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  #41  
Old 13-01-2014, 13:53
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Jan. 13: Asian session

Asian shares rose. The MSCI Asia Pacific excluding Japan Index gained 0.5%, Shanghai Composite moved up 0.4%. Japanese markets are closed for a holiday.

USD/JPY fell almost to 1-month minimum in the 103.30 area as dollar bulls were disappointed by weak US NFP data released on Friday. Traders started reassessing how quickly the Federal Reserve can scale back stimulus.

AUD/USD strengthened to $0.9045, extending the upside after the Friday’s post-NFP jump. Aussie’s strength extends the chances for a base formation with a low at $0.8820. Australia ANZ job advertisements contracted a little bit below the forecast (-0.7% vs. -0.9% expected), while home loans came in line with forecast (+1.1% m/m). NZD/USD has also strengthened, testing the $0.8330 resistance.

EUR/USD is at $1.3677. GBP/USD is just below $1.6500.
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  #42  
Old 13-01-2014, 13:58
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Key currency options (Jan. 13)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3540, $1.3550, $1.3600, $1.3625;

GBP/USD: $1.6400;

USD/JPY: 102.50, 103.50, 104.00, 105.00, 106.00 (large);

EUR/GBP: 0.8270;

EUR/CHF: 1.2370.
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  #43  
Old 13-01-2014, 14:11
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CFTC: USD longs increased

Here are the essentials of the latest Commitments of Traders (COT) report, released on Jan. 10 by the Commodity Futures Trading Commission (CFTC) for a week ended on Jan. 7.

According to the report, large speculators increased their net long USD positions from $17.5 billion on Dec. 31 to $21.1 billion on Jan. 7. This is the best level since Sep. 10 when the US dollar bullish bets equaled to $22.0 billion.



EUR/USD



GBP/USD



USD/JPY



AUD/USD



NZD/USD



USD/CAD



USD/CHF



Gold

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  #44  
Old 15-01-2014, 14:00
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Jan. 15: Asian session

Asian shares were mostly higher on Wednesday as the World Bank upgraded its outlook for the global economy. US dollar extended gains versus its counterparts due to surprising strength in US consumer spending. Japanese Nikkei bounced by 1.8% after suffering its sharpest daily drop in 5 months on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.

USD/JPY recovered to 104.40. AUD/USD slid to $0.8915. NZD/USD slipped to $0.8333.

EUR/USD fell to $1.3630. GBP/USD is trading at $1.6422.
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  #45  
Old 17-01-2014, 14:13
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Jan. 17: Asian session

Asian stocks swung between gains and losses before China reports economic data next week. Nikkei fell by 0.8% following Wall Street lower on the disappointing US corporate earnings, while exporters sagged as the weak-yen trend took a pause. MSCI Asia Pacific Index erased a 0.4% drop.

USD/JPY is trading at 104.33 after testing 104.92 yesterday. Japanese consumer confidence declined. AUD/USD is consolidating in a tight $0.8830/00 range after having hit a low of $0.8878 yesterday (lowest since August 2010). NZD/USD is the main loser of this Asian session, falling by more than 60 pips to $0.8285. Despite the recent NZD decline, the market remains generally long on the kiwi in expectations of RBNZ rate hike in the near future.

EUR/USD is in the $1.3625 area, down from yesterday’s high at $1.3649. GBP/USD is down to $1.6333, but above yesterday’s low at $1.6314.
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  #46  
Old 17-01-2014, 14:49
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FBS Forex Outlook 2014

FBS analytical team prepared a report on 2014 Forex market prospects. What currency pairs deserve traders’ attention in the coming year? Which economic and political events will influence the market? What to expect from the major central banks? Find the answers to these questions and many more in the FBS Forex Outlook 2014.

Contents:
* 2013: A year to remember
* 2014: Highlights
* Analysis by currency

DOWNLOAD REPORT

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  #47  
Old 27-01-2014, 14:24
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Jan. 27: Asian session

USD/JPY tested 7-week low at 101.75, but then recovered to 102.50. Demand for yen as a safe haven increased because of a selloff in emerging-market assets. The MSCI Emerging Markets Index of shares fell 1.2%, extending last week’s 2.3% slump. Investors are worried that troubles in EM could lead to financial crisis. Turkey suffers from political turmoil, while Argentina abandoned support of its peso on the open market. The expectations of the Fed’s policy tightening and tightening credit conditions in China also encourage fears about the EM economic slowdown.

Commodity currencies met buyers in the Asian trade. AUD/USD opened the week slightly above the Friday’s minimum of $0.8660 and strengthened to $0.8740. Australian markets were closed for a holiday. NZD/USD still didn’t close the morning a bearish gap, trading below $0.8225. Kiwi remains well-supported by the $0.8200 mark. On Sunday Forbes published an article saying China halts cash transfers. However, the PBOC statement clarified the issue: the move only covers some Internet transfers and those for small amounts and is due to regular system maintenance.

EUR/USD is trading in the $1.3680 area after it spiked to $1.3740 on Friday. GBP/USD tested $1.6472, but then returned to the levels above $1.6500.
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  #48  
Old 28-01-2014, 13:38
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Jan. 28: Asian session

Asian shares weakened to nearly 5-month lows on Tuesday on concerns about the emerging markets, but then managed to recover on some encouraging news from Turkey and China. Turkey’s central bank may raise interest rates at an extraordinary meeting today, while China’s largest lender said that investors in a troubled high-yield trust can recoup funds. Nikkei hit 2 1/2-month intraday low before recouping the losses to trade 0.2% above its previous close. MSCI Asia Pacific Index of shares was little changed after dropping 3.7% over the previous 3 days.

USD/JPY is trading in the 102.60 area, below yesterday’s peak at 102.93. The greenback rose against yen before the Fed begins a 2-day meeting amid forecasts it will cut monthly asset purchases by $10 billion.

Commodity currencies are trading to the upside. AUD/USD extends growth for a second day in a row, but faced resistance at $0.8800. Australia NAB business confidence for December came at 6. The prior reading was revised up from 5 to 6. Business conditions index for December rose from -3 to a 2.5-year high of 4. NZD/USD strengthened to $0.8275 after forming a long-legged doji candle with a low at $0.8200 on Monday.

EUR/USD is trading in the $1.3670 area, below yesterday’s peak at $1.3717. GBP/USD rose above $1.6600.
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  #49  
Old 28-01-2014, 13:42
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Emerging markets: what’s the problem?

There were a lot of concerns about emerging markets during the recent days. Why there are problems in so many countries simultaneously? There are the following general reasons behind the depreciation: a contraction in Chinese manufacturing, concerns about the impact of the Fed’s stimulus tapering, a variety of more local problems, ranging from troubled economic institutions to political unrest.

Argentina

Argentinean peso survived the biggest depreciation 12 years. In lost 15% of its value last week when the central bank briefly stopped supporting the national currency. Earlier the central bank spent huge sums to slow down peso’s fall. These efforts reduced Argentina’s foreign-currency reserves to about $29 billion from around $43 billion a year ago. Inflation is believed to account for 30%. There’s a big gap between the official exchange rate (around 8 peso per USD) and the black market rate (more than 12 peso per USD). This gap reinforces expectations that peso will devalue even more.

Turkey

Turkish lira has lost about 16% against dollar since Dec. 17, when the arrest of the sons of 3 cabinet ministers exposed a corruption investigation which threatens Prime Minister Tayyip Erdogan and his government’s standing. The nation’s central bank has persistently refused to raise interest rates to defend the currency. Erdogan was opposing the hike, because he wanted low rates to boost economic growth as elections approach. As a result, the central bank had to reduce its foreign currency reserves to give lira some support. Still, it’s clear that it doesn’t work and the regulator has an emergency meeting today. A rate hike’s widely expected.

Currencies likeSouth African rand, Russian ruble, Unraine hryvnia, Chilean peso continue their fall. Pimco thinks that once the risk aversion abates, people will start to differentiate again and currencies would recover. Others say the declines are sowing the seeds of problems for developing nations because weaker currencies would push up overseas debt payments for countries, damping the outlook for their economies.
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  #50  
Old 28-01-2014, 13:45
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Key currency options

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3590, $1.3670, $1.3680, $1.3700;

USD/JPY: 102.00, 102.40, 102.90, 103.00, 103.80, 104.00;

AUD/USD: $0.8700, $0.8875;

USD/CAD: 1.0940;

EUR/GBP: 0.8265;

EUR/JPY: 141.20;

AUD/JPY: 91.30.
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  #51  
Old 28-01-2014, 13:47
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China: the imminent debt crisis?

The risk of a credit crunch is hanging over China. The pace of the nation’s debt increase is extremely high. China’s local governments have public debt of $3 trillion. This week one of Chinese trusts has managed to avoid default, presumably, thanks to a bailout. Still, this raises many questions about the nation’s financial future. The nation’s extraordinary economic growth used to be a wonder and an example for others. However, it seems that this growth is now being built on the growing reliance on debt that will be difficult to repay. The existence of a huge shadow banking sector which, according to some estimates, equals 40% of GDP, makes the problem ever more serious.
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  #52  
Old 28-01-2014, 13:50
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Morgan Stanley: short on USD/JPY

USD/JPY extends the upside, breaking above the sell orders around 102.80. Will the buyers manage to push through the 103.00 mark or the bearish correction will deepen further?

Morgan Stanley expects the pair to move even lower. They opened a sell-limit USD/JPY order at 103.00, with a stop at 104.00 and a target at 100.60. "We expect JPY to regain support as broader risk appetite is tested. Signs of Chinese growth slowing are likely to impact Asia regional risk appetite in particular, which will be JPY-supportive, in our view", analysts clarify.

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  #53  
Old 28-01-2014, 14:03
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FX BAZOOKA: technicals (Jan. 28)

EUR/USD

EUR/USD remained between $1.3700 and $1.3650, 50% and 38.2% Fibo of the decline from $1.3890 to $1.3507. MAs remain horizontal, so do the lines Tenkan and Kijun. MACD is in the positive area, but below the signal line and declining. The desire of the bulls to move higher is confronted by the expectations of another $10B reduction in the Fed’s QE. The pair needs some additional drivers.

Resistance: $1.3700, $1.3750, $1.3800

Support: $1.3670, $1.3640, $1.3600


Chart. H4 EUR/USD

Upcoming events

EUR - All day - ECOFIN Meetings

USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders

USD - 14:00 GMT - S&P/CS Composite-20 HPI

USD - 15:00 GMT - CB Consumer Confidence
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  #54  
Old 28-01-2014, 14:05
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GBP/USD

GBP/USD extends growth for a second day in a row, breaking above $1.6600. The pair is moving towards the recent high of $1.6670. Cable remains supported by the January rising trend line ($1.6515 as of writing). General market sentiment is bullish. MACD histogram rose above the signal line. RSI is close to the overbought zone. Watch the UK Q4 GDP today – the forecast is a little bit to the downside.

Support: $1.6600/6590, $1.6565, $1.6470

Resistance: $1.6670, $1.6740


Chart. H4 GBP/USD

Upcoming events:

GBP – 9:30 GMT – Preliminary Q4 GDP, Index of Services
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  #55  
Old 28-01-2014, 14:19
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USD/JPY

USD/JPY keeps consolidating below 102.80. The pair needs to rise above 102.85 to extend the recovery. The negative MACD crossed the signal line to the upside (bullish signal). On the daily chart the pair is supported by the bullish Cloud.

Support: 102.40, 102.00, 101.75, 101.60

Resistance: 102.85, 103.00, 103.60


Chart. H4 USD/JPY
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  #56  
Old 28-01-2014, 14:26
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USD/CHF

The pair still looks bearish as long as it holds below $0.8985. We expect the greenback to extend the downside. The negative MACD crossed the signal line to the upside (bullish signal). Ichimoku Cloud remains bearish. 55-period MA crossed the 100-period MA to the downside.

Support: $0.8900, $0.8800

Resistance: $0.8985,$0.9030, $0.9090, $0.9130


Chart. H4 USD/CHF
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  #57  
Old 28-01-2014, 14:30
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AUD/USD

AUD/USD recovered to the 55-period MA just below $0.8800. Aussie was supported by higher NAB business confidence. The pair’s trying to rise above the horizontal Kijun-sen. MAs are sloping down. All in all, the pair was quite oversold after hitting a multiyear low last week and it may correct a bit more within the general downtrend. The Ichimoku Cloud represents a hurdle at $0.8825. The upper Bollinger band lies here as well.

Resistance: $0.8800, $0.8825, $0.8865, $0.8890

Support: $0.8758, $0.8740, $0.8700, $0.8663


Chart. H4 AUD/USD

Upcoming events

USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders

USD - 14:00 GMT - S&P/CS Composite-20 HPI

USD - 15:00 GMT - CB Consumer Confidence

AUD - 23:30 GMT - MI Leading Index
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  #58  
Old 28-01-2014, 14:59
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USD/CAD

USD/CAD is consolidating within its medium-term upward trend. Tenkan-sen and Kijun-sen are horizontal and act as support. USD/CAD is trading around the middle Bollinger band. The pair has made a lower high at 1.1118 and the bulls have lost momentum. They might need a day to gather strength.

Resistance: 1.1118, 1.1175, 1.1230

Support: 1.1050, 1.0100, 1.0950


Chart. H4 USD/CAD

Upcoming events

USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders

USD - 14:00 GMT - S&P/CS Composite-20 HPI

USD - 15:00 GMT - CB Consumer Confidence
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  #59  
Old 29-01-2014, 14:08
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Jan. 29: Asian session

Asian markets rallied on Wednesday after Turkey raised the benchmark interest rate from 7.75% to 12%, stirring hopes the drastic action would short-circuit a vicious cycle of selling in emerging markets and revive risk appetite generally. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 1.2% after three sessions of falls.

Nikkei rose by 2.2%. USD/JPY recovered to 103.44. Commodity currencies strengthened on the Turkish rate hike. AUD/USD extends the recovery for a third day in a row. Aussie rose to $0.8830 before retracing in the late Asia. NZD/USD also remains supported, but was unable to overcome the $.8300 handle for now. Investors wait for the RBNZ meeting at 20:00 GMT (an hour after the FOMC announcement). There is a market expectation for a rate hike or at least for a rate hike promise by the RBNZ Governor Wheeler.

EUR/USD is testing $1.3650 to the downside. GBP/USD is little changed in the $1.6575 area.
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  #60  
Old 29-01-2014, 14:16
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RBA won't cut rates

The recent article in Wall Street Journal argues that the Reserve Bank of Australia wouldn’t cut interest from the record low of 2.5% on Feb. 4.

Recent data showed Australia’s inflation cam at 0.8% in Q4 (forecast: 0.5%). For the full year, inflation ran at 2.7%, toward the top of the RBA’s 2%-3% target band. NAB business confidence showed that business conditions are at their best levels in close to 3 years. Housing construction and house prices also are responding to the low rates, and there’s compelling evidence that retail sales are growing quickly, says WSJ.

Surely, not everything is well. Economic growth this year is still forecast to be below its long-term average of 3.0%. The biggest problem is the slowdown in the mining sector: falling commodity prices have forced mining companies to cancel investment plans, shut mines and lay off workers. Australian payrolls contracted in Dec.

Still, even if the RBA’s still thinking about cutting the benchmark rate it wait for now and take time to plan its next move.
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  #61  
Old 29-01-2014, 14:24
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Commerzbank on AUD/USD

Commerzbank says AUD/USD visit $0.8870 (20-day MA) before resuming decline.

Analysts say that the pair has reached its interim target at $0.8710/.8671 (the base of the channel in 2011-2014 and the 38.2% retracement of the advance from 2001 to 2011) and is correcting higher.

After visiting $0.8870 AUD/USD will continue its descent to the next target at $.8550 (50% retracement of the move from 2008) and then to $.8068 and $0.7950/25. The outlook for Aussie will remain negative as long as it’s trading below the resistance line at $0.8957.

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  #62  
Old 29-01-2014, 14:33
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NZD/USD: 2 meetings ahead

NZD/USD was initially supported by the decision of the Turkish central bank to make an aggressive rate hike. However, the pair’s vulnerable to uncertainty ahead of the Fed’s decision (19:00 GMT) and the Reserve bank of New Zealand’s meeting (20:00 GMT).

There’s some speculation about a possible rate hike in New Zealand. However, consensus is that the RNBZ will keep benchmark rate at 2.50%. Note though that the regulator’s governor Graeme Wheeler may hint on plans to begin the tightening cycle in March. We’ll examine the prospects of the FOMC announcement in a different article.

Resistance is at $0.8295, $0.8345, $0.8400. Support is at $0.8245, $0.8215, $0.8178. As you may see from the chart the pair will soon have to move beyond either support or resistance.

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  #63  
Old 29-01-2014, 14:36
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ANZ: long-term bulls on USD/JPY

According to ANZ strategists, USD/JPY remains in a long-term rising trend. However, a close above 103.65 would be required to provide some conviction that the uptrend with a next target of 106.50 might have resumed.

"A resumption of the uptrend should allow for a push through the 105.50-106.50 area (retracement and downtrend) within a push towards the broader retracement level of 111.50 (50% of the range of the past 20 years)," ANZ projects.
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Old 29-01-2014, 14:38
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USD/CAD: ahead of the new highs

USD/CAD bulls made another go at multi-year highs above 1.1170, but then were pulled back to the 1.1140 area. The pair has been rising during the recent month on the divergence between more hawking stance of the Fed and the dovish inclinations of the Bank of Canada.

If the Fed reduces QE, as expected, USD/CAD may reach the psychological mark of 1.1200. TD Securities says that intraday support in the 1.1115/20 area now and note that short-term, bullish trend momentum signals are picking up again and aligning with the still bullishly-oriented longer-term signals. The outlook will remain positive as long as the pair is above 1.1050. “The technical signals look to have the makings of another powerful leg higher in USD/CAD”, said the specialists.

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Old 29-01-2014, 14:40
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BofA: USD index will rise

The US dollar Index keeps consolidating in its 3-month 81.48/79.68 range, notes Bank of America Merrill Lynch.

"Odds continue to favor an upside resolution to 82.55/82.15 but it could take some time to play out. This scenario is invalidated below 79.68," BofA projects.

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  #66  
Old 29-01-2014, 14:43
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Carney will discuss GBP currency union
By Kira Iukhtenko, FX BAZOOKA analyst

The BoE Governor Marc Carney will meet the Scottish First Minister Alex Salmond in Edinburgh today in order to discuss the challenges presented by a potential sterling currency union. Mr. Carney will hold a speech hold a speech today at 12:15 GMT at the Scottish Council for Development.

The issue of Scotland's independance remains on the table - there are less than 9 months left before the September 18 referendum. The voters will be asked the yes/no question: "Should Scotland be an independent country?". There will be another important question to be answered if there is a "Yes" vote: will Scotland be alowed to keep using the pound?

UK Government oficially questions whether such an arrangement will be possible. According to the Chancellor of the Exchequer George Osbourne, it is “unlikely” the rest of the UK would welcome such a currency union. The Edinburgh meeting comes a day after Mr. Salmond said Carney's predecessor as a BoE Governor Sir Mervin King told that the Treasury would adopt an "entirely different" approach to Scottish issues if there was a "Yes" vote in the referendum.

Earlier this week Mr. Carney warned of the dangers of currency unions, referring to the euro zone's example. “It’s one of the factors that affects the outlook for the UK economy, has affected us over the last five years, affects us going forward – the challenges of having a currency union without certain institutional structures.”
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Old 03-02-2014, 14:08
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Feb. 3: Asian session

- Asian shares declined

- Lower liquidity, higher volatility

Asian shares declined as strains in emerging markets show little sign of abating. Chinese official Purchasing Managers’ Index (PMI) dipped from December’s 51 to 50.5 in January. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3%. Japanese Nikkei again led the way with a loss of 1.5% and fell to November lows. Liquidity is lower than usual because of Chinese banks are closed due to the ongoing Lunar New Year holiday.

USD/JPY recovered to 102.40. AUD/USD opened with a bullish gap at $0.8770, faced resistance a bit above this level and then weakened to $0.8750. Aussie has had quite a calm session despite a bunch of statistics from Australia and the downbeat China PMI. RBA is widely expected to leave rates unchanged on the tomorrow’s meeting. NZD/USD strengthened to $0.8115. Kiwi is supported by expectations of an RBNZ rate hike in March.

EUR/USD is little changed in the $1.3480 area near the 10-week low after its fall on Thursday and Friday. GBP/USD is consolidating above $1.6400.
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Old 03-02-2014, 14:23
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Feb. 3: European session

EUR/USD recovered to $1.3500. Euro zone’s final manufacturing PMI for January was revised a bit higher from 53.9 to 54.0. German final January manufacturing PMI was revised up from 56.3 to 56.6. Spanish index came better than expected, but Italian index disappointed though they both were in the positive area above 50.

GBP/USD dropped to $1.6360. UK January manufacturing PMI came below the expectations at 56.7 (forecast: 57.1, prior: revised down to 57.2). EUR/GBP rose to 0.8260.

European shares are on the downside hurt by brewing worries over emerging markets and data showing China’s economy losing momentum.
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Old 03-02-2014, 14:26
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Danthine: EUR/CHF peg still needed

SNB Vice-Chairman Jean-Pierre Danthine told in an interview to a Swiss newspaper that the central bank would only consider scrapping the 1.20 EUR/CHF cap if inflation was much higher and if there was less upward pressure on the currency. He went further, saying there were no inflation risks over the next 3 years, meaning the minimum exchange rate remained the appropriate tool to guarantee price stability for the foreseeable future. Danthine's comments offer a long-term comfort to the CHF bears.

According to the late-January Bloomberg survey, 7of 20 economists predict that the 1.20 cap will be lifted in 2015 and another 7 see that happening in 2016. Only 3 forecast the ceiling being abandoned in 2014 and 3 expects a 2017 exit.
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Old 03-02-2014, 14:33
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Barclays: bearish on GBP/USD

GBP/USD extends the decline on Monday, testing $1.6330.

According to analysts at Barclays, a daily close below $1.6300 will pull the cable down to $1.5850 in the coming weeks. They note that the pair has broken the July trend line to the downside. Analysts point that GBP could find some short-term support in the $1,6300/10 area.

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Old 03-02-2014, 14:49
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EUR/USD: what do the banks say?

We have searched for the fresh EUR/USD recommendations from the major banks and here’s what we’ve found.

Bulls

Nordea: Keep EUR/USD long (from $1.3450), next support area $1.3380/1.3450. Stop loss is at $1.3340, while take profit is at $1.3850. The ECB won’t cut rates, reasons plentiful: the labor market has turned the corner, the credit impulse turned up and the lending survey tone positive, the PMIs and other sentiment/survey data have improved, market-based inflation expectations are rocks solid even with the softer headline CPI.

Bears

SEB Bank: Short-term the minor consolidation since Friday afternoon is seen soon breaking down to a fresh low in the $1.3440/50 area.

JP Morgan: The ongoing straight attack and break below the support at $1.3507/06 to challenge $1.3436 which upon its break would open the way for a deeper decline. Only above $1.3506 would temporally keep the door open for another corrective leg up to $1.3802.

Barclays Capital: Consider selling EUR/USD as a tactical trade to position for the ECB meeting this week. Target is at $1.3400. The ECB will cut rates either in February or in March. Euro will fall anyway.

Danske Bank: We would not be surprised to see such a move and continue to see downward pressure on both EUR/USD that fell below 1.35 on Friday and EUR/GBP the next couple of days

Commerzbank: It’s likely to sell off further towards initially the 200-day MA at $1.3376. We have a minor support en route at $1.3423, the 78.6% retracement of the move up from November. Very near term we would allow for a small near term rebound, however intraday rallies should now find resistance at 1.3525/55. Above $1.3640 the key resistance is the $1.3740/46 recent high and Fibo retracement.

TD Securities: EUR/USD short-term view is bearish, with a potential target of $1.3174 achievable.
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Old 14-02-2014, 13:52
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Feb. 14: Asian session

Japanese Topix index slid 1.2%, while the Nikkei 225 dropped 1.3%. The MSCI Asia Pacific Index of shares was little changed after falling as much as 0.2% earlier today.

USD/JPY slid to 101.56. Demand for safe havens increased making yen appreciate. AUD/USD tested $0.9030 during the Asian trading hours after consumer prices increased in China, the nation’s biggest trading partner, but then returned below $0.9000. NZD/USD tested $0.8367 before easing down to $0.8338.

EUR/USD is consolidating in the $1.3680 area after it rose by about 90 pips yesterday. GBP/USD is consolidating below yesterday’s high at $1.6673, the highest level since May 2011.
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Old 14-02-2014, 14:10
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Italy will have new government

Italy’ Prime Minister Enrico Letta will step down today as the leadership of his centre-left party deserted him for Matteo Renzi (136 votes to 16).

Critics say that Letta hasn’t been able to carry out much-needed administrative reforms and stimulate economic growth. Italy is suffering from near-record levels of unemployment a public debt of more than 2 trillion euro. The nation’s GDP shrank by 9% in 7 years.

Renzi, 39, is now expected to be asked by the President Napolitano to form a new government. He will be Italy’s third unelected premier in as many years.
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Old 10-03-2014, 14:00
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Mar. 10: Asian session

Asian shares fell after reports showed the biggest drop in Chinese exports since 2009 and tensions in Ukraine continue. MSCI Asia Pacific Index dropped by 1%. Japanese Nikkei is also down by 1%. The market’s sentiment was hurt as well as Chinese yuan fell on the central bank’s decision to cut the reference rate by the most in 1 1/2 years.

USD/JPY is testing 103.00 to the downside after peaking to 103.76 on Friday. Japanese GDP grew in Q4 an annualized 0.7% from the previous quarter, less than a preliminary estimate of 1%. The current-account deficit widened to the maximum since 1985.

Commodity currencies extend the downside after having peaked on Friday. The key bearish factors are the upbeat US NFP on Friday and weak China trade data (29B trade deficit vs. expected surplus of 14B) released on Saturday. AUD/USD opened the week with a bearish gap and weakened below $0.9040 after having faced resistance at $0.9135 on Friday. NZD/USD opened with a gap to the upside, but closed it by weakening to $0.8460. Kiwi remains pressured after hitting a 4-month top of $0.8520

EUR/USD rose to $1.3892, but is trading below Friday’s peak at $1.3915. GBP/USD edged up to $1.6440, but is trading below Friday’s peak at $1.6785.


Key option levels (Mar. 10)


Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3800, $1.3840, $1.3850 (large), $1.3900;

GBP/USD: $1.6675;

USD/JPY: 102.00 (large), 102.05, 102.20, 102.50 (large), 103.00 (large), 103.50 (large);

AUD/USD: $0.8925, $0.8930, $0.8940, $0.9000, $0.9080, $0.9105 (large), $0.9110, $0.9130 $0.9150;

NZD/USD: $0.8360, $0.8370, $0.8415, $0.8430, $0.8440;

USD/CAD: 1.1050 (large), 1.1100, 1.1150, 1.1200;

EUR/JPY: 143.00 (large);

EUR/CHF: 1.2205, 1.2210;

EUR/GBP: 0.8180, 0.8350.

EUR/USD holds below the $1.3915 peak

EUR/USD strengthened towards the $1.3900 mark in the Asian morning, but holds below the Friday’s 2-year peak of $1.3915. Better-than-expected US NFP on Friday hindered the continuation of EUR-rally. On Monday French industrial production disappointed the markets, contracting by 0.2%. The pair will likely wait until Tuesday for more decisive moves.

Technically, the pair approached a strong resistance in the $1.3900/4000 area. This is the 2008-2014 resistance trend line and the top of the monthly Ichimoku. The ECB-driven move brought the pair into this area, but was not strong enough to overcome it.

We believe EUR/USD still has a potential to hit $1.4000, but there is a clear need for the market to correct lower. Key support lies at $1.3830 and $1.3780 – look to buy euro on dips. Slide below $1.3700 would return the negative outlook.




EUR/USD: Elliott waves (Mar. 10)

Weekly. The pair keeps forming of the rising correctional wave [D], which is close to completion.


Chart. Weekly EUR/USD

Daily. The wave [D] is a double Zigzag w-x-y. Euro’s now forming the final wave of the second Zigzag [C].


Chart. Daily EUR/USD

H4. We are probably seeing the beginning of construction of wave (5). In the coming days the pair will continue rising within the impulse 3, the market will generate a horizontal correction, after which the growth in the wave 5 will continue. The approximate trajectory is shown at the picture.


Chart. H4 EUR/USD
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Old 17-03-2014, 13:37
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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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Old 19-03-2014, 14:18
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What to expect from the Fed?

The US Federal Reserve will announce the results of its March policy decision on Wednesday at 18:00 GMT. The new Fed's chief Janet Yellen will start her first press-conference at 18:30 GMT.

According to the market consensus, the FOMC decision will include another $10 billion cutback in the pace of asset purchases, slowing QE3 to $55 billion per month. Fed's qualitative "forward guidance" (6.5% unemployment and 2.5% inflation thresholds) is likely to be replaced with a more qualitative guidance. The new guidance is expected to underline that rates will remain unchanged well beyond the end of the QE program ("low for longer" fed funds rates). Markets will of course react to any changes to the Fed projections for growth, unemployment and interest rates.

BNP Paribas: We anticipate relatively neutral market impact on USD from the meeting. As long as Chairman Yellen largely attributes weak US activity to the weather, USD should stay resilient.


Mar. 19: European session

European stocks paused from a two-day rally, with investors awaiting the US Federal Reserve's policy decision at 18:00 GMT. Markets have rallied earlier in the week as Ukraine woes eased a little. Although Crimea moves into Russia, investors interpreted the yesterday's Vladimir Putin's speech, in which he said he wouldn't seek a further division of Ukraine, as a step away from an escalation of the crisis.

EUR/USD trades around $1.3920, staying above the key $1.3880 near-term support. GBP/USD strengthened to $1.6645 on the upbeat UK labor market data. Claimant count fell by 34.6K in February (forecast: - 23.3K). January claimant count change reading was revised from 27K to 34K. As expected, unemployment rate stayed at 7.2%. BoE March meeting show all 9 MPC members voted to leave policy unchanged.


Mar. 19: Asian session

Asian stocks were mixed on Wednesday ahead of the outcome of the FOMC first policy meeting under its new chief Janet Yellen. The Fed is widely expected to continue to reduce the QE size by $10 billion. Traders are also focused on the Fed’s forward guidance, with many expecting the cancellation of a 6.5% unemployment threshold. China concerns remain a negative factor for the risk sentiment. The MSCI Asia Pacific Index rose by 0.2%, while Nikkei 225 added 0.3%.

Currency markets had a calm session. USD/JPY consolidates, capped at 101.60 and supported by the 101.30 mark. Data showed Japan trade deficit unexpectedly widened to 1.13 trillion. According to a Reuters poll, released today, 7 out of 16 economists expect the BoJ to ease further in July.

Commodity currencies are trading under a slight bearish pressure. AUD/USD retraced lower to $0.9115 after testing the $0.9135 resistance (200-day MA) to the upside at the very beginning of the session. NZD/USD followed the Aussie, retracing from the yesterday’s high of $0.8640 towards the $0.8600 mark.

EUR/USD remains in a sideways $1.3950/3880 range, hanging at $1.3920 as of writing. GBP/USD sits at $1.6590 following the yesterday’s dip to $1.6545. Great Britain will release a bunch of employment data and monetary policy minutes at 9:30 GMT.


Nomura: buy USD/JPY ahead of FOMC

Nomura traders bought another $10 million of USD/JPY from 101.75 and with a stop at 100.00. Nomura thinkst the FOMC meeting could be a catalyst for dollar gains vs. the yen.

"Specifically, we think removal of guidance related to the 6.5% unemployment threshold will weaken the Fed’s forward guidance on the margin, which could see some increase in US rates and USD support," Nomura clarifies.




GBP/USD back above $1.6600

Cable recovered from a 1-month low hit yesterday at $1.6544 to $1.6620. The market is waiting for a bunch of UK data to come at 9:30 GMT (MPC March minutes, labor market numbers and later – UK annual budget). Weakening performance and its acknowledgement by the UK authorities may push traders to speculate that this will delay interest rate hikes for a longer period than currently expected.

Cable is trading under a moderate bearish pressure since mid-February, retracing from highs above $1.6800. Major near-term support lies in the $1.6545/40 area (55-day MA, 8-month uptrend). Break below here could open the way towards $1.6260/30 support (September high and the 23.6% retracement of the move up from July 2013).




Trade signals from Danske Bank (Mar. 19)

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

EUR/USD: Long at $1.3915 with a target of $1.4075 and a stop at $1.3869

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

GBP/USD: Short at $1.6625 with a target of $1.6538 and a stop at $1.6675

USD/CHF: Short at 0.8747 with a target of 0.8632 and a stop at 0.8790

AUD/USD: Long at $0.9035 with a target of $0.9204 and a stop at $0.9054

USD/CAD: Long at 1.1035 with a target of 1.1225 and a stop at 1.1070
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Old 20-03-2014, 14:22
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Mar. 20: Asian session

Asian markets moved lower on Thursday on concerns that the US could push up interest rates earlier than expected. In a press-conference after the FOMC meeting, Chairwoman Janet Yellen said the Fed could raise rates "something on the order of six months" after the bank shuts down its bond-buying program. Markets were surprised: it means that rates could be raised as early as April 205 —ahead of the late 2015 market expectation. As expected, the central bank reduced its QE program by $10 billion to $55 billion. US dollar strengthened versus the other major currencies.

USD/JPY jumped to 102.70 on the FOMC news, but retraced to 102.30 in early Asia. Nikkei 225 index lost 1.3%.AUD/USD consolidates 20 pips above the yesterday’s through at $0.9000.NZD/USD extended the yesterday’s drop, hitting a session low of $0.8520 on weaker-than-expected New Zealand Q4 GDP (+0.9% vs. expected +1.0%, Q3 reading revised down to +1.2%). Gold hit a low of $1326 today (lowest since the end of February).

EUR/USD has recovered some ground to $1.3840 after the yesterday’s 120 pips drop to $1.3810. GBP/USD followed the euro, recovering from the low of $1.6510 to $1.6540. USD/CHF hit a high of $0.8810 in the US session. Swiss National Bank will announce its monetary policy decision at 8:30 GMT.


SNB maintains the EUR/CHF peg

The Swiss National Bank left the minimum exchange rate unchanged at 1.20 francs per euro and is ready to enforce it if necessary “by buying foreign currency in unlimited quantities, and to take further measures as required”. The 3-month Libor rate was also kept unchanged at the 0.0–0.25% range.

The regulator explains that the CHF is still high and “with the 3-month Libor close to zero, the minimum exchange rate continues to be the right tool to avoid an undesirable tightening of monetary conditions in the event of renewed upward pressure on the Swiss franc.” SNB's current inflation forecast is at 0% for 2014 and at 0.4% for 2015, in both cases 0.2% lower than the previous estimates. In 2016 the central bank expects a 1.0% rise.

The SNB acknowledged the continued recovery in the EU in Q4 of 2013, but pointed out that risks remained, such as low inflation, uncertainty about the health of Europe's banking system, political tensions and weakness in key emerging markets.
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Old 31-03-2014, 12:44
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Mar. 31: Asian session

Asian shares rose. The MSCI Asia Pacific Index climbed 0.5%. Japanese Nikkei rose by 0.65%.

USD/JPY opened with a small gap up at 102.94, but then edged a bit down. Japanese preliminary industrial production fell by 2.3%. US dollar strengthened a bit before Federal Reserve Chair Janet Yellen speaks and ahead of figures tomorrow that may show US manufacturing strengthened this month.

Commodity currencies are retracing from the Friday’s highs in Asia. AUD/USD extends the correction from the recent peak of $0.9300. Aussie found support at $0.9220 as of writing. Aussie is seen under pressure ahead of the tomorrow RBA meeting (no policy changes expected). NZD/USD follows the Australian counterpart, weakening from the Friday’s high of $0.8695 to $0.8660. NZ business confidence came below the forecast in March (67.3 vs. previous 70.8). Gold has slightly recovered from the Friday’s low of 1285.

EUR/USD is trading in the $1.3750 area after opening with a gap up at $1.3762. On Friday the single currency dipped to $1.3700 and formed a “hammer”. Euro’s under pressure ahead of the central bank’s meeting this week. GBP/USD opened with a gap up at $1.6654, but then slid down by 20 pips.

CFTC: EUR net longs down

Here are the essentials of the latest Commitments of Traders (COT) report, released on March 28 by the Commodity Futures Trading Commission (CFTC) for a week ended on March 25.

According to the report, net long EUR positions fell from the last week's 5-month high of 52K to almost 40K contracts. Canadian dollar was the biggest mover of the week: net short contracts fell from 70K to 33K this week.



EURUSD



GBPUSD



USDJPY



AUDUSD



NZDUSD


USDCAD

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Old 31-03-2014, 13:09
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EUR/USD capped at $1.3800

EUR/USD has recovered some ground on Monday, bouncing from the 55-day MA at $1.3710 towards the $1.3800 figure. However, analysts of the major investment banks are cautious about the euro ahead of the ECB policy meeting on Thursday. The regulator is expected to pull the currency down by an additional easing or at least by a more aggressive verbal intervention.

Credit Agricole holds a medium-term EUR/USD short from $1.3780 with a target of $1.3300 and a stop at $1.4160. Economists believe the most effective measure the ECB can undertake is to introduce the negative deposit rate: “As the EUR has been benefitting from a positive capital flow situation, cutting the deposit rate negative appears to be the most efficient way going forward. Indeed, Weidmann said too that negative rates would be more appropriate to curb the EUR”, they explain.

Credit Suisse recommends selling EUR/USD on rallies from the rising 55-day MA ($1.3712). Strategists went short on the pair from $1.3795 targeting $1.3665. “We favor a break below $1.3704 for a test of $1.3664/43 – the 61.8% retracement of the February/March rally, late February low and trend line support”, analysts add.

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Old 01-04-2014, 13:30
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April 1: Asian session

Asian shares swung between gains and losses as investors weighed reports on China’s manufacturing that pointed to weakness in the world’s second-biggest economy. China March manufacturing PMI came a bit above the forecast at 50.3 (forecast: 50.1, previous: 50.2). However, the final manufacturing PMI from HSBC disappointed, falling the last week's estimate of 48.1 to 48.0 (February: 48.5).

USD/JPY is trading a bit on the upside in the 103.20/35 area, below yesterday’s high at 103.43. Yen remained lower after Bank of Japan’s data showed the Tankan index for sentiment among large manufacturers in the nation rose to 17 in Q1 from 16 in the previous period, while analysts surveyed by Bloomberg News expected an advance to 19. According to Mizuho, “Tankan was weak”.

AUD/USD retested the $0.9300 mark early in the session, but later slipped back into the $0.9260 area. RBA meeting was a pretty neutral event. The regulator repeated the Aussie dollar is high by historical standards, but said it sees a period of interest rate stability ahead. NZD/USD stayed in a small range around the $0.8670 mark.

EUR/USD edged up to $1.3778 after forming a spinning top candle yesterday. GBP/USD edged up to $1.6670, but is below yesterday’s high at $1.6684. US held losses versus most major peers as investors wondered weigh whether American economic data this week will be strong enough to lift central bank’s concerns that the economy still needs stimulus.


Key option levels (Apr. 1)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3650, $1.3700, $1.3750, $1.3765, $1.3790, $1.3800, $1.3830, $1.3890;

GBP/USD: $1.6500, $1.6630;

USD/JPY: 102.10 (large), 102.30 (large), 102.50 (large), 103.25, 103.30, 103.75 (large);

AUD/USD: none;

USD/CAD: 1.0900 (large), 1.1030, 1.1200;

EUR/JPY: 143.00;

AUD/JPY: 94.00.


Trade on US data releases

The Fed’s Chairwoman Janet Yellen said yesterday US economy will need stimulus “for some time.” Analysts at BNP Paribas think, however, that Yellen’s dovish comments was an attempt to reverse some of the impression created by her “6 months” reference (time between the end of QE and the start of rate hikes) at the March FOMC press conference. The specialists note, however, that the market’s reaction was muted. In their view, this seems unlikely to reverse and prospects for USD will remain good unless data begins to materially deteriorate again.

Economists surveyed by Bloomberg predict a report today will show quicker manufacturing growth, while a private survey tomorrow may indicate an improving jobs market. Figures tomorrow from the ADP Research Institute may show companies in the US added 195K jobs in March after boosting positions by 139K the previous month.

Citigroup Inc.’s Economic Surprise Index for the US, which shows whether data beat or fell short of economists’ forecasts, dropped to a one-week low of minus 32.60 yesterday.

BNPP is long on USD/JPY ahead of the release of the ISM Manufacturing PMI (14:00 GMT).


Trade signals from Danske Bank (Apr. 1)

EUR/USD: Sell at $1.3780 with a target of $1.3705 and a stop at $1.3815

USD/JPY: Long at 102.12 with a target of 103.77 and a stop at 103.01

GBP/USD: Buy at $1.6645 with a target of $1.6745 and a stop at $1.6595

USD/CHF: Long at 0.8840 with a target of 0.8899 and a stop at 0.8809

AUD/USD: Look to buy

USD/CAD: Long at 1.1025 with a target of 1.1170 and a stop at 1.0995
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