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Forex: USD/CAD retreats after Canadian GDP




The Canadian dollar strengthened and dragged USD/CAD back from highs after data showed Canadian GDP grew 0.6% in Q4 2012, in line with market expectations, while the previous reading was upwardly revised to 0.7% from 0.6%.


USD/CAD pulled back from an 8-month high of 1.0341 scored right before the data, and slid toward 1.0300. At time of writing, USD/CAD is trading around 1.0305/10, where it is virtually unchanged since opening.


In terms of technical levels, the pair could face immediate supports at 1.0300 and 1.0260 (100-hour SMA), while resistances are seen at 1.0341 (intraday high) and 1.0360 (Jun 28 high).




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Mar 01, 2013
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Forex: GBP/USD consolidating below 1.5050




The sterling keeps the bearish mood below the 1.5050 level on Friday, dragged lower after softer-than-expected data from the UK manufacturing PMI print.


“The UK authorities have a de facto weak pound policy and will be all the more committed to it now. The economy is flirting with a return to recession, monetary policy is out of juice, and GBP/USD is heading for an imminent break of 1.50. After that, a shift to a test of $1.40 will follow on a 6-month time horizon”, argued Kit Juckes, analyst at Societe Generale.


GBP/USD is losing 0.92% at 1.5022 facing the next support at the psychological level at 1.5000 followed by 1.4949 (low Jul.12 2010) and then 1.4873 (low Jul.1 2010).
On the upside, a breakout of 1.5173 (hourly high Mar.1) would expose 1.5223 (high Feb.28) and then 1.5235 (MA10d).




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Mar 01, 2013
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Forex: USD/JPY breaks above 93.00




The US dollar continues to strengthen across the board, having recently broken above the 93.00 mark against the yen to hit its highest level since Monday, underpinned by better-than-expected US PMI and consumer confidence.


USD/JPY has risen nearly 70 pips within the last hour and reached a high of 93.50 before easing a tad. At time of writing, USD/JPY is trading around 93.35 where it records a 0.9% gain during the first day of March.


In terms of technical levels, if the USD/JPY manages to clear the 93.50 area, next resistances are seen at 94.00 and 94.30.On the other hand, immediate supports could be found at 93.00, 92.70 (20-hour SMA), and 92.40 (intraday low).




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Mar 01, 2013
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Forex: EUR/USD closes just above 1.3000; 1.29 vital area










One month and 745 pips later, the EUR/USD has been brought to earth from the February 1st high at 1.3710 to Friday March 1st bottom at 1.2965. However, the euro managed to recover some ground and following the US President Barack Obama speech on 'sequester', the pair has closed above the 1.3000 key level. Is time for bears now? Let see...


The EUR/USD closed Friday at 1.3020, around 0.30% negative on the day. In the 1-day chart, MACD, CCI and Momentum indicators points bearish while Stochastic is bull. In a wider windows the picture changes as MACD, CCI and Momentum are bullish with a stochastic neutral in the 1-day timeframe.


It seems there are signs of a changing trend as the EUR/USD has experienced 4 weeks of losses and the BPI is indicating that EUR is rising from 15.79 and the USD is above the 90 level. However, according to the FXstreet.com EUR/USD Forecast, the mid and long-term forecasts for the euro are 300 pips lower than last week.







According to TD Securities FX analysts Shaun Osborne and Greg Moore, there is still hope for Euro bulls if the pair remains above the 1.28/29 area. "Four weeks of successive losses keeps the EUR on track to test the 1.28/1.29 area (40-week/200-day MA/neckline of the huge, multi-month inverse H&S neckline that drove our late 2012/early 2013 bullishness on the EUR)."


"Holding this support zone (we can tolerate some temporary weakness below) is vital in sustaining a longer-term bull outlook," state both analysts.


But what's going on in the fundamental area? Sequester is fueling the risk aversion and the USD is joining it due its safe haven status. Meanwhile, the Italian disaster is looming in the Euro sentiment. As UBS' analysts Geoffrey Yu and Manik Narain well said in a recent report, "it will be interesting to see how the ECB responds after the Italian election and a return in risk aversion. "


Expectations will be the theme in the coming week as the RBA, BoC, ECB, BoE, and BoJ are expected to hold policy meetings. Beside Mario Draghi, nominated BoJ governor Haruhiko Kuroda will have his first speech and market will pay special attention on what he will say to support, or not, the JPY weakening. USD/JPY finished the week above the 93.50 level.


On the North American side, President Barack Obama said that the U.S. "will get through this, will not be an ‘Apocalypse’”. Earlier in the session, House Speaker John Boehner affirmed that there is still time to reach an agreement during the incoming week. Meanwhile, both Republicans and Democrats continue to kick the can down to each others backyard.


The Banking Week Ahead


As noted before, RBA, BoC, ECB, BoE, and BoJ will publish their monetary policy decisions. Despite some market voices are asking for a rate cut in the ECB, major expectations are that Draghi and his team will maintain his refi rate unchanged. The point of salt will come with the president's press conference.


US unemployment data and its Non Farm Payrolls, the European, Australian and Japanese Q4 GDP and the size of the BoE's APF will also take the market attention.


Major events


- ECB Interest Rate Decision (Mar 07 12:45 GMT)


- BoE Interest Rate Decision (Mar 07 12:00 GMT)


- BoJ Interest Rate Decision (Mar 07 02:00 GMT)


- U.S. Unemployment Rate (Mar 08 13:30 GMT)




- U.S. Nonfarm Payrolls (Mar 08 13:30 GMT)


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Mar 02, 2013
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Forex Flash: GBP/USD to move into a 1.45-1.55 range - RBS








The Sterling has been trading under pressure against the Greenback in the last weeks and after declining around 1350 pips since February 1st high at 1.6335, the GBP/USD seems to have found some support at 1.5000 where the pair built a consolidation movement.


RBS' analyst Paul Robson believes that the GBPUSD is moving into a 1.45-1.55 range, with risks skewed to the downside. "While we believe that GBP fundamentals have deteriorated further, and this will keep the pressure on GBP/USD, we do expect a kicker from a stronger USD tone from concerns over Italy."


"This may mean that EUR/GBP falls at the same time as GBP/USD falls. The USD part has led us to lower our assumed profile for GBP/USD," points Robson. Currently the GBP/USD is itching higher and trading at 1.5070, 0.20% above opening price action. "We now see GBP/USD moving into a 1.45-1.55 range, with risks skewed to the downside," concluded RBS' analyst.


The bank expects the Pound to remain below the 1.5000 level across the 2013. RBS' forecasts are March: 1.4800; Q2 1.4600; Q3: 1.4900 to end the year at 1.4900.




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Mar 04, 2013
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Forex Flash: FLS fails to firefight monetary arson - Nomura








Nomura Economist Phillip Rush notes that there is little evidence that Funding For Lending (FLS) is imparting much stimulus.


He writes, “We do not believe it can do in the presence of strict regulatory pressure to deleverage. Nor is it tying sufficient funding to Bank rate for a cut to be worthwhile. Increasingly repressive policies are being brought up, but softer communication changes are likely to come first, in our view.”


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Mar 04, 2013
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Forex Flash: FLS fails to firefight monetary arson - Nomura








Nomura Economist Phillip Rush notes that there is little evidence that Funding For Lending (FLS) is imparting much stimulus.


He writes, “We do not believe it can do in the presence of strict regulatory pressure to deleverage. Nor is it tying sufficient funding to Bank rate for a cut to be worthwhile. Increasingly repressive policies are being brought up, but softer communication changes are likely to come first, in our view.”


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Mar 04, 2013
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Troika to suggest loan extension options for Ireland and Portugal and resume aid talks with Cyprus




At the press conference ending the two-day Eurogroup meeting on Tuesday EU Commissioner for Economic and Monetary affairs Olli Rehn assured that the the Troika would resume bailout negotiations with Cyprus as soon as possible, with an aim of reaching the final deal at the end of March.


As far as the extension of bailout loan maturities for Ireland and Portugal is concerned, Rehn said that it had been agreed that the Troika should consider establishing a new debt repayment schedule for a part of the loans. The final decision would be announced in April at the next Eurogroup meeting in Dublin.


The question of restricting bank bonuses, supported by all Eurozone officials except for UK Chancellor George Osborne, will be further examined from the side of technical details and put to vote in the nearest future.




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Mar 05, 2013
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Fundamental Afternoon Wrap: Euro PMIs and Central Bank meets in focus




This afternoon institutional report reflects market mood today, with focus falling on the key central bank meetings later in the week and the stablising European services PMIs today. There is a feeling that absent sudden Italian developments, EUR/USD may struggle to decline much further, while in the UK the shock of Manufacturing PMIs was offset by today's numbers.


EUR


Brown Brothers Harriman analysts note that Euro area service PMIs showed a bit of improvement from the 47.3 flash reading, rising to 47.9. However they add that the real take away and one not lost on the foreign exchange market which sold into the euro's bounce, was that the February reading was weaker than the 48.6 reading seen in January. ING economist Martin van Vliet notes that the sharp increase in retail sales raises hopes that the consumer sector will be less of a drag on the Eurozone economy in the first quarter of this year. Overall, he feels that the tentative signs of stabilisation in retail sales, coupled with the upward revision to the earlier “flash” Eurozone composite PMI (to 47.9 in February), reinforces his belief that the ECB will keep interest rates on hold on Thursday.


Jane Foley of Rabobank feels that despite the downside risks, on the back of the QE headwinds undermining USD, she is reluctant to call lower lows on EUR/USD. However, the Italian situation looks like a wildcard that needs to be monitored. Nick Bennenbroek of Wells Fargo notes that the euro is up on firmer than expected data and with some indications surrounding the European Union finance ministers meeting that more flexibility surrounding Europe’s austerity plans may be possible.


GBP


Brown Brothers Harriman analysts note that after reporting weak manufacturing and construction PMIS, the UK reported a better than expected CIPS service PMI, the highest reading since last September. BNP Paribas economist Catherine Stephan notes that in February, activity accelerated again in services, with the good news partially offsetting the poor performance in the manufacturing sector. Overall the PMI composite Index remained in expansion territory.


USD


Marc Chandler of Brown Brothers Harriman notes reports from the YS Commerce Department that estimate hat the dollar value of US exports rose sharply last year to $2.2 trillion which means that US exports appear to have surpassed Chinese exports, which the Chinese government estimates at $2.05 trillion.






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Mar 05, 2013
OctaFX.Com News Updates

Forex: GBP/USD testing support at 1.5080 after US ADP




The GBP/USD has fallen on the heels of a upbeat economic data in the United States Wednesday. A previous upside attempt was halted at 1.5104, causing the pair to decline at the onset of American trading in recent moments. At the time of writing, the cross has settled at 1.5073/76, down -0.35%.


According to the ICN.com Analyst Team, “The GBP/USD dropped during today’s session before rebounding to 1.5100 levels. Trading below 1.5190 levels is negative; RSI is trading with a negative bias below 50 supporting our expectations.”


In the United States, the ADP Employment Change (February) came in at 198K, against expectations of 170K, and compared with 192K previously. Later today at 15:00 GMT investors will learn of the Factory Orders figure, which will shine more light on the status of the US economy.


The ICN.com analysts point to supports at 1.5080, followed by 1.5035, and the 1.5000 barrier. On the positive side, the GBP/USD will encounter resistive means at 1.0260, then 1.5130, 1.5190, and ultimately 1.5225.








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Mar 06, 2013
OctaFX.Com News Updates