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USD/CAD broadly bullish – TDS



FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities explained the events around USD/CAD and remains broadly bullish for funds.


Key Quotes


"The CAD has been subdued in quiet trade so far this wee. Volatility may pick up in the days ahead, however as the Canadian economic release schedule picks up a little more this week—trade data are released Tuesday (we look for a weak-ish report and note that the contents of last week’s US trade data did not augur too positively for Canada), housing data follow Wednesday and Thursday and the employment report is out on Friday (market consensus is for a 15k gain after the 42.9k rise in March)."


"We remain bullish on the broader outlook for USD/CAD—better US data should, eventually, push US yields more obviously higher and pull the USD higher alongside. The better US non-farm payroll numbers last week suggest that the US economy is gathering some momentum after the recent, weather-related softness."


"As Governor Poloz has pointed out in his recent remarks however, there are some sectors of the Canadian economy that are not picking up as much as we might expect due to structural challenges and lost competitiveness. We continue to believe that a slightly softer CAD will have to be part of the solution to that particular challenge."


"From a short-term point of view, we would also highlight that early May tends to be a little more seasonally supportive for USD/CAD—the early part of the month has been the staging point for short, sharp rallies in USD/CAD in the past few years. We note an average 6.6% rally in funds from the low point of the market in late April or early May over the following 4-8 weeks since 2010 and note a seasonal bias towards USD/CAD strength in the period going back a number of years beyond that as well. Over the past 10 years, May has also seen the biggest jump in short-term implied volatility of any month in the year."


"As such, and with a firm base in place at 1.0860 from a technical point of view still, we rather think that risk/reward considerations favour USD/CAD longs from current—or very near—levels. Technically, short-term patterns looks positive—despite the USD’s failure to thrive following the US NFP release last week."


"Gains through 1.1000/10 should be a short-term positive for USD/CAD. We spot firm support at 1.0940/50 now."









May 05, 2014

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USD/CAD reverses and falls to 1.0950



FXStreet (Córdoba) - The USD/CAD rose at the beginning of the American Session to 1.0989, reaching a fresh daily high but then weakened and reversed sharply falling to 1.0951, hitting a new daily low.


Technical outlook for the USD/CAD


Despite moving from a daily high to a low in a few hours, the short term bias in unclear and continues to favor sideways moves. Since last Wednesday the USD/CAD operates with support above 1.0940/50 and resistance below 1.1000.


In the long term, the trend still favor the upside but since March it's moving to the downside, with a corrective bias, that so far has found support at 1.0850.









May 05, 2014

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ECB to make a move? – BBH





FXStreet (Guatemala) - Turning to the ECB, Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that most observers recognise that with the small uptick in the flash April CPI and the new staff forecasts not available until June, a move this week is unlikely.


Key Quotes


“A stand pat ECB decision, however, even with the ongoing threats of more dramatic action, could see the euro push higher as the event risk passes."


"New staff forecast for growth and inflation are important, but only for one set of ECB challenges, namely the threat of deflation. We expect the staff forecasts to continue to be consistent with other economists, including the team at the IMF, that indicate little chance of deflation in the euro area as a whole."


"The IMF’s forecasts point to Greece as the only member to experience deflation this year. Also of note, today’s new EU forecasts cut 2014 inflation to 0.8% from 1.0% and the 2015 forecast to 1.2% from 1.3%."


"The staff currently forecasts headline inflation in the euro area at 1.0% this year and 1.3% in 2015. There does not seem to be a compelling case to change these at this juncture."









May 05, 2014

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USD/JPY nestled back in on the 102 handle





FXStreet (Guatemala) - USD/JPY is trading at 102.09, having posted a daily high at 102.27 and low at 101.86


USD/JPY remains on the 102 handle having reclaimed the territory post falling below the psychological level to the lows with the continued violence in Ukraine that gives the safe haven and risk off JPY an advantage.


USD/JPY Levels


Current price is 102.10, with resistance ahead at 102.13 (Yesterday's Low), 102.18 (Weekly Low), 102.20 (Daily Open), 102.27 (Daily High) and 102.32 (Hourly 100 SMA). Next support to the downside can be found at 102.08 (Hourly 20 EMA), 101.87 (Daily Classic S1), 101.86 (Daily Low), 101.80 (Weekly Classic S1) and 101.55 (Daily Classic S2).


USD/JPY chart formations


Looking at price patterns, we can see a Piercing Line 1-hour candlestick formation.









May 05, 2014

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Fed's Yellen: QE taper to continue in 'measured steps', no specific timeline for rate hike





FXStreet (Łódź) - During the Q&A part of the testimony Janet Yellen says that as long as inflation is moving towards the 2% target and the USeconomy improves the Fed anticipates reducing the QE program in “measures steps.”


• "There is no mechanical formula or timetable for when that will occur," says Yellen when asked about when will Fed start rising rates.


• First rate hike will depend on progress made on Fed mandate.


• “I can't give a number for the appropriate size of the Fed's balance sheet.”


• Ultimately it will move down to substantially lower levels but no certainty that it will return to pre-crisis levels, the Fed head says.










May 07, 2014

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Fed's Yellen: Slack in labor market remains considerable





FXStreet (Łódź) - Yellen says that a high degree of monetary accommodation is warranted given the considerable slack in the labor markets and low inflation.


• “There is a high level of long-term unemployment,” she stresses.


• The 6.5% threshold for considering interest rate hikes was set when unemployment rate was near 8%, Yellen reminds, emphasizing that it was a benchmark not a trigger.


• The trend of increasing inequality in income and wealth in the US could be offset by the Fed's efforts to boost growth.


• The Fed head acknowledges low household formation, high student debt, high house credit requirements.


• She adds however that the sector should pick up and that despite higher mortgage rates they are low by historical standards.










May 07, 2014

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GBP/USD deflates to 1.6960





FXStreet (Edinburgh) - The sterling is grinding lower on Wednesday, dragging the GBP/USD to test session lows in the 1.6965/60 region.


GBP/USD correcting from peaks


Spot continues to correct from Tuesday’s multi-year peaks in levels just shy of 1.7000 the figure following the risk-off mood in the global markets. Next of note in the UK economy will be tomorrow’s BoE MPC meeting, with market consensus expecting the central bank to keep its ‘on-hold’ stance. However, as the unemployment rate is now below 7%, market participants will closely follow the statement or announces (if any) in such regard. “While we remain above the 1.6775/1.6825 zone the risk opens up for tests on the next resistance levels located at 1.6960/80 initially, followed by 1.7150 and final extension target comes in around the 1.73 area”, noted Paul Robson, Senior FX Strategist at RBS.


GBP/USD levels to watch


At the moment the pair is losing 0.04% at 1.6966 with the immediate support at 1.6900 (psychological level) ahead of 1.6870 (10-d MA) and then 1.6866 (low May 7). On the upside, a breakout of 1.6997 (2014 high May 6) would aim for 1.700 (psychological level) and finally 1.7044 (high Aug.5 2009).










May 07, 2014

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USD/CAD bounces off 1.0870





FXStreet (Edinburgh) - The greenback is now gathering pace against its neighbour on Thursday, extending the USD/CAD rebound from session lows in sub-1.0870 levels.


USD/CAD consolidates below 1.0900


The pair continues to stabilize below the 1.0900 key handle, keeping the lower end of the weekly range after Tuesday’s deep pullback. In the data front, US Initial Claims dropped to 319K in the week ended on May 2 and Canadian Housing Starts rose to 194.8K on an annual basis in March, exceeding estimates. “The first relevant retracement level stands at 1.0958 and, from there, a more assertive climb would require breaching 1.1019 — the next retracement level, which coincides with the 40-day MA”, said Shaun Osborne, Chief FX Strategist at TD Securities.


USD/CAD levels to watch


As of writing the pair is down 0.10% at 1.0891 with the next support at 1.0874 (low May 6) ahead of 1.0860 (38.2% of 1.0182-1.1279) and then 1.0858 (low Apr.9). On the upside, a break above 1.0961 (high May 6) would open the door to 1.0980 (21-d MA) and finally 1.1007 (high May 2).










May 08, 2014

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ECB's Draghi: ECB comfortable with acting in June





FXStreet (Łódź) - During the Q&A part of the press conference Draghi says that he is waiting for ECB staff inflation projections which will be available at the beginning of next month.


• Draghi says that the Governing Council discussed taking action and that the “ECB is comfortable with acting in June.”


• Low inflation in the Eurozone is mainly caused by lower energy prices. Weak demand, high unemployment and FX are other reasons, the ECB chief suggests.


• Stronger euro combined with lower inflation “is cause for serious concern.”


• “The exchange rate is not a policy target, but the concern over the exchange rate will have to be addressed.”










May 08, 2014

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Euro loses shine as Draghi says 'comfortable with acting next time'





FXStreet (Córdoba) - Draghi takes the wind out of euro's sails by hinting at June action. He said the ECB is comfortable with acting "next time", sending the shared currency to fresh lows versus most competitors.


However, many analysts are doubting the ECB will actually deliver next month as the central bank has let the market down this path in the past. Nevertheless, his words were enough to halt EUR short term rally.


The EUR/USD lost more than 100 pips in a matter of minutes and dropped from a 2 ½-year high of 1.3992 to a daily low of 1.3878. The EUR/GBP fell to a nearly 3-month low of 0.8187, while the EUR/JPY hit a 10-day low of 141.09.


"Reading between the lines, it appears that even if Draghi himself wanted to ease policy, he is institutionally constrained by the need for consensus", said Marc Chandler, analyst at BBH. "Several of the creditor countries, led by Germany, are more worried about interest rates being too low for too long then the lowflation. Note that as the euro area expands, the ECB is going to adopt a rotating voting basis, and this will add a new wrinkle into ECB meetings next year".










May 08, 2014

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Euro loses shine as Draghi says 'comfortable with acting next time'





FXStreet (Córdoba) - Draghi takes the wind out of euro's sails by hinting at June action. He said the ECB is comfortable with acting "next time", sending the shared currency to fresh lows versus most competitors.


However, many analysts are doubting the ECB will actually deliver next month as the central bank has let the market down this path in the past. Nevertheless, his words were enough to halt EUR short term rally.


The EUR/USD lost more than 100 pips in a matter of minutes and dropped from a 2 ½-year high of 1.3992 to a daily low of 1.3878. The EUR/GBP fell to a nearly 3-month low of 0.8187, while the EUR/JPY hit a 10-day low of 141.09.


"Reading between the lines, it appears that even if Draghi himself wanted to ease policy, he is institutionally constrained by the need for consensus", said Marc Chandler, analyst at BBH. "Several of the creditor countries, led by Germany, are more worried about interest rates being too low for too long then the lowflation. Note that as the euro area expands, the ECB is going to adopt a rotating voting basis, and this will add a new wrinkle into ECB meetings next year".










May 08, 2014

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Oil prices higher on China




FXStreet (Edinburgh) - Malcolm Graham- Wood, Independent Analyst, noted the recent Chinese data was behind the higher prices of crude oil.


Key Quotes


“The oil price rose yesterday as a number of factors had an impact, none more so than the Chinese data which came in two forms. The economic stats which beat consensus were good, particularly in the export figures whilst the oil numbers were even more surprising. Crude oil imports for April were up 22.4% m/m and the y/y figure was up 11.5%, I had speculated that they would be buying more a little while ago but this figure was even higher than that”


“The EIA inventory numbers were similar to the API ones the day before and therefore caught the Wall Street scribblers off guard once again but that comes as no surprise. A crude draw of 1.8m barrels was set against forecasts of a build of 1.4m and given refineries are buying ahead of the driving season was no great surprise. Finally it seems that President Putin is being a tad more conciliatory regarding the Ukraine but then again when did we ever believe anything on that front”.









May 08, 2014

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EUR/JPY breaks below 141.00 and falls to 3-week lows




FXStreet (Córdoba) - The EUR/JPY is falling sharply on Thursday as the Euro remains weak in the market. Recently the pair broke below 140.80 (previous lows) and tumbled to 140.59 hitting the lowest price since April 15.


At the moment trades at 140.63, down 0.79% for the day so far. The euro is having the worst day in a month against the Yen and is headed toward the lowest daily close since April 8.


EUR/JPY breaking range


Since mid April the pair has been moving sideways around 141.50, with moves limited between 142.40 and 141.00. But today price is breaking decisively to the downside, pointing out to further weakness.









May 08, 2014

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EUR/USD stabilizing around 1.3850




FXStreet (Edinburgh) - The intraday decline of the EUR/USD seems to have halted around the 1.3855/50 region at the end of the US session on Thursday.


EUR/USD hurt by Draghi


A more than expected dovish tone in today’s press conference by President Draghi dragged spot from fresh ytd highs near the psychological barrier at 1.4000 to current weekly lows in the mid-1.3800s. The EUR reacted adversely after Draghi favoured some form of monetary easing in the central bank’s next meeting (June). “In the context of his repeated mentioning of the exchange rate, we now believe the ECB will cut its refi rate by 15bp June, to be accompanied by a 15-45bp cut in the marginal lending rate and by several other measures to strengthen the effectiveness of this rate cut”, commented Elwin de Groot, Senior Eurozone Strategist at Rabobank.


EUR/USD levels to watch


At the moment the pair is down 0.37% at 1.3857 and a breakdown of 1.3847 (21-d MA) would open the door to 1.3812 (low May 2) and then 1.3796 (daily cloud top). On the upside, the initial hurdle aligns at 1.3995 (2014 high May 8) ahead of 1.4000 (psychological level) and then 1.4100 (psychological level).









May 08, 2014

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AUD/USD's recovery capped at 0.9375




FXStreet (San Francisco) - The Aussie's recovery from 0.9345 against the US Dollar found buying interest at 0.9375 level where the pair was rejected to the downside and now it is trading at 0.9355.


Currently, AUD/USD is trading at 0.9361, down 0.14% on the day, having posted a daily high at 0.9381 and low at 0.9347. The FXStreet OB/OS Index is reflecting neutral hourly conditions, while the FXStreet Trend Index is slightly bullish.


AUD/USD levels


Next support to the downside can be found at 0.9347 (Daily Low), 0.9338 (Hourly 100 SMA), 0.9330 (Weekly Classic R1), 0.9329 (Daily Classic S1) and 0.9318 (Yesterday's Low).


Resistances are at 0.9363 (Daily Classic PP), 0.9366 (Hourly 20 EMA), 0.9375 (Daily Open), 0.9375 (Weekly High) and 0.9381 (Daily High).









May 09, 2014

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GBP/USD hits fresh 1-week low




FXStreet (Córdoba) - The GBP/USD is stretching to fresh lows at the beginning of the American session after the release of the UK GDP estimation by NIESR.


The GBP/USD came under strong pressure and triggered stops below 1.6900, accelerating to a 1-week low of 1.6831. With the data barely affecting the pair, the Cable is currently trading at 1.6840, 0.53% below its opening price.


The UK GDP Estimate released by the National Institute of Economic and Social Research on Friday showed that 1% growth in the three months to April, following a 0.9% increase in the three months to March.


GBP/USD technical outlook


“In the 4 hours chart readings are strongly bearish, with a break below 1.6840 supporting a downward continuation towards 1.6770 price zone”, says Valeria Bednarik, chief analyst at FXStreet. ·A recovery above 1.6890 on the other hand should bring some relief on Pound, and see the pair attempting a recovery towards 1.6920”.









May 09, 2014

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NZD/USD resting up on a down week




FXStreet (Guatemala) - NZD/USD is trading at 0.8624, down -0.26% on the day, having posted a daily high at 0.8654 and low at 0.8613.


NZD/USD is taking a breather on its decent at these levels with Asia finished for the week and the data behind us, so to speak. Meanwhile, RBS strategists explained that it's worth reiterating how weaker than expected NZ retail sales data provides more reason to think RBNZ won't follow through with a rate rise in June. “Our sell zone on NZD/USD is 0.87-0.90 for huge multi month declines”. However, the strategists also went onto suggest that strengthening data in the US paired with a still credibly dovish Fed plays positive for carry currencies more broadly.


NZD/USD Levels


Current price is 0.8625, with resistance ahead at 0.8626 (Daily 20 SMA), 0.8640 (Hourly 20 EMA), 0.8641 (Hourly 200 SMA), 0.8646 (Daily Open) and 0.8647 (Weekly Low). Next support to the downside can be found at 0.8625 (Yesterday's Low), 0.8624 (Daily Classic S1), 0.8613 (Daily Low), 0.8612 (Weekly Classic PP) and 0.8600 (Daily Classic S2).


NZD chart formations


Looking at price patterns, we can see a Doji 1-hour candlestick formation.









May 09, 2014

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Yen weakness will be slightly delayed, but it is coming - Commerzbank




FXStreet (Córdoba) - Esther Reichelt, analyst at Commerzbank notes that absence of further BoJ measures suggests USD/JPY will remain at current levels longer than previously expected, although in the medium term many factors point towards a notably weaker yen.


Key Quotes


“At present the Bank of Japan sees no need for further action. As a result USD/JPY will remain at current levels longer than we had previously expected”.


“However, medium term many factors still point towards a notably weaker yen, as the BoJ will step up its measures in the autumn if it looks as if the inflation target will be missed”.


“Moreover market attention might begin focussing again on another issue on Monday: the stubborn current account deficit. This too will put medium term pressure on the yen”.









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USD/CHF at 1-month highs above 0.8850




FXStreet (Córdoba) - The USD/CHF recently rose to 0.8863 reaching the highest price since April 8 and extended weekly gains and currently is holding above 0.8850. The US dollar is rising further against European currencies after Wall Street opening, while the Swiss Franc is among the worst performers across the board.


USD/CHF best week since March


The pair is about the end the week with a gain of a hundred pips, the best weekly result since March. All gains were achieved after Draghi’s press conference on Thursday that boosted the US dollar versus the Euro and the Swissy.


On Thursday the pair approached 2014 lows but then bounced sharply to the upside. Despite the gains the weekly chart still looks bearish but price has approached a downtrend line originated 10 months ago.









May 09, 2014

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