Updated May 23, 2013 4:00:00 AM
It’s been a volatile 24 hours for USDJPY, which has traded in a 200 pip range, after trading in a 100 pip range for most of the last week. After rallying on the back of the Bernanke testimony on Wednesday, it has retreated so far today, falling back below 101.50 – its lowest level since mid-May. Key drivers of yen strength so far include: • The fall in purchases of foreign stocks and bonds [...] Continue Reading ...
Updated May 22, 2013 4:30:00 PM
Cable has once again extended its decline (over the past 48-hours) on the back of a combination of GBP weakness and USD strength. This was prompted by both fundamental and technical factors. Fundamental highlights contributing to GBPUSD decline: • UK April CPI: +0.2% vs. expected +0.4% MoM
• UK April Retail Sales: -1.3% vs. consensus +0.1% MoM
• UK April Public Finances: -10.8B vs. exp. -4.0B
• Bank of England meeting minutes were [...] Continue Reading ...
Updated May 22, 2013 11:35:00 AM
Fed Chairman Ben Bernanke’s testimony on the economy to the US Congress, has so far been the epitome of neutral. In typical Bernanke style he has oozed caution, unwilling to side with the doves or the hawks, leaving the markets in a bit of a fluster. Highlights: • He said that policy will remain accommodative “as long as needed”. • Premature tightening “increases the risk of slowing or ending the recovery”. • [...] Continue Reading ...
Updated May 22, 2013 11:30:00 AM
The Bank of England minutes from the May meeting released this morning was largely as expected and showed that Governor King was once again outvoted. The soon-departing Governor voted in favor of a £25B expansion of quantitative easing (QE) along with MPC members Miles and Fisher. However, the doves were unable to gather enough support as the majority decided to keep policy steady. Minutes are backward looking as they reveal the MPC’s discussion on May [...] Continue Reading ...
Updated May 22, 2013 11:00:00 AM
When stock markets are at record highs it can be a stressful time as history tells us that bull runs always come to an end. In the past, a lead indicator of market sentiment has been the gold/ silver ratio. This is the gold price divided by the price of silver, when it is moving higher the gold price is outpacing gains in silver, and vice versa. Since gold is considered a safe haven [...] Continue Reading ...
Updated May 22, 2013 8:50:00 AM
The dollar is back in the ascendency today as we lead up to the key event that ALL eyes will be on: Fed chairman Bernanke’s testimony to Congress at 1500 BST/ 1000 ET. USDJPY is close to the top of its range at 103.30, while the dollar index has also broken higher and looks like it might make another stab at 84.00. So what are the risks from Bernanke’s speech for USDJPY traders? • [...] Continue Reading ...
Updated May 22, 2013 5:30:00 AM
It’s been a rough morning for GBP, with economic data thwarting early attempts at a GBP recovery. BOE minutes, retail sales and public sector data all weighed on the pound, pushing it below 1.5100 – a key support level. Data details: • BOE minutes were as expected: 6-3 vote to keep QE on hold. This reinforces he view that the BOE is practically in limbo until Mark Carney takes the helm in July. [...] Continue Reading ...
Updated May 22, 2013 1:09:38 AM
The Bank of Japan elected not to adjust its current easing plans. Instead, the bank retained its commitment to its plan announced in April to increase the supply of money in the economy by 60-70 trillion a year. At the same time the bank upgraded its economic assessment of Japan. This was all expected and fairly mundane, the market was really looking for guidance on how the BoJ plans to address the threat of rising [...] Continue Reading ...
Updated May 21, 2013 6:12:15 PM
NZDCAD has been on a downward trajectory since early April, with the sell-off intensifying after the pair broke through a key support zone around 0.8450 – bottom of daily Ichimoku cloud, trend line support and 100day SMA. The resulting push lower sent the pair towards its 200day SMA, yet this support zone has held up thus far. In fact, the pair has drifted higher in the past few days as part of a natural retracement [...] Continue Reading ...
Updated May 21, 2013 5:45:00 PM
Key technical bullets over the past 24-hours: • Rebuffed by the 200-hour sma yesterday
• Found support into the 38.2% retracement around $22.06
• Hourly RSI bounced off the key 40 level (bullish)
• Appears to be consolidating within an hourly Bull Flag – Resistance: $22.60
• Hourly RSI has broken above corresponding resistance prior to price
• Preferred Elliot Wave count becomes invalid upon break of $21.80 Potential levels of resistance (only valid upon [...] Continue Reading ...
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