07 / 06 / 2016 | Technical Analysis

AUD/USD: Extends its gains to 0.7453

North American Session
The AUD/USD pair has been under bullish pressure since the 2nd of June 2016, with the bears lifting the price from as low as 0.7201 to as high as 0.7453.

The pair initially fell on Monday, but found enough support at 0.7315 to turn things back around and end the day at 0.7379. Today, the pair rose considerably, hitting the session high of 0.7345.

The Australian dollar found support after the Reserve Bank of Australia announced its decision to keep interest rates unchanged and raised the bar on further monetary easing. As of writing, the pair trimmed some of its gains, trading at 0.7437.

On a sustained move above 0.7453, the major could inch higher to 0.7497 and 0.7529 in extension.

Alternatively, in the scenario where the price breaks below 0.7315, the pair could find support at 0.7297 and 0.7260 respectively.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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07 / 06 / 2016 | Market News

Greenback hovers over four-week lows as Yellen remains cautious

The U.S. dollar edged higher, but still traded around four-week lows against its major counterparts on Tuesday, after the Federal Reserve Chair’s comments failed to provide support to the falling greenback.

The U.S. dollar index inched up 0.1% to 94.017, but remained close to yesterday’s bottom of 93.634, its lowest level since the 11th of May 2016.

While the Fed Chair Janet Yellen was rather optimistic about the general outlook of the economy and stated that the U.S. central bank would raise interest rates, she gave no new clues about the timing of a future rate hike and called May’s labour market data disappointing.

The greenback has been under pressure since the release of the U.S. nonfarm payrolls report last Friday that indicated the slowest job growth in more than five years in May, disappointing expectations for a near-term rate hike.  

Against the Japanese yen, the greenback recovered from its earlier losses and inched up 0.2% to 107.81, drifting away from the previous session’s trough of 106.35, its weakest level in a month.

Earlier on Tuesday, the Japanese Finance Minister Taro Aso stated that he would refrain from commenting on the country’s possible reaction in the foreign exchange market if the yen were to appreciate even further.  

The single currency rose 0.1% to 1.1360, shifting back towards the previous session’s nearly one-month peak of 1.1393.

The volatile British pound registered a strong rebound, after falling more than 1% to three-week lows in the previous session, in light of a number of polls favouring the possibility of Britons voting to leave the E.U.

However, two polls revealed in Tuesday that British voters favour remaining in the E.U., as opposed to the surveys released a day before. The sterling edged higher 0.7% to 1.4524, after reaching a one-week high of 1.4664.
 
The Aussie inched up 0.6% to 0.7413 to one-month highs after the Australian central bank announced its decision to leave monetary policy unchanged, in line with expectations, and stated that its decision was consistent with sustainable growth.

Investors’ focus will now shift to the eurozone’s gross domestic product report, expected to remain unchanged at 0.5% quarter-over-quarter and 1.5% year-over-year. 
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07 / 06 / 2016 | Technical Analysis

USD/JPY: Falls below session highs of 107.88

European Session
The USD/JPY pair has been trading downwards since the 30th of May 2016, led by a risk-aversion sentiment that drove the pair from as high as 111.43 to as low as 106.37.

 The major rose during the course of the day on Monday, reaching the intraday high of 107.64. Today, the pair moved higher for a second consecutive day, hitting the session high of 107.88, but subsequently fell lower to 107.60 at the start of the European session.

The dollar has not managed to find a sustainable buying interest yet, as the likelihood of a near-term rate hike has declined considerably, after the disappointing non-farm payrolls report.

In the event that the price breaks above the session high of 107.88, the pair could rise up to 108.31 and 108.90 in extension.

On the flip side, on a sustained move below 107.54, the pair could find support at 107.13 and Friday’s low at 106.37 respectively. 



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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06 / 06 / 2016 | Market News

The greenback plunged to three-week lows

The U.S. dollar fell to three-week lows against its other major counterparts on Friday, after the release of a disappointing U.S. jobs report for May that crashed expectations of a June rate hike by the Fed.
 
The U.S. dollar that tracks the greenback’s performance against a basket of six other peers dropped 1.74% at 93.9 late Friday, registering the weakest level since the 12th of May. The index finished the week losing 1.54%.
 
A report from the U.S. Labor Department released earlier on Friday, indicated that the economy added only 38,000 jobs in May, marking the smallest increase since September 2010. Analysts had expected that nonfarm payrolls would increase to 164,000.
 
April’s print was downwardly revised to 123,000 from an initial estimate of 160,000. The unemployment rate dropped to 4.7% from 5% in April, as more people dropped out of the labour force.

The weaker-than-expected report cast doubts over the possibility of an interest rate hike by the Federal Reserve in the near-term and triggered new concerns over slowing global growth.

The U.S. dollar strengthened against the other major currencies last month, after the Federal Reserve Chair Janet Yellen and other policymakers reported that the U.S. economy gained enough traction to underpin higher interest rates. Higher rates will boost the greenback, as they will make it more appealing to yield-seeking investors.
 
The dollar plummeted more than 2% against the Japanese yen, with USD/JPY losing 2.15% at 106.53 late Friday. The pair registered a weekly loss of 3.84%.
 
The single currency edged higher, with EUR/USD soaring 1.91% to 1.1366, posting the largest one-day gain since the 3rd of December 2015.
 
The sterling also inched up, with GBP/USD gaining 0.73% to 1.4528, but gains remained limited amid uncertainty over the upcoming British referendum on Britain’s E.U. membership.

Today, market watchers will be closely monitoring Fed Chair Janet Yellen’s speech at an event in Philadelphia for new signals on the timing of future rate hikes. In addition, investors will be looking at Germany’s data on factory orders.
 
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06 / 06 / 2016 | Technical Analysis

EUR/USD: Retreats from highs, trading at 1.1344

European Session
The EUR/USD has been trading in a broad range since the 23rd of May 2016, with the price ranging between the levels of 1.1235 and 1.1098.

The major rose sharply on Friday, hitting the intraday high of 1.1375, after the release of the disappointing U.S. nonfarm payrolls report. The print came at 38,000 against the expected 164,000 figure. Today, the pair eased gains trading at 1.1344, ahead of Janet Yellen’s speech due later in the day. Consensus expects the Fed Chair’s speech to be in line with her counterparts.

In the event that the price breaks above Friday’s high of 1.1375, the pair could escalate up to 1.1436 and 1.1466 respectively.

Conversely, in the scenario where the price breaks below 1.1310, the pair could find support at 1.1268 and 1.1235 in extension.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
 
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03 / 06 / 2016 | Technical Analysis

USD/JPY: Dropping down to 107.52 after downbeat NFP report

North American Session
The USD/JPY pair has been trading downwards since the 30th of May 2016, with the bears leading the price from as high as 111.43 to as low as 107.52.

The pair fell during the course the day of Thursday, reaching the daily low of 108.55. Today, the pair traded sideways before plunging to 107.66, in the wake of the release of the disappointing nonfarm payrolls report.

The U.S. Labor Department indicated that the economy added 38,000 new jobs in May, surprising expectations for an increase of 164,000. The downbeat labour market report eliminates the possibilities of a Fed rate hike in June and increases the pair’s vulnerability.

In the event that the pair continues drifting even lower, the pair could extend its losses to 106.75 and 106.16 in extension.

On the flip side, in the scenario where the price breaks above 109.12, the pair could rise up to 109.57 and 110.09 respectively.  



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
 
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03 / 06 / 2016 | Market News

Dollar moving ahead of nonfarm payrolls

The greenback fell against the Japanese yen and held steady against the single currency on Friday, ahead of the release of the nonfarm payrolls report due later in the day.

Market participants were wary after the release of U.S. labour market data on Thursday, indicating a mixed picture of the strength of the jobs market. A report from the ADP payroll processing company showed that non-farm private employment increased by 137,000 in May, slightly lower than expectations for a 175,000 increase.
 
Another report from the U.S. Department of Labor indicated that the number of people applying for unemployment benefits in the week ending May 28th decreased by 1,000 to 267,000 from the previous week’s 268,000 figure. Economists had expected initial jobless claims to increase by 2,000 to 270,000.
 
The USD/JPY pair slipped 0.13% to 108.73, the lowest level since the 16th of May. The yen remained underpinned after the Japanese Prime Minister revealed on Tuesday that he was intending the delay a planned sales tax raise amid persistent weakness in the country’s economy. He also said that he was planning to employ a fiscal stimulus package later in 2016.
 
The EUR/USD pair was slightly changed at 1.1153. On Thursday, the European Central Bank announced its decision to leave the benchmark interest rate unchanged at 0.0%, in accordance with economists’ expectations. Moreover, the central bank upgraded its growth forecast for 2016 up to 1.6% from 1.4%, but left its forecasts for 2017 and 2018 unchanged.
 
In a press conference shortly after the decision, the ECB President Mario Draghi stressed that inflation in the eurozone is likely to remain low or even negative for some time.  
 
Elsewhere, the Australian dollar extended its gains, following the release of a strong services survey. The AUD/USD pair inched up 0.11% at 0.7237.  The AIG services index climbed to 51.1 in May from 49.7 a month before, pushing the indicator into positive territory. Capacity utilization edged lower last month and price measures remained subdued, signaling a lack of inflation pressure.

The U.S. dollar index, which tracks the greenback’s performance against six other major counterparts, was steady at 95.53. 
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03 / 06 / 2016 | Technical Analysis

EUR/USD: Consolidating around 1.1151 ahead of NFP data

European Session
The EUR/USD pair has been trading in a broad range since the 23rd of May 2016, with the price ranging between the levels of 1.1221 and 1.1098.

The major went back and forth on Thursday, reaching the daily high of 1.1221 to subsequently drop down to 1.1155, after the ECB shocked the markets with a conservative approach and marginal revisions to growth forecasts and inflation.  Today the pair traded sideways, consolidating around 1.1151 ahead of today’s Non-farm payrolls report and the rest of the labour market figures.

In the event that the price breaks below the bottom of the range at 1.1098, the pair could find support at 1.1055 and 1.1023 in extension.

Alternatively, in the scenario where the price breaks above yesterday’s highs of 1.1221, the pair could go up to 1.1250 and 1.1270 respectively. 



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.
 
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02 / 06 / 2016 | Technical Analysis

AUD/USD: Drops to 0.7200 in the wake of the ADP report

North American Session
The AUD/USD pair has been trading sideways since the 24th of May 2016, with the price trading in a broad range between the levels of 0.7299 and 0.7150.

The major rose significantly on Wednesday reaching the high of 0.7299, but subsequently corrected lower, ending the day at 0.7258. Today, the pair fell sharply hitting the session low of 0.7200, following the release of the ADP report on the U.S. private sector employment that came as expected.

In the event that the pair pushes even lower, the price could find support at 0.7180 and 0.7150 respectively.

Alternatively, in the scenario where the price breaks above 0.7250, the pair could rise up to 0.7262 and 0.7299 in extension.



Please note: The content in this daily technical analysis article should not be taken as investment advice. It comprises our personal view.

 
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02 / 06 / 2016 | Market News

Dollar drops to two-week lows against the yen

The greenback fell to new two-week lows against the Japanese yen, a day after the Japanese PM delayed a scheduled sales tax hike, triggering speculation that Japan is shifting from a monetary easing programme towards fiscal stimulus.
 
 The USD/JPY pair fell 0.48% to 109.01, the weakest level since the 18th of May 2016. The yen remained supported after Shinzo Abe said on Tuesday that he was planning to delay a sales tax raise amid escalating weakness in the economy. He also announced his plans to employ a fiscal stimulus package later in 2016.
 
AUD/USD also inched down 0.33% to 0.7236 after the release of mixed data from Australia.  A report from the Australian Bureau of Statistics showed that retail sales increased by 0.2% in April, missing expectations for a 0.3% rise, after an increase of 0.45 in March.
 
Another report from Australia revealed that the country’s trade deficit narrowed to A$1.58 billion in April from a downwardly revised print of A$1.97 billion in the month before.  Economists had expected the trade deficit to widen to A$2.00 billion.
 
The New Zealand dollar was little changed at 0.6812 against the dollar, ahead of the ADP nonfarm payrolls report.
 
The U.S. dollar index which tracks the greenback's performance against a group of six other counterparts fell 0.26% to 95.17, the lowest level since the 27th of May. The greenback remained vulnerable after a string of mixed U.S. economic reports added to concerns over whether the Fed will hike rates in June.
 
The Institute of Supply Management reported on Wednesday that its manufacturing index increased for a second month in May. The data came after a similar report by the research group Markit showed that U.S. factory activity deteriorated in May, reaching the lowest level since September 2009.
 
Another report revealed that U.S. consumer spending registered the highest monthly decline in April since January 2011.

Investors were shifting their attention to the release of the ADP report on nonfarm payrolls and initial jobless claims due later in the day for further clues on the status of the labour market and possible indications of the timing of the next U.S. rate hike.
 
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