Align For Further Upside

Forex News and Events: Bank of England stands to make a crucial decision today as turmoil hinders most of its peer Euro Zone economies. UK’s GDP contracted in the last quarter of 2011 by a revised 0.3%, and inflation remained higher than the 2% average target set by the BoE. During the last weeks, economic data in services and manufacturing were mainly affected by rising petroleum prices and austerity budget cuts biting deep into consumer / household spending. But MPC member Adam Posen, hitherto a fervent supporter of QE stated: “My own personal view is that I think the economy is stronger than what data is going to show”. The central bank last increased its asset purchase program target by 18% in February to GBP325bn as the money supply gauge M4 dipped heavily, suggesting a tightening of ...

EUR/USD The near-term structure weakens again, as today’s attempt towards key barrier at 1.3380 zone, failed at 1.3366 and subsequent weakness pushed the price through trendline support at 1.3330, to test the top of strong support zone at 1.3300/1.3280 so far. This pushes hourly studies towards the negative territory, with similar situation on 4H chart, where indicators are pointing lower. Unless today’s high at 1.3366 is regained, near-term outlook remains in a neutral/negative mode, with risk of losing 1.3300/1.3280 handles for extension towards next significant support and near-term range floor at 1.3250, below which to possibly signal near-term top. Res: 1.3324, 1.3354, 1.3366, 1.3384 Sup: 1.3300, 1.3277, 1.3265, 1.3250 GBP/USD The pair comes under increased pressure after ...

(Reuters) - Gold eased on Wednesday as the euro declined but was still near one-week highs on signs of improved consumer demand in Asia, prompted by last week's price drop to six-month lows. Gold eased from earlier session highs after the euro's rally against the dollar petered out, deterring investors from stepping up any bullion purchases. In Europe, yields on peripheral euro zone debt edged higher after data showed commercial banks hoarded a record amount of cash at the European Central Bank, highlighting the fear financial institutions have about lending to each other. Spot gold was last down 0.3 percent on the day at $1,598.74 an ounce at 1214 GMT, while most-active COMEX February gold futures were flat at $1,600.20. "The physical demand side of things will be the big factor ...

Forex News and Events: FX markets remain hostage to political uncertainties in the Eurozone, specifically significant developments in Greece and Italy. Last week in Greece and now in Italy, parliaments scrambled with urgency to install more technocratic focused governments that are committed to implementing the difficult austerity measures demanded by the EU, ECB and IMF. The expectation that politics in these two nations would have some level of short term resolution has supported the Euro and caused Eurozone yields to soften. Yields on Italian sovereign bond Thursday climbed above the critical 7.00% threshold across the curve but have since retreated (10yr yield now stands at 6.44%). Risk appetite improved with the EURUSD traded up to 1.3814 from 1.3741 while Asian regional indices ...

EUR/USD Holds steady above 1.3850, yesterday’s low and near Fib 38.2% of 1.3655/1.3959 upleg, however, upside stays capped at 1.3650 zone for now. Lack of direction is due to markets awaiting decisions of the EU summit today, as the pair was mainly driven by news in the past few days. Near-term studies are still aligned to the upside, with break above 1.3659, yesterday’s high, to expose Fibonacci level at 1.4000 next. On the downside, initial support lies at 1.3900 zone, ahead of 1.3850/20. Res: 1.3935, 1.3959, 1.4000, 1.4056 Sup: 1.3888, 1.3876, 1.3850, 1.3820 GBP/USD Maintains positive short-term tone, after brief consolidation at 1.6000 zone, with today’s fresh push higher, posting fresh high at 1.6039. Daily studies are gaining momentum for further extension higher and test of ...

A day prior to the US Non-Farm Employment Change report, ECB President Jean-Claude Trichet set the stage for the first European interest rate increase since the financial crisis. Economic News USD - US Dollar Gains on Weekly Unemployment Data A significant drop in weekly US unemployment claims helped spur dollar gains versus the major currencies. The lone exception to this price action was versus the euro where the pair surged to its highest level since November 2010 on the back of hawkish comments by the ECB. Weekly unemployment claims came in better than expected with new jobless claims falling to 368K from the previous week's 388K. Labor economists had forecasted a rise to 394K jobless claims. At the end of the day's trading, the EUR/USD was up at 1.3960 from 1.3855. The USD/JPY ...

Forex News and Events: As oil prices continue to ease and economic data improves, risk aversion has slowly melted from FX markets. GBPUSD had enough momentum to break the 1.6300 barrier taking near term stops with it, while EURUSD found its sea legs right before the European open, climbing rapidly to 1.3830. Asian regional indices were able to sustain their three day rally, with the Nikkei rising 1.22%. Even a warning from the CBRC head that Chinese lending growth has been rising too quickly and real-estate prices were increasingly irrational wasn’t able to dampen investors’ appetite as the CNY fixed 50 pips lower against the USD at 6.5706 and the Shanghai Composite was mildly higher 0.48%. As was widely expected, the RBA held rates at 4.75% and in their statement acknowledged that ...

In the Forex markets risk appetite remains strong with further encouraging news flowing from the EU. But also worth mentioning is the glaring reversal in bias attached to any EU news. Stories that only two weeks ago would be viewed have EUR negative are now given a positive slant and room to recover. Take the Irish political situation, reports of the ruling coalition’s collapse failed to give markets a start, as FX and yield spreads were unaffected. And while sentiment remained upbeat today the Irish finance minister stated that a finance bill would pass through parliament by Saturday, eliminating worries that parliament would be disbanded without agreement regarding recent budgetary legislation. We suspect that only a few weeks ago this news would have hit the markets like a bomb ...

Weekly Economic and Financial Commentary U.S. Review Steady Beat of Good Economic News * In what was a very busy week for economic indicators, the theme was generally better-than-expected readings on the economy, which is consistent with our outlook for steadily improving growth in the next couple of years. * The retail sales report pointed to better consumer spending numbers. Another dip in jobless claims suggests improvement in the job market might not be far away. Industrial production gains and improving business survey data tell us the manufacturing recovery has legs. Finally, consumer prices remain in check, but producer prices are another story. Economic Recovery is Gaining Momentum Developments in the economy this week were generally better than expected and served to ...