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Old 17-03-2014, 13:37
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Default Re: Market news and trade recommendations by FBS

Mar. 17: Asian session

Asian stocks mostly fell on Monday as concerns over Ukraine escalated after the Crimea referendum on Sunday. Russian exit polls show that 95.5% of Crimeans voted to break away from Ukraine and join the Russian Federation. Investors nervously await for the West’s response to Crimea’s vote, which has drawn international condemnation. MSCI Asia Pacific Index recovered by 0.18% in the session, while Nikkei 225 lost 0.35%. USD/JPY strengthened from the Friday's low of 101.20 to 101.65. Chinese shares rose as the yuan dropped after the government widened the currency’s trading band.

Commodity currencies are trading a bit higher. AUD/USD recovered to $0.9065. Westpac economists revised their forecasts for the RBA monetary policy: they no longer see RBA cutting rates in 2014. NZD/USD is trading around $0.8550, extending the consolidation in the $0.8520/60 range. Gold hit a fresh 6-month high in the early Asia, strengthening to $1388.

EUR/USD is trading a little lower around the $1.3900 mark. GBP/USD sitting at $1.6640.

CFTC: USD longs keep falling

Here are the essentials of the latest Commitments of Traders (COT) report, released on March 14 by the Commodity Futures Trading Commission (CFTC) for a week ended on March 11.

According to the report, large speculators decreased their overall USD bullish position from $11.6 billion in the week ended on March 4 to $10.6 billion in the week ended on March 11. USD longs keep on falling for a fifth week in a row. The US dollar aggregate position remains at the lowest level since Nov. 5, 2013 ($7 billion).

Trade signals from Danske Bank (Mar. 17)

*Danske Bank uses trailing stop orders (moved together with the price)

EUR/USD: Buy at $1.3859 with a target of $1.4000 and a stop at $1.3831

USD/JPY: Short at 101.75 with a target of 100.76 and a stop at 102.43

GBP/USD: Long at $1.6603 with a target of $1.6719 and a stop at $1.6565

USD/CHF: Short at 0.8759 with a target of 0.8632 and a stop at 0.8807

AUD/USD: Long at $0.9035 with a target of $0.9204 and a stop at $0.8975

USD/CAD: Buy at 1.1035 with a target of 1.1225 and a stop at 1.0950

What to expect from EUR/USD?
Kira Iukhtenko, FX BAZOOKA analyst

EUR/USD extended the upside over the past week. At the beginning of the week euro paused a little, but bounced from the $1.3830 support and moved to the upside with renewed energy. The pair hit a fresh high of $1.3966 on Thursday – highest since 2011. Rally slowed later in the day as better-than-expected US data increased the QE tapering expectations on the March 19 meeting.

All in all, the market remains quite optimistic on the EUR/USD prospects, despite the attempts of the European officials to calm the demand spurred by Draghi on a March meeting. We see a good chance to test the $1.4250 area in the coming weeks, but this week we still expect a bearish correction to extend towards the $1.3720 support.

Technical factors confirm the need for retracement. The pair keeps on testing the major resistance area $1.3900/4000 and lacks an immediate power to break above it. This is the 2008-2014 resistance line and the upper boarder of the monthly Ichimoku Cloud. There is a MACD divergence on the weekly chart.

Near-term support lies at $1.3830 (61.8% Fibo from the 2011-2012 decline) and $1.3800. The market will remain bullish until the $1.3720 holds.

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