor Carney in an interview yesterday reiterated that interest rate

increases will be “limited and gradual” with some very big persistent

forces likely to conspire collectively to keep the level of interest rates

down”. 

 

“However with other major central banks not yet even seriously

considering rate hikes, even the prospect of very gradual and modest BoE

rate hikes ahead is likely to continue boosting the relative attractiveness

of the pound further”.

 

 

 

 

 

 

 


 

 

Feb 17, 2014

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GBP/USD pushing through 1.6720


 

 

 

FXStreet (Guatemala) - GBP/USD has continued on and is looking better bid now with the release of the lowest read NAHB housing read in the US since May. 

 

GBP/USD got a slight lift and has been attempting 1.6730 and towards yesterdays highs in 1.6740 after NAHB housing read 46 vs the 56 consensus and previous 56 indicating the housing market trend in the US has taken a turn for the worst. Next up for tomorrow, BoE minutes and the Unemployment Rate for the UK.

 

GBP/USD Levels

 

The 20 DMA is 1.6502. The 50 DMA is 1.6445 and the 200 DMA is 1.5874. RSI (14) reads 52.37. Supports are ascending from 1.6623, 1.6644, 1.6667 and1.6694. Spot is 1.6724 while resistances are 1.6757, 1.6796, 1.6823 and 1.6845.

 

 

 

 

 

 

 

 


 

 

Feb 18, 2014

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USD/CAD keeping to a tight range


 

 

 

FXStreet (Guatemala) - USD/CAD has remained in sideways mode this week, but despite this, the daily chart shows USD/CAD nearing the 40-day MA (1.0927) which was strong support for the market at the start of the year.

 

Strategists at TD Securities explained that USD/CAD’s drift lower has slowed over the past few days, leaving the market’s sideways shift to put the spot rate in touch with the upper boundary of the corrective channel in place from the late January high above 1.12. “Short-term trend momentum remains geared to the downside and we continue to view the 1.09 area as reachable in the near-term before the broader corrective pattern starts to slow and risk/reward considerations shift towards favouring USD longs. Above 1.0985/95 near- term will be more USD-supportive more immediately and reduce the risk of an extension lower towards 1.09”. The analysts continued and said, “The 40-day MA plus the corrective retracement supports noted on the short-term chart above imply very strong support for funds in the low 1.09 area. We favour looking to buy USD dips against this support zone”. 

 

USD/CAD Levels

 

The 20 DMA is 1.1066, the 50 DMA is 1.0852 and the 200 DMA is 1.0503. RSI (14) reads 52.60. Supports are ascending from 1.0842, 1.0875, 1.0905, 1.0940

Spot is 1.0964 while resistances are 1.1026, 1.1095, 1.1123 and 1.1138.

 

 

 

 

 

 

 

 

 


 

 

Feb 18, 2014

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Flash: UK Inflation outlook is bearish - RBS


 

 

 

FXStreet (Guatemala) - Strategists at RBS noted that the January 2014 inflation data in the UK is forecast to fall to 1.7% in February.

 

Key Quotes:

 

“CPI inflation fell to 1.9% in January, its first sub-target outturn since November 2009 and below City forecasts (consensus & RBS: 2.0%). The fall was driven by core CPI inflation, which declined to 1.6% from 1.7%, some way below consensus expectations at 1.9% (RBS: 1.7%). There were broad-based declines in inflation in January: of the 12 main CPI inflation sub-categories, 6 were down, 3 unchanged, 3 higher”.

 

 

 

“CPI inflation is forecast to fall to 1.7% in February, primarily reflecting energy price disinflation (powerful base effects)”.

 

“Core CPI inflation is forecast to remain at 1.6%. The core rate has fallen rapidly but declines have been broad-based”.

 

“RPI & RPIX inflation are forecast to fall to 2.7% in Feb from 2.8% in Jan”.

 

 

 

 

 

 

 

 

 


 

 

Feb 18, 2014

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Hungary further cuts rates in bid to unfreeze economy


 

 

 

FXStreet (London) - The Hungarian central bank showed today that it has not finished with its easing cycle that began in August 2012. The latest 15bps cut takes the benchmark interest rate set by the Magyar Nemzeti Bank from 7 percent at the beginning of its cycle to a current 2.7 percent.

 

The rate cut went further than expectations of a 10bps drop, and comes after the forint hit a two-year low against the dollar. The aggressive approach from the Hungarian central bank has been driven by concerns over retreating investor demand for emerging market economies as the US Federal Reserve scales back its asset purchases.

 

Though the central bank remains dovish in its outlook, there was some change in language accompanying the rate cut. “Further cautious easing may follow,” was replaced by “will decide on the need and possibility for continuing the easing cycle”. However projections for Hungarian inflation remain benign, with the central bank stating that it sees “a significant degree of unused capacity in the economy”.

 

While Turkey has drastically hiked rates in an attempt to slow lira depreciation, the Hungarian central bank has argued that, unlike Turkey and others who have run a current account deficit which places them at greater risk in tightening conditions, Hungary’s current account puts it in a much stronger position. The central bank argues that its flatlining inflation (albeit largely as a result of state directed utility price controls) gives it space to ease monetary policy.

 

In addition to the 430 bps of headline interest rate cuts carried out over 19 consecutive months by the Hungarian central bank, it has also mooted a HUF2.75trillion/USD12.2bn credit facility in a bid to prop up private lending and stimulate growth.

 

 

 

 

 

 

 

 


 

 

Feb 18, 2014

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BoE Minutes: Scope remains to absorb spare capacity further before raising bank rate


 

 

 

FXStreet (Łódź) - The BoE Minutes from the MPC monetary policy meeting held on 5 and 6 February and released today revealed that the Committee voted unanimously in favor of maintaining the interest rate at 0.5% and the stock of asset purchases at £375 billion. 

 

UK inflation slowed down back to the 2% target in December, partly due to the strength of the pound. The MPC expects the CPI rate to stay close or slightly below the 2% over the forecast period and indicates that the inflation outlook depends on “the pace at which slack was 

absorbed and the impact that slack had on wages and prices” as well as the moves in commodity prices and in the exchange rate. 

 

Domestic recovery has been advancing steadily, in line with projections, while unemployment had fallen more sharply than expected. Growth remained robust, although productivity has been lagging behind. The MPC expects UK recovery momentum to continue in coming quarters. The recent emerging volatility poses a downside risk to the recovery, but on the other hand concerns about the Eurozone economy have eased. 

 

Furthermore, the MPC indicated that with the unemployment rate still above the 7% threshold, it was decided that the current policy guidance should remain unchanged. 

 

According to the minutes: “The Committee judged that there remained scope to absorb spare capacity further before raising Bank Rate. When Bank Rate did begin to rise, it expected that the appropriate path, so as to eliminate slack over the next two or three years and keep inflation close to target,would be gradual.”

 

 

 

 

 

 

 

 


 

 

Feb 19, 2014

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GBP/USD remains below 1.6700

 

 

 

FXStreet (Córdoba) - The GBP/USD continues to consolidate below the 1.6700 mark Wednesday with the latest string of US data having little impact on the pair.

 

The GBP/USD was weighed by disappointing UK employment data during the European trade and fell to a low of 1.6636 before finding support. The GBP/USD has managed to trim losses during the last hours and it is currently trading around 1.6675, virtually unchanged since opening.


GBP/USD technical levels

 

"Yesterday's rebound above 1.6654 low failed to break through 1.6740 crucial resistance and there is a risk of a deeper drowning towards 1.6580 area before renewal of the general uptrend beyond 1.6821", said Stoyan Mihaylov, analyst at DeltaStock.com. "Crucial on the upside is 1.6740".

 

 

 

 

 

 

 


 

 

Feb 19, 2014

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US: Initial Jobless Claims fell to 336K

 

 

 

FXStreet (Edinburgh) - According to the Labour Department, the Americans that filed in their first initial claims for regular state unemployment-insurance benefits fell by 3K last week to a seasonally adjusted 336K in the week ended February 14, a tad above forecasts at 335K and coming from 339K (revised from 339K) in the previous print. Continuing claims, which reflect people already receiving benefits, rose by 28K to a seasonally adjusted 2.981 million in the week ended February 7 vs. 2.953 million in the previous week (revised).

 

 

 

 

 

 

 

 


 

 

Feb 20, 2014

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GBP/USD completes its recovery and trades positive in the day

 

 

FXStreet (San Francisco) - The Sterling jumped in the last few minutes against the US Dollar following the US inflation and jobless claims data. With a 45 pips post-data climb, the GBP/USD extended gains and it completes its recovery from intra-day low of 1.6635 to test 1.6700 area.

 

The GBP/USD is currently trading at 1.6680, flat on the day. The short term perspective is slightly bullish according to the FXStreet trend index in the 15-minute chart. MACD, CCI Momentum are pointing to the north while the Stochastic is bearish. 

 

GBP/USD levels

 

Above the 1.6700, the Cable would face resistances at 1.6725 and 1.6735. On the downside, the Sterling to Dollar exchange rate would find supports at 1.6635, 1.6600 and 1.6520.

 

 

 

 

 


 

 

Feb 20, 2014

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