Forex Blog

March 21, 2014

S&P 500 – Yellen Back Of Mind As Bullish Sentiment Back

US Stocks recovered  strongly yesterday, reclaiming almost all the losses suffered on Wednesday following the FOMC monetary policy announcement. Headlines today seems to attribute the sharp gains to “stronger”, “favourable” US economic data that came out yesterday, but that seems a little bit too convenient. If we look at what was released yesterday, we would notice that there isn’t really any big event risk – the strongest of which would be the Philly Fed Index which came in at 9.0 versus an expected 3.2. Even though this is definitely a good print, but Philly Fed tended not to inspire change in market direction be it much higher or lower than expected.

The 2nd most important number would be Initial Jobless Claims, and that was also better than analysts forecasts but the difference was a mere 2K, while Continuing Claims was 9K worst than expected. Given this, it is hard to imagine a neutral trader would look at this numbers and think that US economy has improved and hence a good proposition to start buying up stocks. Hence, it is more likely that market is simply discounting the words of Janet Yellen – not an unreasonable assertion when we remember that bullish momentum in US stocks was rather strong prior to FOMC announcement.  Also, it should be noted that Yellen’s “around 6 month” clarification is not that far off from the original rate hike forecast which is mid 2015, and may only be 3-4 months earlier in the most aggressive scenario. In the bigger scheme of things, this does not change long-term pricing of assets that much and the Yellen’s words was never really impactful fundamentally and was only relevant in terms of market sentiment.

Hourly Chart

SPX_210314H1

With yesterday’s rally, it is clear that Yellen’s comments are no longer relevant, and that should mean that the previous bullish momentum will be able to climb higher once again. That being said, price is currently back within the consolidation zone seen on Wednesday and a confirmed break is needed for demonstration of strong bullish conviction that can bring us back to previous record highs and potentially even higher. Unfortunately for bulls, Stochastic indicator tells us that momentum is already Overbought in the short-run, and considering that today is the final day of the week the likelihood of a significant breakout occurring is lower. Nonetheless, as long as prices do not dip below 1,870 either today or next Monday, the likelihood of a bullish breakout remains.

Daily Chart

SPX_210314D1

Daily Chart shows that uptrend is fully intact with a bullish engulfing candle. Based on this alone, a move back towards 1,890 and higher objectives is possible.  However, given that the closest reasonable stop loss would be below 1,850 and perhaps all the way below 1,830 if more allowance is desired, traders will need to determine if the potential gains is enough for the risk involved.

More Links:
GBP/USD – Pound Slides Continues As US Unemployment Claims Drop
USD/CAD – Loonie Tumbles After Yellen Rate Comments
USD/JPY – Dollar Spanks Yen After Yellen Rate Comments

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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 S&P 500 – Yellen Back Of Mind As Bullish Sentiment Back appeared first on MarketPulse.

March 20, 2014

WTI Crude – Pushing Higher Against Broad Negativity

It seems that WTI Crude did not receive the memo that yesterday was supposed to be bearish. Yellen’s surprising hawkish comments drove Stocks sharply lower and pushed Treasuries yield higher yesterday, USD was also strengthened due to safe-haven flow on top of higher rate expectation. All these should have driven risk correlated WTI Crude lower, but that did not happen and instead prices actually climbed higher. It is not as though Crude Oil was immune to the broad negativity, as Brent Crude was trading lower.

The mystery deepens when we consider that latest data from Department of Energy reflected a higher than expected inventory build up for the weak of 14th March. Crude Oil inventories grew by 5.85 million barrels when analysts were calling for a 2.75 million hike. This suggest that implied demand for Crude is much lower than expected and provided additional bearish pressure for Oil prices in US. Inventory in Cushing OK did decline by slightly under a million barrels, but that is much lower than the additional build up in overall inventory mentioned earlier, and should not have a net bullish impact. Case in point, it is clear that market actually reacted bearishly when the numbers were first given, hitting below 99.0 initially before rebounding up higher.

Hourly Chart

WTI_200314H1

 

Hence, it is clear that prices rallied in spite of the DOE numbers, and not because of it. From a technical perspective, the failure to breach 99.0 and confluence and rising trendline suggest that initiative is firmly within the bulls’ court. By trading above 99.5 prices bulls have also successfully mount a bullish breakout and we could still see prices climbing higher and allow us to ignore the fact that Stochastic readings are at the highest Overbought levels in 2014.

That being said, 100.0 round figure remains a tough challenge for bulls, and considering that there is very little going on in terms of fundamentals or global risk appetite that can propel prices higher, do not be surprised if the round figure ultimately holds even though sentiment of WTI is extremely bullish right now.

Daily Chart

WTI_200314D1

Things are more optimistic on the Daily Chart though. The breakout of the descending Channel coincides with a bullish cycle signal seen on WTI suggest that overall bullish uptrend since the beginning of Jan remains in play, and a push towards 101.0 significant resistance and potentially all the way to 105.0 and more is possible in the long run. The only problem is that we will need a shift in fundamentals to justify a long-term gain scenario for WTI. Right now there isn’t anything that suggest that this is even remotely possible. The Seaway pipeline expansion narrative is the only thing bullish event that is going for WTI right now, and it is unlikely that this development alone will be able to send prices all the way back to Feb levels.

More Links:
GBP/USD – Slight Gains As Employment Data Shines
AUD/USD – Steady As Markets Eye Fed Announcement
NZD/USD Technicals – Bulls Barely Live On After Wounded By Yellen’s Words

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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 WTI Crude – Pushing Higher Against Broad Negativity appeared first on MarketPulse.

March 13, 2014

USD/CAD – US Dollar Loses Ground Despite Positive Employment Data

USD/CAD has lost ground on Thursday, as the Canadian dollar takes advantage of a broadly-lower US dollar. Early in the North American session, the pair is trading in the mid-1.10 range. In economic news, Canadian New Housing Price Index had its best showing since June 2012. Over in the US, Unemployment Claims dropped and easily beat the estimate. Retail Sales and Core Retail Sales both improved in February and met market expectations.

In the US, concern about the job market eased after a solid Unemployment Claims release. 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 the 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.

 

USD/CAD for Thursday, March 13, 2014

Forex Rate Graph 21/1/13

USD/CAD March 13 at 15:00 GMT

USD/CAD 1.1061 H: 1.1120 L: 1.1044

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0852 1.0906 1.10 1.1094 1.1177 1.1319

 

  • USD/CAD has posted strong losses in the Asian session, dropping below the 1.10 level. The pair has settled down in the European and North American sessions.
  • The key level of 1.10 is providing support. Next is support at 1.0906, protecting the 1.09 level.
  • 1.1094 has reverted to a resistance line following strong gains by the Canadian dollar. It is not a strong line and could face pressure during the day. This is followed by 1.1177.
  • Current range: 1.1094 to 1.1177

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/CAD ratio is posting gains in long positions, continuing the trend we saw in the previous day. This is not consistent with what we are seeing from the pair, as the Canadian dollar has posted strong gains. The ratio has a majority of short positions, indicating trader bias towards the loonie moving higher.

The Canadian dollar has dropped  below the 1.11 line in Thursday trading. The pair is steady in the North American session.

 

USD/CAD Fundamentals

  • 12:30 US Core Retail Sales. Estimate 0.2%. Actual 0.3%.
  • 12:30 US Retail Sales. Estimate 0.3%. Actual 0.3%.
  • 12:30 US Unemployment Claims. Estimate 334K. Actual 315K.
  • 12:30 US Import Prices. Estimate 0.6%. Actual 0.9%.
  • 14:00 US Business Inventories. Estimate 0.4%. Actual 0.4%.
  • 14:00 US Federal Reserve Governor Nomination Hearings.
  • 14:30 US Natural Gas Storage. Estimate -199B. Actual -195B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -223.2B

*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 – US Dollar Loses Ground Despite Positive Employment Data appeared first on MarketPulse.

AUD/USD – Aussie Pushes Above 90 As Australian Job Data Shines

AUD/USD has crossed above the key 0.90 level. The Aussie received a boost from an excellent Employment Change release. Over in the US, retail sales numbers met expectations, while Unemployment Claims dropped for a second straight week.

Australian Employment Change surprised the markets, as the key indicator posted its biggest gain in a year, climbing to 47.3 thousand. This easily surpassed the estimate of 15.3 thousand. The Unemployment Rate remained unchanged, at 6%. The Australian dollar reacted positively to the employment news and broke above the 0.90 line. The Aussie has gained over one cent since Tuesday.

In the US, employment numbers also pleased the markets. Unemployment Claims dropped to 315 thousand, beating the estimate of 334 thousand. This was the second straight drop for the key employment indicator. Core Retail Sales and Retail Sales both posted modest gains of 0.3%, which were within market expectations.

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 the 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.

 

AUD/USD for Thursday, March 13, 2014

Forex Rate Graph 21/1/13

AUD/USD March 13 at 13:35 GMT

AUD/USD 0.9080 H: 0.9082 L: 0.8995

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8735 0.8893 0.9000 0.9119 0.9229 0.9361

 

  • AUD/USD has posted sharp gains in Thursday trading. The pair was up sharply late in the Asian session, when it crossed into 0.90 territory.
  • 0.90 has switched to a support role as the Aussie moves higher. This is followed by support at 0.8893.
  • 0.9119 is the first resistance line. This line has weakened and could face pressure during the day. Next, there is resistance at 0.9229.
  • Current range: 0.9000 to 0.9119

Further levels in both directions:

  • Below: 0.9000, 0.8893, 0.8735, 0.8658 and 0.8565
  • Above: 0.9119, 0.9229, 0.9361 and 0.9466

 

OANDA’s Open Positions Ratio

AUD/USD ratio has reversed directions on Thursday, pointing to gains in short positions. This is not consistent with what we are seeing from the pair, as the Aussie has registered sharp gains. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar continuing to rally against the US currency.

The Australian dollar continues to gain ground as it moves closer to the 0.91 line. We continue to see strong pressure on the US dollar in the European session.

 

AUD/USD Fundamentals

  • 00:00 Australian MI Inflation Expectations. Actual 2.1%.
  • 00:30 Australian Employment Change. Estimate 15.3K. Actual 47.3K.
  • 00:30 Australian Unemployment Rate. Estimate 6.0%. Actual 6.0%.
  • 12:30 US Core Retail Sales. Estimate 0.2%. Actual 0.3%.
  • 12:30 US Retail Sales. Estimate 0.3%. Actual 0.3%.
  • 12:30 US Unemployment Claims. Estimate 334K. Actual 315K.
  • 12:30 US Import Prices. Estimate 0.6%. Actual 0.9%.
  • 14:00 US Business Inventories. Estimate 0.4%.
  • 14:00 US Federal Reserve Governor Nomination Hearings.
  • 14:30 US Natural Gas Storage. Estimate -199B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -223.2B

*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 AUD/USD – Aussie Pushes Above 90 As Australian Job Data Shines appeared first on MarketPulse.

USD/JPY – Yen Up As Japanese Manafacturing Data Impresses

The Japanese yen has posted modest gains on Thursday, as USD/JPY trades in the mid-102 range. Japan released strong manufacturing data, as Core Machinery Orders posted its largest gain in ten months. In the US, today’s highlights are Retail Sales and Unemployment Claims. The sole Japanese release is the BOJ’s Monetary Policy Meeting Minutes.

There were no surprises from the BOJ, which released its Monetary Policy Statement on Tuesday. The BOJ said it would continue to expand monetary policy by 60-70 trillion each year. The Bank sounded optimistic about the economy, noting that economic growth and inflation are in line with its forecasts. The BOJ’s aggressive monetary policy has severely weakened the yen, and we could see the currency continue to struggle against the US dollar.

Tuesday’s US employment numbers disappointed, as JOLTS Job Openings dipped to 3.97 million in February. This fell short of the estimate of 4.02 million and marked a three-month low. On Friday, Nonfarm Payrolls jumped to 175 thousand in February, compared to just 113 thousand last month. This easily beat the estimate of 151 thousand. We’ll get a look at Unemployment Claims later on Thursday, with the markets expecting the key indicator to climb after last week’s strong release. A better than expected reading could give a boost to the US dollar.

With the US posting solid Unemployment Claims and Nonfarm Payrolls late last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the 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.

 

USD/JPY for Thursday, March 13, 2014

Forex Rate Graph 21/1/13

USD/JPY March 13 at 13:00 GMT

USD/JPY 102.66 H: 102.86 L: 102.42

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
100.00 101.19 102.53 103.30 104.17 105.70

 

  • The pair is facing resistance at 103.30. This is followed by a resistance line at 104.17, which has remained intact since late January.
  • 102.53 is providing support. This weak line could be tested during the day if the yen continues to move higher. The next support level is at 101.19.
  • Current range: 102.53 to 103.30

 

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions, continuing the trend we have seen for most of the week. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar moving higher.

USD/JPY is trading in the mid-102 range. The pair has edged higher in the European session.

 

USD/JPY Fundamentals

  • 12:30 US Core Retail Sales. Estimate 0.2%.
  • 12:30 US Retail Sales. Estimate 0.3%.
  • 12:30 US Unemployment Claims. Estimate 334K.
  • 12:30 US Import Prices. Estimate 0.6%.
  • 14:00 US Business Inventories. Estimate 0.4%.
  • 14:00 US Federal Reserve Governor Nomination Hearings.
  • 14:30 US Natural Gas Storage. Estimate -199B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -223.2B
  • 23:50 Bank of Japan Monetary Policy Meeting Minutes.

*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 Up As Japanese Manafacturing Data Impresses appeared first on MarketPulse.

EUR/USD – Rally Continues As 1.40 Within Striking Distance

The euro rally continues, as EUR/USD is trading in the mid-1.39 range in Thursday’s European session. The surging euro is now trading at its highest levels in 2-1/2 years. In economic news, French CPI surprised the markets, posting its sharpest gain in almost a year. It’s a busy day in the US, highlighted by Retail Sales and Unemployment Claims.

The euro has been on the move since last week’s ECB meeting. ECB head Mario Draghi did not announce any moves but did say that low inflation was not a problem and the Eurozone was making a modest recovery. Are the markets buying it? Judging by the euro’s strong performance, the answer is yes. However, with the US releasing key consumer spending and employment numbers later on Thursday, the dollar could make a comeback if these releases are strong.

Tuesday’s employment numbers were not a disaster, but could have been better, and didn’t help the struggling US dollar. JOLTS Job Openings dipped to 3.97 million in February, missing the estimate of 4.02 million and slipping to a three-month low. We’ll get a look at Unemployment Claims later on Thursday, with the markets expecting the key indicator to climb after last week’s strong release. The dollar has taken a hit in the past few days, and a better than expected employment release could put the brakes on the euro’s rally.

With the US posting solid Unemployment Claims and Nonfarm Payrolls late last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the 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.

 

EUR/USD for Thursday, March 13, 2014

Forex Rate Graph 21/1/13

EUR/USD March 13 at 11:20 GMT

EUR/USD 1.3952 H: 1.3966 L: 1.3897

 

EUR/USD Technical

S3 S2 S1 R1 R2 R3
1.3649 1.3786 1.3893 1.400 1.4149 1.4307

 

  • EUR/USD continues to move higher in Thursday trade. The pair posted strong gains late in the Asian session and has held steady in European trading.
  • 1.3893 is providing resistance. This is a weak line which could face pressure during the day. The key psychological line of 1.40 follows.
  • 1.3786 is providing support. The next support level is 1.3649.
  • Current range: 1.3786 to 1.3893

Further levels in both directions:

  • Below: 1.3893, 1.3786, 1.3649, 1.3585 and 1.3410
  • Above: 1.4000, 1.4149, 1.4307 and 1.4397

 

OANDA’s Open Positions Ratio

EUR/USD ratio is unchanged in Thursday trading. This is not consistent with the pair’s current movement, as the euro has posted gains. Short positions retain a strong majority, indicative of trader bias towards the dollar posting gains.

The euro continues to move higher and is closing in on the key 1.40 line. EUR/USD is steady in the European session.

 

EUR/USD Fundamentals

  • 7:45 French CPI. Estimate 0.4%. Actual 0.6%.
  • 9:00 ECB Monthly Bulletin.
  • 12:30 US Core Retail Sales. Estimate 0.2%.
  • 12:30 US Retail Sales. Estimate 0.3%.
  • 12:30 US Unemployment Claims. Estimate 334K.
  • 12:30 US Import Prices. Estimate 0.6%.
  • 14:00 US Business Inventories. Estimate 0.4%.
  • 14:00 US Federal Reserve Governor Nomination Hearings.
  • 14:30 US Natural Gas Storage. Estimate -199B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -223.2B

*Key releases are highlighted in bold

*All release times are GMT

Get OANDA’s exclusive weekly Market Pulse FX

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 – Rally Continues As 1.40 Within Striking Distance appeared first on MarketPulse.

March 12, 2014

USD/CAD – US Dollar in Holding Pattern As Markets Await Key Numbers

USD/CAD has edged higher on Wednesday, as the pair trades in the mid-1.11 range in the North American session. There is not much action on the release front, with only a handful of US releases. Crude Oil Inventories looked excellent, as the weekly release hit its highest level in 2014. There are no Canadian releases on Wednesday.

Tuesday’s employment numbers could have been stronger, as JOLTS Job Openings dipped to 3.97 million in February. This fell short of the estimate of 4.02 million and marked a three-month low. On Friday, Nonfarm Payrolls jumped to 175 thousand in February, compared to just 113 thousand last month. This easily beat the estimate of 151 thousand. The Unemployment Rate edged up to 6.7%, up from 6.6% in the previous reading. With the markets expecting the Fed to trim QE next week, every employment release should be treated as a market-mover.

With some solid US employment numbers last week, it’s a good bet that the Fed is likely to take its scissors and trim QE next week for the third time since the haircutting began in December. 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. If all goes well, the Fed plans like to wrap up QE by the end of 2014.

Canadian releases started the week on the right foot. Housing Starts improved to 192 thousand, up from 180 thousand a month earlier. This edged above the estimate of 190 thousand. On Friday, Employment Change looked awful, posting its second decline in the past three releases. The indicator came in at -7.0 thousand, way off the estimate of +16.9 thousand. There was no change to the Unemployment Rate, which remains at 7.0%. The Canadian dollar responded to the weak employment news by coughing up 100 points on Friday, and the currency continues to struggle against the US dollar.

 

USD/CAD for Wednesday, March 12, 2014

Forex Rate Graph 21/1/13

USD/CAD March 12 at 15:15 GMT

USD/CAD 1.1137 H: 1.1154 L: 1.1102

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0906 1.10 1.1094 1.1177 1.1319 1.1496

 

  • USD/CAD is slightly higher in Wednesday trading. The pair touched a low of 1.1102 late in the European session.
  • 1.1094 is providing support. It is a weak line which could see activity during the day. Next is support at 1.10, a key psychological level.
  • 1.1177 is a strong resistance line. This is followed by 1.1319.
  • Current range: 1.1094 to 1.1177

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/CAD ratio is posting gains in long positions, reversing directions from the previous day. This is consistent with what we are seeing from the pair, as the US dollar has posted gains. The ratio has a majority of short positions, indicating trader bias towards the loonie moving higher.

The Canadian dollar is struggling, as USD/CAD trades above the 1.11 line on Wednesday. The pair is showing little movement in the North American session.

 

USD/CAD Fundamentals

  • 14:30 US Crude Oil Inventories. Estimate 2.1M. Actual 6.2M.
  • 17:01 US 10-year Bond Auction.
  • 18:00 US Treasury Secretary Jack Lew Speaks.

*Key releases are highlighted in bold

*All release times are GMT

Get OANDA’s exclusive weekly Market Pulse FX

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 USD/CAD – US Dollar in Holding Pattern As Markets Await Key Numbers appeared first on MarketPulse.

Corporate Japan Sentiment Rises in First Quarter

Sentiment at large Japanese companies in the January-March period rose to a record high, but they are wary of the economic outlook as a planned sales tax hike in April may choke consumption and investment, a government survey showed Wednesday.

The confidence index covering firms capitalized at 1 billion yen or more came to 12.7 in the first quarter of 2014, up from 8.3 for the three months through December and hitting its highest level since comparable data became available in 2004, according to the joint survey by the Finance Ministry and Cabinet Office.

Many large companies, however, expect business conditions to sharply deteriorate after the country’s sale tax rate is raised to 8 percent from the current 5 percent next month, with the index at minus 9.8 for the April-June period, the survey showed.

The index is forecast at 8.3 in the three months through September, indicating firms believe an economic downturn in the wake of the tax increase would be only temporary, a Finance Ministry official said.

During the January-March period, business sentiment at manufacturers climbed to 12.5 from 9.7 the previous quarter on the back of a rush in demand prior to the sales tax hike, while that at nonmanufacturers gained to 12.8 from 7.5, the survey showed.

The results, which are based on valid answers provided by around 13,000 companies as of Feb. 15, are calculated by subtracting the percentage of firms reporting deteriorating business conditions from those observing improvements.

via Mainichi

The post Corporate Japan Sentiment Rises in First Quarter appeared first on MarketPulse.

AUD/USD – Under Pressure After Weak Aussie Numbers

AUD/USD has edged lower on Wednesday, as the pair trades in the mid-0.89 range in the European session. In economic news, Australian Westpac Consumer Sentiment and Home Loans posted weak readings. Over in the US, there are no major releases on the schedule. Today’s highlight is Crude Oil Inventories.

Australian numbers continue to disappoint. Westpac Consumer Sentiment continues to sag, posting a decline of 0.7% in February. This was the fifth decline in six releases. Home Loans, which is an important gauge of the housing industry as well as consumer spending, came in with a flat of 0.0%. This was an improvement compared to the previous release, but fell well short of the estimate of 0.8%. We’ll get a look at Employment Change, a key indicator, early on Thursday.

With the US posting solid Unemployment Claims and Nonfarm Payrolls late last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the 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.

 

AUD/USD for Wednesday, March 12, 2014

Forex Rate Graph 21/1/13

AUD/USD March 12 at 13:00 GMT

AUD/USD 0.8950 H: 0.8970 L: 0.8924

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8658 0.8735 0.8893 0.9000 0.9119 0.9229

 

  • AUD/USD has edged lower in Wednesday trading. The pair touched a low of 0.8924 early in the European session.
  • On the upside, the key line of 0.90 has switched to a resistance role. This is followed by 0.9119.
  • 0.8893 is providing support. There is stronger support at 0.8735, which has held firm since early February.
  • Current range: 0.8893 to 0.9000

Further levels in both directions:

  • Below: 0.8893, 0.8735, 0.8658 and 0.8565
  • Above: 0.9000, 0.9119, 0.9229, 0.9361 and 0.9466

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Wednesday, continuing the trend we saw a day earlier. This is not consistent with what we are seeing from the pair, as the Aussie is down slightly. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar moving higher against the US currency.

The Australian dollar is under pressure, as the pair remains below the 0.90 level. AUD/USD is steady in the European session.

 

AUD/USD Fundamentals

  • 00:30 Australian Home Loans. Estimate 0.8%. Actual 0.0%.
  • 14:30 US Crude Oil Inventories. Estimate 2.1M.
  • 17:01 US 10-year Bond Auction.
  • 18:00 US Treasury Secretary Jack Lew 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 AUD/USD – Under Pressure After Weak Aussie Numbers appeared first on MarketPulse.

March 11, 2014

USD/CAD – Lower As US Employment Data Slips

USD/CAD has posted modest losses, as the pair is trading back below the 1.11 line in Tuesday’s North American session. It’s a quiet day on the release front, with just three releases on the schedule. Today’s highlight, US JOLTS Job Openings, lost ground in February and fell short of the forecast. There are no Canadian releases on Tuesday.

US employment numbers remain in the spotlight on Tuesday. US JOLTS Job Openings dropped slightly in February, coming in at 3.97 million. This fell short of the estimate of 4.02 million. Late last week the markets were treated to better news, as Unemployment Claims and Nonfarm Payrolls showed sharp improvement in February. Nonfarm Payrolls, one of the most important economic indicators, jumped to 175 thousand in February, up from 1113 thousand a month earlier. This was well above the estimate of 151 thousand. Unemployment Claims dropped to 323 thousand, a thirteen-week low.

With some solid US employment numbers last week, it’s a good bet that the Fed is likely to take its scissors and trim QE next week for the third time since the haircutting began in December. 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. If all goes well, the Fed plans like to wrap up QE by the end of 2014.

Canadian releases started the week on the right foot. Housing Starts improved to 192 thousand, up from 180 thousand a month earlier. This edged above the estimate of 190 thousand. On Friday, Employment Change looked awful, posting its second decline in the past three releases. The indicator came in at -7.0 thousand, way off the estimate of +16.9 thousand. There was no change to the Unemployment Rate, which remains at 7.0%. The Canadian dollar responded to the weak employment news by coughing up 100 points on Friday.

 

USD/CAD for Tuesday, March 11, 2014

Forex Rate Graph 21/1/13

USD/CAD March 11 at 15:10 GMT

USD/CAD 1.1083 H: 1.1131 L: 1.1078

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.0852 1.0906 1.10 1.1094 1.1177 1.1319

 

  • USD/CAD is down slightly in Tuesday trading. The pair dropped below the 1.11 level in the European session.
  • 1.1094 has reverted to a resistance role. It is a weak line which could see further activity during the day. This is followed by 1.1177.
  • 1.10, a key line, continues to provide support. Next 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 and 1.0783
  • Above: 1.1094, 1.1177, 1.1319, 1.1496 and 1.1639

 

OANDA’s Open Positions Ratio

USD/CAD ratio is posting gains in short positions, continuing the trend we saw to start the week. This is consistent with what we are seeing from the pair, as the US dollar has lost ground. The ratio has a majority of short positions, indicating trader bias towards the loonie moving higher.

The pair is back below 1.11 on Tuesday, and the US dollar remains under pressure in the North American session.

 

USD/CAD Fundamentals

  • 11:30 US NFIB Small Business Index. Estimate 95.3 points. Actual 91.4 points.
  • 14:00 US JOLTS Jobs Openings. Estimate 4.02M. Actual 3.97M.
  • 14:00 US Wholesale Inventories. Estimate 0.5%. Actual 0.6%.

*Key releases are highlighted in bold

*All release times are GMT

Get OANDA’s exclusive weekly Market Pulse FX

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 USD/CAD – Lower As US Employment Data Slips appeared first on MarketPulse.

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