Advise
Forex News and Events:
The markets mostly remain on wait-and-see mood to hear what the Fed President Bernanke will say to end the suspense on “to taper or not to taper” specs. The USD is broadly sold ahead of Bernanke’s testimony while the British pound registered a heavy unwind amid the retail sales missed the market expectations in UK.
Elsewhere, the Swiss franc losses ground on the IMF annual report advising negative interest rates to halt the franc appreciation. The franc is trading at four-month lows against the euro yet the inflows to Swiss banks still weigh on the safe haven currency.
Bernanke to Remain Dovish
The key topic across the major currency markets over the past two weeks has clearly been the specs on hawkish Fed and early tapering of asset purchases. However, last week’ ...
Morning Briefing : Eyeing the US dollar ahead of key events today
What's new :
Asia: Equity indices mixed this morning
Japan: BoJ left rates unchanged in line with expectations
Forex: Aussie and Kiwi continue to tumble
Overnight rates and Indices:
EUR/USD 1.2903 1.2939 0.16 %
USD/CHF 0.9681 0.9715 0.07 %
GBP/USD 1.5138 1.5174 -0.04 %
USD/JPY 102.35 102.74 -0.11 %
EUR/CHF 1.2515 1.25426 -0.07 %
EUR/JPY 132.22 132.69 -0.28 %
Dow Jones 15325.68 15434.50 0.34 %
Nasdaq 3011.51 3036.71 0.18 %
S&P 500 1662.67 1674.93 0.17 %
Nikkei 225 15432.64 15706.63 1.60 %
Shanghai 2292.43 2314.18 -0.18 %
Gold spot 1372.47 1389.16 0.78 %
Crude Oil 95.51 95.97 -0.27 %
Comments:
All eyes on the ...
Euro Zone Trade runs surplus in March
Notes/Observations
Japan Preliminary Q1 GDP shows Abeonomics working with YoY growth at 3.5% vs. 2.7%e
China Apr Actual FDI YoY registers 0.4% vs. 6.2% cons
IMF approves €1.0B aid for Cyprus with €110.7M to be disbursed immediately but adds the country's outlook still highly uncertain
New Zealand budget to return to surplus in 2014/15
EU Trade Balnce handily beats expectations to record level
Economic Data
(FR) France Q1 Preliminary Wages Q/Q: 0.7% v 0.2% prior; Non-Farm Payrolls Q/Q: -0.1% v -0.3%e
(FR) France Survey of Industrial Investments: Executives see 2013 Manufacturing Investment -4% y/y vs. 0.0% (flat) prior Jan view
(CZ) Czech Mar Export Price Index Y/Y: 2.6% v 0.8% prior; Import Price Index Y/Y: +1.1% v -0.5% prior
(CZ) Czech Apr ...
Q1 European GDP data disappoints; UK quarterly inflation report a bit more upbeat but still cautious
Notes/Observations
Nikkei225 surged to fresh multi-year highs, climbing above the 15,000-level for the first time since Jan 2008 on the back of a weak JPY currency
JGBs reversed sharp rise after BoJ announced it would inject ¥2.8T in market operation on Friday (3x ordinary amount)
ECB's Asmussen: SMEs must get better access to bank loans; ECB considering ways to achieve this
Bank of France official seeks to help banks securitize loans for use as ECB collateral via a simple special purpose vehicle; process already possible but complex
Fitch upgrades Greece to B- from CCC; Outlook stable; clear progress eliminating twin deficits
Italy mandates banks for 30y syndicated bond
Major ...
The pair USD/CAD is currently in a consolidation phase of its last rally. The price continues to stagnate below the major resistance at 1.0286. The pair has nevertheless made a pullback on the support at 1.0250 as we anticipated and is currently moving on the lower band of its short-term uptrend channel (blue lines).
We continue to advise long positions as far as 1.0250 is support. The breakout of 1.0286 will give a new buy signal and should allow the price to reach its annual highs to 1.0338 and then 1.0350 in extension.
In case of return below 1.0250 (uptrend channel output), we will advise to stay flat between this level and 1.02.
USD/CAD 1h chart
USD/CAD 4h chart
The pair GBP/USD made yesterday a new pullback on 1.5293 before resuming its downtrend. The price has just broken its last low at 1.5158 and is now moving below its medium term bearish slant (purple dotted line).
We continue to advise short positions as far as 1.5272 is resistance (last short term high). The course should now move for a test the major support at 1.5090. This level corresponds to all lows of the end of May and the beginning of April. In case of breakout, the movement should continue towards 1.50.
In case of return above 1.5272, we will be neutral between this level and 1.5350 (level of a former short term bearish slant - dotted blue line - see previous analysis for better understanding)
GBP/USD 4h chart
GBP/USD 1h chart
The Gold (XAU/USD) has rebounded sharply yesterday on the resistance at 1400 points, allowing the price to validate the break of its bearish slant (blue line).
A triple top has been made on 1400 points.
During the night, the price made also a pullback on the fibonacci retracement 23.60% of the last bearish rally of April.
I advise traders to trade the pair outside the range of 1375/1400 points:
- Stay flat between 1375 and 1400 points
- Trade only long positions above 1400 points.
A break of 1425 points will provide a new buy signal for an extension of the rebound towards 1450 points or higher.
- Trade only short positions below 1375 points.
A break of 1360 points will provide a new sell signal for a return to 1340 points.
NB: traders whose trading strategy is more aggressive could ...
The pair EUR/USD has validated yesterday a return above 1.29, giving us a buy signal.
The price is now moving into a short-term ascending flag (brown segment on the 1H chart).
The pair has confirmed its return above the center line of the medium / long term bearish channel (orange line).
I advise to trade the pair EUR/USD based on 1.29:
Currently valid - Only long positions above 1.29.
A break of 1.2950 will offer a new buy signal an extension of the correction and a return on 1.30.
- Only short positions below 1.29 (short term flag output).
A break of 1.2850 will offer a new sell signal for a return on 1.28
1H chart on EUR/USD
4H chart on EUR/USD
The pair USD/CHF is currently into a consolidation phase and evolves horizontally between 0.9644 and 0.97. The price therefore went out of its short-term uptrend channel (blue lines) but is now finding support on the first short term bullish slant (purple dotted line).
We continue to advise long positions as far as 0.9644 is support. The breakout of 0.9775 will give a new buy signal. In August 2012, the break of this level had led to a powerful trend reversal of the pair. If this level is broken, the way will be open to 0.99.
In case of return below 0.9644 (this level corresponds to the second short term bullish slant - purple line), we recommend to remain flat between this level and 0.9596 (major support).
USD/CHF 4h chart
USD/CHF 1h chart