Forex Blog

April 18, 2014

GBP/USD – Pound Trading at 1.68 in Thin Trade

Filed under: OANDA News — Tags: , , , , , , , , — admin @ 1:39 pm

The British has edged higher on Friday, as the pair trades at the 1.68 line early in the North American session. GBP/USD has settled down after hitting four-year highs on Thursday. On the release front, there no US or British events scheduled for Good Friday.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 316 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope. There was more good news from the manufacturing sector, as the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act on his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

 

GBP/USD for Friday, April 18, 2014

Forex Rate Graph 21/1/13

GBP/USD April 18 at 13:25 GMT

GBP/USD 1.6796 H: 1.6802 L: 1.6775

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6549 1.6705 1.6765 1.6896 1.7000 1.7210

 

  • GBP/USD has edged higher in Friday trade.
  • 1.6765 is providing weak support. The next support line is 1.6705.
  • 1.6896 is the next resistance line. This line is protecting the key 1.70 level.

 

Further levels in both directions:

  • Below: 1.6765, 1.6705, 1.6549 and 1.6416
  • Above: 1.6896, 1.70, 1.7210 and 1.7374.

 

OANDA’s Open Positions Ratio

GBP/USD is pointing to gains in long positions in Friday trade. This is consistent with the movement of 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.

The pound is trading quietly on Friday. With the UK markets closed for a holiday, we can expect the lack of movement to continue during the day.

 

GBP/USD Fundamentals

  • There are no British or US releases on Friday.

 

 

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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 Trading at 1.68 in Thin Trade appeared first on MarketPulse.

AUD/USD – Flat As Markets Off For Good Friday

Filed under: OANDA News — Tags: , , , , , , , , , — admin @ 11:15 am

AUD/USD is unchanged in thin holiday trading, as the pair trades in the mid-0.93 range on Friday’s European session. The Australian markets are closed, and there are no Australian or US releases.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 314 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope. There was more good news from the manufacturing sector, as the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Australian releases failed to impress on Thursday. NAB Quarterly Business Confidence dropped to 6 points in Q1, down from 8 points in Q4. New Motor Vehicle Sales, an important consumer spending indicator, declined by 0.3%, its second drop in three releases. Despite the weak numbers, the Aussie is holding its own as it remains at high levels against the US dollar.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

 

AUD/USD for Friday, April 18, 2014

Forex Rate Graph 21/1/13

AUD/USD April 18 at 12:10 GMT

AUD/USD 0.9332 H: 0.9338 L: 0.9324

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9542

 

  • AUD/USD is listless on Friday, as the pair has steadied following losses a day earlier.
  • 0.9229 is providing strong support.
  • 0.9361 is a weak resistance line. This is followed by stronger resistance at 0.9446.
  • Current range: 0.9229 to 0.9361.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000 and 0.8893
  • Above: 0.9361, 0.9446, 0.9542, 0.9617 and 0.9703

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Friday. This is consistent with the pair’s movement, as the Aussie has posted very slight gains. The ratio remains close to an even split, pointing to a lack of bias as to which direction AUD/USD might take next.

AUD/USD is showing little activity on Friday. With trading muted due to the holiday, we can expect more of the same from the pair.

 

AUD/USD Fundamentals

  • There are no Australian or US releases on Friday.

 

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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 AUD/USD – Flat As Markets Off For Good Friday appeared first on MarketPulse.

USD/JPY – Unchanged In Holiday Trading

The Japanese yen is not showing movement on Friday, as USD/JPY continues to trade in the mid-102 range. In economic news, Japanese Tertiary Industry Activity slipped in March, posting its sharpest decline in almost a year. There are no Japanese or US releases on the Good Friday holiday.

US releases ended the week on a high note, as employment and manufacturing numbers were strong. The all-important Unemployment Claims was up slightly to 304 thousand, but had no trouble beating the estimate of 316 thousand. With the Federal Reserve planning another trim to its QE program at the end of the month and speculation rising about a possible interest rate increase next year, every employment release is under the market microscope. Meanwhile, the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Thursday’s Japanese releases did not impress the markets, but nonetheless the yen managed to hold its own against the strong US dollar. Revised Industrial Production plunged by 2.3%, its worst showing since July. Consumer Confidence continues to lose ground, with the March reading dropping to 37.5 points. Finally, Tertiary Industry Activity, an important manufacturing indicator, disappointed with a drop 0f 1.o%, well below the estimate of 0.2%, and its weakest showing since last April. With the Japanese economy still recovering slowly, the BOJ is unlikely to trim its current stimulus program.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

 

USD/JPY for Friday, April 18, 2014

Forex Rate Graph 21/1/13

USD/JPY April 18 at 10:15 GMT

USD/JPY 102.42 H: 102.57 L: 102.37

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
99.57 100.00 101.19 102.53 103.07 104.17

 

  • USD/JPY is unchanged in thin trading on Friday.
  • 102.53 continues to provide resistance, but has weakened due to significant gains by US/JPY this week. It could be tested if the dollar shows any upward movement. There is stronger resistance at 103.07.
  • 101.19 is a strong support level.
  • Current range: 101.19 to 102.53

Further levels in both directions:

  • Below: 101.19, 100.00, 99.57 and 98.97.
  • Above: 102.53, 103.30, 104.17, 105.70 and 106.85.

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains by short positions in Friday trade. This is not consistent with what we are seeing from the yen, which is showing very little activity. The ratio is made up of a strong majority of long positions, indicating trader bias towards the dollar moving upwards.

The yen is listless on Friday. With US markets closed for a holiday, we can expect more of the same from USD/JPY as we wrap up the week.

 

USD/JPY Fundamentals

  • There are no US or Japanese releases on Friday.

 

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.

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The post USD/JPY – Unchanged In Holiday Trading appeared first on MarketPulse.

Gold Slips After Strong US Job, Manufacturing Data

Gold prices dipped on Thursday, falling below the key $1300 level, as excellent readings from Unemployment Claims and the Philly Fed Manufacturing Index helped push down the precious metal. On Good Friday, gold is trading quietly, with a spot price of $1294.80. We can expect thin trading during the day, with no releases out of the US.

US releases ended the week on a high note, as employment and manufacturing numbers were strong. The all-important Unemployment Claims was up slightly to 304 thousand, but had no trouble beating the estimate of 316 thousand. With the Federal Reserve planning another trim to its QE program at the end of the month and speculation rising about a possible interest rate increase next year, every employment release is under the market microscope. Meanwhile, the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

 

XAU/USD for Friday, April 18, 2014

Forex Rate Graph 21/1/13

XAU/USD April 18 at 9:45 GMT

XAU/USD 1294.80 H: 1294.80 L: 1292.80

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1241 1260 1273 1300 1315 1330

 

  • XAU/USD is showing little movement in Friday trade.
  • 1273 is providing strong support. This line has remained intact since mid-February.
  • 1300, a key level, is the next resistance line. This is followed by stronger resistance at 1315.
  • Current range: 1273 to 1300

Further levels in both directions:

  • Below: 1273, 1260, 1241 and 1215
  • Above: 1300, 1315, 1355, 1388 and 1403

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions in Friday trade. This is not consistent with the pair’s current lack of movement. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the dollar.

Gold is steady on Friday trading, after dropping below the $1300 level a day earlier. There is little movement in thin holiday trading on Friday.

 

XAU/USD Fundamentals

  • There are no US releases on Friday.

*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 Gold Slips After Strong US Job, Manufacturing Data appeared first on MarketPulse.

April 11, 2014

Gold Showing Little Movement Ahead of Key US Data

Gold prices are steady in Friday trading, as the spot price stands at $1317 early in the European session. On the release front, the US will release two major events, Producer Price Index and UoM Consumer Sentiment. On Thursday, Unemployment Claims looked very sharp, but gold prices still posted a gain on the day.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 314 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope.

The Federal Reserve minutes were eagerly awaited by the markets on Wednesday, but the minutes didn’t deliver much in the way of breaking news. Policymakers expressed concern about speculation over a possible rise in interest rates, but didn’t say when the central bank might change its current monetary policy. Under its QE program, the Fed is purchasing $55 billion in assets every month. There have been three tapers to QE so far, and the Fed chair Janet Yellen has said that the Fed plans to wind up QE late in the year. However, if there are any setbacks on the inflation or employment fronts, the Fed could be forced to delay further tapers. As the tapers are dollar-positive, any delay would be bearish for the greenback.

Gold often moves higher as a result of geopolitical turmoil, as investors turn to the safe-haven commodity in times of trouble. One of the world’s hottest trouble spots is in Ukraine, particularly its border with Russia. Increasing tensions between the West and Russia over this tense situation has boosted gold, which was trading at $1281 just over a week ago. After annexing the Ukrainian region of Crimea in lighting speed, Russia has massed forces on its western border with Ukraine, although its says its has no interest in attacking Ukraine. The situation could easily spill out of control and this could lead to a negative reaction from the markets and send gold even higher.

 

XAU/USD for Friday, April 11, 2014

Forex Rate Graph 21/1/13

XAU/USD April 11 at 9:50 GMT

XAU/USD 1318.88 H: 1321.65 L: 1314.08

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260.98 1273.78 1312.62 1338.98 1355.80 1388.54

 

  • XAU/USD is steady in Friday trade. The pair dipped to a low of 1314.08 earlier in the European session.
  • 1312.62 is providing support. This is followed by a support level at 1273.68
  • 1338.98 is providing strong resistance.
  • Current range: 1312.62 to 1338.98

Further levels in both directions:

  • Below: 1312.62, 1273.78, 12.60.98, 1241.75 and 1215.64
  • Above: 1338.98, 1355.80, 1388.54 and 1403.24

 

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Friday. The ratio has a substantial majority of long positions, reflecting a strong trader bias towards gold moving higher against the dollar.

Gold is steady in Friday trading. XAU/USD is showing some movement in the European session, and this could continue in the North American session, as the US releases key consumer confidence and inflation data later in the day.

 

XAU/USD Fundamentals

  • 12:30 US PPI. Estimate 0.1%.
  • 12:30 US Core PPI. Estimate 0.2%.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 81.2 points.
  • 13:55 US Preliminary UoM Inflation Expectations.
  • 14:30 US Natural Gas Storage. Estimate 15B.

*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 Gold Showing Little Movement Ahead of Key US Data appeared first on MarketPulse.

EUR/USD – Robust Euro Flirts With 1.39

EUR/USD is on a tear, as the currency trades just under the 1.39 line on Friday. The euro has gained close to 200 points this week against the sagging US dollar. The greenback failed to make a dent in the euro rally despite an excellent reading from US Unemployment Claims. On Friday, German inflation indicators were weak but met expectations. Later in the day, ECB head Mario Draghi holds a press conference in Washington. Today’s US highlights are the Producer Price Index and UoM Consumer Sentiment.

The Federal Reserve minutes were eagerly awaited by the markets, but didn’t deliver much in the way of breaking news. Policymakers expressed concern about speculation over a possible rise in interest rates, but didn’t say when the central bank might change its current monetary policy. Under its QE program, the Fed is purchasing $55 billion in assets every month. There have been three tapers to QE so far, and the Fed chair Janet Yellen has said that the Fed plans to wind up QE late in the year. However, if there are any setbacks on the inflation or employment fronts, the Fed could be forced to delay further tapers. As the tapers are dollar-positive, any delay would be bearish for the greenback.

Tensions between the US and Russia continue to worsen over the Ukraine. On Monday, pro-Russian demonstrators took over a government building in an industrial city in the east of the country and declared their independence. Russia has warned the Ukraine not to react with force, while the US has accused Russia of continuing to foment unrest in the Ukraine ahead of elections in May. With the country split down the middle between pro-Western and pro-Russian camps, we could see the turmoil continue.

 

EUR/USD for Friday, April 11, 2014

Forex Rate Graph 21/1/13

EUR/USD April 11 at 8:35 GMT

EUR/USD 1.3892 H: 1.3905 L: 1.3886

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3585 1.3649 1.3786 1.3893 1.4000 1.4149

 

  • EUR/USD showed little movement in the Asian session, staying close to the 1.3790 line. The pair is unchanged in the European session.
  • 1.3786 is providing strong support.
  • On the upside, the pair is testing resistance at 1.3893. Will the pair break above this line? The next resistance line is at the key level of 1.40.
  • Current range: 1.3786 to 1.3893

Further levels in both directions:

  • Below: 1.3786, 1.3649, 1.3585, 1.3410 and 1.3335
  • Above: 1.3893, 1.4000, 1.4149 and 1.4307

 

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Friday, continuing the direction seen a day earlier. This is not consistent with the pair’s current movement, as the euro has edged upwards. Short positions retain a strong majority, indicative of trader bias towards the dollar reversing its current direction and moving higher.

EUR/USD has edged higher on Friday and could push into 1.39 territory before the weekend. The pair is showing little movement in the European session.

 

EUR/USD Fundamentals

  • 6:00 French German Final CPI. Estimate 0.3%. Actual 0.3%.
  • 6:00 French German WPI. Estimate 0.1%. Actual 0.0%.
  • 12:30 US PPI. Estimate 0.1%.
  • 12:30 US Core PPI. Estimate 0.2%.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 81.2 points.
  • 13:55 US Preliminary UoM Inflation Expectations.
  • 14:30 US Natural Gas Storage. Estimate 15B.
  • 16:00 ECB President Mario Draghi Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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Email Address: Preferred Format: HTML Text

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 EUR/USD – Robust Euro Flirts With 1.39 appeared first on MarketPulse.

March 14, 2014

USD/JPY – Yen Rally Continues As Markets Fret Over Ukraine

The Japanese yen continues to make inroads against the US dollar, as the pair trades in the mid-101 range in Friday trading. There is growing tension in the markets over the crisis in the Ukraine, with a referendum over Crimea scheduled for Sunday. On the release front, US Unemployment Claims looked sharp, while Retail Sales met expectations. In the US, today’s key events are PPI and Preliminary UoM Consumer Sentiment. Over in Japan, the BOJ released minutes of its last policy meeting, with policymakers saying the country’s economy is on track. The sole Japanese release on Friday, Revised Industrial Production, came within market expectations.

All eyes are pointed east of the Eurozone, as the crisis in the Ukraine quickly heads to a boiling point. Russia has effectively taken over Crimea and a referendum over whether the region’s residents wants to join Russia will be held Sunday. Europe and the US have already slapped some sanctions on Russia, and have vowed to take stronger steps if the referendum goes ahead. There are also fears that Russia could invade eastern Ukraine, which has a pro-Russian population. Secretary of State John Kerry is meeting on Friday with his Russian counterpart to try and de-escalate the crisis, which some European leaders have described as the worst since the end of the Cold War in the 1990s.

No news was good news as far as the yen was concerned, as the BOJ minutes contained no surprises. The central bank said that the economy and inflation is in line with the forecasts, and the April sales tax hike should not hurt economic growth. The Abe government is implementing the tax hike in a bid to tackle Japan’s massive national debt, and there are concerns that consumer spending could suffer, which would in turn hurt the current recovery.

In the US, concerns about the job market eased after a solid Unemployment Claims release on Thursday. The key indicator dropped to 315 thousand, down from 323 thousand the previous week. This beat the estimate of 334 thousand. This was the second straight drop for the key employment indicator. 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.

With Nonfarm Payrolls improving and Unemployment Claims dropping, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for a third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue, with the Fed aiming to wind up the program before the end of 2014.

 

USD/JPY for Friday, March 14, 2014

Forex Rate Graph 21/1/13

USD/JPY March 14 at 11:45 GMT

USD/JPY 101.45 H: 101.85 L: 101.41

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
99.57 100.00 101.19 102.53 103.30 104.17

 

  • 102.53 has switched to a resistance role as the yen continues to climb. This is followed by a resistance line at 103.30.
  • 101.19 has weakened as a support line and could be tested during the day. The next support line is the key level of 100.00, which has held firm since last November.
  • Current range: 101.19 to 102.53

 

Further levels in both directions:

  • Below: 101.19, 100.00, 99.57 and 98.65
  • Above: 102.53, 103.30, 104.17, 105.70, 106.85

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to strong gains in long positions on Friday, continuing the trend we have seen for most of the week. This is not consistent with the pair’s current movement, as the yen continues to strengthen. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar reversing its current downward trend.

The Japanese yen continues to point upwards and is trading in the mid-101 range. The US dollar remains under pressure in the European session.

 

USD/JPY Fundamentals

  •  4:30 Japanese Revised Industrial Production. Estimate 4.0%. Actual 3.8%.
  • 12:30 US Producer Price Index. Estimate 0.2%.
  • 12:30 US Core PPI. Estimate 0.1%.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 81.9 points.
  • 13:55 US Preliminary UoM Inflation Expectations.

*Key releases are highlighted in bold

*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.

 

Get OANDA’s exclusive weekly Market Pulse FX

Email Address: Preferred Format: HTML Text

 

The post USD/JPY – Yen Rally Continues As Markets Fret Over Ukraine appeared first on MarketPulse.

March 7, 2014

AUD/USD – Firm Ahead of Unemployment Claims

The Australian dollar is steady in Friday trading, as AUD/USD trades in the low-0.91 range. The Aussie rallied on Thursday following strong Australian numbers. Taking a look at Friday news, there are three key events out of the US on the schedule – Nonfarm Payrolls, the Unemployment Rate and Trade Balance. There are no Australian releases on Friday.

In the US, all eyes are on Nonfarm Payrolls, which will be released together with the Unemployment Rate later on Friday. US employment numbers have been a mix so far this week, as ADP Nonfarm Payrolls was well below the estimate, but Unemployment Claims dropped to its lowest level since December. Even if today’s numbers aren’t great, we can expect the Fed to take the scissors and trim QE at its meeting next week.  New York Fed President William Dudley said as much on Thursday when he stated that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

It’s been an excellent week for Australian releases. Retail Sales looked sharp in February, with a strong gain of 1.2%. This easily beat the estimate of 0.5%, and was the indicator’s strongest gain since last March. Retail Sales is the primary gauge of consumer spending, so a strong reading from the indicator points is an important sign of economic growth. Trade Balance also looked sharp, posting a surplus of $1.43 billion, crushing the estimate of $0.13 billion. The indicator has been marked by monthly deficits, so a sharp increase in the trade surplus is certainly good news for the economy and the Australian dollar. As well, GDP rose in Q4 and Building Permits also impressed.

Earlier this week, the RBA opted to keep a steady course and maintain interest rates at 2.50%, where they have been pegged since August. The Bank said that current low rates were likely to remain low for some time and also took a shot at the high value of the Australian dollar. Governor Glenn Stevens stated that the currency remains “high by historical standards.” The RBA has said in the past that it would like to see the Aussie closer to the 85 level, so we’re likely to see the central bank continue to “talk down” the currency.

 

AUD/USD for Friday, March 7, 2014

Forex Rate Graph 21/1/13

AUD/USD March 7 at 14:40 GMT

AUD/USD 0.9128 H: 0.9130 L: 0.9069

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8893 0.9000 0.9119 0.9229 0.9361 0.9466

 

  • AUD/USD has posted slight gains in Friday trading. The pair has moved back above the 0.91 line in the European session.
  • On the upside, 0.9229 is providing strong resistance.
  • 0.9119 has switched to a support role as the Aussie moves higher. The next support line is the key 0.90 level.
  • Current range: 0.9119 to 0.9229

Further levels in both directions:

  • Below: 0.9119, 0.9000, 0.8893, 0.8735 and 0.8658
  • Above: 0.9229, 0.9361, 0.9466 and 0.9595

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged in Friday trading. This is not consistent with what we are seeing from the pair, as the Aussie has posted slight gains. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move higher against the US currency.

The Australian dollar is trading above the 0.91 line and continues to put pressure on the greenback in the European session.

 

AUD/USD Fundamentals

  • 13:30 US Nonfarm Employment Change. Estimate 151K.
  • 13:30 US Trade Balance. Estimate -39.1B.
  • 13:30 US Unemployment Rate. Estimate 6.6%.
  • 13:30 US Average Hourly Earnings. Estimate 0.2%.
  • 17:00 US FOMC Member William Dudley Speaks.
  • 18:00 US Consumer Credit. Estimate 14.6B.

 

*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 AUD/USD – Firm Ahead of Unemployment Claims appeared first on MarketPulse.

February 28, 2014

EUR/USD – Euro Steady As German Retail Sales Shine

EUR/USD is trading comfortably above the 1.37 line in Friday trade. Taking a look at today’s releases, it’s a full day on both sides of the Atlantic. In the Eurozone, German Retail Sales jumped 2.5%, its best showing in almost a year. The Italian unemployment rate rose in January and was higher than the estimate. The markets are keeping a close eye on Eurozone Flash Estimate CPI, a key event. In the US, there are three key events - Preliminary GDP, Chicago PMI, and Pending Home Sales.

It’s been all smiles for German numbers this week. On Friday, Retail Sales jumped 2.5%, crushing the estimate of 1.2%. German GfK Consumer Climate continues to rise, as the key indicator moved upwards for a fourth straight month. Earlier in the week German Ifo Business Climate and Unemployment Change declined by 14 thousand, its third straight decline. With the ECB under pressure to take action and boost the sputtering Eurozone economy, good news from Germany, the largest economy in the bloc, is especially welcome. Meanwhile, the data out of other major Eurozone members was much worse. French Consumer Spending declined by 2.1%, its worst showing in almost two years, and well off the estimate of -0.8%. Italian Quarterly Unemployment jumped to 12.6%, up from 12.3% the month before. The estimate stood at 12.4%.

Federal Reserve Chair Janet Yellen testified on Thursday before a Senate committee. As expected, Yellen said that the Fed remains committed to tapering QE and would like to wind up the bond-buying scheme by the fall. At the same time, she acknowledged the string of weak US releases recently and said that the Fed would closely monitor to what extent the weak numbers are due to cold weather and what portion can be attributed to a “softer outlook”. The next Fed policy meeting takes place in mid-March and the markets will be expecting another $10 billion cut to QE.

Thursday was a mix for US key releases. Manufacturing data looked strong, as Core Durable Goods Orders jumped 1.1% in January. This surprised the markets, which had expected a decline of -0.1%. However, Unemployment Claims did not look as sharp, as the key indicator rose to 348 thousand, well above the estimate of 333 thousand. Meanwhile, a nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand, crushing the estimate of 406 thousand. It was the housing indicator’s best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week. We’ll get another look at key housing data on Friday, with the release of  Pending Home Sales. The markets anticipate a strong gain after a miserable reading in December.

USD/INR Technicals – Rupee Showing Strength As Price Steady

Rupee has weakened slightly today against the Greenback ahead of Q4 GDP numbers (to be released at 12:00pm UTC), which is expected to come in at 4.8% according to analysts consensus estimate. This increase in USD/INR can be attributed to traders expecting a weaker than expected GDP print, but credit should also be given to the strengthening USD whose impact is visible in major pairs such as EUR/USD, AUD/USD and GBP/USD. Given all these, it is actually rather remarkable that USD/INR managed to stay under 62.07 soft resistance especially since risk appetite in European stocks are bearish right now ( DAX -0.09%, FTSE 100 -0.27%) which should drive high risk currencies such as Rupee much lower.

Hourly Chart

USDINR_280214H1

Perhaps the high interest yields that RBI has raised made Rupee attractive to investors and give them reasons to hold onto INR, or at the very least make it expensive for speculators to short it. The true test of this new found strength in INR will be tonight. Should GDP numbers come in weaker than expected but USD/INR manage to stay below 62.07 by the end of day, we can ascertain that support for INR is strong and this bodes well for Rupee holders moving forward. Conversely, if 62.07 is broken today despite GDP numbers meeting or exceeding expectations, we can interpret this outcome as the breakdown of bullish sentiment for INR and further bullish push in USD/INR may be likely next week.

Weekly Chart

USDINR_280214W1

Nothing new from the Weekly Chart, as prices remain steady between Channel Top and the ceiling of consolidation range back in Jul 2013 which has been providing support for USD/INR. This is actually good for carry traders who abhors volatility, and the longer we stay within this band, expect to see more and more carry traders willing to buy INR and keep USD/INR down. Will this be able to negate the bullish pressure from USD entirely? We are unable to say for sure but similarly this uncertainty will prevent traders to go long USD/INR as the negative interest is too expensive to keep when one is unsure.

More Links:
EUR/USD – Regains Lost Ground back above Key Level of 1.37
AUD/USD – Trying to Claw Back to Key 0.90 Level
GBP/USD – Dealing with Resistance at 1.67

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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/INR Technicals – Rupee Showing Strength As Price Steady appeared first on MarketPulse.

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