OctaFX.Com - Financial News and Analysis

[Mark Hoffman]

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I love using OctaFX’s free analysis and more so on Eur/Usd, it is deadly accurate and I must say that with following these I am hardly needed to look anywhere else. In fact, not just getting great results but I can learn so much out of this which helps me prepare for creating my own analysis in future to use them.

[OctaFX_Farid]

AUD/USD erased gains and fell below 0.8170


FXStreet (Córdoba) - AUD/USD weakened and reversed the daily trend falling 40 pips during the last three hours. The pair failed to hold above 0.8200 and dropped to 0.8168, reaching a fresh daily low.

The aussie failed to hold to gains after trading at 2-week highs while the US dollar gained momentum across the board, hitting fresh highs after Wall Street opening bell.

AUD/USD technical levels

To the downside, support levels might lie at 0.8155 and below at 0.8120 (Dec 30 low) while to the upside resistance could be located at 0.8190, 0.8215 (daily high) and 0.8255.





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Jan 01,2015
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[OctaFX_Farid]

USD/CHF at highs since July 2012


FXStreet (San Francisco) - The USD/CHF is enjoying its negative correlation with the EUR/USD and after a 35-pip rise from 0.9890, the pair jumped to trade at highs since July 2012 at 0.9925.

Regarding the EUR/USD, it pushed lower and hit a fresh 29-month to bid farewell to the year 2014 as euro weakened following London's close.

Currently, USD/CHF is trading at 0.9910, up 0.20% on the day, having posted a daily high at 0.9928 and low at 0.9879. The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish.

USD/CHF levels

If the pair consolidates gains above 0.9900, next resistances are at 0.925 and 1.0000. To the downside, supports are at 0.9900, 0.9890 and 0.9880.





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Jan 01,2015
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[OctaFX_Farid]

Crude oil hits fresh multi-year lows


FXStreet (Córdoba) - Oil prices extended its decline during the last trading day of the year amid oversupply concerns.

Crude oil fell more than 2% and hit a fresh 5-year low of $52.68 a barrel before recovering somewhat. Oil is trading at $53.35/bbl, still on track to post a 43% loss in 2014, its biggest annual decline since 2008, as the OPEC refrained from cutting output to keep the price high.

The latest US government report on oil inventories showed stockpiles decreased by 1.8 million barrels during the last week. On the other hand, the American Petroleum Institute reported Tuesday US crude inventories rose by 760,000 barrels last week versus expectations of a 100,000 barrels decline.




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Jan 01,2015
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[OctaFX_Farid]

Investors paring back Yen risk - Scotiabank


FXStreet (Guatemala) - Eric Theoret, Currency Strategist at Scotiabank noted the price action surrounding USD/JPY.

Key Quotes

"USD/JPY is consolidating just below 119.50, having attempted and failed to break above Tuesday’s close given the deterioration in broader market sentiment”.

“The considerable decline in both long and short JPY positions detailed in Tuesday’s CFTC report suggests that investors are paring back JPY risk in an environment whereby weak fundamentals are offset by the supportive impact of recurring periods of risk aversion, with measures of implied volatility putting JPY between AUD and NZD -currencies typically associated with much greater risk."




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Jan 01,2015
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[OctaFX_Farid]

EUR/JPY consolidated through moves in the greenback


FXStreet (Guatemala) - EUR/JPY is trading at 144.98, down -0.22% on the day, having posted a daily high at 145.61 and low at 144.82.

EUR/JPY is consolidated through the greenback as its rallies against the Euro, printing new yearly lows into the 1.2000’s, and the Yen is punished back up towards 120.00 vs the US dollar.

Spikes over thin trading have been the theme over the last number of sessions of the year, but significantly, the spikes are hitting key technical levels that will be paid attention to when full markets return and maybe indicating the apatite for a stronger greenback into 2015. The EUR/JPY cross will also be affected by the domestic policies of the ECB and Abenomics for Japan and associated risk events such as the Greek elections and QE. This offers the Yen some support in an environment of weak fundamentals that are offset by the supportive impact of recurring periods of risk aversion, as Eric Theoret, Currency Strategist at Scotiabank explained.

Technically, however, EUR/JPY remains under pressure and changes hands in bearish territory. The cross is on course to test the 2-month support line at 143.90, as signified by Karen Jones, chief analyst at Commerzbank, and notes that the 55-day ma reinforces this at 142.78.




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Jan 01,2015
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[OctaFX_Farid]

EUR/USD falls below 1.2100, ends the year on the back foot


FXStreet (Córdoba) - The EUR/USD’s selloff extended to fresh cycle lows sub 1.2100 in thin trading on New Year’s Eve, putting the euro on track for a 12% annual decline.

EUR/USD pierced the 1.21 mark and hit a low of 1.2096, last seen July 2012, as the dollar received a final boost to bid farewell the 2014. The shared currency remains vulnerable amid divergent ECB/FOMC monetary policy outlooks coupled with political uncertainty in Greece, with the 2012 low of 1.2041 coming closer into sight.

At time of writing, EUR/USD is trading at 1.2105, recording a 0.41% loss on the day. At the same time, the pair is headed for its sixth monthly loss in a row, having fallen all the way from this year peak of 1.3993 struck in May.





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Jan 01,2015
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[OctaFX_Farid]

ECB won by targeting Foreign Reserves – SG


FXStreet (Guatemala) - Sebastien Galy, analyst at Societe Generale explained that the EUR/USD is now most likely a sell on rallies.

Key Quotes:

“…as foreign reserves reallocate into the higher yielding UST curve helping to cap the back end and likely investing in some key EM curves”.

“This confirms that the ECB won the game on EUR/USD by changing the dynamic of reserve diversification into EUR which had kept EUR very expensive and deflationary pressures considerable”.

“Reserve selling should pressure EUR/USD lower the prospect of a Greek election increases credit risk in the Eurozone”.

“It also increases the odds of ECB easing as does ever lower oil prices. Faced with these twin hammers on EUR reserves, the amount of EUR selling may remain considerable helping the downward EUR/USD trend”.

“Compensating this partly are hopefully rising export revenues as the EUR weaken. The Japanese experience suggests considerable patience on this mechanism”.




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Jan 01,2015
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[OctaFX_Farid]

Peru Inflation climbed from previous -0.15% to 0.23% in December


Read more in Forex News




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Jan 01,2015
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[OctaFX_Farid]

Euro rapidly approaching June 2010 low of $1.1877 BBH


FXStreet (Barcelona) - The Brown Brothers Harriman shares the FX performance for majors, and suggests that the EUR/USD pair is rapidly approaching the June 2010 low of 1.1877 after it made a fresh low at 1.2035 levels.

Key Quotes

The euro broke below the mid-2012 low to trade at $1.2035, rapidly approaching the June 2010 low of 1.1877. Euro-area final PMI manufacturing for December came in slightly lower at 50.6, but more significantly, Draghi made some more dovish comments during an interview to a German newspaper yesterday. He reinforced the ECBs reediness to act and his concerns about deflation.

The New Zealand dollar is the weakest major currency on the day, falling to $0.7750 against the dollar, but still well within recent ranges.

The pound is also underperforming, falling to a 16-month low of 1.5470 after a weaker UK PMI figure for December, at 52.5 compared with 53.6 expected.

The dollar is back above the ¥120.0 level against the yen, in part supported by comments by BoJ governor Kuroda saying that the bank still has tools to meet the CPI target.

The Indonesian rupiah fell over 1% following a shockingly weak set of trade prints for December. Exports fell -14.5% y/y (exp. -4.5%) and imports were -7.3% (exp. +0.1%), leading to a -$426 mln trade deficit. The ruble is back on the defensive again, falling 1.0% against the basket.



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Jan 02,2015
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[OctaFX_Farid]

Euro rapidly approaching June 2010 low of $1.1877 – BBH


FXStreet (Barcelona) - The Growth Aces Research Team notes that Draghi strengthened QE bets by commenting that the ECB was in preparations to adjust the QE measures to keep the inflation near its target, leading the EUR to make a fresh low at 1.2035.

Key Quotes

“European Central Bank President Mario Draghi said the risk of the central bank not fulfilling its mandate of preserving price stability was higher now than half a year ago, and reiterated its readiness to act early this year should it become necessary.”

“Euro zone inflation stands at 0.3%, far below the ECB's target of just under 2%. Draghi said: “We are in technical preparations to adjust the size, speed and compositions of our measures early 2015, should it become necessary to react to a too long period of low inflation. There is unanimity within the Governing Council on this.” He added that government bond purchases were among the tools the ECB could use to fulfill its mandate.”

“The EUR/USD fell to 1.2035 after Draghi strengthened expectations for quantitative easing in the Euro zone. That was the lowest level since June 2010.”

“We were looking for a correction in the EUR/USD. However, breaking below the level of 1.2100 fueled bearish sentiment.”

“Our strategy now is to sell EUR/USD at 1.2180. If our order is filled the target will be 1.1950 (just below daily low on June 6, 2010).”




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Jan 02,2015
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[OctaFX_Farid]

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FX outlook for 2015 – Scotiabank

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, shares the FX outlook for 2015, anticipating broad USD strength to create a pattern similar to 2014 among the majors.

Key Quotes

“In 2014, NOK and SEK were the worst performing primary currencies, losing 18% each; followed by JPY and EUR, who lost 12% and then the commodity currencies of AUD and CAD who lost just over 8% each, leaving GBP as the outperformer, having lost just 6% against the USD but gaining ground against all the other majors.”

“Looking out to 2015, we expect broad USD strength, with a similar pattern among the majors, where EUR and JPY lose the most ground, and GBP weakens against the USD but outperforms both EUR and JPY. AUD and CAD are likely to continue to weaken.”

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Jan 02,2015

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[OctaFX_Farid]

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Data ahead: US December ISM Manufacturing PMI expected to decline – TDS

FXStreet (Barcelona) - Shaun Osborne and Martin Schwerdtfeger, FX Strategists at TD Securities, preview the data ahead for US and Canada, and anticipate the US December Manufacturing PMI to decline modestly to 56.3 from previous 58.7.

Key Quotes

“The first US indicator of 2015 will be the final Dec print for Markit’s US Manuf PMI, which is seen rising modestly to 54.0 from a preliminary reading of 53.7.”

“Nov Construction Spending will be released at 10.00ET, and the market calls for a 0.4% monthly gain (1.1% prior).”

“The Dec ISM Manuf PMI — also out at 10.00ET — is expected to decline modestly to 56.3 (mkt 57.5) from a particularly strong 58.7 in the prior month, showing some deterioration in momentum but continuing to signal a strong growth handoff into 2015; Prices Paid are expected to fall further to 43.5 (44.5 prior).”

“In Canada, the RBC Manuf PMI for Dec will be released at 9.30ET; there is no market call, Nov came in at 55.3 and the index has been steadily rising since Jan last year.“

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Jan 02,2015

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[OctaFX_Farid]

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EUR falls to 4.5yr low, breaking below 1.2043 (2012 low) – Scotiabank

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank shares that EUR fell to a 4.5yr low, breaking below 1.2043 (2012 low), on soft PMIs & Draghi’s comments that price stability risks have increased, and anticipates the pair to head towards 1.1800 levels towards 2015-end.

Key Quotes

“EUR is weak, having lost a further 0.5% since the close of 2014; breaking below the July 2012 low of 1.2043; opening up the next level of resistance at 1.1877, the 2010 low. The combination of soft PMI data and dovish comments by ECB President Draghi have weighted heavily on the currency.”

“The final December Eurozone manufacturing PMI came in at 50.6, still in expansion and above the November dip to 50.1, but disappointing the expectation for 50.8. In addition, ECB President Draghi commented in Germany’s Handelsblatt that “the risk that we don’t fulfill our mandate of price stability is higher than it was six months ago”, highlighting once again that the ECB is in technical preparations to alter the size, speed and composition of its current asset buying program.”

“The next ECB meeting is January 22nd and there is already building anticipation as to the action the central bank is likely to take.”

“We expect EUR to trend lower throughout 2015 and hold a year‐end target of 1.1800.”

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Jan 02,2015

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[OctaFX_Farid]

Can US raise rates in 2015 amidst global concerns? – RBS


FXStreet (Barcelona) - The Research Team at RBS notes that today’s ISM release will help determine the answer to whether US will raise rates amidst global concerns.

Key Quotes

“For the US, the critical question of "can the US go it alone amidst these global concerns, and raise rates in 2015, even modestly?" remains. Today's ISM release will help determine if the base case answer in the markets continues to be "yes," and if the ongoing equity market rise continues to send the message that even if the Fed does so, riskier assets should be just fine.”

“Some of this I believe is the current impression that even as rates rise, it will happen in a "not too hot not too cold" fashion – rate rises won't be too hot or fast given the global outlook and local inflation backdrop, while the cold coming from overseas is to be met with asset boosting stimulus abroad, helping all global assets.”

“This may end up being the case, but I have doubts that even if it is, we will get there without any volatility, minor market "accidents," or periods of concern that one side of the other will indeed be "too hot" or "too cold.”





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Jan 02,2015
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[OctaFX_Farid]

US ISM disappoints, but job creation remains strong – ING


FXStreet (Barcelona) - James Knightley, Senior Economist at ING, explains that today’s US ISM Manufacturing release disappointed by coming out below than expectations at 55.5, but better employment numbers point towards a decent Labour Report in the coming week, anticipating wages to move higher and unemployment to fall further.

Key Quotes

“The ISM manufacturing index for December has come in at 55.5, down from 58.7 in November. This is disappointing given the consensus was 57.5 and follows the trend seen elsewhere around the world today. Nonetheless, it still suggests that the US economy is growing strongly, roughly at trend of around 3%, which is well above the rate seen in other mature developed economies.”

“The details show that production fell to 58.8 from 64.4 while new orders declined from 66.0 to 57.3 with net exports dropping to 52 from 55.5. There was better news on employment though, which rose to 56.8 from 54.9. This offers some hope that next week’s Labour Report should be decent. The current consensus is 240,000 versus the 321,000 outcome in November.”

“We also expect to see wages creep higher next week and the unemployment to fall further so the data remains consistent with very gradual Federal Reserve policy tightening later this year and ongoing dollar strength.”






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Jan 02,2015
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[OctaFX_Farid]

EUR/JPY drops to 7-week lows


FXStreet (Córdoba) - EUR/JPY broke below 144.70 after the release of a weak ISM report in the US that boosted the yen across the board. The pair dropped from 145.00 to 144.33 in a few minutes, hitting the lowest price since mid November.

EUR/JPY levels

The decline found support above the 144.30 area and it was trading at 144.50, down 0.32% for the day. Below support levels might lie at 144.00, 143.65 (Nov 5 high) and 142.95.

To the upside, resistance could be located at 144.70 (Dec 30, 31 low), 145.30 and 145.55 (Dec 31 high).





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Jan 02,2015
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[OctaFX_Farid]

EUR/USD: Not much in the way until 1.1900 – FXStreet


FXStreet (Barcelona) - Valeria Bednarik, Chief Analyst at FXStreet, shares that with the technical indicators heading south and the daily charts presenting a strong bearish momentum, there is not much in the way for EUR/USD pair until 1.1900 levels if it breaks below 1.2000.

Key Quotes

“The EUR/USD pair debut in this 2015 sees it dangerously close to the 1.2000 level for the first time since June 2010”

“Data was far from encouraging both shores of the Atlantic, but the dollar rules anyway: as a new month starts, market attention shifts to Central Banks possible movements, with the ECB expected to introduce some further stimulus as deflation and lack of growth become more evident month after month.”

“The US by opposition, will release next week its employment figures, and there are no signs the strong growth seen on previous months will suffer a setback.”

“Technically, the weekly chart of the EUR/USD pair shows that price continues to slide below its moving averages, whilst indicators head south below their midlines, with RSI around 25 after a failure attempt of correcting higher, and with no bottom yet confirmed in the indicator.”

“In the daily chart indicators present a strong bearish momentum also supportive of a continued decline.”

“The immediate supports stands at the 1.2000 psychological figure, and if broken, there is little in the way down to the 1.1900 level. There’s a possibility this last gives up next week, and it that case the next big long term support stands in the 1.1650 area.”

“Last December week low around 1.2160 is the immediate resistance level, followed by 1.2250 price zone. Upward movements up to this last are possible but not likely, and market players will see those advances more as selling opportunities than as signs of a bottom.”





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Jan 02,2015
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[OctaFX_Farid]

Gold rises again; still gains capped at USD 1200.00


FXStreet (Mumbai) - Gold prices recovered losses to trade over and above the 50-DMA located at USD 1191, although the metal is still unable to rise above the USD 1200 mark.

The metal currently trades 0.94% higher at USD 1197.30/Oz levels, after having tested the USD 1200 mark. The metal regained strength due to the weakness in the US treasury yields and the US stock markets. The DJIA has weakened 0.86% to trade at 17,680.50 levels, while the S&P futures are down 0.74% at 2031.15 levels. Meanwhile, the 10-yr treasury yield slipped 3.9 basis points to 2.074%. Consequently, the USD index has cooled down to 91.72 levels from the high of 92.05 hit earlier today.

Gold Technical Levels

Gold has an immediate resistance located at 1200, above which gains could be extended to 1203.23 (100-DMA) levels. Meanwhile, support is seen at 1191.40 (50-DMA) and 1183.40 levels.





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Jan 06,2015
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[OctaFX_Farid]

AUD/JPY fails to hold above 97.00


FXStreet (Córdoba) - AUD/JPY erased gains and is moving toward yesterdays low that lie at 96.37; if it fall under it would be trading at the lowest since December 18.

During the Asian session the pair climbed to 97.20 but failed to hold and pulled back. On European hours rebounded and the 97.00 offered resistance.

Currently trades at 96.48, down 0.30% for the day weakened by the rise of the yen across the board. The Japanese currency is among the strongest for the second day in a row supported by risk aversion and falling US government bond yields.





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Jan 07,2015
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[OctaFX_Farid]

AUD/USD holds above 0.8100


FXStreet (Córdoba) - AUD/USD failed to extend its recovery above 0.8160 and came under mild pressure, surrendering a portion of its intraday gains at the beginning of the New York session.

The Australian dollar has been on recovery mode over the last sessions after hitting a fresh 4 ½-year low Monday, underpinned by rising gold prices. However, AUD/USD lost momentum after reaching a daily high of 0.8157 and pulled back, but the 0.8100 level contained the downside.

At time of writing, the pair is trading at 0.8115, still up 0.41% on the day, with the US Markit services PMI reading having virtually no effect on the greenback. Still on tap, the more important ISM non-manufacturing PMI will be published at 15:00 GMT.

AUD/USD levels to watch

In terms of technical levels, AUD/USD could find immediate supports are seen at 0.8080 (daily low) and 0.8035 (4 ½-year low Jan 5). On the upside, resistances line up at 0.8157 (daily high) and 0.8200 (psychological level).





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Jan 07,2015
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[OctaFX_Farid]

Treasuries overbought, but bulls still in control – RBS


FXStreet (Barcelona) - William O’Donnell, Head of US Treasury Strategy at RBS, notes that US treasuries are still overbought but there are not signs yet that the bulls/buyers have lost control of the price action.

Key Quotes

“I still have high confidence that market technicals (long-term momentum work, positioning and sentiment data, etc) will eventually sniff out the beginnings of new bear trends in rates markets, even if the economic data has done a lousy job at it in the past year.”

“Long term momentum work in Treasury 10's and 30's is into 'overbought' territory but there are no signs yet that the bulls/buyers have lost control of the price action. We've seen ~104 straight days where national gas prices have fallen; a good lesson that trends can persist longer than trend-fighters can remain solvent.”

“Anyway, it's clear that the brushfires that have pushed safe haven rates lower around the globe still have dry tinder to burn.”

“Indeed, the just updated CFTC data showed that Specs and Levered $ are near an all-time record short in TU out to WN futures. Specs had a record net short in TY futures of $26bn in TY futures equivalents in the latest numbers.”

“This is why I've said in recent weeks that it's too early to sell or go short, even if it may be too late to buy the overbought back-end of the US rates curve.”

“10s (1.99%)–Next major resistance comes in at the flash crash lows ~1.86%. There is some minor resistance at ~2.10% before that. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is solidly bullish.”

“30s (2.56%)– Bonds don't have any solid support until 3.105%, the November "lows." Next resistance is a huge level at ~2.50%, the all-time rate lows for bonds. Daily momentum is bullish but edging into overbought readings.”




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Jan 07,2015
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[OctaFX_Farid]

MPC losing the footrace versus the Fed – BAML


FXStreet (Barcelona) - The Research Team at Bank of America-Merrill Lynch explains that with BoE continues to lose the race to policy tightening versus the Fed with markets pushing probability of a MPC rate hike into early 2016, and thus anticipate Pound to face lose against the USD in the near-term.

Key Quotes

“It has been an inauspicious start to the year for GBP which has underperformed all of its G10 peers with the exception of the NOK. Sentiment has not been helped by further evidence of a loss of momentum in the UK economy, with both the manufacturing and construction PMI numbers printing on the weaker side of expectations.”

“Though the USD has made a strong start to 2015, GBP/USD has been particularly hit hard, driven primarily by a further shift in rate differentials in favor of the USD.”

“With the markets pushing back the chances of UK rate hikes into 1Q16, the Bank of England continues to lose the footrace to policy tightening versus the Fed. GBP/USD is thus likely to remain under pressure in the near-term as these forces continue to dominate sentiment.”

“EUR/GBP has once again failed to make a sustained break of the 0.7750 level despite significant pressure on the EUR at the start of the year.”

“The conflicting forces of prospective QE weighing on EUR and softening near-term UK inflationary pressures weighing on GBP suggest that EUR/GBP will trade a range for the time being. But, in our view, with the UK general election on the horizon and continued uncertainty on the outcome, there appears to be no respite for the GBP at present.”




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Jan 07,2015
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[OctaFX_Farid]

Dec US employment index drops, but keeps Fed hike expectations unchanged – ING


FXStreet (Barcelona) - Rob Carnell of ING, notes that the US non-manufacturing ISM came out weaker than expectations and the employment index registered a marginal dip, keeping the Fed hike expectations on course for a Q2 15 rate hike.

Key Quotes

“The US non-manufacturing ISM index for December (56.2) was somewhat weaker than consensus expectations (58.0, INGf 58.4), and was a little surprising as this contemporaneous indicator of retail strength should be receiving good support from both lower oil prices and a buoyant labour market. Recent car sales strength is a reflection of this.”

“But in any case, it is the employment index of this survey that we usually look at, and this dipped fairly marginally to 56.0 from 56.7 back in November, and is in our view still consistent with a decent, albeit somewhat less robust payrolls figure in January from the 321K figure initially printed for December.”

“Consensus is currently looking for a 240K payrolls figure with a slight dip in the unemployment rate to 5.7%, and hopefully a further uptick in the wages growth rate to 2.2%. All of which, if it happens, should keep the Fed on course for a 2Q15 (June rather than April we think) first rate hike.”




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Jan 07,2015
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[OctaFX_Farid]

Dec US employment index drops, but keeps Fed hike expectations unchanged – ING


FXStreet (Barcelona) - Rob Carnell of ING, notes that the US non-manufacturing ISM came out weaker than expectations and the employment index registered a marginal dip, keeping the Fed hike expectations on course for a Q2 15 rate hike.

Key Quotes

“The US non-manufacturing ISM index for December (56.2) was somewhat weaker than consensus expectations (58.0, INGf 58.4), and was a little surprising as this contemporaneous indicator of retail strength should be receiving good support from both lower oil prices and a buoyant labour market. Recent car sales strength is a reflection of this.”

“But in any case, it is the employment index of this survey that we usually look at, and this dipped fairly marginally to 56.0 from 56.7 back in November, and is in our view still consistent with a decent, albeit somewhat less robust payrolls figure in January from the 321K figure initially printed for December.”

“Consensus is currently looking for a 240K payrolls figure with a slight dip in the unemployment rate to 5.7%, and hopefully a further uptick in the wages growth rate to 2.2%. All of which, if it happens, should keep the Fed on course for a 2Q15 (June rather than April we think) first rate hike.”




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Jan 07,2015
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