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Will FOMC minutes stray from the beaten path? - MP

 

 

FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis and Research at MarketPulse, expects FOMC to make some noise as the market remains overtly bullish on USD.

 

Key Quotes

 

“Today, Fed watchers are looking for elaboration on a number of points, especially employment and inflation.”

 

“The market will be expecting the usual range of opinions to be offered up – global development and inflation concerns.”

 

“The varying views are likely to be balanced by discussion of removing the “considerable” period language and downplaying oil related softness in headline inflation (the weak energy prices are also helping – think of it as a form or stimulus).”

 

“The market remains overtly bullish the U.S dollar, but it has sought a strong enough reason to kickstart the dollar’s next leg higher. Will investors get that reason later today?” 

 

 


 

 

Nov 19, 2014

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EUR soft after the release of disappointing PMIs - Scotiabank

 

 

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that EUR is weak, down 0.2%, after failing to maintain its post FOMC rally to 1.2600 as the currency came under additional pressure on the release of disappointing Eurozone PMIs, with the flash composite dropping to a 16‐month low of 51.4, disappointing expectations.

 

Key Quotes

 

“The details suggest that the pace of economic growth in Europe has slowed further, with the manufacturing PMI at just 50.4 and services at 51.3; France was particularly weak, with the manufacturing PMI falling to 47.6; while Germany’s dropped to 50”

 

“Since the announcement of ECB asset purchases on October 2nd, the balance sheet has fallen from €2.05trn to €2.03trn, highlighting the impact of loan repayments to the ECB and the hurdle the ECB faces in expanding its balance sheet."

 

“EURUSD short‐term technicals are mixed — several technical studies are warning of building upside pressure; while others have not shifted from bearish territory.”

 

“The lack of clarity from technicals warns of a period of range trading. Support comes in at Tuesday’s open of 1.2450; while resistance comes in at the recent high of 1.2600.”

 

“A break above 1.2600 would open up at test to the 50‐day MA at 1.2663.” 

 

 

 


 

 

Nov 20, 2014

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US continuing jobless claims hit year 2000 lows

 

 

FXStreet (London) - In the week ending November 15, the advance figure for seasonally adjusted initial claims was 291k, a decrease of 2k from the previous week's revised level, according to the US Department of Labor The previous week's level was revised up by 3k from 290k to 293k. The 4-week moving average was 287k, an increase of 1,750 from the previous week's revised average. 

 

The previous week's average was revised up by 750 from 285k to 285.75k. 

 

The DoL reported there were no special factors impacting this week's initial claims. 

 

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending November 8, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 8 was 2,330,000, a decrease of 73k from the previous week's revised level. 

 

 

 


 

 

Nov 20, 2014

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US Treasury yields recover after CPI data

 

 

FXStreet (Mumbai) - The yields across the short-end and the long-end of the US treasury market curve recovered losses after the CPI data in the US printed higher than the market expectation. Month-on-month the CPI index came-in higher than the market expectation. 

 

The Two-year yield, which mimics short-term interest rate expectations, recovered to 0.521% from the pre-data low of 0.504%. The Ten-year yield recovered to 2.34%, from the pre-data low of 2.313%. Meanwhile, yields at the short –end posted sharp recovery. The yields were pushed higher as the CI in October came-in at 1.7% year-on-year, compared to the market expectation of 1.6%. Month-on-month, the inflation came-in at 0.0%, against the expectation of a 0.1% decline. Meanwhile, core inflation number printed in-line with the expectations. 

 

The higher-than-expected inflation data came-in a day after the Federal Reserve minutes revealed that the policymakers were concerned about falling inflation expectations. Thus, the data released today is likely to reinforce the expectations that the Fed is on track to raise interest rates next year. 

 

In the meantime, the initial jobless claims for the last week printed at 291K, compared to the market expectation of 284K. The previous week’s figure was revised upwards to 293K. The rise in the jobless claims may cap gains in the treasury yields. 

 

 

 

 


 

 

Nov 20, 2014

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GBP/USD tests 1.5675 after US inflation

 

 

FXStreet (San Francisco) - The pound extended its rejection of the 1.5700 area against the US Dollar following a better than expected US CPI data; however, the pair bounced off at 1.5675 where it found buying interest that sent it back to daily highs.

 

The US CPI rose to 1.7% YoY in October, above 1.6% expected; The Ex food and energy inflation rose to 1.8% YoY, above the 1.6% awaited. Jobless claims was up to 291K, well above 285K expected; and even worst, the previous week was revised 3K up to 293K.

 

Currently, GBP/USD is trading at 1.5689, up 0.10% on the day, having posted a daily high at 1.5710 and low at 1.5632. GBP/USD spot is in overbought territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bullish. 

 

Earlier in the day, the GBP/USD was lifted by a good UK retail sales data that fueled the pair to recover from 14-month lows to a intraday high of 1.5705.


GBP/USD levels

 

Above 1.5700, the GBP/USD will find next resistances at 1.5710, 1.5725 and 1.5735. To the downside, supports are at 1.5675, 1.5655 and 1.5630. 

 

 

 


 

 

Nov 20, 2014

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US October inflation fails to fall from 1.7%, despite weaker crude prices – ING

 

 

FXStreet (Barcelona) - Rob Carnell of ING notes that US inflation failed to fall in October, despite sizeable declines in crude oil and US retail gasoline prices.


Key Quotes

 

“Headline inflation remains 1.7% (0.0%mom) How come? As we suggested in our preview of this figure, the seasonal adjustment used on gasoline at this time of year is particularly severe, and as a result, published CPI energy prices are down only 1.9%mom, with regular unleaded gasoline down only 3.2% apparently, not the 10% or more that we know that pump prices have fallen in the real world.”

 

“It not be until after the New Year before lower crude prices and lower gasoline prices begin to have a much more marked effect on US inflation. And at current levels of crude oil prices, we would not be surprised to see US inflation falling to about 1.0%YoY in April / May 2015.” 

 

 

 


 

 

Nov 20, 2014

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US index futures decline on global growth concerns

 


FXStreet (Mumbai) - The activity in the US index futures indicates that stock markets in the US are likely to open on a weak note after a series of manufacturing data from China to Europe highlighted a slowdown in the activity. 

 

The DJIA futures are trading 83 points lower at 17,573 levels, while the S&P 500 futures are down 10.10 points to trade at 2036.95 levels and the NASDAQ futures have shed 18.55 points to trade at 4205.20 levels. 

 

A higher-than-expected US CPI inflation data along with the rise in the weekly jobless claims did little to support the index futures. The US CPI inflation failed to decline from 1.74% despite the weakness in the crude prices, while the initial jobless claims for the last week came-in at 291K, compared to the forecast of 284K. Meanwhile, Markit flash estimate of US PMI manufacturing is also due for release later today along with the existing home sales data for October. 

 

Earlier today, the Asian markets ended on a weak note, as the soft Chinese manufacturing data curbed the ‘risk-on’ buying in the equities. In Europe, the stock markets declined after the flash PMI survey showed private activity in the Eurozone fell to a 16-month low in November. Elsewhere, the UK retail sales were reported at 0.8% in October, up from a 0.4% decline in September. 

 

 

 

 


 

 

Nov 20, 2014

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EUR/USD consolidating between 1.2500 and 1.2570 – FXStreet

 

FXStreet (Barcelona) - Matias Salord, Analyst at FXStreet sees the EUR/USD pair moving trendless in a consolidation manner, but holding a bearish tone after the Eurozone and US economic data release.

 

Key Quotes

 

“The EUR/USD is moving in a consolidating mode, without a clear trend for the day, but holding a bearish tone after Eurozone and US economic data, but as long as it holds above 1.2500, declines would be limited; a break below could trigger a bearish rally, targeting initially 1.2475 and below here 1.2450.”

 

“To the upside the euro has been unable to break above 1.2570; it needs a consolidation above to gain strength and break the current trading range.”

 

“Technical indicators in the 1-hour and 4-hours charts show indicators mixed. The 4-hour chart is at an important support level, that could favor a rebound, but below 1.2500 the scenario could change.” 

 

 

 


 

 

Nov 20, 2014

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PBoC cuts interest rates, raises deposit-rate ceiling

 

 

 

The People’s Bank of China has announced a cut in interest rates effective 22 November. The central bank has cut the 1-year lending rate to 5.6 percent with the 1-year deposit rate cut to 2.75 percent.

 

The PBoC also raised the deposit-rate ceiling to 1.2 times the benchmark. 

 

 

 

 


 

 

Nov 21, 2014

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Dovish Draghi turns EUR/USD technicals lower – FXStreet

 

 

 

FXStreet (Barcelona) - Ani Salama, Analyst at FXStreet, notes that EUR/USD fell sharply on Friday, turning short-term outlook into negative after Draghi said the bank will do what it must to raise inflation back to its target of 2%.

 

Key Quotes

 

“Technically speaking, EUR/USD short-term perspective has turned bearish, with indicators pointing down below their midlines.”

 

“However, with the RSI in oversold levels in 1-hour charts, the euro might enjoy a consolidation phase ahead of another leg lower.”

 

“Next support stands at 1.2400, and a break below would signal the end of the correction and resume the broader bearish trend, with 2014 low at 1.2357, as immediate target.”

 

“On the other hand, EUR/USD needs to regain the 1.2560 area (38.2% Fibo of 1.2882-1.2357) to ease the bearish pressure.” 

 

 

 

 


 

 

Nov 21, 2014

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EUR/USD finds oxygen at 1.2420

 

 

 

FXStreet (Edinburgh) - The sharp sell off in the EUR/USD seems to have found some support in the 1.2420 vicinity on Friday.

 

EUR/USD in multi-day lows

 

Spot keeps suffering the effects of the dovish appreciations by ECB’s Draghi earlier on in his speech in Frankfurt, falling to the area of 1.2425/20 where it presumably found some support. The pair is thus eroding its weekly gains, trading back to levels last seen on Friday 14th November. Without any data releases left in Euroland and an empty docket in the US economy, the demand for the euro would likely remain subdued at current levels. According to Camilla Sutton, Chief FX Strategist at Scotiabank “several technical studies are warning of building upside pressure; while others have not shifted from bearish territory. The lack of clarity from technicals warns of a period of range trading”.

 

EUR/USD key levels

 

At the moment the pair is losing 0.87% at 1.2436 with the next support at 1.2400 (psychological handle) ahead of 1.2398 (low Nov.4) and finally 1.2394 (low Nov.11). On the flip side, a breakout of 1.2602 (high Nov.19) would aim for 1.2614 (low Oct.23) and then 1.2617 (high Oct.31). 

 

 

 

 


 

 

Nov 21, 2014

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Limited offshore yuan response to first PBoC rate cut in 2 years

 

 

 

FXStreet (London) - After the People’s Bank of China announced this morning that it would be cutting interest rates for the first time in two years, the response of offshore yuan trading was relatively benign, swinging to an initial CNH6.1230 on the announcement from the PBoC before whipsawing back up to highs at CNH1.12.99. The offshore yuan is now trading at CNH1.1273, up 0.02 percent on the morning session.

 

The central bank has cut the 1-year lending rate to 5.6 percent with the 1-year deposit rate cut to 2.75 percent. The PBoC also raised the deposit-rate ceiling to 1.2 times the benchmark. The changes will be effective 22 November.

 

The move is a shift from the PBoC’s focus on targeted monetary easing and liquidity injections. The announcement comes against a backdrop of a steadily deteriorating outlook for Chinese growth. 

 

 

 

 

 


 

 

Nov 21, 2014

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AUD/USD lifted by PBoC move

 

 

 

FXStreet (Córdoba) - Australian dollar and other currencies linked to commodities, strengthened and reached fresh daily highs versus the greenback, on the back of China's central bank decision to cut interest rates to lift a slowing economy.

 

The PBoC has cut the benchmark 1-year lending rate by 40bps to 5.60%, and the 1-year deposit rate by 25bps to 2.75%, and it also raised the deposit-rate ceiling to 1.2 times the benchmark. 

 

AUD welcomed China easing measures and rose more than a full cent after the news. AUD/USD reached a 3-day peak of 0.8722 before pulling back slightly. At time of writing, teh pair is trading at 0.9686, recording a 0.85% gain on Friday. 

 

 

 

 

 


 

 

Nov 21, 2014

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USD needs Draghi’s help to rise – TD Securities

 

 

 

FXStreet (Barcelona) - According to Shaun Osborne and Martin Schwerdtfeger, FX Strategists at TD Securities, the markets failed to get a strong push in spite of better than expected US data released yesterday, but today’s Draghi’s remark did for EUR/USD what US data couldn’t.

 

Key Quotes

 

“The markets could not decide what to do with the USD yesterday; better than expected CPI data and a great—not just good—Philly Fed survey should have been good news for the big dollar—and it was, briefly before the markets knocked it back again. Even the contrast with the disappointing EZ data earlier in the session could not help EURUSD extend lower.”

 

“Overnight, EURUSD was hit hard by dovish comments from ECB President Draghi; his remark that the ECB will do what it has to raise inflation and inflation expectations “as fast as possible” may boost expectations of more ECB easing sooner rather than later.”

 

“Recall that the ECB moves to a 6-week meeting schedule a la Fed in 2015 so that puts the first meeting of the New Year in late January; that “gap” and Draghi’s sense of urgency may serve to boost thoughts of more action being unveiled at the December policy meeting.”

 

“US yields remain resolutely range-bound, meanwhile, and are providing no directional help for the markets that seems to be slipping into holiday mode.”

 

“There’s not much on tap in terms of US data today so flows and technicals will dominate. A retest of the early November low around 1.2360 looks likely near-term.” 

 

 

 

 


 

 

Nov 21, 2014

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China cuts interest rates – Danske

 

 

 

FXStreet (Barcelona) - Flemming J. Nielsen of Danske Bank, notes that China cutting its interest rate by 25bps is positive for risky assets, particularly emerging markets and commodities.

 

Key Quotes

 

“The Peoples Bank of China (PBoC) today cut its leading interest rates. The one-year benchmark deposit rate was cut by 25bp to 2.75% and the one-year benchmark lending rate was cut by 40bp to 5.6%. As the lending rates have largely been liberalised, the oneyear depot rate is now the most important of the two benchmark interest rates.”

 

“The interest rate cut is extremely positive for risk sentiment and risky assets in general in financial markets and it is particularly positive for emerging markets and commodities. Hence, it should help commodity and Emerging Market currencies like the Norwegian krone, the Australian dollar, Canada dollar, Brazilian real, Mexican peso and the South African rand.”

 

“The implication of today’s interest rate cut is that the Chinese growth manufacturing PMIs and growth have probably bottomed out and should start to improve in Q1 when investment demand and particularly the property market will start to rebound.”

 

“The growth outlook is definitely more positive for H1 15. However, we do not expect to see a sharp rebound in growth next year as the government will still be focused on managing financial risk and securing sustainable credit growth.”

 

“Hence, the PBoC will continue to ease only cautiously and we do not expect it to cut rates further. In addition, China remains in a structural slowdown, which will continue to weigh on growth further ahead.” 

 

 

 

 


 

 

Nov 21, 2014

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Both rates and oil currently pushing CAD – BAML

 

 

 

FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that their view for a higher USD/CAD has continued to play out in their favour, with our short-term target at 1.14 for the end of this year. 

 

Key Quotes:

 

“While much of the Canadian dollar's drop has logically been the result of the decline in oil prices, rate differentials have also arguably played a key role”. 

 

“Our Chart of the Day looks at the daily drivers around USD/CAD since 2013, as explained either by oil or oil in conjunction with rates”. 

 

“While the value of USD/CAD explained by oil has been rising, rate differentials have also played a crucial role in explaining the weakness in Canadian dollar, as they have with many risky currencies”. 

 

“Still, we would argue that the decline in CAD may stall out going forward”. 

“USD/CAD is fairly close to levels that it previously approached earlier this year, when WTI was closer to US$100/barrel”. 

 

“In our view, a reversion in oil prices, as well as a relatively robust US growth picture that should ultimately benefit the Canadian economy, will help support the CAD next year”. 

 

“Of course, in the short-term, the upcoming OPEC meeting on November 27 presents substantial event risk for oil, and thus potentially impact USD-CAD”. 

 

“Moreover, deflationary risks that push the Fed into delaying rate hikes could well wind up moving the CAD higher, as the Bank of Canada currently remains locked in its current rate”. 

 

“In the medium-term, however, we still focus on both oil and a solid US outlook, which we do believe will move the Canadian dollar modestly higher, in contrast to many of our USD forecasts”. 

 

 

 


 

 

Nov 21, 2014

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Bitcoin back at USD 350

 

 

 

FXStreet (Mumbai) - The virtual currency extended slide today after closing at a one-week low in the previous session as the prices continue to correct after a sharp rally which saw the virtual currency rising to USD 454.60 levels. 

 

Bitcoin traded 1.31% lower at USD 351.34 at the time of writing, compared to the previous session’s close of USD 355.37. Elsewhere, the BTC/EUR pair is trading 0.94% lower at 283.59 levels. Meanwhile, CoinDesk’s Bitcoin Price Index, which calculates the average price of Bitcoin across globe, is down 0.97% at USD 352.67 levels. 

 

Litecoin or LTC/USD has also weakened 1.325 today to trade at USD 3.52 levels. 

 

Bitcoin Technical Levels

 

Bitcoin has an immediate resistance located at 355.37, above which gains could be extended to 370. Meanwhile, support is seen at 338 and 318 levels. 

 

 

 


 

 

Nov 21, 2014

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USD/CAD finding support after dumping a cent

 

 

 

FXStreet (Guatemala) - USD/CAD is trading at 1.1229, down -0.67% on the day, having posted a daily high at 1.1328 and low at 1.1190.

 

The USD/CAD has dumped over a cent, while analysts at TD Securities explained that the pair may start to find support in the low 1.12 area after this morning’s slide below congestion (now resistance) in the mid/upper 1.12 area. “Short-term trend momentum is picking up bearishly, so the market is likely to remain biased to the downside in the short

run at least”. 

 

As with the general beat of the rum, the dollar is being questioned and scrutinized in respect of whether it can sustain a rally in a disinflationary environment around the globe and how slower growth might impact the US economy and the Feds interest rate policy going forward. “A quick move back above 1.1270 would be a positive for the USD but that looks a big ask at this point”, explained the analysts at TD Securities.

 

USD/CAD noteworthy levels

 

Current price is 1.1230, with resistance ahead at 1.1241 (Daily Classic S2), 1.1274 (Daily Classic S1) and 1.1283 (Hourly 20 EMA). Next support to the downside can be found at 1.1226 (Weekly Classic S1), 1.1193 (Daily Classic S3) 1.1176 (Weekly Classic S2) and 1.1166 (Monthly Low). 

 

 

 


 

 

Nov 21, 2014

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Bitcoin back at USD 350

 

 

 

FXStreet (Mumbai) - The virtual currency extended slide today after closing at a one-week low in the previous session as the prices continue to correct after a sharp rally which saw the virtual currency rising to USD 454.60 levels. 

 

Bitcoin traded 1.31% lower at USD 351.34 at the time of writing, compared to the previous session’s close of USD 355.37. Elsewhere, the BTC/EUR pair is trading 0.94% lower at 283.59 levels. Meanwhile, CoinDesk’s Bitcoin Price Index, which calculates the average price of Bitcoin across globe, is down 0.97% at USD 352.67 levels. 

 

Litecoin or LTC/USD has also weakened 1.325 today to trade at USD 3.52 levels. 

 

Bitcoin Technical Levels

 

Bitcoin has an immediate resistance located at 355.37, above which gains could be extended to 370. Meanwhile, support is seen at 338 and 318 levels.  

 

 

 


 

 

Nov 21, 2014

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US Session: The market left shell-shocked on Draghi

 

 

 

FXStreet (Guatemala) - The US session was scrambling around in a panic on the back of Europe’s action with Draghi taking the spot light delivering a speech that left markets with a strong indication that we will see further easing which sent the Euro to finish up a shave away from the November lows and over 1.2% down on the US shift and close to 200 pips lower on the week.

 

GBP/USD took a back seat in the consolidation corner having been bolstered on the UK's domestic data from and strong retail sales surprises in the week in London but the pair finishes up now back into neutral territory down 0.25% on the session with lows at 1.5626.

 

USD/CAD was scrambling back lost ground towards the end of the NA session and back in for the mid 1.1200’s on the back of CPI for the Canadian economy and rising WTI prices. CPI year on year came in for October at 2.4% vs 2.1% expected and 2.0% previous. 

 

EUR/JPY was a big moved and made a huge correction from the 148 handle and through the Nov low at 146.39 on the back of Draghi’s comments.

 

AUD/USD found a base on 0.8860 after a steep drift lower post its European markets highs through the 0.87 handle when China cut 1 their year lending rates by 0.4 and the 1 year deposit rates by 0.25 to 2.75% to help bolster the economy.

 

USD/JPY remained a non-contender and only managed a sideways drift in the US session having given all that it could give from the lows on the 117 handle in Europe. Previous to that, the Yen had strengthened when Japan's finance minister gave the markets his concerns about the rapid depreciation of the currency in Asia trade. Aso said "the pace of the decline in the past week has been too fast". The pair finishes up at 117.80 into the close. 

 

 

 

 


 

 

Nov 22, 2014

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