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GBP/USD bounces at 1.6400

FXStreet (San Francisco) - The GBP/USD is performing a bounce from 1.6400 area as the pair is now trading at 1.6430. Earlier, the cable fell 70 pips from 1.6465 to trade at lows since February 11 at 1.6390 amid central banks decision.

However the pair found buying interest at this level and now it is attempting to recover above 1.6430. Currently, GBP/USD is trading at 1.6431, down 0.18% on the day, having posted a daily high at 1.6467 and low at 1.6394.

GBP/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bearish.

GBP/USD levels

If the pair continues to recover, next resistance will be 1.6460, 1.6500 and 1.6545. On the downside, 1.6395, 1.6340 and 1.6250 are supports.

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Sep 04, 2014

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ECB's Draghi: ECB's move prompted by worsening inflation outlook in August

FXStreet (Łódź) - When asked about the definition of QE Draghi explains that it's not related to size but rather to the modalities.

• The program is designed just to boost bank lending.

• Draghi also assures a "comfortable" majority of the Governing Council members were in favor of implementing the ABS program.

• "Rules have been followed when hiring investment management company BlackRock as a consultant for ABS program.

• Draghi points to the deterioration of inflation expectations in August as the reason for cutting rates and introducing new measures at today's meeting.

• Eurozone recovery is losing momentum.

• Measures introduced today were aimed at moving the balance sheet up to 2012 levels.

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Sep 04, 2014

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ECB's Draghi: New measures to provide support to TLTRO

FXStreet (Łódź) - The ECB chief stresses that the measures introduced at today's meeting should reinforce the TLTRO program intoduced in June and coming into effect this month.

• ABS will include real estate, Draghi informs.

• It will purchase loans to the real economy.

• "Structural reforms, fiscal policy and monetary policy can jointly support growth."

• Draghi stresses that there is no bargain between Eurozone politicians and central bankers as they all should be doing their own jobs.

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Sep 04, 2014

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[OctaFX_Farid]

USD/CHF surges to 1-year highs

FXStreet (Córdoba) - USD/CHF rallied to a fresh 1-year high as the franc weakened, moving in tandem with the euro, after announcement of rate cuts and asset buying program by the European Central Bank.

USD/CHF has risen nearly 100 pips within the last hour, reaching a peak of 0.9269, last seen September 17 2013. At time of writing, USD/CHF is trading at 0.9265, 0.98% above its opening price, while EUR/USD hovers barely above 1.3000.

Following ECB move, many suggested the SNB could be the next to cut deposit rates to protect the 1.2000 floor on EUR/CHF. However, such a decision is not imminent as the SNB still has other tools such as intervention for that aim.

EUR/CHF has printed a 22-month low of 1.2043 and it was last at 1.2055.

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Sep 04, 2014

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ECB cuts rates and announces ABS purchases to fight low inflation

FXStreet (Łódź) - During the press conference following ECB's unexpected decision to cut rates to new record lows at the September meeting, Mario Draghi also announced that simple asset-backed securities and covered bonds purchases would be launched next month.

The introduction of ABS purchases, which are supposed to facilitate credit flows to the economy, was backed by a "comfortable" majority of the Governing Council members, as Mario Draghi assured.

The measures are expected to reinforce the TLTRO program announced in June and coming into effect this month and push the balance sheet up to levels seen in 2012. Draghi refused to determine the size of the ABS program however, suggesting it is currently "difficult to assess."

The introduction of measures, as well as the rate cuts, were prompted by the deterioration of inflation expectations in August, Draghi said. The ECB inflation forecast for 2014 was cut to 0.6% from 0.7%, while predictions for 2015 and 2016 remained unchanged, at 1.1% and 1.4%, respectively.

As far as growth forecasts for the Eurozone are concerned, they were reduced to 0.9% this year from 1%, to 1.6% from 1.7% the next and were raised to 1.9% from 1.8% for 2016.

"Structural reforms, fiscal policy and monetary policy can jointly support growth," Draghi assured.

During the Q&A part of the press conference Draghi informed that the decision to cut rates and buy loans was not unanimous and that now "rates are at the lower bound where technical adjustments will not be possible."

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Sep 04, 2014

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[OctaFX_Farid]

USD/JPY retreated from 6-year high before another attack

FXStreet (Moscow) - USD/JPY retreated from almost 6-year high at 105.70 seen in Asia; it is trading at 105.24.

Another volatile day

Today the pair became even closer to 6-year highs, but the stronger than expected Non-Manufacturing ISM was not enough to convince the traders to buy more. Partially the cautious behavior of the market may be attributed to the looming Non-Farm Payrolls report. There are arguments for the employment rise, for instance, in form of strong ISM Non-Manufacturing Employment Component. However, there are also some leading indicators pointing to possible weakness of the report. We already know, the ADP reported worse than expected rise in payrolls, ISM Manufacturing Employment Component dropped to 58.1, and Jobless Claims 4-Week Moving Average rose to 302k. We may see another volatile day ahead!

What are today’s key USD/JPY levels?

Today's central pivot point can be found at 105.13, with support below at 104.89, 104.51 and 104.26 with resistance above at 105.51, 105.76, and 106.14. Hourly Moving Averages are mixed, with the 200SMA bullish at 104.39 and the daily 20EMA bullish at 103.75. Hourly RSI is bullish at 53.

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Sep 05, 2014

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[OctaFX_Farid]

SEB: S&P500 unhealthy price action - eFXnews

FXStreet (Łódź) - As the eFXnews team point out the SEB sees S&P500's action as unhealthy, with another topside spike added on Thursday.

Key quotes

"Buyers encounter big difficulties to drive the trend further."

"A sustained drop under 1.9888/86 remains an elevated risk - and if so, extension towards 1, 965 should be accounted for."

"Current intraday stretches are located at 1,988 & 2,008."

'This content has been provided under specific arrangement with eFXnews.'

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Sep 05, 2014

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[OctaFX_Farid]

The ECB finally delivered – Danske Bank

FXStreet (Edinburgh) - Pernille Nielsen, Senior Analyst at the Nordic Danske Bank, evaluated yesterday’s announcements by the ECB.

Key Quotes

“Overall, the measures should support the easing in June, when the ECB introduced a negative deposit rate and announced it would boost liquidity through TLTRO loans”.

“At the same time, the ABS purchases will strengthen the effectiveness of the TLTROs as it removes loans from the banks’ balance sheet and hence increases the banks’ lending capacity to the real economy due to capital requirements”.

“So far, the size of the ABS and covered bonds purchases is unknown and, according to Mario Draghi, it is difficult to assess the size of the ABS programme as it will include new and existing ABS”.

“Draghi stated that the ECB has now reached the lower bound on policy rates”.

“The ECB is still unanimous in using unconventional measures should it become necessary to further address risks on inflation”.

“The decisions taken by the ECB should underpin anchoring of inflation expectations”.

“The ECB still sees expectations as anchored, but it has seen downside risks to inflation increasing and due to that it eased again”.

“The market reaction to the rate cut was pronounced as it was not expected with any greater conviction”.

“It is noteworthy to see the steepening in the EUR swap curve from the long end as a sign of the market believing the ECB measures will lift growth and inflation expectations.

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Sep 05, 2014

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European stocks edge lower after ECB shock, NFP eyed

FXStreet (Córdoba) - European stocks were little changed Friday, a day after the European Central Bank (ECB) surprised markets by announcing rate cuts and other measures to support economic growth and fight deflation in the Eurozone. Meanwhile, investors are refraining from taking big positions ahead of the US nonfarm payrolls report.

The Stoxx Europe 600 fell 0.32% to 347.77, pulling back from a 2-month high. As for country-specific indexes the UK FTSE dropped 0.29%. The Germany’s DAX 30 was up 0.12% while the France’s CAC 40 shed 0.10%. Spain’s Ibex 35 and Italy’s FTSE MIB were both little changed.

On Thursday, the ECB took a step forward and cut all 3 of its main interest rates and announced it will start purchasing non-governmental securities and asset-backed securities (ABS) next month. However, the bank refrained from committing to unlimited sovereign QE.

Equities markets received the ECB news with optimism. The Stoxx Europe 600 rallied 1.1% yesterday, closing at its highest level since July 3.

Today, Eurozone GDP for the second quarter matched expectations of a 0.7% growth YoY.

In the FX market, majors are taking a breather after yesterday’s fireworks. EUR/USD is nearly flat at the 1.2950 area after bottoming at a 14-month low of 1.2919 on the back of ECB expansionary measures. GBP/USD is trading at 1.6320, after hitting 7-month trough of 1.6285 while USD/JPY is also flat at the 105.20 region, having pulled back modestly from a 6-year peak of 105.70.

As for commodities, gold recovered a tad after hitting a fresh 3-month low. The metal was 0.2% up at $1,264 an ounce while crude oil rose 0.52% to $94.93 a barrel.

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Sep 05, 2014

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[OctaFX_Farid]

EUR/USD sedated around 1.2950

FXStreet (Edinburgh) - The single currency remains under the effects of yesterday’s ECB announcements, with the EUR/USD meandering around 1.2950/55.

EUR/USD focus on Payrolls

The pair dropped from the mid-1.3100s to as low as 1.2920 following the ECB meeting and subsequent press conference by President Draghi, leaving the door open for further downside in case today’s Payrolls surprise to the upside. Market consensus expects the US economy to have created 225K in August and the jobless rate to decrease to 6.1% from 6.2%. Data wise in the euro area, the GDP figures showed a flat reading inter-quarter during Q2 and 0.7% on a yearly basis, in line with consensus. “We anticipated that the break of 1.3105 could lead to acceleration lower but the down-move was much deeper than expected. The lack of any significant bounce after touching a low of 1.2933 suggests further downside risk for today (albeit at a slower pace). Expect 1.2980 to cap any short-term recovery for another leg lower towards 1.2890”, signaled Quek Ser Leang, Market Strategist at UOB Group.

EUR/USD levels to consider

The pair is now up 0.09% at 1.2956 with the next resistance at 1.3030 (high Sep.4) followed by 1.3110 (low Sep.2) and then 1.3154 (high Sep.4). On the flip side, a breakdown of 1.2920 (low Sep.4) would aim for 1.2788 (61.8% of 1.2042-1.3995) and finally 1.2755 (low Jul.9 2013).

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Sep 05, 2014

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[OctaFX_Farid]

EUR/USD could slump further on positive NFP - FXStreet

FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that ahead of the US NFP release EUR/USD is consolidating losses sustained after the ECB monetary policy announcement yesterday, near the 1.2921 low.

Key quotes

"Today, the market expects the US economy to add 225K and unemployment rate to retrace back to 6.1%."

"The dollar may look exhausted in the short term, yet if numbers outcome such expectations, will probably continue advancing: a break through the 1.2920 mentioned low should see a quick slide towards 1.2880 price zone, while if the downward acceleration extends, next target stands at 1.2845."

"If the reading however disappoints, market may take the opportunity to profit from recent slide, generating an upward corrective movement: 1.3000 critical figure is the first level to watch, while if above, 1.3050 is next."

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Sep 05, 2014

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[OctaFX_Farid]

AUD/USD around 0.86 in 12m view – Rabobank

FXStreet (Edinburgh) - Senior Currency Strategist Jane Foley at Rabobank expects the pair to range bound between 0.92 and 0.93 in the short term and to slip towards 0.86 in 12m.

Key Quotes

“Over the past year or so, one of the greatest fears regarding the outlook for the Australia economy has related to concerns over a lack of alternative investment spending (in anything other than residential property)”.

“Although a number of labour market indicators have picked-up since the start of this year, the weakness in capital expenditure has suggested that future employment growth could be weak”.

“Last week, however, official data showed that Q2 capital expenditure grew a better than expected 1.1% q/q, suggesting that Australia is finally managing to re-invent itself following the end of the mining investment boom. This piece of data will certainly have fed the AUD’s current resilient tone”.

“Looking forward we expect that soft economic data releases will wear down the current resilient tone of the AUD”.

“While the official Capex data should bolster the mood of the policy makers, it is clear that headwinds still cloud the outlook and this suggests risk that the RBA could again attempt to jawbone the AUD to lower levels”.

“Over the coming 3 mth we expect the AUD/USD 0.92 to 0.93 to contain most activity. On a 12 mth view, we look for a move towards 0.86. This assumes a broad based recovery for the USD as the first hike in the Fed funds rate near”.

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Sep 05, 2014

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UK IP and construction data to hint at steady Q3 GDP growth - RBS

FXStreet (Łódź) - Ross Walker, Senior UK Economist at RBS remarks that the UK industrial production and construction data, due out next week, will provide more information on the possible Q3 GDP outcome.

Key quotes

"Underlying trends and survey data suggest a steady pace of economic expansion in Q3."

"Although modest downside risks are becoming more evident, July is probably a little too early for any significant euro area contagion to affect output."

"We forecast growth of 0.2% m/m in IP and 0.7% m/m in construction."

"These early data, together with this week’s variable PMI surveys, would be consistent with Q3 GDP growth of 0.7%-0.8% q/q in Q3 (vs 0.8% q/q in both Q1 and Q2)."

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Sep 05, 2014

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[OctaFX_Farid]

Session Recap: Majors take a breather ahead of NFP

FXStreet (Córdoba) - The European session brought some calm to the FX market as investors remain sidelined, digesting ECB moves and awaiting the US nonfarm payrolls report.

EUR/USD has recovered only modestly after yesterday’s selloff as investors refrain from taking big positions ahead of the nonfarm payrolls. EUR/USD climbed to the 1.2960 from a 14-month low of 1.2919 . GBP/USD also edged a tad higher, regaining the 1.6300 level to trade flat at the 1.6315 zone. USD/JPY pulled back after hitting its highest level since October 2008 at 105.70.

European economic data had virtually no impact on currencies as all eyes are now poised on US jobs report. However, following Thursday’s ECB surprise and given that the strength of the US economy has been largely priced in, data could take a back seat this month.

Consensus look for a strong labour market performance: a 209K gain in payrolls and the unemployment rate to fall to 6.1%.

Main Headlines in Europe:

Germany Industrial Production n.s.a. w.d.a. (YoY) rose from previous -0.5% to 2.5% in July

All eyes on US Non farm Payrolls – Danske Bank

What lies ahead of the EUR/USD? – Scotiabank and OCBC Bank

Gold recovers from fresh 3-month lows

EMU: GDP up 0.7% in Q2, as expected

European stocks edge lower after ECB shock, NFP eyed

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Sep 05, 2014

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[OctaFX_Farid]

USD/CAD capped around 1.0890

FXStreet (Edinburgh) - The greenback is extending the consolidation pattern vs. its Canadian counterpart on Friday, taking the USD/CAD to the 1.0880/75 region.

USD/CAD eyes on US, Canadian docket

Spot continues to retrace the weekly peaks just below the 1.0950 level ahead of key releases from the labour markets in the US and Canada. While market expectations point to a creation of 225K jobs in the US economy in August, Canadian employment is expected to increase by 10K and the jobless rate to stay unchanged at 7.0%. “With market perceptions of US divergence only likely to have been strengthened further this week, there is a very strong possibility that the CAD continues to trade with a stronger tone on the European crosses (EUR, GBP, NOK, SEK & CHF), depending on the tone of today’s data releases from North America”, observed Stephen Gallo, European Head FX Strategy at BMO.

USD/CAD levels to watch

The pair is now advancing 0.08% at 1.0885 with the next resistance at 1.0890 (high Sep.5) followed by 1.0910 (high Sep.4) and finally 1.0943 (high Sep.3). On the downside, a break below 1.0857 (100-d MA) would open the door to 1.0821 (low Sep.4) and then 1.0810 (low Aug.29).

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Sep 05, 2014

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Japan Gross Domestic Product (QoQ) came in at 0%, above forecasts (-1.8%) in 2Q

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Sep 05, 2014

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USD/CAD consolidating under 1.0900

FXStreet (Córdoba) - After the release of employment data from the United States and Canada, USD/CAD fell to 1.0838 and then rose to 1.0902, in a few minutes. Afterwards move toward the 1.0880/90 area, where it was trading before economic data.

During the last hours USD/CAD has remained steady trading below 1.0900, slightly above the price it had a week ago.

USD/CAD technical outlook

“The short-term charts for USDCAD are getting a little messy which is reflective of the high degree of uncertainty and the tumbling degree of conviction in this market after all the recent swings in spot”, said the Rates, FX and Commodities Research Team from TD Securities.

According to them the lack of upside momentum “leaves the process of lower highs in place since the late August rejection of the upper 1.09s. We have no strong views here at the moment and feel the market may continue to range-trade for a few more weeks.”

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Sep 05, 2014

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[OctaFX_Farid]

Japan's August Eco Watchers Survey points to the economy’s fading growth momentum - BNP Paribas

FXStreet (Łódź) - Raymond Van Der Putten, economist at BNP Paribas, comments on the poor Japan Economy Watchers Survey results, published today.

Key quotes

"Today’s Economic Watchers Survey confirms the fading growth momentum in the economy."

"In August, the current condition index dropped sharply by 3.9 points to 47.4. This decline is partly related to unfavourable weather (slow moving typhoons that caused heavy rainfall) and rising prices for fuel and materials."

"On the other hand, a growing number of respondents noted that the fall in demand after the VAT-hike had been waning."

"Today’s survey will increase calls on the BoJ to step up its asset buying programme."

"However, we are rather doubtful of such a change in policy."

"More asset buying may lead to a further depreciation of the yen and worsening purchasing power."

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Sep 08, 2014

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[OctaFX_Farid]

Portugal Gross Domestic Product (QoQ): 0.3% (2Q) vs previous 0.6%

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Sep 08, 2014

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[OctaFX_Farid]

Troika awaiting Cypriot foreclosure law details

FXStreet (Łódź) - EU officials informed on Monday that the Troika hasn't received the new Cypriot bill adopted on Saturday, speeding up foreclosures on business loans and mortgages and aimed at making way for the release on the next, 10 billion euro tranche of bailout money.

The controversial bill allows financial institutions to seize delinquent borrowers' properties already after two years, and not after 15 years as it is currently established.

The EU stressed that the disbursement of aid, which could be approved at the Eurogroup meeting on Friday, couldn't be done without the details of the foreclosure law.

The Irish and Greek bailout proceedings are also to be discussed during the Eurogroup meeting.

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Sep 08, 2014

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[OctaFX_Farid]

USD/CAD could drop sub-1.08 in early 2015 – Rabobank

FXStreet (Edinburgh) - According to Jane Foley, Senior Currency Analyst at Rabobank, the pair could slip back to levels below the 1.0800 handle at the beginning of the next year.

Key Quotes

“Last week Canada’s Q2 GDP report registered a much firmer than expected 3.1% annualised expansion driven by a 17.8% annualised increase in exports”.

“In recent years it has been consumption that has been the mainstay of Canadian economic growth. However, with household debt levels having risen to worrying high levels and with the savings rate in decline, it would clearly be to the economy’s advantage if the external sector and investment spending were to take a broader share of the growth burden”.

“It is likely that the better tone of recent economic data releases will persuade Governor Poloz to refrain from extremely dovish language. However, there would appear little incentive in him moving away for the neutral outlook on rates”.

“The BoC has maintained that the recent upside pressure on inflation is temporary and the CPI inflation did drop back in July. Investment spending is still weak and there are still plenty of clouds over the world economy”.

“Also, since its March low vs. the USD the CAD has recovered some ground. We expect USD/CAD to hold close to the 1.09 area for the rest of the year”.

“We look for the first BoC rate hike of the cycle at Q3 2015, a little ahead of the Fed (we expect the first Fed hike in Q4 2015) and therefore see risk of a push below USD/CAD1.08 at the start of 2015”.

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Sep 08, 2014

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[OctaFX_Farid]

GBP/USD on its way to 1.6000? – Westpac

FXStreet (Edinburgh) - Robert Rennie, Analyst at Westpac, notes the likeliness of the sterling to test the 1.6000 level vs. the greenback in the near term.

Key Quotes

“While there are significant unknowns about the event itself given the structure of the vote (16 year olds but no expats?), potential turnout and the very simple yes/ no question, the recent trend in the polls confirms the outcome will be extremely close”.

“However, the weekend poll clearly demonstrates a clear narrowing in views and this now means that this is a critical driver for the £ and financial markets will follow each and every twist closely”.

“Given the poll takes place in the same week as the first of the TLTROs and the September FoMC where the Fed is expected to debate 'new language on interest rates' we would expect to see further weakness in the £ and € and strength in the US$”.

“Even if, as I hope and expect, a no vote is the final outcome, it's likely that we will see further weakness ahead for the £. With the 1.6280 level broken this morning, the potential for a push down to 1.60 looks possible in the near term”.

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Sep 08, 2014

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[OctaFX_Farid]

EUR/USD treading water around 1.2950

FXStreet (Edinburgh) - The EUR managed to bounce off overnight lows near 1.2930, lifting the EUR/USD to the 1.2950/55 band.

EUR/USD supported near 1.2930

After dipping to overnight lows near 1.2930 at the beginning of the week, spot managed to rebound and regain the mid-1.2900s so far. Data wise in the euro region, investor’s confidence gauged by the Sentix index unexpectedly dropped to -9.8 for the month of September vs. 2.0 forecasted and August’s 2.7, although the result did not curb the upbeat momentum surrounding the single currency today. “Technically, the $1.3000-50 area needs to be overcome to signal a correction, we suspect, instead of a consolidation phase. On the downside, the next big target is just below $1.28”, noted analysts at BBH.

EUR/USD levels to watch

As of writing the pair is losing 0.02% at 1.2948 and a breakout of 1.2990 (high Sep.5) would aim for 1.3110 (low Sep.2) and then 1.3154 (high Sep.4). On the flip side, the initial support aligns at 1.2920 (low Sep.4) ahead of 1.2788 (61.8% of 1.2042-1.3995) and finally 1.2755 (low Jul.9 2013).

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Sep 08, 2014

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[OctaFX_Farid]

USD/CAD regains 1.0900

FXStreet (Edinburgh) - The greenback is inching higher on Monday, pushing the USD/CAD back to levels above the 1.0900 mark.

USD/CAD supported near 1.0800

Recent pullbacks in spot found decent support in the vicinity of 1.0800 the figure, although any bullish attempt seems to struggle to overcome the upper 1.09s so far. In the data front, Canadian Building Permits advanced 11.8% inter-month in July, surpassing estimates albeit lower than June’s print (16.4%). In the opinion of Shaun Osborne, Chief FX Strategist at TD Securities, “From the Bank of Canada’s perspective, Friday’s employment figures contribute to the narrative of continued slack in the economy, which will be absorbed gradually as the latter regains a stronger performance in the second half of the year… funds will spend some time trading in the 1.08-1.10 range and remain somewhat vulnerable to a drop to the 1.07s”, signaled Shaun Osborne, Chief FX Strategist at TD Securities.

USD/CAD relevant levels

The pair is now advancing 0.22% at 1.0904 with the next resistance at 1.0910 (high Sep.4) followed by 1.0943 (high Sep.3) and finally 1.0956 (high Aug.27). On the downside, a break below 1.0841 (low Sep.5) would open the door to 1.0821 (low Sep.4) and then 1.0810 (low Aug.29).

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Sep 08, 2014

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[OctaFX_Farid]

Support level at the price of 1.5020 is on the test - ForexTrading.TV

FXStreet (Łódź) - Petar Jacimovic, currency analyst at ForexTrading.TV, points out that the GBP/CHF support level at the price of 1.5020 is on the test.

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Sep 08, 2014

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