30 / 09 / 2016 | Technical Analysis

AUD/USD: Gains traction ahead of US releases

North American Session

Having dipped to session lows of 0.7589, the AUD/USD managed to recover the majority of its losses and it currently trades around the 0.7625/30 band.
 
The major failed to find support from Chinese manufacturing PMI data, amid Deutsche Bank-led risk aversion sentiment.  Attention turns to US economic releases, including core PCE prince index, personal income/spending data, Chicago PMI and revised UoM consumer sentiment for fresh short-term impetus on the pair.

Immediate resistance is located at 0.7635, which if broken, could open the doors to 0.7664 and 0.7701 respectively. On the flip side, in the event that the price breaks below session lows of 0.7588 the pair could head down to 0.7571 and 0.7345 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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30 / 09 / 2016 | Market News

Greenback strengthens ahead of a mix of US economic releases

The US dollar jumped to 1-1/2 week highs against its other major peers on Friday, as market participants awaited the release of a string of US economic reports due out later in the day.

Investors eyed the release of US personal spending and consumer sentiment data, as well as manufacturing activity report in the Chicago area for fresh clues on the health of the world’s largest economy.

The euro edged lower 0.35% to 1.1179 against the dollar. Official statistics released on Friday indicated that the eurozone’s consumer price inflation advanced by 0.4% in September, in accordance with forecasts, and following a print of 0.2% in the previous month.

Core CPI, excluding food, energy, tobacco and alcohol costs, increased by 0.8% this month, a tad below expectations for a 0.9% rise and the previous month’s 0.8% rise.

The data came out shortly after the release of a report showing that German retail sales declined 0.4% last month, missing expectations for a 0.3% drop.

The dollar was steady at 101.07 against the yen, after touching a one-week high of 101.86 on Thursday. Data released earlier in Japan revealed that household spending fell 3.7% in August, surprising expectations for a 1.0% drop.

A separate report indicated that Tokyo’s core CPI, excluding fresh food, declined by an annualised rate of 0.5%, against expectations of a 0.4% drop.

The sterling inched lower 0.11% at 1.2953 against the dollar, still close to last week’s one-month trough of 1.2912.

A report from the UK Office for National Statistics showed on Friday that GDP rose to 0.7% in the three months to July, up from a previous reading of 0.6%. Economists expected the GDP to rise to 0.6%.

On an annual basis, the GDP rose 2.1% in the second quarter, up from a previous reading of 1.9%, but missing expectations for a 2.2% increase.

Another report revealed that the UK current account deficit widened to £28.7 billion in the second quarter from £27.0 billion in the previous quarter. Economists had expected the deficit to widen to £30.5 billion.

The dollar also edged higher 0.35% to trade at 0.9695 against the Swiss franc.

 

 
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30 / 09 / 2016 | Technical Analysis

USD/JPY: Drops sharply to session lows of 100.76

European Session
A renewed selling pressure around the dollar seems to have emerged, dragging the USD/JPY pair lower to trade back around the 100.80/75 region.
 
The pair initially jumped to 101.76, finding support from BoJ intervention talks and Thursday’s upward revision of US GDP growth for the second quarter, before falling to session lows of 100.76.  

The major came under new selling pressure amid a risk aversion sentiment in equity markets on concerns over Deutsche Bank’s status that is weighing on investor sentiment and lending support to the safe-haven yen.

Investors will be monitoring today a plethora of US economic releases, including the release of Federal Reserve’s preferred inflation gauge, Core PCE Price Index, personal spending data, Chicago PMI and revised UoM consumer sentiment.

On a sustained move below 100.76, the pair could aim for 100.30 and 100.08 respectively. On the upside, a break above 101.16 could lift the pair up to 101.29 and 101.68 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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29 / 09 / 2016 | Technical Analysis

USD/CAD: Fades the upside near 1.3080

North American Session
The USD/CAD pair has been trying to gain momentum unsuccessfully, after falling to session lows near 1.3048 in the aftermath of the OPEC output freeze deal.

As of writing, the pair trades around 1.3085/80. The recent deal lent support to the West Texas Intermediate barrel, sending it to levels above $47.00, despite the subsequent correction lower.

The dovish tone from the Bank of Canada, via recent remarks by BoC Governor, keeps limiting the upside in Loonie. The divergence in monetary policy between the Canadian and US central banks remains in the back burner as a driver fur further weakness in the major.

In the event that the price breaks below session lows of 1.3048, the pair could head down to 1.3005 and 1.2939 respectively. On the flip side, in the scenario where the price manages to break above 1.3191, the pair could rise up to 1.3218 and 1.3280 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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29 / 09 / 2016 | Market News

Greenback soars vs. yen as OPEC deal boosts risk appetite

The US dollar jumped 1% against the safe-haven yen on Thursday to reach an eight-day high, as investors sought riskier assets following an OPEC deal to cut oil production.
 
The Organisation of the Petroleum Exporting Countries reported it would trim output to a range of 32.5 million to 33.0 million barrels per day, marking a reduction of 0.7% – 2.2%.

The currencies of the oil-exporting countries soared after the agreement late Wednesday, but were slightly lower on Thursday, reflecting a fall in oil prices, as markets became more skeptical on how the organization would implement the output cut.  
 
The Canadian dollar and the Norwegian krone, however, still traded more than 1% higher than their levels before the deal was announced. The Norwegian krone was a winner, touching a 14-month high of 9.00 against the euro.
The US dollar climbed as much as 1.1% to trade at 101.75 against the yen, its highest level since the 21st September.

The Aussie also reached a three-week high of 0.7711, as Australia exports several natural resources even though it is an importer of oil, but later retraced 0.3%.

Analysts argue that the oil-cut agreement is posing critical questions as to how much each country will produce to be decided at the next OPEC meeting in November, when an innovation to join cuts could also be extended to non-OPEC countries like Russia.

The euro was steady at 1.1224 against the dollar, with investors eyeing German inflation data. 
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29 / 09 / 2016 | Technical Analysis

EUR/GBP: Losing steam near 0.8617

European Session
Having reached session highs near 0.8626, the EUR/GBP pair has now corrected to the 0.8620/15 band.
 
Both the euro and the sterling are trading in narrow ranges today, amid a strong recovery of the dollar. Additionally, risk-on sentiment in global markets seems to have dampened, following yesterday’s boost after oil producers reached a preliminary agreement to trim oil production.

Focus today will be on EMU’s economic sentiment and advanced inflation figures for September in Germany, while Bank of England’s consumer credit, mortgage approvals and M4 money supply are all due out later in the day.

A break below 0.8555 would aim for 0.8522 and 0.8456 respectively. On the flip side, a break above 0.8678 would open the doors to 0.8717 and 0.8738 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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28 / 09 / 2016 | Technical Analysis

GBP/USD: Consolidates around 1.3017

North American Session
The GBP/USD pair failed to break above the 1.3030 level and corrected to the downside, confined in a consolidation pattern.
 
The major ranged between the levels of 1.2984 and 1.3030 during the course of the day, unable to find support to extend its recovery. As of writing, the pair is trading at 1.3017.

Investors turn their attention to the US report on durable goods, Fed members’ speeches and Janet Yellen’s testimony to the US House committee.

In the event that the price breaks above 1.3042, the pair could head to 1.3065 and 1.3121 respectively. On the downside, in the scenario where the price breaks below 1.2963, the pair could find support at 1.2945 and 1.2916 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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28 / 09 / 2016 | Market News

Dollar pulls back from 1-month lows against the yen, euro retreats

The US dollar inched up versus the Japanese yen on Wednesday, while the euro retreated on fears over the health of the European financial system.

The greenback inched up 0.2% to 100.69 against the yen, regaining some ground after hitting a one-month trough of 100.08 on Tuesday.

The euro was unchanged at 1.1209 against the dollar, drifting away from weekly highs of 1.1280 posted on Monday.

The common currency retreated on Tuesday, as stock prices in Deutsche Bank – Germany’s largest lender – dipped to record low on concerns about a $14 billion demand from the US Department of Justice.  

The Australian dollar was flat at 0.7670 against its US counterpart, still close to the previous session’s two-and-a-half week high of 0.7696, while New Zealand inched down 0.38% at 0.7525.

The US dollar index, which tracks the greenback’s performance against a basket of six other currencies, inched up 0.1% to 95.55.

Official statistics released on Tuesday revealed that US consumer confidence improved, while a service sector survey came in better than expected.

Federal Reserve Chairman Stanley Fischer stated on  Tuesday that the US central bank should refrain from hiking rates too much, a remark that dragged the 10-year US bond yield to a three-week low, also putting pressure on the dollar.

While the Federal Reserve’s monetary policy statement last week pointed to the likelihood of a rise in rates in December, money market futures have since been lowering the probability of a December hike.

The futures now price in a less than 50% possibility of a rate hike by December, as opposed to more than 60% after the central bank’s policy meeting last week.

Federal Reserve Chair will give a semi-annual testimony later before a Congressional committee, although her main focus will be on financial regulation. 
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28 / 09 / 2016 | Technical Analysis

USD/CHF: Hits fresh session highs at 0.9730

European Session
The USD/CHF pair has been building on yesterday’s gains, now lifting the price to reach new session highs of 0.9730.

The pair bounced off yesterday’s lows of 0.9673 and now extends further into positive territory, as the dollar gains ground against most of the other currencies.

Risk-on sentiment supports the uptick in the pair, while markets shrugged off strong Swiss data, showing that the Swiss consumption indicator advanced to 1.53 from 1.45 and that the KOF economic barometer inched up to 100.5 against a previous print of 99.8.

Attention remains on the dollar price action ahead of the US economic releases and Fed speeches due later in the day.

Immediate resistance is located at 0.9744, which if broken, the pair could extend its gains up to 0.9770 and 0.9785 respectively. On the flip side, in the event that the price breaks below 0.9661, the pair could head to 0.9645 and 0.9616 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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27 / 09 / 2016 | General

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