Updated May 24, 2013 6:20:00 AM
Written by Kathleen Brooks
The first phase of Abenomics, which started at the end of 2012, involved stimulating the economy and expanding the monetary base to JPY 270 trillion, resulting in a sharp drop in the JPY and a large boost for the Nikkei. However, the events of the last few days have caused this relationship to break down. The Nikkei’s large decline on Thursday fuelled a wave of risk aversion, which boosted the yen. This isn’t the way [...] Continue Reading ...
Updated May 24, 2013 5:00:00 AM
Written by Kathleen Brooks
A mix of a stronger than expected German IFO survey for May and a weaker dollar has boosted the EUR this morning and EURUSD is now testing key resistance at 1.2980 – the 50-day moving average. But any gains may be sold into as we approach a key resistance zone around 1.3000. • Key resistance level between 1.3020-40 – the 200-day sma and the base of the daily cloud, along with being a psychologically important [...] Continue Reading ...
Updated May 24, 2013 12:18:55 AM
Written by Chris Tedder
Up by the stairs, down by the elevator. Yesterday’s equity sell-off in Japan highlights the somewhat shaky foundations that this year’s equity rally has been built upon. Optimism is contagious, but pessimism is arguably more infectious. Shortly after hitting a resistance zone around 16,000 the Nikkei 225 lost the most ground in one day since the tragic earthquake of 2011, plummeting over 7.0% in yesterday’s session. But there wasn’t one overriding cause of the sell-off. [...] Continue Reading ...
Updated May 23, 2013 7:32:00 PM
Written by Chris Tedder
NZDUSD tested a support zone yesterday around 0.8000 on the back of broad USD strength. Fed Chairmen Ben Bernanke sent the market into a frenzy after alluding to the possibility that the Fed may end QE3 sooner than expected if economic data provides the base for an early exit. The fact that confirmation from strong US economic data is needed to justify an early exit by the fed creates the opportunity for USD weakness if [...] Continue Reading ...
Updated May 23, 2013 3:30:00 PM
Written by Eric Viloria, CMT
AUD/USD has experienced a sharp decline over the past month and the drop may have found support below the 0.9600 figure. For nearly 10 months, the pair was trading in a horizontal channel with support above the 1.01 figure and resistance above 1.06. The height of the channel projected from the break below channel support extended to about the 0.9600 figure and the 2012 lows which occurred in June of last year are just beneath [...] Continue Reading ...
Updated May 23, 2013 2:30:00 PM
Written by Chris Tevere, CMT
Let’s face it, the whole purpose of doing any form of analysis, whether that is technical, fundamental or statistical, is to try to improve our odds of being successful on any one particular trade. As many of you know, one of my favorite strategies is the utilization of a European opening range and it will typically focus on EURUSD, although it could be applied to any of the European majors. For those of you unfamiliar [...] Continue Reading ...
Updated May 23, 2013 11:00:00 AM
Written by Eric Viloria, CMT
The Japanese yen is the big mover today in the G10 space after reports showing that Japanese investors returned to being net sellers of foreign bonds after 3 weeks as net buyers of overseas debt. Ministry of Finance flow data showed that Japanese investors sold a net ¥804.4B in the week ended May 17 To add to that, the private sector reading of May manufacturing PMI in China surprisingly fell below the 50 threshold with [...] Continue Reading ...
Updated May 23, 2013 7:00:00 AM
Written by Kathleen Brooks
There have been some violent moves across asset classes this morning after a perfect storm of central bank chatter, weak Chinese economic data and some large declines in Asian equities knock risk sentiment. European stocks are down 2% or more, and US stock market futures don’t look much better. The yen and CHF are higher in the FX space as risk aversion takes hold. So what is driving these moves? It could be down [...] Continue Reading ...
Updated May 23, 2013 4:00:00 AM
Written by Kathleen Brooks
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
Written by Chris Tevere, CMT
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 ...
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