OctaFX_Farid Posted October 30, 2012 Author Share Posted October 30, 2012 Forex News: Euro Rises on Surprising Spanish GDP THE TAKEAWAY: Spanish GDP drops by 0.3% in Q3, better than expected -> Better GDP could lower expectations for bailout -> Euro rises The Spanish economy shrank by 0.3% in the third quarter, marking 4 straight quarters of economic contraction. However the drop in gross domestic product was better than the expected 0.4% decline, as predicted by forex news sources, and better than the previous quarter’s 0.4% drop in GDP. The third quarter saw a 1.6% drop in GDP from Q3 of 2011, according to National Statistics Institute. Spain is said to be considering a bailout from the EU via the ESM bailout fund, but has thus far resisted asking for the aid. An improving economy could lower our expectations for a Spanish bailout request. In forex markets, the Euro climbed on the positive economic news, despite its effect on bailout expectations, rising close to 1.2950 against the US Dollar. EURUSD has since erased those gains following disappointing German employment data. Support could be provided by a rising month-long trend line which is currently near 1.2843. EURUSD 15-minute: October 30, 2012 October 30, 2012 OctaFX.Com News Updates Forex News: Euro Erases Gains on Intense Rise in German Unemployment THE TAKEAWAY: German unemployment rises by 20,000 in October -> German unemployment rate at 6.9% -> Euro reverses gains The amount of people looking for work in Germany has increased at the fastest pace in 6 months as the unemployment rate remained at an 11-month high. The rise in unemployment during October was 20,000 (seasonally adjusted), double the expected 10,000 person rise in those unemployed, and significantly higher than last month’s revised 12 thousand rise in amount of people looking for work. The unemployment rate remains at 6.9% for the second month, as last month’s rate was revised higher from 6.8%, according to the Federal Labor Agency. The amount of people out of work in Germany now totals 2.94 million. The German economy has suffered because of the Euro debt crisis, and the GDP only rose 0.3% in the second quarter. Germany is the biggest economy in the Euro and signs of economic suffering are Euro negative in forex markets. In currency trading, EURUSD erased earlier gains that were made following a Spanish GDP release and retracted from a short term 1.2950 resistance. Support could now be provided by a rising month-long trend line, which is currently near 1.2843. EURUSD 15-minute: October 30, 2012 October 30, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted October 30, 2012 Author Share Posted October 30, 2012 Forex News: Italian Benchmark Bond Prices Soar, and so Does the Euro Following a meeting in Berlin, France Finance Minister Moscovici and German Finance Minister Schaeuble announced that they are aiming for a solution to Greece by November. They said that they both want to see Greece remain in the Euro-zone, and that the solution will be discussed further in tomorrow’s Euro-group meeting tomorrow. Schaeuble declined to comment on the size of the funding gap in Greece, but added that they can’t go in the opposite direction on debt reduction. Moscovici said he doesn’t want to reopen the discussion on Euro bonds. Greece has previously said that the government might run out of money by November. The release of these statements had little effect on forex markets. Obviously, the biggest story of the day is Hurricane Sandy and its impact on the East Coast of the US. Bloomberg is reporting estimates of 20 billion dollars of damages from the hurricane and US stock markets will remain closed today. The US markets may reopen as soon as tomorrow, and there has been no noticeable effect on currency trading from the hurricane since some early losses to EURUSD on Monday morning. The big catalyst in today’s trading was the BoJ decision to expand asset purchases. The stimulus expansion barely met expectations and therefore had a positive effect on Yen trading. BoJ’s Shirakawa and a government official speaking after the meeting both agreed that the central bank must continue to act until an end of deflation. In Spain, the GDP in Q3 was reported to have contracted less than expected and therefore gave a brief boost to the Euro to just a bit short of 1.2950 in trading. That gain was soon erased by higher than expected unemployment in Germany. Finally, an Italian bond sale saw a drop in 10-year bond yields to 4.92% from 5.24% in September’s sale. EURUSD bounced back towards 1.2950 following the sale news, where the currency is still trading. The North American session calendar is light and traders should keep an eye out for updates relating to Greece or any serious changes to damage estimates from the hurricane. EURUSD Daily: October 30, 2012 October 30, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted October 31, 2012 Author Share Posted October 31, 2012 OctaFX.Com - ECB: Loan demand sags in slack eurozone economy Eurozone central bank reports 'pronounced' fall in demand for loans as businesses hold back FRANKFURT, Germany (AP) -- The European Central Bank has more dismal numbers about the slack eurozone economy. The chief monetary authority for the euro reports a "pronounced net decline" in business demand for credit in the third quarter. Its quarterly bank lending survey shows that companies are not asking for money. Credit shows signs of shrinking even though banks are themselves finding it easier to raise money as the turmoil from the eurozone debt crisis has eased. The key figure showed a minus 28 percent balance, reflecting the difference between banks reporting more and less loan demand. The figure worsened from 25 percent in the second quarter. The eurozone economy shrank 0.2 percent in the second quarter and many fear it could sink into recession when third quarter figures come out Nov. 15. Oct 31, 2012 OctaFX.Com News Updates OctaFX.Com - ECB: Loan demand sags in slack eurozone economy Eurozone central bank reports 'pronounced' fall in demand for loans as businesses hold back Unemployment for the 17 countries that use the euro rose to a record high of 11.6 percent in September. Oct 31, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 1, 2012 Author Share Posted November 1, 2012 OctaFX.Com - Forex Analysis: US Dollar Classic Technical Report 11.01.2012 Prices remain wedged between resistance-turned-support at the upper boundary of a falling channel set from the June 1 high (9884) and the 38.2% Fibonacci entrancement at 9963. A break higher exposes the 50% Fib at 10032. Alternatively, a drop below support targets rising trend line support at 9867. Nov 1, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 2, 2012 Author Share Posted November 2, 2012 OctaFX.Com - Forex News: Sterling Rises as UK Construction Activity Expands THE TAKEAWAY: UK construction PMI for October rises to 50.9 -> Report is very pessimistic despite expansion -> Sterling rises Following two months of reduction, UK construction activity expanded in October according to Markit’s Purchasing Managers’ Index. The construction PMI was reported at 50.9, beating expectations for an index result of 49 and higher than last month’s 49.5 index result. A PMI result below 50.00 indicates deterioration in activity. Civil engineering saw a rise in construction output, while residential output was the weakest area of construction, and commercial activity was marginally reduced. New order volumes for construction were lower which led to lower employment in the industry. Markit’s Senior Economist Tim Moore said that, ‘the bigger picture remains bleak given ongoing falls in new orders alongside renewed job cuts across the sector over the month.’ Yet despite some of the pessimism in the report, Sterling climbed higher in forex trading on the surprising index level. GBPUSD climbed above 1.6100 following the release of the forex news. Resistance could be provided by a two week high around 1.6174. GBPUSD 15-minute: November 2, 2012 Nov 2, 2012 OctaFX.Com News Updates OctaFX.Com - Forex News: The Dollar Roars Back With Jump in NFPs, Eyes Turn to Election The Takeaway: Greater than expected increase in Non-farm Payrolls >> Improving jobs market removes expectations for further Fed stimulus >> US Dollar Rallies The October US labor market added an impressive 171k non-farm jobs versus an expected 125k in the final employment report before the November elections. The US dollar gained sharply against all major counterparts, especially the Japanese Yen and gold as signs of an improving economy start to erode expectations for more stimulus from the Federal Reserve. The report was also a boon for risky assets in other markets, as US and world equity futures as well as crude erased previous losses on the heels of the report. Today’s report represents the largest gain since the August NFP report, where the labor market added 192k non-farm jobs. The string of large gains since July 2012 along with better consumer confidence further supports expectations that the US economy is improving despite ongoing economic worries in Europe. The better data is expected to remove expectations for more stimulus in the world’s largest economy, and may bring an early end to the Fed’s QE3 purchases of $40 billion in mortgage backed securities per month. Even with these welcomed improvements, the central bank may not move as quickly to tighten to prevent stepping on the economy too quickly. Boston Federal Reserve President Eric Rosengren stated on Thursday that he supported asset purchases until unemployment fell to 7.25%, and a zero-interest rate policy until the rate dropped to 6.5%. Atlanta Federal Reserve President Dennis Lockhart also hinted at no quick exit from additional asset purchases despite better economic data. GBPUSD 15-minute: November 2, 2012 Generated with FXCM Trading Station/Marketscope 2.0. 5 minute chart, vertical line indicates time of data release. The US dollar rallied against key counterparts after the report. At the time of writing, the US dollar is higher by 0.702% against the Euro, 0.572% against the Japanese yen, 1.10% against gold and 1.51% against silver. Equity futures are gaining on higher risk appetite, with the benchmark S&P500 up by 0.464% at 1430 and Dow Jones Industrial Average mirroring with at 0.311% gain at 13200. Nov 2, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 5, 2012 Author Share Posted November 5, 2012 OctaFX.Com - Dollar strength keeps gold gains in check MADRID (MarketWatch) — Gold futures rose Monday to recover a fraction of recently lost ground last week, but further moves higher for the dollar were keeping a lid on gains as investors got jittery ahead of the U.S. presidential election. Gold futures for December delivery GCZ2 ticked up $6.50 to $1,681.70 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. In regular trading hours on Friday, gold futures tumbled $40.30, or 2.4%, to settle at $1,675.20 an ounce, the metal’s lowest level since last August. See: Gold drops more than $40, suffers fourth weekly loss “Gold continues in a consolidation phase within an ongoing bull trend,” said Ross Norman, chief executive officer at Sharps Pixley. “A lot of people are frustrated by gold’s actions since last summer, but good jobs data last Friday translated into a stronger dollar,” he said. “On the other side of that is gold weakness. The market is making a small, but steady recovery, but dollar strength continues to weigh heavily on gold at the moment.” Gold losses were triggered by a better-than-expected report on U.S. employment, which showed payrolls rose 171,000 in October, well above the 120,000 new jobs that economists had expected. See: U.S. adds 171,000 jobs as hiring picks up That news boosted the dollar. A stronger dollar tends to weigh on prices for dollar-denominated commodities such as gold, since it makes them more expensive for holders of other currencies. The ICE dollar index DX-Y.NYB recently rose to 80.729, up from 80.600 in late North American trading Friday. See: Dollar rallies as jobs data spur QE doubts The euro EURUSD dropped to a nearly two-month low against the greenback on Monday amid renewed uncertainty over Greece’s next tranche of bailout money. Some caution ahead of the U.S. election also underpinned the greenback. U.S. stocks traded lower in early action and Europe and Asia stock markets also fell. Julian Jessop at Capital Economics said that the drop for the precious metal on Friday underlined its sensitivity to expectations of further central-bank monetary support. “Commodity markets are probably right to be thinking that they cannot rely both on a strong economic recovery in the U.S. and unlimited largesse from the Fed,” they said. For a stronger rebound, gold will need a new catalyst, Jessop said. “This is likely to come soon in the form of a renewed escalation of the crisis in the euro zone and a revival of safe-haven demand,” he said. Deutsche Bank commodity strategists said that they expected a renewed weakening in the U.S. dollar to help precious-metal returns into the end of the year. Reuters Gold edges higher Monday after dropping 2% in the previous session. “We find a weak seasonal tendency for the U.S. dollar to display extreme weakness during December,” they said. Across the rest of the metals complex, silver for December delivery SIZ2 rose 11 cents to $30.97 an ounce, palladium futures for delivery in the same month PAZ2 fell $1.45 to $598.20 an ounce, while platinum for delivery in January PAF3 fell $1.70 to $1,543.20 an ounce. December copper futures HGZ2 edged down 2 cents to $3.46 per pound. Nov 5, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 6, 2012 Author Share Posted November 6, 2012 OctaFX.Com - Forex Analysis: Dollar at Risk if US Election Yields Decisive Outcome The US Dollar is likely to face selling pressure if the US general election yields a decisive outcome, opening the door for a re-focus on resolving the “fiscal cliff” fiasco. Talking Points All Eyes on US Election, Forex Traders to Welcome Any Decisive Result Euro, Pound May Suffer as Data Boosts Bets on ECB and BOE Stimulus Aussie Dollar Leads Comm Bloc Higher as RBA Leaves Rates Unchanged A busy European economic calendar is likely to be overshadowed as traders await the outcome of the US general election. Financial markets appear broadly chipper, which likely reflects hopes for an easing to the deadlock in Washington DC in the months leading up to today’s ballot. Indeed, a decisive victory by either candidate that opens the door for the current President and legislature to shift their focus toward addressing the fast-approaching “fiscal cliff” – a set of automatic spending cuts and tax hikes slated to trigger at the turn of the calendar year that may tip the US back into recession – is likely to be seen as broadly supportive for risk appetite. Indeed, S&P 500 index futures are pointing higher, warning the safe-haven US Dollar is vulnerable. On the data front, the spotlight is on the final revision of October’s Eurozone PMI Composite reading. Expectations call for confirmation at a 40-month low, an outcome that may put downward pressure on the Euro as forex traders consider deepening recession to increase the probability of additional easing from the ECB. UK Industrial Production is likewise on the docket, with forecasts pointing to another contraction in September. The result may weigh on the British Pound as markets consider the possibility of a QE expansion after the BOE completes the latest round of asset purchases this month. The so-called “commodity bloc” currencies outperformed in overnight trade as risk appetite firmed across financial markets. The MSCI Asia Pacific regional stock index rose 0.2 percent, pulling the growth-geared Canadian and New Zealand Dollars higher against their US namesake. The Australian Dollar outperformed its counterparts after the Reserve Bank of Australia opted to keep rates unchanged at 3.25 percent. RBA Governor Glenn Stevens said that while “risks to the outlook are still seen to be on the downside…prices data [turned out] slightly higher than expected and recent information on the world economy slightly more positive.” Stevens added the effects of past rate cuts continue to filter into the overall economy, hinting that will offer ongoing stimulus even without an additional reduction this time around. Nov 6, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 7, 2012 Author Share Posted November 7, 2012 OctaFX.Com - Forex Analysis: US Dollar Stalls at Resistance as S&P 500 Bounces THE TAKEAWAY:The US Dollar has stalled below technical resistance as the S&P 500 has once again managed to hold up above the stubbornly resilient 1400 level. US DOLLAR TECHNICAL ANALYSIS– Prices narrowly edged though resistance-turned-support at 9963, the 38.2% Fibonacci retracement. Sellers now aim to target 9868-77 area, marked by a rising channel bottom set from mid-September and a falling channel top established from the June 1 high. Resistance is at the 10000 figure, with a break above that aiming for the 50% Fib at 10032. Daily Chart - Created Using FXCM Marketscope 2.0 S&P 500 TECHNICAL ANALYSIS – Prices are retesting support-turned-resistance in the 1424.90-30.90 area, with a break higher aiming to challenge the underside of a rising channel set from the June 4 swing low (now at 1450.30). Near-term support lines up at the 1400 figure, with added reinforcement offered by the 38.2% Fibonacci retracement at 1394.30. A drop below the latter level targets the 50% Fib at 1369.40. Daily Chart - Created Using FXCM Marketscope 2.0 Read more click here Nov 7, 2012 OctaFX.Com News Updates OctaFX.Com - Forex Analysis: Dollar Slowly, Consistently Edges Lower as Equities Swing Dollar Slowly, Consistently Edges Lower as Equities Swing The US Presidential elections have a long standing influence over investor confidence. The outcome of political power in the world’s largest economy can significantly influence growth, trade and financial regulation. However, as with any economic event, this particular driver is set within a hierarchy of fundamental impact. Regardless of who wins the election, it would still be a struggle to answer the United States’ Fiscal Cliff. Furthermore, we have other big-ticket items such as the Euro-area crisis, Chinese regime change and Japanese fiscal countdown that all denote a distinctive impact on global markets. With that in mind, we recognize the market’s unusual activity over the past 24 hours. It is very similar to how we approach the average NFPs release: even though the event’s outcome is not likely to have a lasting influence over a fundamentally-crowded market, the uncertainty its presence carries pumps volatility and sidelines trend generation. Now, as we move forward, we may very well see risk trends regain traction and revive cross-market correlations. Through the past trading session, we witnessed a significant deviation between the standard ‘risk’ measures. While the S&P 500 rallied sharply into resistance (13,300), the Forex’s safe haven US dollar was holding relatively steady. Soon after the NY market close, equities took to a quick reversal while the dollar accelerated into its decline with EURUSD moving back above 1.2825 – yet another contradictory sentiment move. As the election results started to take shape in the overnight, however, risk’s influence started to firm up. With the dollar holding onto its losses, the equity futures found a moderate bounce. Revived correlations are a strong step towards developing a lasting trend. Yet, does a resolution of the US vote equate to a better investment environment. The bigger, international concerns aside; the unconfirmed vote tally leaves the United States with a divided Congress that may struggle to force necessary budgetary changes to avoid the looming fiscal cliff. Euro May Climb on US Crisis Distraction - Juncker Most policy makers (fiscal and monetary) follow academic lines of thought in their expectations of how their efforts will impact their economies and currencies. However, every now-and-then there is an official that acknowledges the speculative influence in the market. Euro Group head Jean-Claude Juncker revealed a streak of ‘trader’ in his outlook when he remarked early Wednesday morning that the US Fiscal Cliff could direct negative attention away from the Euro-area (offsetting the more ‘cheerleading’ effort in suggesting Europe’s fundamentals were better than those of the US and Japan). From a real world market perspective, the countdown to the United States’ self-imposed deficit adjustment can paint a far less stable situation than the more measured austerity balance in the Eurozone. That said, there are two variables in this austerity comparison. The euro’s own fundamental issues are more immediate than the end-of-the-year countdown for the US. This past session, Greece’s general strike set the backdrop to the Parliamentary vote on the new austerity bill (reportedly aiming to cut pensions by 15 percent and raise the retirement age). Spain’s Rajoy suggested he would not ask for a rescue unless forced to - saying he needed to be certain it would lower yields. Today is a Euro-risk lull. Thursday brings forecasts, meetings and the ECB decision. Australian Dollar Presses Through Risk Trends on Improved Rate Outlook Risk trends have shifted back and forth over the past 24 hours, yet the Aussie dollar maintained its bullish ambitions. While US equity futures took a dive through the early Wednesday trading session, AUDUSD held steady above 1.0400. This is partially due to the greenback’s own lack of commitment; but other, less investment-sensitive Aussie pairs (AUDNZD, AUDCAD, GBPAUD) have shown a consistent support for the commodity currency. This additional strength can be easily traced back to the RBA. The central bank held its benchmark lending rate yesterday morning to catch a significant portion of the market off guard. With the market pricing in a 47 percent probability of a cut and 20 of 27 economists in a Bloomberg poll expecting the same, there was a surprise quotient. The 12-month rate outlook now calls for only 50 bps worth of cuts. Japanese Yen: Officials Want Risk Trends, Stimulus to Weigh Currency With the volatility on risk trends elevated, the Japanese yen is under scrutiny. However, policy officials are no doubt hoping that the US election results can sustain a buoyant outlook. Yesterday, BoJ Executive Director Hayakawa (in charge of monitoring the financial system) stated his belief that the bank’s new lending program (unlimited at a marginal 0.1 percent) could weaken the currency. His supposition was that this effort would translate into a pickup in carry interest. However, carry is a global factor and rates are low worldwide. What they need is true risk appetite. New Zealand Dollar Advances after RBNZ Financial Report, Ahead of Jobs Data Green RBNZ Governor Graeme Wheeler is keeping up the effort of stirring speculative interest in the kiwi. The central banker released the Financial Stability Report this morning. In the statement, Wheeler said stated that he believed it was unlikely that the kiwi exchange rate would fall significantly going forward – adding weight to his dismissal of QE. Up next, we have jobs figures for hard data. Swiss Franc: FX Reserves Expected to Build, Though Euro Share Under Scrutiny The Swiss National Bank already holds 432 billion francs in foreign currency reserves – a record for the group and one of the highest amongst its counterparts. The update for October is due in the upcoming European session and a fresh high is expected. However, those monitoring the EURCHF will be more concerned about the possible composition of holdings. The central bank has slowly diversified away from euros recently. Gold Surges During US Election, Trend is a Dollar Matter There was some speculation amongst the gold bugs that if the US election went a certain way, Fed Chairman Bernanke would be ousted and the policy of stimulus expansion would be reversed with his exit. It is a stretch to say the metal rallied because this scenario was disproved; but it would be outright dangerous to trade on this belief carrying a lasting influence. The next move for gold will be based on the dollar. Nov 7, 2012 OctaFX.Com News Updates OctaFX.Com - Forex Analysis: Dollar Slowly, Consistently Edges Lower as Equities Swing Dollar Slowly, Consistently Edges Lower as Equities Swing The US Presidential elections have a long standing influence over investor confidence. The outcome of political power in the world’s largest economy can significantly influence growth, trade and financial regulation. However, as with any economic event, this particular driver is set within a hierarchy of fundamental impact. Regardless of who wins the election, it would still be a struggle to answer the United States’ Fiscal Cliff. Furthermore, we have other big-ticket items such as the Euro-area crisis, Chinese regime change and Japanese fiscal countdown that all denote a distinctive impact on global markets. With that in mind, we recognize the market’s unusual activity over the past 24 hours. It is very similar to how we approach the average NFPs release: even though the event’s outcome is not likely to have a lasting influence over a fundamentally-crowded market, the uncertainty its presence carries pumps volatility and sidelines trend generation. Now, as we move forward, we may very well see risk trends regain traction and revive cross-market correlations. Through the past trading session, we witnessed a significant deviation between the standard ‘risk’ measures. While the S&P 500 rallied sharply into resistance (13,300), the Forex’s safe haven US dollar was holding relatively steady. Soon after the NY market close, equities took to a quick reversal while the dollar accelerated into its decline with EURUSD moving back above 1.2825 – yet another contradictory sentiment move. As the election results started to take shape in the overnight, however, risk’s influence started to firm up. With the dollar holding onto its losses, the equity futures found a moderate bounce. Revived correlations are a strong step towards developing a lasting trend. Yet, does a resolution of the US vote equate to a better investment environment. The bigger, international concerns aside; the unconfirmed vote tally leaves the United States with a divided Congress that may struggle to force necessary budgetary changes to avoid the looming fiscal cliff. Euro May Climb on US Crisis Distraction - Juncker Most policy makers (fiscal and monetary) follow academic lines of thought in their expectations of how their efforts will impact their economies and currencies. However, every now-and-then there is an official that acknowledges the speculative influence in the market. Euro Group head Jean-Claude Juncker revealed a streak of ‘trader’ in his outlook when he remarked early Wednesday morning that the US Fiscal Cliff could direct negative attention away from the Euro-area (offsetting the more ‘cheerleading’ effort in suggesting Europe’s fundamentals were better than those of the US and Japan). From a real world market perspective, the countdown to the United States’ self-imposed deficit adjustment can paint a far less stable situation than the more measured austerity balance in the Eurozone. That said, there are two variables in this austerity comparison. The euro’s own fundamental issues are more immediate than the end-of-the-year countdown for the US. This past session, Greece’s general strike set the backdrop to the Parliamentary vote on the new austerity bill (reportedly aiming to cut pensions by 15 percent and raise the retirement age). Spain’s Rajoy suggested he would not ask for a rescue unless forced to - saying he needed to be certain it would lower yields. Today is a Euro-risk lull. Thursday brings forecasts, meetings and the ECB decision. Australian Dollar Presses Through Risk Trends on Improved Rate Outlook Risk trends have shifted back and forth over the past 24 hours, yet the Aussie dollar maintained its bullish ambitions. While US equity futures took a dive through the early Wednesday trading session, AUDUSD held steady above 1.0400. This is partially due to the greenback’s own lack of commitment; but other, less investment-sensitive Aussie pairs (AUDNZD, AUDCAD, GBPAUD) have shown a consistent support for the commodity currency. This additional strength can be easily traced back to the RBA. The central bank held its benchmark lending rate yesterday morning to catch a significant portion of the market off guard. With the market pricing in a 47 percent probability of a cut and 20 of 27 economists in a Bloomberg poll expecting the same, there was a surprise quotient. The 12-month rate outlook now calls for only 50 bps worth of cuts. Japanese Yen: Officials Want Risk Trends, Stimulus to Weigh Currency With the volatility on risk trends elevated, the Japanese yen is under scrutiny. However, policy officials are no doubt hoping that the US election results can sustain a buoyant outlook. Yesterday, BoJ Executive Director Hayakawa (in charge of monitoring the financial system) stated his belief that the bank’s new lending program (unlimited at a marginal 0.1 percent) could weaken the currency. His supposition was that this effort would translate into a pickup in carry interest. However, carry is a global factor and rates are low worldwide. What they need is true risk appetite. New Zealand Dollar Advances after RBNZ Financial Report, Ahead of Jobs Data Green RBNZ Governor Graeme Wheeler is keeping up the effort of stirring speculative interest in the kiwi. The central banker released the Financial Stability Report this morning. In the statement, Wheeler said stated that he believed it was unlikely that the kiwi exchange rate would fall significantly going forward – adding weight to his dismissal of QE. Up next, we have jobs figures for hard data. Swiss Franc: FX Reserves Expected to Build, Though Euro Share Under Scrutiny The Swiss National Bank already holds 432 billion francs in foreign currency reserves – a record for the group and one of the highest amongst its counterparts. The update for October is due in the upcoming European session and a fresh high is expected. However, those monitoring the EURCHF will be more concerned about the possible composition of holdings. The central bank has slowly diversified away from euros recently. Gold Surges During US Election, Trend is a Dollar Matter There was some speculation amongst the gold bugs that if the US election went a certain way, Fed Chairman Bernanke would be ousted and the policy of stimulus expansion would be reversed with his exit. It is a stretch to say the metal rallied because this scenario was disproved; but it would be outright dangerous to trade on this belief carrying a lasting influence. The next move for gold will be based on the dollar. Nov 7, 2012 OctaFX.Com News Updates OctaFX.Com - Forex Analysis: Dollar Selling on US Election Result May Be Fleeting The US Dollar fell on waning haven demand as risk appetite firmed following a clear-cut outcome to the US election but markets’ chipper mood may be short-lived. Talking Points US Dollar Falls on Swelling Risk Appetite After US Election Outcome S&P 500 Futures Hint Sentiment Likely to Stay Supported Near-Term Markets’ Chipper Mood May Unravel as “Fiscal Cliff” Fears Resurface Euro May Underperform if Greece Fails to Pass New Austerity Plan The US Dollar weakened in overnight trade as risk appetite swelled across financial markets – weakening forex traders’ demand for the go-to haven currency – in the aftermath of the US general election. The ballot handed victory to President Barack Obama while challenger Governor Mitt Romney conceded. As we argued yesterday, any outcome that produced a clear winner was likely to be greeted by investors hopeful for a swift re-orientation toward resolving the looming “fiscal cliff” fiasco. Looking ahead, a quiet economic calendar is likely to keep the election front and center as financial markets around the world take their opportunity to respond to the results. S&P 500 stock index futures have erased earlier losses ahead of the opening bell on Wall Street, suggesting the risk-on bias into the hours ahead. Investors’ chipper mood may not prove lasting however, opening the door for the greenback to mount a swift recovery. All signs appear to point to an extension of the status quo in the US political landscape, with President Obama’s victory matched by another Democrat-controlled Senate and Republican-dominated House of Representatives. That may spark fears of renewed deadlock as markets tremble at the thought that a set of automatic spending cuts and tax hikes slated to trigger at the turn of the calendar year will tip the US back into recession. Such prospect bodes ill for global growth in an environment where the Eurozone is contracting while China slows. In Europe, all eyes are on Greece where the parliament will vote on an austerity package agreed-upon by the Samaras administration and the EU/ECB/IMF troika. Fears that opposition parties will torpedo the poll and delay the release of the latest tranche of bailout funds has scope to trim risk appetite and dent the ability of the Euro to capitalize on the post-US election festivities. On the data front, German Industrial Production is seen falling for a second consecutive month in September while Eurozone Retail Sales snap four months of gains to yield a negative print in the same period. Nov 7, 2012 OctaFX.Com News Updates OctaFX.Com - Forex Analysis: Dollar Selling on US Election Result May Be Fleeting The US Dollar fell on waning haven demand as risk appetite firmed following a clear-cut outcome to the US election but markets’ chipper mood may be short-lived. Talking Points US Dollar Falls on Swelling Risk Appetite After US Election Outcome S&P 500 Futures Hint Sentiment Likely to Stay Supported Near-Term Markets’ Chipper Mood May Unravel as “Fiscal Cliff” Fears Resurface Euro May Underperform if Greece Fails to Pass New Austerity Plan The US Dollar weakened in overnight trade as risk appetite swelled across financial markets – weakening forex traders’ demand for the go-to haven currency – in the aftermath of the US general election. The ballot handed victory to President Barack Obama while challenger Governor Mitt Romney conceded. As we argued yesterday, any outcome that produced a clear winner was likely to be greeted by investors hopeful for a swift re-orientation toward resolving the looming “fiscal cliff” fiasco. Looking ahead, a quiet economic calendar is likely to keep the election front and center as financial markets around the world take their opportunity to respond to the results. S&P 500 stock index futures have erased earlier losses ahead of the opening bell on Wall Street, suggesting the risk-on bias into the hours ahead. Investors’ chipper mood may not prove lasting however, opening the door for the greenback to mount a swift recovery. All signs appear to point to an extension of the status quo in the US political landscape, with President Obama’s victory matched by another Democrat-controlled Senate and Republican-dominated House of Representatives. That may spark fears of renewed deadlock as markets tremble at the thought that a set of automatic spending cuts and tax hikes slated to trigger at the turn of the calendar year will tip the US back into recession. Such prospect bodes ill for global growth in an environment where the Eurozone is contracting while China slows. In Europe, all eyes are on Greece where the parliament will vote on an austerity package agreed-upon by the Samaras administration and the EU/ECB/IMF troika. Fears that opposition parties will torpedo the poll and delay the release of the latest tranche of bailout funds has scope to trim risk appetite and dent the ability of the Euro to capitalize on the post-US election festivities. On the data front, German Industrial Production is seen falling for a second consecutive month in September while Eurozone Retail Sales snap four months of gains to yield a negative print in the same period. Nov 7, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 8, 2012 Author Share Posted November 8, 2012 OctaFX.Com -Forex Analysis: US Dollar Hovers at Support as S&P 500 Crumbles THE TAKEAWAY: The US Dollar managed to hold near support, reversing earlier losses, as the S&P 500 turned sharply lower to boost demand for the go-to haven currency. US DOLLAR TECHNICAL ANALYSIS– Prices continue to flirt with 9963, the 38.2% Fibonacci retracement. A move lower from here aims to target 9864-79 area, marked by a rising channel bottom set from mid-September and a falling channel top established from the June 1 high. Resistance is at 10002, with a break above that aiming for the 50% Fib at 10032. Daily Chart - Created Using FXCM Marketscope 2.0 S&P 500 TECHNICAL ANALYSIS – Prices turned sharply lower from support-turned-resistance in the 1424.90-30.90 area to test the 38.2% Fibonacci retracement at 1394.30 once again. A drop below that targets the 50% Fib at 1369.40. Alternatively, a reversal above 1430.90 aims to challenge the underside of a rising channel set from the June 4 swing low (now at 1452.50). Daily Chart - Created Using FXCM Marketscope 2.0 read more Nov 8, 2012 OctaFX.Com News Updates OctaFX.Com -Euro weakens as eyes turn to ECB meeting LONDON (Reuters) - The euro fell to a two-month low on Thursday despite approval of a crucial austerity package by Greece, with investors focused on a European Central Bank policy meeting later in the day. The ECB is widely expected to leave interest rates on hold, but comments by President Mario Draghi on the weak economic outlook and gloomy European Commission forecasts have raised speculation it might just cut its main rate from 0.75 percent. "If you wander around the trading floors they are flirting with the idea we could get a cut from the ECB today," said Daragh Maher, director of FX strategy at HSBC. The common currency was down 0.1 percent at $1.2765, not far from Wednesday's two-month low of $1.2736. The euro was under pressure even though the Greek parliament approved in the early hours of Thursday an austerity package needed to unlock international aid and avert bankruptcy, defying political rifts and violent protests. CLIFF EDGE LOOMS The dollar was up 0.1 percent, near a two-month high against a basket of major currencies of 80.924 (.DXY) hit on Wednesday, as concerns about U.S. fiscal problems raise its safe-haven appeal. Investors fear the preservation of the status quo in Washington after this week's elections means may make it hard to reach a deal on about $600 billion in spending cuts and tax increases due to start early next year, and that this could derail the U.S. economic recovery. The "fiscal cliff", which can be avoided only if Democrats and Republicans settle their differences in Congress, provoked a selloff on Wall Street on Wednesday. Asian markets followed suit, pushing the MSCI world equity index <.MIWD00000PUS> down 0.2 percent at 326.13 points. "The fiscal cliff is here and it will reveal itself to be very real," said Jeffrey Sica, president of Sica Wealth Management. Sica said higher capital gains taxes could form part of a Congressional deal to tackle the budget deficit, and this may be encouraging investors to sell equities. "The strong likelihood that capital gains (could) double will force investors to take profits now to avoid paying higher capital gains taxes later," he said. In Europe the FTSEurofirst 300 index (.FTEU3), which lost 1.4 percent in Wednesday's selloff, recovered slightly on Thursday to be up 0.15 percent at 1,100.85 points. London's FTSE 100 (.FTSE), Paris's CAC-40 (.FCHI) and Frankfurt's DAX (.GDAXI) all traded around 0.25 percent higher. (.L) (.EU) U.S. stock futures were also higher, up 0.2 percent, pointing to a recovery when Wall Street opens. (.N) SPANISH TEST In the fixed income market the approaching ECB meeting kept most prices little changed. Much attention focused on a Spanish sale of 4.8 billion euros ($6 billion) of new debt, which included a 20-year bond - the longest dated issue to be auctioned since mid-2011. The sale drew good demand as Spain's debt has been trading in relatively narrow ranges since the ECB promised to step in buy unlimited amounts of the bonds, provided Madrid requests help and agrees to a closely-monitored economic reform programme. Spanish 10-year bond yields gained 5 basis points after the auction at 5.77 percent, but German 10-year bonds, often an indicator of any change of sentiment in the euro zone, were largely unchanged at 1.38 percent. Commodities markets focused on developments in China where the government has begun a once-in-a-decade leadership change against a backdrop of growing social unrest and public anger at corruption and a gap between rich and poor. Traders are looking for hints from the Communist Party Congress on future policy direction that may affect demand from the world's biggest consumer of many industrial commodities. "So far, contents of speeches from the 18th Party Congress have been within expectations. There hasn't been anything particularly encouraging to investors," said Orient Futures derivatives director Andy Du. Oil rose after tumbling more than $4 on Wednesday amid concerns about weak demand for fuel as the U.S. and European economies face the risk of a prolonged slowdown. Brent Crude traded 56 cents higher at $107.35 per barrel after posting its steepest fall since 2011 on Wednesday. U.S. crude rose 56 cents to $84.99 a barrel. (O/R) ($1 = 0.7840 euros) Nov 8, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 10, 2012 Author Share Posted November 10, 2012 OctaFX.Com - Forex Analysis: New Zealand Dollar To Maintain Range-Bound Price On RBNZ Policy The New Zealand dollar pared the rebound from 0.8100 as the economic calendar instilled a weakened outlook for the region, but we may see the high-yielding currency preserve the range-bound price action carried over from the previous month as the Reserve Bank of New Zealand (RBNZ) persistently strikes a neutral tone for monetary policy. Indeed, the NZDUSD quickly fell back from a fresh monthly high of 0.8307 as New Zealand’s jobless rate advanced to 7.3% - the highest since 1999 – and the ongoing weakness in the real economy may continue to drag on the exchange rate as it spurs bets for a rate cut. However, RBNZ Governor Graeme Wheeler argued that lowering the benchmark interest rate further would have a limited impact in triggering a ‘major depreciation in the exchange rate in the short term,’ and continued to highlight the risk for a higher exchange rate should ‘New Zealand’s relative growth outlook continued to be perceived as favorable despite the lower terms of trade.’ At the same time, the central bank head warned ‘excessive credit growth could hinder rebalancing of the economy and accentuate existing vulnerabilities’ as household and businesses take advantage of record-low borrowing costs, and the uptick in private sector borrowing will certainly limit the RBNZ’s scope to ease policy further as it heightens the risk for an asset bubble. As the RBNZ sees the persistent strength in the local currency having a dampening effect on the real economy, we may see Governor Wheeler continue to rely on the transmission mechanisms to talk down the exchange rate, and we should see the central bank carry its wait-and-see approach into the following year as policy makers anticipate the rebuilding efforts from the Christchurch earthquake to spur domestic growth. Despite the dismal data coming out of the region, Credit Suisse overnight index swaps reflect a 22% chance for a 25bp rate cut at the December 5 meeting, and the central bank may continue to endorse a neutral policy stance in 2013 in order to mitigate the threat for an asset bubble. As the 10, 20, 50 and 100 Day moving averages on the NZDUSD start to converge with one another, the indicators instill a neutral outlook for the pair, and the kiwi-dollar may continue to track sideways ahead of the December meeting as it trades above the 0.7900 figure. However, we will keep a close eye on the relative strength index as it comes up against interim support around the 42 figure, and the oscillator may paint a bearish outlook for the NZDUSD should it continue to approach oversold territory. Nov 10, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 10, 2012 Author Share Posted November 10, 2012 OctaFX.Com - Forex: Dollar Looks for Breakout Under Fiscal Cliff Insecurity Even the most optimistic investor has to be nervous about the state of risk appetite. This past week, the benchmark US equity indexes (Dow Jones Industrial Average and S&P 500) broke critical levels of support and plunged to three-month lows. That is a considerable warning that a bigger speculative deleveraging effort is under way. The shift from this particular market is particularly remarkable. Not only are equities the average investor’s ‘risky’ or growth-sensitive asset, but the Federal Reserve has further backstopped the market through stimulus. In other words, a turn here speaks to the kind of concern that not even a central bank guarantee can prevent. Under this kind of pressure, we would expect the Forex market’s preferred safe haven currency (the US dollar) to surge. So why hasn’t it taken off yet? Looking back at the greenback’s performance this past week, we see that progress has been uneven at best. The benchmark EURUSD has slipped to two-month lows below 1.2750 and GBPUSD has followed suit. That said, the far more risk-sensitive AUDUSD and NZDUSD have refused to definitively reverse their respective bull trends – an odd thing for carry pairs that should be exceptionally sensitive to sentiment trends. Furthermore, pulling back from the ebb and flow of risk, USDJPY has retreated sharply even though the yen faces immediate fundamental troubles with its fiscal health. Ultimately, it is the Dow Jones FXCM Dollar Index (ticker = USDollar) that best illustrates the reticence of the world’s reserve currency. Congestion has been tamed by the 100-day moving average and pulsating 10,000 figure above. Over the past months, we have seen a few disconnects between benchmark measures – though they haven’t been quite as flagrant. In most of those cases, the grounds for the divergence were a lack of conviction. Risk aversion (or risk appetite) wasn’t fully established, so either one asset was moving because it was extremely sensitive to sentiment or there was otherwise a completely different fundamental driver in play. There is an element of disbelief to this move as well. While there is plenty of fundamental fuel to raze sentiment to the ground (slowing growth, a downturn in earnings growth, Euro-area debt crisis, Asian financial troubles, US fiscal crisis, etc), we need the spark from the speculative ranks to ensure the spark catches. While hesitation is certainly an aspect, deleveraging is starting to give an active face to otherwise intangible fundamental worry. The moves we are starting to see should have leveraged more of a response from the dollar. Something else was acting against this straightforward speculative reaction – a buffer. That extra facet is the primary source of the fear that has developed - the ‘Fiscal Cliff’. This is a media-derived term that refers to a sudden expiration of tax cuts and implementation of spending cuts – activated at the end of the year if the US government cannot find a solution to rein the budget in. The $600 billion impact the cliff entails would easily drive the US economy to recession and carry serious ramifications for the global markets that are already on shaky footing. Normally, this would be a significant booster for the dollar. Why? Though the US would be the point of origin, the backdraft would be a global event that sent investors the world over seeking safety in the most liquid and trustworthy assets – ironically enough, the dollar and Treasuries. Yet, not this time. There is another element to this explosive mix. If the fiscal cliff scenario plays out, it would likely lead to a US downgrade. That would lower (marginally, but substantive) the dollar’s safe haven status. As we must often do as speculators, tracking out the path from here runs on the most probable outcomes and expectations as to how speculators will respond. It is highly unlikely that the US plummets over the fiscal cliff – though even if it did, the backlash of the diminished safe haven status would be short-lived and the dollar would rally back eventually. The more contentious scenario is that the budgetary issue is solved and the market expects it. As the most prolific threat to stability, the absence of this risk could lead to a rebound in risk and dollar tumble. There are other issues however. The dollar needs fiscal cliff uncertainty and broad risk aversion. Nov 10, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 12, 2012 Author Share Posted November 12, 2012 Forex: Commodity Currencies Rally, but Euro Remains Lower ASIA/EUROPE FOREX NEWS WRAP A quiet US trading session is on the horizon in light of the Veteran’s Day holiday, which has bond markets closed and lower volumes expected throughout the day on Monday. Nevertheless, with Asian and European markets fully online, there are have been some noteworthy developments that have influenced price action today worth discussing. Yesterday, the Samaras-led Greek government had its 2013 budget passed in parliament, clearing the way for Euro-zone finance ministers to vote on the next tranche of Greek aid later on today. Although the event would typically yield a more positive risk horizon, it appears that the measures passed will fall short of pan-European approval. A meeting is set for later today that should provide insight into this process. We expect some sort of intermediate measures to be proposed that keeps Greece afloat over the next few weeks, as the country is expected to run out of money (again) in the next week or so. The Euro seems to be reflecting this lack of enthusiasm, as the European currencies have trailed their Asia and North American counterparts for most of the day. With the US fiscal cliff squarely in focus – and freshly reelected President Barack Obama convening with Congressional leaders later this week – the Japanese Yen remains well-supported, while Gold and Silver continue to outperform and lead the broader market, as they have since their mid-September highs. Taking a look at credit, Euro weakness has been reflected by weakness in periphery bonds. The Italian 2-year note yield has increased to 2.318% (+2.5-bps) while the Spanish 2-year note yield has increased to 3.139 % (+8.7-bps). Likewise, the Italian 10-year note yield has increased to 4.995% (+3.4-bps) while the Spanish 10-year note yield has increased to 5.842% (+5.0-bps); higher yields imply lower prices. Nov 12, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 14, 2012 Author Share Posted November 14, 2012 OctaFX.com- Forex: Dollar So Close to a Bullish Surge, What Does it Take? Dollar So Close to a Bullish Surge, What Does it Take? Euro Finds Little Bounce From Greece Hole Plug, Spain Rescue Rumors British Pound Rallies Briefly After CPI Data, Right Back Towards 1.5850 Japanese Yen: Risk Aversion May have Wavered but the Yen Hasn’t Swiss Franc at Two Month High Versus Euro, 1.2000 in Sight Australian Dollar Losing Steam on Rate Outlook, Bullishness Deflating Gold Makes a Bearish Turn but Commitment Lacking Without Dollar New to FX? Watch thisVideo; For live market updates, visitDailyFX’s Real Time News Feed Dollar So Close to a Bullish Surge, What Does it Take? The Dow Jones FXCM Dollar Index (ticker = USDollar) has held just below critical resistance and fresh two month lows since risk-trends were rejected despite the otherwise ‘better-than-expected’ October payrolls. Taking a look at the chart of the Dollar Index, we find the big-ticket 10,000 figure is complimented by the 100 and 200-day moving averages – considerable weight to any technical trader. However, the most remarkable technical read on the greenback is also a very telling fundamental consideration: the average true range (ATR). Measuring the average of the currency’s daily range (on a rolling 10-day basis), we find that the dollar has carved out the smallest rate of activity since high and low data have been recorded – so since at least January 2011. Altogether, that tells us a significant swell of volatility is soon at hand. These measures of activity on the technical level are mirrored with what we have seen fundamentally. As the US benchmark equities have led a questionable march higher for riskier assets over the past months and years, we have also seen the FX Volatility Index slide to lows not seen since before the financial crisis in 2008 (the index is currently at 7.41 percent). The standard volatility indicators are both measures of insurance costs against adverse price movements and more elementally ‘fear’ gauges. Therefore, when these measures of risk rise, it is generally in response to a more active move towards risk aversion. That is a strong factor for the greenback – if and when it happens. Yet, we have seen the volatility measures continuously trend lower against a trend of more obvious troubles in growth trends, financial crises and fiscal imbalances. Though it doesn’t necessarily have to jump start a watershed event in speculative positioning, a sudden return of volatility through the immediate future is a particularly credible threat. That being said, this may be a pickup in activity that defies the common convention that a big swing in price action necessarily translates into risk aversion (a disconnect that would most likely bypass the traditional volatility readings). Markets are currently positions such that they reflect the ‘tail risk’ (low probability, but high impact potential) that the Euro-area crisis will hit critical mass and / or the US will hit the wall that is its Fiscal Cliff. Recently, however, EU officials have managed to by Greece a few more weeks and lawmakers on both sides of the US political spectrum have voiced confidence in a budget resolution. Winding down those factors could boost risk trends – and likely will. The critical question is how much is the market weighing this possible short-term relief against the obviously, long-term problems… Euro Finds Little Bounce from Greece Hole Plug, Spain Rescue Rumors European officials are struggling to put out fires as the flames come progressively closer with each swell. The newswires have been crowded by headlines that are clearly aimed at provoking fear in a rapidly deteriorating financial situation in the Eurozone. Yet, through all the countdowns to Greece running out of money, the questions over whether the Spain will ask for an official rescue and other (lesser) concerns that have intensified this past week; the euro has posted limited – though consistent – downside progress. In contrast, recent positive developments / speculation have yielded just as little return in the Euro’s favor. Between a bill auction yesterday and allowance of Asset Backed Securities use as collateral, Greece looks like it will be able to cover the bond maturity that happens on Friday. On another front, rumors were running in the speculative circles that Spain would soon seek a bailout. Neither risk (EURUSD) nor anti-risk (EURAUD) pair closed in the green for the euro. Perhaps the market is awaiting today’s event risk: Greek and Portuguese 3Q GDP. There is no misinterpret ting these reports. British Pound Rallies Briefly After CPI Data, Right Back Towards 1.5850 In quiet trading conditions, traditional fundamental releases – that would otherwise struggle for face time in market influence against larger themes like risk trends – can have a bigger impact on price action. That was the case with the pound and CPI data this past session. The headline CPI reading for October rose 2.7 percent on a year-over-year basis – a pickup from the lowest reading since November 2009. GBPUSD and other pound pairs responded with a brief bounce, but it wouldn’t hold. The BoE will not be hiking rates anytime soon. Japanese Yen: Risk Aversion May have Wavered but the Yen Hasn’t We have seen a strong risk aversion move this past week – though it may have been uneven across the markets – and the yen has certainly benefit the safe haven seeking. The only problem is that policy officials are trying to push the currency lower to offer some relief to the economy through exports. It is likely doubly frustrating that with recent hints over the past 24 hours at a possible bounce in risk trends that the yen has continued to gain ground against all of its counterparts. We have to wonder at what point, Japanese authorities will mimic the SNB. Swiss Franc at Two Month High Versus Euro, 1.2000 in Sight SNB President Jordan must not be happy. Two months ago, the EURCHF exchange rate finally picked up from the central bank’s force-imposed 1.2000-floor without the express influence of policy authority. Tail risk on the Euro-crisis seemed to ease and the safe haven flows reversed. Today, however, we are only 35 pips off that floor once again. After this brief jaunt, the market may realize the SNB will have to push it higher. Australian Dollar Losing Steam on Rate Outlook, Bullishness Deflating The Australian dollar seems to be relentless. The currency has climbed against the dollar and yen despite risk aversion moves from US equities this past week. And, despite the even footing, it has also advanced against fellow safe haven – the New Zealand dollar. The market hasn’t fully committed to risk aversion, but the Aussie’s true strength is the reduction of expected rate cuts. Well, that rebound seems to be fizzling out… Gold Makes a Bearish Turn but Commitment Lacking Without Dollar Gold has put in for three consecutive bearish days through Tuesday’s close. Though we haven’t moved very far on this retreat, it is still the worst trend for the metal in over a month. Until the dollar commits to a clear run – the anti-fiat / anti-inflation appeal of gold is put into the spotlight. Meanwhile, ETF holdings are at record highs and the CBOE’s gold volatility index has plunged back to multi-year lows (14.5 percent). Nov 14, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 15, 2012 Author Share Posted November 15, 2012 OctaFX.com- Dollar soars to 6-month high versus Japanese yen FRANKFURT (MarketWatch) -- The U.S. dollar soared to its highest level versus the Japanese yen in more than six months Thursday, rising as the leader of Japan's main opposition party continued to push for a further loosening of monetary policy by the Bank of Japan. The dollar soared as high as 81.25 yen and changed hands in recent action at 81.15 yen, up from 80.20 yen in North American trade late Wednesday. The yen last traded above 81 yen in late April. News reports said Shinzo Abe, leader of the main opposition Liberal Democratic Party, urged the Bank of Japan to push official interest rates below zero. Abe is seen as likely to become Japan's next prime minister in elections expected next month. Nov 15, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 16, 2012 Author Share Posted November 16, 2012 OctaFX.Com - Euro rises but vulnerable to Greece uncertainty Prices took out resistance at the top of a rising channel established from mid-September, exposing the 61.8% Fibonacci retracement at 10038. A push above that targets the 76.4% retracement at 10109. The channel top – now at 10021 – has been recast as support, with a push back below that aiming for the 50% level at 9982. Nov 16, 2012 Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 16, 2012 Author Share Posted November 16, 2012 OctaFX.Com - Forex Analysis: NZD/USD Classic Technical Report 11.16.2012 ASIA/EUROPE FOREX NEWS WRAP Prices are testing support in the 0.8064-0.8101 area, with a break lower exposing the 0.80 figure and the 50% Fibonacci retracement at 0.7962. Near-term resistance is at 0.8222, the underside of a previously broken rising channel set from late May, with a push above that targeting the 0.83 mark. Nov 13, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 19, 2012 Author Share Posted November 19, 2012 OctaFX.Com -Forex Analysis: US Dollar Classic Technical Report 11.19.2012 Prices edged through resistance at 10038, the 61.8% Fibonacci retracement, with buyers now aiming to challenge the 76.4% level at 10109. The first layer of significant support lines up at 10020, the top of a formerly broken rising channel set from mid-September, with a drop below that targeting the 50% retracement at 9982. Nov 19, 2012 OctaFX.Com News Updates OctaFX.Com -Forex Analysis: US Dollar Classic Technical Report 11.19.2012 Prices edged through resistance at 10038, the 61.8% Fibonacci retracement, with buyers now aiming to challenge the 76.4% level at 10109. The first layer of significant support lines up at 10020, the top of a formerly broken rising channel set from mid-September, with a drop below that targeting the 50% retracement at 9982. Nov 19, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 19, 2012 Author Share Posted November 19, 2012 OctaFX.Com -FOREX Technical Analysis: British Pound Slips in Early Week Trading FOREX Trading and Technical Analysis Observations EUR/USD-As focused in FX Technical Weekly, the EUR/USD decline from Thursday’s high (12801) is impulsive which suggests that the larger downtrend has resumed. I am short as of this morning with a 12805 stop. Exceeding 12801 would shift focus to former supports at 12824 and 12882. AUD/USD-is nearing resistance from the 61.8% retracement of the decline from 10480 at 10406. I’m on the lookout for a top and reversal but understand that RBA minutes are due tonight. Exceeding 10480 would shift focus to 10550 (again). USD/JPY-is showing signs (JS Spike bars on multiple time frames) of topping. The rally from 9/13 may be complete in 5 waves. Wave 5, from the 11/9 low, is also in 5 waves. Considering the 61.8% retracement of the decline from March at 8148, risk is to the downside. AUD/JPY-is approaching a potentially HUGE pivot near 8500. EUR/USD – 60 Minute Bars READ MORE Nov 19, 2012 OctaFX.Com News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 21, 2012 Author Share Posted November 21, 2012 OctaFX.Com - Dollar Rebounds after Greece Decision Delayed, EUR/USD Ranges Dollar Rebounds after Greece Decision Delayed, EUR/USD Ranges Euro Rally Halted in its Tracks after Officials Fail to Advance Crisis Fight Australian Dollar: Reserve Currency Status vs Risk Sensitivities Japanese Yen Can Drop Slow or Drop Fast Depending on Vote British Pound: Traders Await BoE Minutes to Gauge QE Appetite US Oil Tumbles on Expectations of Gaza Strip Cease Fire Gold Trading Lower after EU Delays Rescue, Dollar Guiding Dollar Reboundsafter Greece Decision Delayed, EUR/USD Ranges The dollar spent Tuesday slowly drifting higher as the sharp risk aversion move over the open 24 hours of trading this week consolidated. That slow drift found a considerable accelerant early this morning, however, as the market learned that European policy officials had once again deferred making a decisive call on how to proceed with Greece’s financial aid – the linchpin to one of the financial market’s greatest fundamental threats. Without a solution on hand to a market-wide threat, the comfort of dollar liquidity looks considerably more appealing. From a risk assessment, we find S&P 500 futures have taken a quick turn lower having held the well-worn resistance at 1,390/88. On the FX side, EURUSD collapsed 80 pips while the AUDUSD dropped 40 pips. For the safe haven dollar itself, the Dow Jones FXCM Dollar (ticker = USDollar) has extended its climb from Tuesday’s 10,000-mark test. A turn in risk is one thing. A sustained trend is something else completely though… News that Eurozone officials have prolonged the uncertainty surrounding their weakest link is a clear bearish weight on speculators shoulders. The longer this situation continues unsolved (or more appropriately, unprogressed), the less likely it is that global investors will be satiated by a lackluster solution. The underlying reality is that the long-term situation in Europe, Asia and the United States is murky and not being met with clear and lasting reform (instead, officials seem to be betting on a ‘general improvement’ in market conditions or other external development like exports or stimulus). Yet, traders are willing to overlook the lack of a long-term solution so long as they see the opportunity to speculate for short-term gain in the interim. With each temporary effort to buy time and subsequent return to critical structural issues, we find the market less willing to play along with the short-lived risk rally. That speaks to a fundamental shift where deleveraging and dollar advance grow more permanent. A lack of confidence in genuine improvement for growth, yields and financial operation is a critical concern for traders heading forward. That said, such concerns may be muted the rest of this week. Active risk aversion – the necessary ingredient for dollar strength – requires an active catalyst. However, we have seen the Euro-area crisis put on ice and the Fiscal Cliff has grown scarce amongst the financial headlines. Furthermore, the liquidity drain and disruption in risk transmission with the US Thanksgiving holiday is fast approaching. Euro Rally Halted in its Tracks after Officials Fail to Advance Crisis Fight In the lead up to what was arguably this week’s most prominent event risk – the EU Finance Ministers’ funding decision on Greece – euro activity collapsed. In fact, the average hourly range just before the announcement was an incredible 10 pips. Why was this event so influential? Greece has had to return to the funding well numerous times, but this particular iteration has seen greater reticence and a many more delays than what we have seen in the past. Yet another postponement was announced early this morning. After more than 11 hours of debate over the next steps for the Eurozone’s most troubled member, officials reneged on their vow to offer a definitive resolution. Officials offered hollow remarks about progress in discussions and idea sharing, but these comments offer little reassurance. The statement that was released has set the next meeting on November 26 as the firm date for a verdict on Greece’s aid needs. Looking ahead, the situation is tense with some EU members troubled about offering more support and the IMF wavering on further participation with the debt-to-GDP forecasts for 2020 projected well above the level deemed ‘sustainable’. One thing is certain: Monday’s risk trend bearing has been significantly altered. Rather than return to a clear sentiment bearing, we will have another wait-and-see Monday. Australian Dollar: Reserve Currency Status vs Risk Sensitivities The IMF’s announcement that it was considering adding the Australian (and Canadian) dollar to the official list of reserve currencies offers a substantive change in fundamental bearing for the currency. A high-yielding, safe haven would be the Holy Grail for FX traders. Yet, the Aussie dollar doesn’t fit that ideal. The fund’s label wouldn’t represent an official change for traders – rather it’s a reaction to central banks already buying. This ‘reserve’ status is flimsy. With enough momentum, the carry currency would quickly fall back into line in with a risk aversion move. Japanese Yen Can Drop Slow or Drop Fast Depending on Vote Heading into the December 16 Parliamentary vote in Japan, growth and a high yen will be a centerpiece of both the LDP and DPJ’s campaign. As such, stimulus and proactive currency devaluation will be a shared objective. However, there is a different rate of attrition for the yen. Under Noda (DPJ), the BoJ’s independence looks more secure. With Abe (LDP), unlimited stimulus and foreign bond buying is on the table. British Pound: Traders Await BoE Minutes to Gauge QE Appetite Bank of England Governor Mervyn King is very concerned about the state of the English economy if his statements are to be believed. And yet, his efforts to bolster growth (and offset government austerity measures) have fallen well short of what his counterparts in the US, Eurozone and Japan have pursued. Is the MPC ready to augment its efforts? We will have another update from the upcoming BoE minutes. US Oil Tumbles on Expectations of Gaza Strip Cease Fire US oil prices collapsed Tuesday on early news that a cease fire would be called in the active engagement in the Gaza Strip. Such a move would help curb supply fears in the oil-rich Middle East. However, that calm never seemed to fully materialize. Crude prices began to rebound from 85.50 as that realization dawned. However, more general risk trends are a major factor here as well. With Greece, risk aversion is a weight. Gold Trading Lower after EU Delays Rescue, Dollar Guiding Under a purely academic interpretation of how fundamental roles play out, gold should have rallied after news that EU officials were delaying a decision on Greece. That maintains a sense of uncertainty and is a considerable threat to financial market stability. And yet, the metal dropped after the news. Why? With the euro under pressure, the world’s most liquid currency receives a boost. And gold is priced primary in dollars. Nov 21, 2012 News Updates Link to comment Share on other sites More sharing options...
OctaFX_Farid Posted November 21, 2012 Author Share Posted November 21, 2012 OctaFX.Com - Forex: Euro Relief Rally At Risk, Sterling Looks Higher On BoE Policy Talking Points Euro: EU Fails To Deliver Greek Deal, IMF Says More Needs To Be Done British Pound: BoE Votes 8-1 on QE, Curbs Bets For Lower Borrowing Costs U.S. Dollar: Continues To Gain Ground Ahead Of Thanksgiving Holiday Euro: EU Fails To Deliver Greek Deal, IMF Says More Needs To Be Done The Euro pared the overnight decline to 1.2735 as European policy makers floated different options to save Greece, but the reactionary approach held by the EU continues to encourage a bearish outlook for the EURUSD as the debt crisis dampens the fundamental outlook for the region. Indeed, the EU unveiled a EUR 10B bond-buyback plan for Greece, which would be financed through the European Financial Stability Facility, while the group is also looking to suspend Greece’s interest payment on the bailout program through 2020 in an effort to keep the periphery country within the monetary union. As the EU prepares a bundled aid package to avert a Greek default, International Monetary Fund Managing Director Christine Lagarde argued that ‘a bit more’ needs to be done to find a credible solution for Greece, and the ongoing rift within the troika – the EU, ECB, and IMF – may produce further weakness in the EURUSD as European policy makers struggle to restore investor confidence. As European policy makers increase their pledge to avoid a credit event in Greece, headlines coming out of the region may keep the single currency afloat over the coming days, but we may see the EURUSD struggle to hold above the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50 as the fundamental outlook for the euro-area turns increasingly bleak. As the short-term rebound in the EURUSD fails to keep the exchange rate above the 20-Day SMA (1.2820), the pair may consolidate going into the holiday trade, and we will maintain our bearish forecast for the euro-dollar as the weakening outlook for the region is expected to put additional pressure on the European Central Bank to ease monetary policy further. British Pound: BoE Votes 8-1 on QE, Curbs Bets For Lower Borrowing Costs The British Pound climbed to a fresh weekly high of 1.5948 as the Bank of England (BoE) Minutes sapped bets for additional monetary support, and the rebound from 1.5822 may continue to gather pace over the near to medium-term as the central bank appears to be slowly moving away from its easing cycle. Although the Monetary Policy Committee voted 8-1 to keep its asset purchase program at GBP 375B, the board argued against a further reduction in the benchmark interest rate, while a growing number of central bank officials turned their attention to the stickiness in price growth as the central bank warned that ‘above-target inflation in the near term increased the chance that any pick-up in productivity would result in higher wage demands.’ As the BoE strikes a more neutral tone for monetary policy, we’re seeing the relatives strength index on the GBPUSD breakout of the downward trend carried over from September, and the technical development encourages a bullish outlook for the GBPUSD as the pair appears to be carving out a higher low in November. U.S. Dollar: Continues To Gain Ground Ahead Of Thanksgiving Holiday The greenback continued to gain ground on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a high of 10,059, and the reserve currency may track higher ahead of the holiday trade as the developments coming out of the EU meeting fails to generate an improved landscape for risk-taking behavior. As U.S. traders go offline ahead of the Thanksgiving holiday, the drop in market participation may produce choppy price action over the next 24-hours of trading, but the bullish sentiment surrounding the reserve currency looks poised to gather pace over the remainder of the year as the Federal Reserve adopts an improved outlook for the world’s largest economy. Nov 21, 2012 News Updates Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now