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ECB: Whatever it takes - RBS

 

 

FXStreet (Guatemala) - Strategists at RBS explained that one plausible explanation for the post 'whatever it takes' appreciation is a shift in the euro FX risk premium. 

 

Key Quotes:

 

"The excess compensation that investors required to hold euro denominated assets given the potential returns in bad states of the world. That OMT-induced compression in the risk premium, and the corresponding move in the currency, is likely to persist". 

 

"The underlying shift in beliefs would likely have a material impact on the output gap and inflation through other channels – largely pushing in the opposite direction – via a shift in animal spirits, the virtuous circle of positive feedback through the banking sector, and even healing some of the supply side scar of the financial crisis". 

 

"However, much of the full price level effect from exchange rate pass through into consumer prices could be in the data before some of these other transmission channels start to kick in".

 

 


 

 

July 15, 2014

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AUD/USD extiende rebote desde el importante 0.9320/25

 

 

FXStreet (San Francisco) - Jamie Coleman de FXBeat afirmó recientemente que el 0.9320/25 es un enorme nivel fundamental para el AUD/USD. Y eso, el par lo probó durante la noche con el consiguiente rebote al 0.9360 actual.

 

"Ese es el 61,8% del último rally de 0.9210/0.9505 y por debajo de ese nivel la multitud de complacientes 'carry traders' comenzarán a ponerse nerviosos", afirma Coleman. Actualmente, el AUD/USD se cotiza a 0.9359, baja 0.11% en el día, después de haber publicado un máximo diario en 0.9377 y mínimo a 0.9329.

 

AUD/USD sentimiento

 

Si par cae por debajo de 0.9320, el mercado vería una liquidación en el par. Los próximos soportes serían 0.9300, 0.9250 y 0.9210. Por el lado positivo, 0.9375, 0.9400 y 0.9420 son resistencias.

 

 


 

 

July 16, 2014

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USD/CAD spikes to 1-month highs after BoC decision

 

 

FXStreet (Córdoba) - The USD/CAD spiked to fresh 1-month highs after the Bank of Canada decided to leave the overnight rate unchanged at 1.0% but issued a quite dovish statement.

 

BoC said it is neutral with respect to the timing and direction of the next change to the policy rate and downplayed CPI rise as temporary

 

The USD/CAD jumped to 1.0793, its highest level since June 20, but failed to sustain gains and pulled back instead. At time of writing, the pair is trading at 1.0765, right where it was before the release.

 

Attention now turns toBoC Governor Poloz, who will hold a press conference at 15:15GMT.

 

 


 

 

July 16, 2014

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EMU: Annual CPI up 0.5% in June, as expected

 

 

FXStreet (Łódź) - According to data released today by Eurostat, Eurozone annual inflation rose 0.5% in June, following 0.5% growth registered the previous month. This result is in line with analysts' forecasts. On a monthly basis Eurozone CPI edged up 0.1%, after sliding 0.1%, as expected.

 

Year-over-year Core CPI rose 0.8% in June, up from 0.7%, in line with projections.

 

 

 


 

 

July 17, 2014

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ECB's Constancio: Strictness of stress tests not only about results

 

 

FXStreet (Łódź) - Vice-President of the ECB Vítor Constâncio commented on the details of Eurozone bank stress tests, released by the central bank on Thursday, saying that their strictness was not only about the results, as they have already prompted many lenders to raise new capital.

 

“Banks know what we expect and have advance notice to prepare for the outcome of the comprehensive assessment,” the ECB policymaker said in a statement. “Much work has already been undertaken to repair banks’ balance sheets and, encouragingly, this work is continuing.”

 

Constâncio admitted that some of the financial institutions would fail the stress tests but that there shouldn't be too many of them. He also added that the current strength of the euro reflected the improvement in market sentiment. 

 

"The upcoming stress tests have the potential to create some large volatility," Ryan Littlestone speculates on ForexLive. "Bad news and the euro plummets, good news and it rockets."

 

 

 


 

 

July 17, 2014

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EUR/USD finds support at 1.3520

 

 

FXStreet (San Francisco) - The EUR/USD reacted to the upside following the better than expected jobless claims in US as the pair is trading slightly bullish at 1.3530 after supporting the 1.3520. 

 

Earlier in the day, the EUR/USD peaked to 1.3540 where the pair found selling interest and it was launched down to test the 1.3520. Currently, EUR/USD is trading at 1.3531, up 0.04% on the day, having posted a daily high at 1.3541 and low at 1.3521.

 

EUR/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is strongly bearish. 

 

EUR/USD sentiment

 

"EUR/USD is seeing some light short-covering, now at 1.3530. A sustained move through 1.3540 is needed to make the weak shorts sweat," comments Jamie Coleman from FXBeat. "A move above 1.3580 is needed to make them puke."

 

To the upside, resistances are seen at 1.3540, 1.3560 and 1.3570. Supports are at 1.3520, 1.3500 and 1.3510.

 

 

 

 


 

 

July 17, 2014

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GBP/USD struggling around 1.7100

 

 

FXStreet (Córdoba) - The GBP/USD has extended its decline below the 1.7100 psychological level at the beginning of the American session as the USD benefits from decline in risk appetite.

 

The GBP/USD dipped to a low of 1.7093 but bears lacked determination to take the GBP lower. A series of mixed US data barely affected the pair that continued to hover around 1.7100. At time of writing, the GBP/USD is trading at 1.7105, 0.17% below its opening price.

 

US housing starts fell 9.3% in June, while consensus was looking for a small uptick. Meanwhile, initial jobless claims dropped to 302K last week, beating the 310K expected. 

 

GBP/USD levels to watch

 

In terms of technical levels,on the downside next supports could be found at 1.7073 (23.6% Fibo of 1.6692-1.7190) and 1.7058 (Jul 15 low). On the flip side, resistances are seen at 1.7190 (2014 high Jul 15) and 1.7200 (psychological level).

 

 

 


 

 

July 17, 2014

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GBPJPY sees successful rejection from Fibonacci retracement 61.8% - ForexTrading.TV

 

 

FXStreet (Łódź) - Petar Jacimovic, currency analyst at ForexTrading.TV, observes that GBPJPY is experiencing a successful rejection from the 61.8% Fibonacci retracement.

 

 

 


 

 

July 17, 2014

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Aussie strengthens against the dollar - FXStreet

 

 

As FXStreet Chief Analyst Valeria Bednarik notes, AUD/USD has moved above 0.9370 and is approaching the 0.9400 level.

 

Key quotes

 

"The hourly chart shows indicators heading higher above their midlines and 20 SMA acting as dynamic support currently near strong static support of 0.9370."

 

"In the 4 hours chart a mild bullish tone is also present, with indicators aiming to cross their midlines to the upside and price above moving averages. "

 

 

 


 

 

July 17, 2014

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Risk aversion increasing in the global markets - BTMU

 

 

FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, remarks sentiment around safe havens are building up.

 

Key Quotes

 

"Financial markets have been unsettled by the upturn in geopolitical risks after the downing of a civilian airplane over Eastern Ukraine and after Israel began a ground-offensive operation in Gaza. The VIX index jumped a huge 32% to close at 14.54, crude oil was up 2% while the price of gold increased 1.5%."

 

"With the EU and US sanctions being digested by the markets yesterday, USD/RUB jumped 2.2%. However, outside of the rouble move, the foreign exchange market remains remarkably stable."

 

"One-month USD/JPY implied volatility is currently at 4.89%, up from 4.45% on Wednesday, which was another record low. Volatility in EUR/USD and other major currency pairs remains subdued as well."

 

"In part we think this is explained by the latest downturn in UST bond yields in the US – the 10-year yield fell to 2.44% yesterday, matching the low from May, a level not seen since May last year. The 10-year yield is down 20bps since early July."

 

"Higher yields in the US is going to be the key catalyst for increased volatility in the foreign exchange market as investors eye greater divergence with other major economies and general risk appetite conditions become less favourable. These latest developments, it is believed, make it more likely that all central banks will remain on the same page for longer, thus limiting the risk of any major change in financial market developments."

 

 


 

 

July 18, 2014

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AUD/USD remains capped by 0.9390

 

 

FXStreet (Córdoba) - The recovery of the AUD/USD faltered once again at the 0.9390 area Friday, confining the pair to a phase of consolidation over the last hours.

 

The AUD/USD rose more than half a cent from daily lows despite the prevailing risk-off tone, but lacked momentum to break above the 0.9390 zone for a second day in a row, where the 14-day SMA is reinforcing static resistance. The AUD/USD has been consolidating in a range since early European session, currently trading at 0.9380, up 0.32% on the day.

 

However, mounting geopolitical tensions, after a missile hit a commercial flight in Ukraine conflict area and Israel launched a ground offensive in Gaza, could maintain risky assets under pressure.

 

AUD/USD technical levels

 

As for technical levels, if the Aussie dows break above 0.9390, next resistances could be found at 0.9400 (psychological level) and 0.9423 (Jul 9 high). On the other hand, supports are seen at 0.9328 (Jul 16 & 3 lows) and 0.9320 (Jun 18 low) and 0.9300 (psychological level).

 

 


 

 

July 18, 2014

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EUR/USD at levels not seen since last February - FXStreet

 

 

FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that EUR/USD is moving close to levels handful only several pips away from the critical 1.3476 year low.

 

Key quotes

 

"The EUR/USD finally moved away from the 30 pips range that contained price for most of the week, with the hourly chart showing an increased bearish potential as per price accelerating below its 20 SMA and the 4 hours chart showing indicators resuming the downside after repeated failure around 1.3535 static resistance."

 

"Immediate support comes at 1.3476, this year low, and a large amount of stops should stand below so if trigger, the slide may quickly extend. "

 


 

 

July 18, 2014

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USD benefits from prospects of monetary policy normalisation - Commerzbank

 

 

FXStreet (Córdoba) - Ulrich Leuchtmann, analyst at Commerzbank, notes that the FX market displayed a notable reaction to Fed Yellen testimony this week, a fact that is quite remarkable following times of continuously falling volatility. He attributes this mainly to prospects of normalisation of US monetary policy, which at the same time supports a dollar appreciation.

 

Key Quotes

 

“Two factors are likely to have been decisive for this development: Mrs Yellen had such a dovish reputation that even a neutral statement comes as a surprise. The normalisation of US monetary policy is progressing so notably that the markets are increasingly pricing a return to normal circumstances in the US”. 

 

“The second factor in particular is likely to influence exchange rates in the future, which is why we feel confirmed in our view of a (initially slow but then increasingly rapid) dollar appreciation”. 

 

“The US dollar is increasingly benefiting from the increasingly certain prospect of a normalisation of US monetary policy. Fed signals pointing in this direction are becoming increasingly important for the FX market – even if they should not come as much of a surprise”.

 


 

 

July 18, 2014

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More USD/CAD range trading expected - TD Securities

 

 

FXStreet (Łódź) - The TD Securities Rates, FX and Commodities Research team note that USD/CAD continues to struggle to push above short-term resistance in the upper 1.07 range.

 

Key quotes

 

"We had been looking for a push to 1.0766 as a consequence of the move above 1.0695 resistance zone earlier this week and while the USD is lacking the incentive—and momentum—to extend the rally at the moment."

 

"We think neutral directional momentum at this point suggests more range trading, rather than a renewed turn lower, in USD/CAD from here."

 

"The daily chart for USD/CAD reflects the strong overhead resistance in funds in the upper 1.07 zone, with trend line resistance off the major cycle high above 1.12 capping gains."

 

"After five waves down and last week’s strong rejection on the daily and weekly charts of the 1.0600/50 area, however, we still rather think risks are geared towards a push higher."

 

"Gains should pick up above 1.0810/15 where the 200-day MA and the May/June lows converge."

 

"We think a rebound to the 1.10 area (at least) is achievable still (1.1027 equals a 61.8% retracement of the 1.1277/1.0622 drop). We remain bullish above 1.06."

 


 

 

July 18, 2014

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GBP/USD closing before the pivot on 1.70 handle

 

 

FXStreet (Barcelona) - GBP/USD is trading at 1.7084, down -0.09% on the day, having posted a daily high at 1.7119 and low at 1.7036.

 

GBP/USD has fallen shy of the trophy 1.71 handle at the end of this week after a valiant effort to withhold its champion status. Rumours that Carney had given a dovish interview to the press was eventually gathered as being untrue. We are closing here below the pivot by the looks of it.

 

GBP/USD Levels

 

Spot is presently trading at 1.7086, and next resistance can be seen at 1.7101 (Daily Open), 1.7110 1.7114 (Hourly 100 SMA) and 1.7119 (Daily High). Support below can be found at 1.7085 (Yesterday's Low), 1.7082 (Daily 20 SMA) and 1.7075 (Weekly Classic S1).

 


 

 

July 18, 2014

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AUD and AUD crosses analysed in a snap shot– TDS

 

 

FXStreet (Guatemala) - Analysts at TD Securities gave us a snap shot at some of the AUD crosses.

 

Key Quotes:

 

“AUD/USD's strong recovery from 0.9330 support suggests moderate upside risks for the AUD near-term – but scope for a more sustained recovery remains limited after the heavy fall (weekly reversal) seen in early July”. 

 

“EUR/AUD trades softly through the close of the week and looks technically poised to extend lower; new cycle lows will support the outlook for a drop to 1.39.” 

 

“AUD/JPY's recovery today reflects the firmer AUD tone evident elsewhere but we think scope for AUD gains is limited here as well; we look for resistance in the 96.00/50 zone near-term”.

 

 


 

 

July 19, 2014

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Geopolitical tensions boosting the JPY - BTMU

 

 

FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observed the strength around the Japanese currency following geopolitical jitters.

 

Key Quotes

 

"The yen has continued to strengthen modestly in the Asian trading as global investor risk sentiment has been soured in the near-term by heightened geopolitical tensions".

 

"The leaders of Britain, France, and Germany on Sunday called on Russian President Putin to ensure that pro-Russia separatists in eastern Ukraine allow the recovery of bodies from the Malaysia Airlines Flight MH17."

 

"They also agreed that the EU must be ready to impose further sanctions on Russia when foreign ministers meet on Tuesday according to a spokesperson from the UK prime minister. Britain will reportedly push as early as today for a UN Security Council resolution to ensure that the Ukraine-led crash enquiry can proceed without delay".

 

"German Chancellor Merkel reportedly spoke by telephone with Russian President Putin and her spokesperson confirmed that they had agreed that an independent investigatory commission led by the International Civil Aviation Organisation should get quick access to the crash site. Australian prime minister Abbott has also threatened to block Russian President Putin from attending the G20 summit in November if Russia does not help to facilitate an independent investigation."

 

 


 

 

July 21, 2014

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EU ready to impose further sanctions on Russia

 

 

FXStreet (Łódź) - In the recent developments regarding the shooting down of Malaysia Airlines plane in Ukraine, UK PM David Cameron declared that the EU was prepared to impose further sanctions on Russia, which on Sunday he accused of contributing to the tragedy through its support for the separatists militants.

 

The sanctions could include an export ban on defense equipment and also focus on advanced industrial goods which might have dual use for defense purposes, Cameron said. 

 

He also called for halting the flow of troops and weapons from Russia into Ukraine and for Moscow to withdraw all its support for the separatists. EU foreign ministers will meet in Brussels on Tuesday to discuss the situation.

 

Meanwhile, the Kremlin said that Russian president Vladimir Putin would hold a meeting with the Security Council on “safeguarding of sovereignty and territorial integrity” later today.

 

 


 

 

July 21, 2014

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USD/CAD consolidates in the mid-1.0700 area

 

 

FXStreet (Córdoba) - The USD/CAD has barely moved Monday and has spent most of the day consolidating within a narrow range, following price swings seen Friday.

 

With no much ahead in terms of economic data, the pair might extend its consolidation phase during the American hours as investors refrain from taking big positions. At time of writing, the USD/CAD is trading at 1.0745, 0.14% above its opening price.


USD/CAD technical outlook

 

"For today, we see minor resistance developing in the mid 1.07 area as our session gets underway, which may mean another look at support in the low 1.07 area but we think scope for CAD gains is limited at this point", said the TD Securities team. "We look for firm support on minor weakness to the 1.0710/15 area… USD/CAD trading above 1.0750 should see 1.0800/15 retested".

 


 

 

July 21, 2014

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AUD/USD finds support at 0.9370

 

 

FXStreet (San Francisco) - The Aussie's decline from the 0.9400 area against the US Dollar was supported at 0.9370 where the AUD/USD found buying interest as it bounced back to 0.9380. 

 

Currently, AUD/USD is trading at 0.9379, down 0.17% on the day, having posted a daily high at 0.9402 and low at 0.9371. AUD/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is strongly bearish. 

 

AUD/USD sentiment

 

"Range 0.9400-0.9370 Struggled to crack 0.9400 in Asia and gave up the ghost as Europe stepped up and sold it back to 0.9370," comments Matt Bacon-Hall from FXBeat. "RBA Governor Stevens and his willing deputy Debelle speak tomorrow. Lets hope they give the market something."

 

If the pair breaks below the 0.9370, next supports are at 0.9355 and 0.9330. On the upside, resistances re at 0.9380, 0.9400 and 0.9410.

 

 


 

 

July 21, 2014

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