Forex Blog

March 17, 2014

GBP/USD – Pound Shows Little Movement in Cautious Trading

The pound is steady in Monday trading, as the pair trades in the mid-1.66 line in the North American session. In economic news, the Empire State Manufacturing Index missed the estimate but Industrial Production posted a strong gain. In the UK, Rightmove HPI posted its third straight gain. The crisis in the Ukraine continues to dominate the news, and has dampened market sentiment.

It’s being described as the worst crisis on the European continent since the end of the Cold War. On Sunday, Crimea, a southern region of the Ukraine, voted overwhelmingly to leave the Ukraine and join Russia. The results brought joy to most residents of Crimea, who are of Russian ethnicity. However, the vote has been sharply denounced by the EU and the US as illegal, and both have warned Russia against annexing the region. Western nations are expected to impose stiff sanctions if Russia does not step back and respect Ukrainian sovereignty, but Moscow has not given any indication of backing down. The standoff between East and West is likely to get worse, and the turmoil could well affect the markets this week.

In the US, concern about the job market eased after a solid Unemployment Claims release late last week. The key indicator dropped to 315 thousand, down from 323 thousand the previous week. This beat the estimate of 334 thousand. This was the indicator’s lowest level in three months. Core Retail Sales and Retail Sales both posted gains of 0.3%, which were within market expectations. These indicators are the primary gauges of consumer spending, and although the gains were modest, they mark an improvement over the January readings.

 

GBP/USD for Monday, March 17, 2014

Forex Rate Graph 21/1/13

GBP/USD March 17 at 14:45 GMT

GBP/USD 1.6662 H: 1.6666 L: 1.6605

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6329 1.6416 1.6549 1.6705 1.6765 1.6896

 

  • GBP/USD has edged higher in Monday trade.
  • 1.6549 continues to provide strong support. This is followed by support at 1.6416.
  • 1.6705 is the first line of resistance. Next, there is resistance at 1.6765.
  • Current range: 1.6549 to 1.6705.

 

Further levels in both directions:

  • Below: 1.6549, 1.6416, 1.6329 and 1.6236
  • Above: 1.6705, 1.6765, 1.6896, 1.6964 and 1.7087

 

OANDA’s Open Positions Ratio

GBP/USD ratio is posting gains in long positions. This is consistent with what we are seeing from the pair, as the pound has edged higher. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar posting gains against the pound.

GBP/USD is showing little movement on Monday. The pair has edged higher early in the North American session.

 

GBP/USD Fundamentals

  • 9:30 British BOE Deputy Governor Jon Cunliffe Speaks.
  • 12:30 US Empire State Manufacturing Index. Estimate 6.6 points. Actual 5.6 points.
  • 13:15 US Capacity Utilization Rate. Estimate 78.7%. Actual 78.8%.
  • 13:15 US Industrial Production. Estimate 0.2%. Actual 0.6%.
  • 14:00 US NAHB Housing Market. Estimate 50 points.

*Key releases are highlighted in bold

*All release times are GMT

 

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The post GBP/USD – Pound Shows Little Movement in Cautious Trading appeared first on MarketPulse.

March 12, 2014

GBP/USD – Rests on Support Level at 1.66

Filed under: OANDA News — Tags: , , , , , , , , , , , — admin @ 2:23 am

GBP/USD for Wednesday, March 12, 2014

The last couple of days has seen the GBP/USD slump back towards the support level at 1.66 where it is presently resting.   Over the last week it has been edging higher back towards the short term resistance level at 1.6750 before falling sharply.   Just above the 1.6750 level is the resistance level at 1.68 which continues to loom large and is ready to offer an obstacle to higher prices should the pound rally again. Earlier last week the pound fell sharply away from the resistance level at 1.6750 and rest on a support level around 1.6650 before rallying higher again. Over the last few weeks the GBP/USD has received solid support from the key 1.66 level after it retraced strongly from the resistance level at 1.68 and over the last couple of weeks it had been edging higher slowly placing upwards pressure on a short term resistance level at 1.6750. In early February, the pound enjoyed a very healthy time moving well from the support level at 1.6250 through 1.6450 before pushing on to the multi-year high above 1.680.

In late January the pound fell sharply and experienced its worst one week fall this year which resulted in it moving to the six week low near the support level at 1.6250. Over the last few months the pound has established and traded within a trading range roughly around the key level of 1.6450, whilst moving down to support at 1.6250 and up to 1.66 and beyond. The 1.66 level has become quite significant and has loomed large throughout this year providing some resistance to higher prices. This level has resurfaced again as one of significance and it is now providing solid support. In late November it did well to break through the long term resistance level at 1.6250 which had established itself as a level of significance over the last few months. This level continues to play a role in providing support. In early November, the pound bounced strongly off the support level at 1.59 to return back to above 1.6250.

Towards the end of October the GBP/USD slowly drifted lower from the strong resistance level at 1.6250 and down to a three week low just around 1.5900 which was recently passed as the pound moved down towards 1.5850 only a week ago. For the week or so before that the pound moved well from the key level at 1.60 back up to the significant level at 1.6250, only again for this level to stand tall and fend off buyers for several days. Throughout September the pound rallied well and surged higher to move back up strongly through numerous levels which was punctuated by a push through to its highest level for the year just above 1.6250 several weeks ago. In the first week of October the pound was easing back towards 1.60 and 1.59 where it established a narrow trading range between before surging back to 1.6250 again.

Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a “root and branch” review of its strategy, after suspending an official over the foreign exchange market manipulation scandal.   Carney claimed that there was “no evidence” any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs).   He defended the Bank against MPs’ suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal.   “It is possible foreign exchange traders decided to collude to make their lives easier and richer,” Carney said.   In a move likely to have ramifications for the central bank’s history, he signaled that he is prepared to make the 420 year-old Bank a more open institution.

(Daily chart / 4 hourly chart below)

Cable_20140312Cable_20140312_4hour

GBP/USD March 12 at 01:55 GMT   1.6632   H: 1.6653   L: 1.6596

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6600 1.6300 1.6250 1.6750 1.6800

During the early hours of the Asian trading session on Wednesday, the GBP/USD is remaining very steady just above the 1.6600 level after spending the last couple of days resting on the support level there.   Current range: Trading just above 1.6600 around 1.6630.

Further levels in both directions:

• Below: 1.6600, 1.6300, and 1.6250

• Above: 1.6750 and 1.6800.

OANDA’s Open Position Ratios

Cable_20140312_ratio

(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)

The GBP/USD long positions ratio has moved back below 30% again as the GBP/USD remains steady around 1.6600 again. Trader sentiment remains in favour of short positions.

Economic Releases

  • 23:30 (Tue) AU Westpac Consumer Confidence (Mar)
  • 00:30 AU Housing Finance (Jan)
  • 00:30 AU Lending Finance (Jan)
  • 05:00 JP Consumer Confidence (Feb)
  • 09:30 UK Trade Balance (Non-EU) (Jan)
  • 09:30 UK Visible Trade Balance (World) (Jan)
  • 10:00 EU Industrial production (Jan)
  • 18:00 US Budget (Feb)
  • JP BoJ Publication of Monthly Report

 

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The post GBP/USD – Rests on Support Level at 1.66 appeared first on MarketPulse.

BOE Bolsters Oversight with New Deputy Governor

Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a “root and branch” review of its strategy, after suspending an official over the foreign exchange market manipulation scandal.

Carney claimed that there was “no evidence” any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs).

He defended the Bank against MPs’ suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal.

CNBC

The post BOE Bolsters Oversight with New Deputy Governor appeared first on MarketPulse.

US 3 Yr Treasury Auctioned at 0.802%, highest in 2 months

The post US 3 Yr Treasury Auctioned at 0.802%, highest in 2 months appeared first on MarketPulse.

March 11, 2014

BoE Carney Plans a Shakeup At the Central Bank

Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a “root and branch” review of its strategy, after suspending an official over the foreign exchange market manipulation scandal.

Carney claimed that there was “no evidence” any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs).

He defended the Bank against MPs’ suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal.

“It is possible foreign exchange traders decided to collude to make their lives easier and richer,” Carney said.

In a move likely to have ramifications for the central bank’s history, he signaled that he is prepared to make the 420 year-old Bank a more open institution.

Parliament’s Treasury Select Committee quizzed Carney and the bank’s Executive Director of Markets Paul Fisher about allegations that bank officials condoned or were informed of manipulation in the foreign exchange market or the sharing of confidential client information.

via CNBC

The post BoE Carney Plans a Shakeup At the Central Bank appeared first on MarketPulse.

March 6, 2014

USD/CAD – Building Permits, PMI Lift Loonie

Filed under: OANDA News — Tags: , , , , , , — admin @ 4:33 pm

The Canadian dollar rally continues, as the currency is trading in the mid-1.09 range in Thursday trade. The loonie has now gained over 100 points since Tuesday.  In economic news, Canadian Building Permits climbed sharply, Ivey PMI improved in February. There was good news on the US employment front, as Unemployment Claims dropped nicely.

Canadian Building Permits jumped by 8.5%, crushing the estimate of 1.9%. The reading marked a nine-month high for the key indicator, which tends to fluctuate strongly. Ivey PMI also improved in February, coming in at 57.2 points, above the estimate of 56.7. On Wednesday, the RBC held rates at the 1.0% level, as was widely expected.

In the US, there was a sigh of relief as Unemployment Claims looked solid and dropped to 323 thousand in February, down sharply from 348 thousand a week earlier. The estimate stood at 336 thousand. The US faces a big test on Friday, with the release of Nonfarm Payrolls. The markets are expecting an improvement in February, but the ADP Nonfarm Payroll release on Wednesday fell well short of the estimate. If Nonfarm Payrolls fails to meet expectations, we could see the US dollar lose ground.

Meanwhile, nervous markets are glued to the Ukraine, as Russia has effectively taken over Crimea following the ousting of the Ukrainian president, who has fled to Russia. The US and Russia continue to talk tough as the standoff between Russia and the Ukraine continue. Until this tense situation subsides, traders should be prepared for volatility in the currency markets.

 

USD/CAD for Thursday, March 6, 2014

Forex Rate Graph 21/1/13

USD/CAD March 6 at 16:10 GMT

USD/CAD 1.0970 H: 1.1046 L: 1.0956

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0783 1.0852 1.0906 1.1000 1.1094 1.11177

 

  • USD/CAD has posted modest losses in Wednesday trading.
  • 1.1094 is the next resistance line. It is followed by 1.1174, which is protecting the 1.12 level.
  • The key line of 1.10 is providing support to the pair. It could face strong pressure if the Canadian dollar continues to improve. Next, there is support at 1.0906, protecting the 1.09 level.
  • Current range: 1.1000 to 1.1094

Further levels in both directions:

  • Below: 1.1000, 1.0906, 1.0852, 1.0783 and 1.0662
  • Above: 1.1094, 1.1177, 1.1319, 1.1496 and 1.1639

 

OANDA’s Open Positions Ratio

USD/CAD ratio is posting gains in Thursday trade. This is not consistent with what we are seeing from the pair, as the Canadian dollar continues to post gains. The ratio has a majority of short positions, indicating trader bias towards the loonie continuing to rally at the expense of the US dollar.

The Canadian dollar got some help from solid releases on Thursday and continues to improve. The US dollar remains under pressure in the North American session.

 

USD/CAD Fundamentals

  • 00:00 US FOMC Member Richard Fisher Speaks.
  • 1:15 Bank of Canada Senior Deputy Governor Tiff Macklem Speaks.
  • 12:30 US Challenger Job Cuts. Actual -24.4%.
  • 13:15 US FOMC Member William Dudley Speaks.
  • 13:30 Canadian Building Permits. Estimate 1.9%. Actual 8.5%.
  • 13:30 US Unemployment Claims. Estimate 336K. Actual 323K.
  • 13:30 US Revised Nonfarm Productivity. Estimate 2.6%. Actual 1.8%.
  • 13:30 US Revised Unit Labor Costs. Estimate -1.0%. Actual -0.1%.
  • 15:00 Canadian Ivey PMI. Estimate 56.7 points. Actual 57.2 points.
  • 15:00 US Factory Orders. Estimate -0.4%. Actual -0.7%.
  • 15:30 US Natural Gas Storage. Estimate -134B. Actual -152B.
  • 16:30 Bank of Canada Deputy Governor John Murray Speaks.
  • 18:00 US FOMC Member Charles Plosser Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The post USD/CAD – Building Permits, PMI Lift Loonie appeared first on MarketPulse.

February 27, 2014

BoE’s Broadbent Says Bank Will Never Give Time Specific Guidance

Filed under: OANDA News — Tags: , , , , , , , — admin @ 3:18 pm

The Bank of England would never give “time-specific” guidance on the U.K’s first interest rate hike, Ben Broadbent, Bank of England monetary policy committee member — and rumored leading contender for the deputy governorship — told CNBC.

Broadbent told CNBC that there is “too much focus” on the interest rate hike amid speculation that the central bank could raise rates in the first half of 2015.

“We have never given, would not want to give, and are not giving time-specific guidance about when this happens. I might also say that I think there’s too much focus on this particular date,” Broadbent told CNBC.

Improving economic data in the U.K. since last year has increased expectations the Bank of England will look to raise its main interest rate. This measure is a benchmark for mortgages and savers all over the U.K. and was originally tied to the unemployment rate.

The U.K.’s official statistics office on Wednesday confirmed the country’s gross domestic product rose 0.7 percent in the last three months of 2013 from the previous quarter, while business investment picked up sharply in the same period.

Bank of England Governor Mark Carney unveiled the “next phase” of his forward guidance in February after a sharp fall in jobless numbers took the central bank by surprise. In a surprise to some analysts, Carney’s “second phase” of forward guidance did not link a rate hike to any specific indicators.

via CNBC

The post BoE’s Broadbent Says Bank Will Never Give Time Specific Guidance appeared first on MarketPulse.

Ukrainians Withdraw 7 Percent of Bank Deposits

Fears of a bank run in Ukraine are rising, as central bank reserves sink and some 7 percent of bank deposits were lost in just 3 days.
Ukraine’s reserves currently sit at $15 billion, according to the country’s newly appointed central bank governor, Stepan Kubiv. Kubiv said 7 percent of deposits, or 30 billion hryvnias ($3.3 billion), were lost between February 18-20, when the violence in the country reached its zenith and snipers opened fire on protesters.

Goldman Sachs has estimated the country’s foreign currency reserves have declined to $12 – $14 billion.

The central bank is considering providing loans to five of the country’s banks, according to analysts, in order to prevent a bank run – when a large number of customers withdraw money simultaneously, increasing the likelihood of the bank running out of funds.

Reuters reported later on Wednesday that the central bank was taking measures to stop capital flight from the country.

via CNBC

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January 23, 2014

IMF Deputy MD Shinohara: Japan should start planning for easing exit now

The post IMF Deputy MD Shinohara: Japan should start planning for easing exit now appeared first on MarketPulse.

October 28, 2013

EUR/JPY up to 134.70 after BOJ’s Iwata Repeats Easing Pledge

The yen extended its three-week decline against the euro after Deputy Governor Kikuo Iwata reiterated the Bank of Japan’s commitment to unprecedented monetary easing.

The euro traded near a two-year high against the dollar before the Federal Reserve begins a two-day meeting tomorrow, with economists predicting policy makers will refrain from tapering stimulus. Japan’s currency weakened against all its major peers as the BOJ is also due to meet this week, and is expected to maintain its more than 7 trillion yen ($72 billion) in Japanese government bonds each month to end deflation.

“The Bank of Japan, the Fed and the Bank of England are still effectively printing money, and the ECB is not. It’s a natural trade for the euro to strengthen,” Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company in Sydney, said referencing the European Central Bank and its global peers. “I still think the yen will weaken.”

Bloomberg

The post EUR/JPY up to 134.70 after BOJ’s Iwata Repeats Easing Pledge appeared first on MarketPulse.

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