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Former Bullish ChannelTitle:
Forex - Heavy Calendar Tomorrow Keeps FX Subdued Today
Forex News and Events:
Very quiet Asian session in FX trading. New flow once against this week basically ground to a halt as traders seem reluctant to put on directional trades. Overall we remain constructive on the environment for risk correlated trades and macro risk looks to be fading into the background and the fears that the Fed will suddenly shift gears ending the world reliance on the cheap & endless liquidity. That said the highlight o f the trading day will be a slew of Fed speaks that the market will be monitoring every word for hints that a psychological adjustment is taking place within the Fed. Yet with none of the “dovish three” speaking (Bernanke, Dudley and Yellen) impact will should be limited. EURUSD was able to regain the 1.4500 handle and USDJPY run at 83.20 was fell ...
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Forex - FX Markets Wait For More Data
Forex News and Events:
The erosion of risk appetite seen yesterday was short lived as FX risk-correlated trades are gaining across the board. Asian regional equity indices were higher across the board and the good feeling looks to be spreading into Europe. EURUSD traded relatively easily off 1.4400 climbing swiftly to 1.4500 while USDJPY has been consolidating between the 83.50 and 84.50 levels.
AUDJPY - our barometer for risk appetite and carry trade attractiveness, rallied further off the 86.87 lows to 88.40 this morning in Asia. Despite JPY fueled carry trades looking slightly overstretched with IMM data pointing to long position vs. JPY near historical highs, we suspect that traders will continue to build and maintain these positions.
The current conditions just does not look ripe ...
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Forex - News From Japan Unnerves FX Markets
Forex News and Events:
FX markets pulled back risk appetite in Asian sessions in the wake of an another earthquake and amid rumors that Japanese authorities would imminently upgrade the nuclear disaster to the same level as Chernobyl. We don’t really see much of the USD buying as a relief rally, due to the US governments budget approval, as this would be a heck of a delay in response to an event that was highly coordinated for the public consumption. While an upgrade of this nature should have an economic impact, it most definitely will have an immediate psychological impact, which has already been seen in stock prices today. Asia regional indices were expectedly lower with Nikkei down -1.69 and Europe opening lower across the board. Safe-haven trades in USD, JPY and CHF were gainers, ...
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Forex - USD Fails to Gain on US Budget Agreement
Forex News and Events:
This week’s FX open was orderly, stable and generally range bound with marginal USD strength. The lack of a slight USD rally was surprising since news flows have been broadly USD positive. That said, the issue surrounding the US debt ceiling remains unresolved and should continue to weigh on the USD in the near term. Given the lack of reaction through this morning’s European session from broadly negative news flows from the Eurozone, there probably won’t be much support for the USD nor EUR today.
Regional indices in Asia were marginally lower with the Nikkei down -0.49% (with new earthquakes rattling local traders). Not surprising since local Japanese media claims that the evacuation zone around the Fukushima nuclear plant has been extended. Banks are reporting ...
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Forex - AUDUSD Hits New Highs As Risk Assets Rally
Forex News and Events:
Markets are breathing a collective sigh of relief this morning as the impact of the latest earthquake to hit Japan’s Fukushima nuclear plant appears to be negligible. Asian stock markets were quick to reflect the news with gains across the board, and risk currencies have been buoyed higher – most notably AUDUSD hit new all-time highs of 1.0538. Of course, the impressive gains in risk assets have also been fuelled by broad-based USD weakness as the prospect of US government shutdown looms large. Thus far, President Obama and Congressional leaders have failed to reach an agreement on a budget deal, and the clock is ticking down before a shutdown is enforced. Obama has stated he is still looking for an agreement to be reached before this final day is out; and if he is ...
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Forex - Portugal Turns to the EU for a Bailout
Forex News and Events:
In Asia, the BoJ kheld the policy rate unchanged at 0.1% as was universally expected. However, the bank has decided to launch a new loan facility with a ceiling size of JPY 1 trn, for banks located in the earthquake damaged region. Let’s just move right to the critical issue today. European traders walked into headlines that Portugal would finally (cause we all knew they would) seek bailout assistance from the EU.
Since everyone knew this was the eventual play, it was already priced into the market with EURUSD trading down slightly to 1.4286 from 1.4340 (contagion fears are just non-existent right now). Even now, downside pressures seem to be waning and we don’t expect much more downside. The trigger was a this week’s bill auction that showed borrowing costs ...
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Forex - FX Risk Appetite Improves on Global Recovery Story
Forex News and Events:
Asian equity indices traded higher across the board showing broad gains in all sectors with Shanghai leading the charge up 1.34%. Commodities took a moment to pause from its impressive bullish run as WTI Crude traded around $108.00 (higher energy prices have not damped expectations for global demand so far). EURUSD bounced between 1.4220 to 1.4268 and AUDUSD failed to hold above the 1.0400 level during this morning’s Asian session. Both currency pairs haven’t benefited as much as they should have from Friday’s rally in risk appetite (ushered in by encouraging US employment data).
This week, interest rate expectations will be the core driver with continued inter FOMC divergence between Fed speakers and the ECB. While the economic data continues to firm up, the ...
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Forex - Hawkish Fed Comments Signal A Key Shift In Sentiment
Forex News and Events:
The US non-farm payrolls are bound to take centre stage today, with the market looking for another strong monthly increase of +190k after last month’s gain of +192k jobs. Furthermore, analysts expect the unemployment rate to stay down at 8.9%, and thereby solidify the perception of improvement in the US labour market. However, we feel that more important than today’s one-off employment readings are the hawkish murmurs from Fed members this week that have been growing in both number and scope. Minneapolis Fed President Kocherlakota was on the wires yesterday, stating that he was concerned at the likely future path of CPI, and revealed that QE2 had boosted inflation expectations more than he anticipated. This boosted the USD steadily, although comments initially ...
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Technical analysis of the EUR/JPY pair on March 18th, 2011
Commentary of the EUR/JPY pair :
The pair EUR/JPY is currently very volatile. After a lowest on 107, the pair rebounded on 111 at the first place and just continued its bullish movement until 115. The price is now back into its former bullish channel. All indicators are now bullish. We maintain to trade only long positions as far as 114 is support. The breakout of 115 and 116 will both give a new buy signal. However, if 114 is broken, we will advise to trade short positions. THe breakout of 113 will give a new sell signal.
See the previous analysis of the EUR/JPY pair of March 17th, 2011
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