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Treasuries trade flat ahead of the US Fed meet

FXStreet (Mumbai) - The yields across the long end and the short end of the US bond market curve are trading flat ahead of the Federal Reserve (Fed) meet today.

The ten-year yield is trading at 2.29%, largely unchanged from the yesterday’s New York closing of 2.298%. The Fed is widely expected to announce the end of its monthly bond purchase program today. Moreover, the taper begun in December 2013 when the Fed announced a first cut of USD 10 billion to the monthly bond buying program of USD 85 billion. Since then, the central bank has trimmed its bond purchase program at a pace of USD 10 billion in every policy meet. The Fed is widely expected to announce a final cut of USD 15 billion today.

However, the Fed has maintained through the Taper process that it intends to keep the interest rate at record low levels for a considerable period of time post end of QE. Thus, the equity markets have gained across the globe today on hopes that the Fed would continue to remain dovish on interest rates.

Ten-year yield Technical levels

The yield is trading near an immediate resistance of 2.3%, above which it can rise to 2.345%. On the other hand, a failure to rise above 2.3% today, shall push the yields lower to 2.2%.

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Oct 29, 2014

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[OctaFX_Farid]

GBP/USD to continue to range trade within 1.6000-1.6200 - OCBC Bank

FXStreet (Łódź) - Emmanuel Ng, FX Strategist at OCBC Bank sees GBP/USD trading in a range of .6000-1.6200.

Key Quotes

"Meanwhile, the GBP-USD came off intra-day highs above 1.6150 after the BOE’s Cunliffe called for caution with respect to hiking rates given the evidence of slowing UK growth coupled with darker international prospects, noting that the Bank '…can afford to maintain the current degree of monetary stimulus for a longer period than previously thought'."

"Note that this comes on the heels of similarly dovish or guarded sentiment expressed by the BOE’s Shafik on Monday."

"With BOE expectations still waning, look for the pair to continue to range trade within 1.6000-1.6200 although the pair may not be beyond reacting to any negative dollar vibes from the FOMC."

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Oct 29, 2014

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[OctaFX_Farid]

EUR rise likely limited to 1.2860 - UOB Group

FXStreet (Łódź) - The Market Strategy Team at UOB Group suggests that we will see some more EUR gains today but the climb will most probably be limited to the 1.2860 level for now.

Key Quotes

"EUR broke above the strong resistant at 1.2750 reaching an overnight high of 1.2763."

"While further EUR strength is likely in the coming days, upward momentum is not very strong at this stage and any further rally will likely struggle to move above the recent high near 1.2860."

"However, only an unlikely break below the key support at 1.2640 would indicate that the prevalent upward pressure has eased."

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Oct 29, 2014

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[OctaFX_Farid]

AUD/USD reaches fresh 3-week high

FXStreet (Córdoba) - AUD/USD pushed higher and reached its highest level in 3 weeks as the mild risk-on mood continued to support the Aussie.

AUD/USD stretched to a fresh high of 0.8885 but the move lacked follow-through as investors remain cautious ahead of the Federal Reserve decision. The Fed is expected to end its QE program but it is unlikely to mention a specific timeline for any eventual rate hikes.

AUD/USD will likely extend its consolidative path heading into the decision, with 0.8900 as next bullish target. At time of writing, AUD/USD is trading at 0.8880, recording a 0.32% gain on the day.

AUD/USD technical levels

As for technical levels, AUD/USD could find immediate resistances at 0.8885 (intraday high), 0.8898/0.8900 (Oct 9 high/psychological level) and 0.8926 (Sept 23 highs). On the other hand, supports are seen at 0.8848 (Oct 29 low), 0.8793 (10-day SMA), 0.8780 (21-day SMA) and 0.8742 (Oct 22 low).

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Oct 29, 2014

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[OctaFX_Farid]

Gold trades marginally weak

FXStreet (Mumbai) - Gold prices have weakened marginally ahead of the US opening, although not much activity is seen since the investors prefer to stay on the sidelines ahead of the Federal Reserve (Fed) meet.

Gold is trading 0.16% lower for the day at USD 1227.50/Oz levels. Moreover, prices remained consolidated in a narrow range of 1227-1230 through the entire European session today. The US Equity futures are trading marginally in the red, despite the strength in the major European equity indices. Meanwhile, the ten-year treasury yields have inched higher to 2.293%, which may have weakened the Gold prices.

Gold Technical levels

The metal is trading in a narrow range of 1227-1230, breach of which shall open doors for 1233 levels or 1224 levels depending on which direction the prices break out.

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Oct 29, 2014

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[OctaFX_Farid]

Focus on potential changes to Fed forward guidance statement - TD Securities

FXStreet (Łódź) - The TD Securities team of experts note that EUR/USD is trading flat ahead of the Fed monetary policy announcement which is expected to bring the end of QE3.

Key quotes

"This FOMC meeting should mark the end of the QE3 program. However, with domestic economic growth momentum beginning to leak lower (e.g., the Atlanta Fed GDP Q3 projection stands at 2.7% q/q annualized, down from 3.2% a couple of weeks ago), and the medium term outlook for the recovery and inflation becoming less certain, there will be no incentives to appear hawkish."

"The key element today will be any potential changes to the forward guidance statement that would remove the reference to the fed funds rate staying at current levels for a 'considerable time after the asset purchase program ends' and make the timing for liftoff more data dependent."

"Market pricing currently implies a first hike would occur in October 2015. And, as price action yesterday demonstrated, the FX market in particular appears to be very sensitive to changes around Fed timing expectations."

"Disappointing US data saw the USD falling quite noticeable across the board, whereas both EURUSD and USDJPY had ignored domestic data releases earlier in the day."

"Overnight, USDJPY once again was unresponsive to a stronger-than-expected industrial production reading. The risk, however, is that the statement fails to live up to the overly dovish tone that the market may be expecting."

"In this case, we would expect to see USDJPY pushing higher into the high 108s, and EURUSD having a somewhat more pronounced reaction, pushing lower into the low 1.26 area."

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Oct 29, 2014

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[OctaFX_Farid]

Focus on potential changes to Fed forward guidance statement - TD Securities

FXStreet (Łódź) - The TD Securities team of experts note that EUR/USD is trading flat ahead of the Fed monetary policy announcement which is expected to bring the end of QE3.

Key quotes

"This FOMC meeting should mark the end of the QE3 program. However, with domestic economic growth momentum beginning to leak lower (e.g., the Atlanta Fed GDP Q3 projection stands at 2.7% q/q annualized, down from 3.2% a couple of weeks ago), and the medium term outlook for the recovery and inflation becoming less certain, there will be no incentives to appear hawkish."

"The key element today will be any potential changes to the forward guidance statement that would remove the reference to the fed funds rate staying at current levels for a 'considerable time after the asset purchase program ends' and make the timing for liftoff more data dependent."

"Market pricing currently implies a first hike would occur in October 2015. And, as price action yesterday demonstrated, the FX market in particular appears to be very sensitive to changes around Fed timing expectations."

"Disappointing US data saw the USD falling quite noticeable across the board, whereas both EURUSD and USDJPY had ignored domestic data releases earlier in the day."

"Overnight, USDJPY once again was unresponsive to a stronger-than-expected industrial production reading. The risk, however, is that the statement fails to live up to the overly dovish tone that the market may be expecting."

"In this case, we would expect to see USDJPY pushing higher into the high 108s, and EURUSD having a somewhat more pronounced reaction, pushing lower into the low 1.26 area."

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Oct 29, 2014

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[OctaFX_Farid]

USD/JPY hovers around 108.00

FXStreet (Córdoba) - USD/JPY remains directionless, trading erratically near the top of its recent range as investors gear up for the Federal Open Market Committee decision on monetary policy.

USD/JPY pulled back throughout the European session but found support at the 107.90 zone and bounced afterward, but moves are lacking real strength. The pair is facing mild pressure at the beginning of the New York session, having dropped a few pips to currently trade around 108.05, virtually unchanged on the day.

Sideways consolidation will likely persist until 18:00 GMT when the Federal Reserve will announce its verdict. The Fed is expected to announce its commitment to end QE today.

USD/JPY levels to watch

In terms of technical levels, resistances are seen at 108.19 (Oct 29 high), 108.33 (Oct 27 high) and 108.73 (Oct 8 high). On the other hand, supports could be found at 107.93 (Oct 29 low), 107.58/64 (Oct 27 low/20-day SMA) and 107.38 (Oct 20 high).

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Oct 29, 2014

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[OctaFX_Farid]

EMU: Consumer Confidence up to -11.1 in October, as expected

FXStreet (Łódź) - Eurozone Consumer Confidence edged up to -11.1 in October, from -11.4 in September, the European Commission reported on Thursday. This result is in line with market consensus.

Eurozone Business Climate rose to 0.05, from 0.02, as expected.

The Economic Sentiment Indicator climbed to 100.7 from 99.9 and against forecasts of falling to 99.7.

Industrial Confidence decline slowed down from -5.5 to -5.1, against expectations of remaining unchanged. Services Sentiment improved to 4.4 from 3.2 and against consensus of falling to 3.1.

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Oct 30, 2014

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[OctaFX_Farid]

EUR/USD depressed below 1.2600

FXStreet (Edinburgh) - The single currency is extending its decline on Thursday, taking EUR/USD to the 1.2580 region so far.

EUR/USD muted post-data

Spot remained pretty much unchanged after Economic Sentiment and Business Climate surpassed forecasts during October, coming in at 100.7 and 0.05, respectively. Other indicators also showed auspicious results: Industrial Confidence improved to -5.1 from -5.5 and Services Sentiment bettered to 4.4 from 3.2. All in all, good prospect for the region although the demand for the single currency is still suffering yesterdays FOMC hawkish statement. The lack of any significant bounce suggests further EUR weakness but any further decline will likely be at a slower pace. Only a move back above 1.2675 would indicate that a temporary low is in place. Otherwise, expect a move lower towards 1.2600.

EUR/USD key levels

The pair is now losing 0.32% at 1.2591 and a breach of 1.2504 (low Oct.6) would expose 1.2501 (2014 low Oct.3) and then 1.2493 (low Aug.31). On the upside, the initial hurdle aligns at 1.2639 (high Oct.30) followed by 1.2690 (10-d MA) and finally 1.2691 (21-d MA).

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Oct 30, 2014

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[OctaFX_Farid]

Sensex at a new closing high

FXStreet (Mumbai) - The Indian equity markets rose on optimism that the US economy is on the track as indicated the optimistic Federal Reserve (Fed) policy statements. Moreover, the reforms initiated by the new government has managed to negate the impact of little hawkishness seen in the Fed’s statement.

The market ended with hefty returns today Nifty ending at 8169.20 up 78.75 points or 0.9%, while the Sensex ended at a record closing high at 27346.33, up 0.9% for the day. The index was pushed up by Relianc, which gained 3%, while TCS, Hindalco, Infosys and GAIL were top gainers. On the losing side were Sesa Sterlite, M&M, Cipla, Tata Power and Hero.

Exporter shares also edged higher on optimism about the US economy. Infosys ended up 1.6 %, while rival Tata Consultancy Services Ltd gaining 2.3%.

Sensex Technical levels

The index has an immediate support at 27,256 (Sept. 23), under which the prices can fall to 27,000 levels. Meanwhile, a breach of 27,385 levels shall open doors for a fresh record high levels in the index.

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Oct 30, 2014

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[OctaFX_Farid]

EUR/USD trading close to 1.2580 - FXStreet

FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that the post-Fed strength of the USD extended in the European session with the EUR/USD trading close to the 1.2580 region.

Key quotes

"Having breached the 1.2610/20 price zone, the technical outlook has turned now strongly bearish, and the level will likely attract sellers if reached."

"Later on the day, the US will release the Advanced GDP for the third quarter, expected at 3.1%."

"Previous quarter was revised up to 4.6%, so a better than expected number should boost the greenback, yet a not so good one needs to be extremely disappointing, something below 2% to actually reverse latest dollar gains."

"Technically, the 4 hours chart shows indicators still heading south despite in oversold territory, with 20 SMA now turning south well above current price, in the 1.2680 level."

"A break below 1.2550 should lead to a downward extension towards 1.2500, this year low, whilst a break below exposes 1.2440 as next probable bearish target."

"Price needs to advance above 1.2620 to begin an upward move, eyeing then a probable move up to 1.2660/80 area, next selling level on pullbacks."

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Oct 30, 2014

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[OctaFX_Farid]

USD/JPY challenges 109.00

FXStreet (Edinburgh) - The greenback is now losing the grip vs. its Japanese counterpart on Thursday, with USD/JPY putting the key support at 109.00 to the test.

USD/JPY focus on US data, Yellen

After hitting 3-week highs near 109.30 in early trade, spot is now giving away some gains and returning to the 109.00 neighbourhood. Ahead in the day, the US docket will take centre stage once again, with the GDP Annualized and Yellen’s speech as the main events. Other data releases will be the weekly report on the labour market and inflation figures tracked by the PCE. “The sharp rally overnight appears to be over-extended and further sustained up-move is unlikely. Allow for a test of 109.00/05 but this will likely lead to a pull-back towards 108.55/60”, suggested Quek Ser Leang, Market Strategist at UOB Group.

USD/JPY levels to watch

As of writing the pair is up 0.10% at 109.00 facing the next resistance at 109.85 (high Oct.6) ahead of 109.91 (high Oct.3) and finally 110.09 (2014 high Oct.1). On the flip side, a breakdown of 108,75 (low Oct.30) would aim for 107.94 (low Oct.29) and then 107.71 (Tenkan Sen).

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Oct 30, 2014

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[OctaFX_Farid]

Downside pressure on Treasuries possible in the near-term - RBS

FXStreet (Łódź) - Dmytro Bondar, Technical Analyst at RBS observes that following the break below 126-25, US Treasuries could experience further downside pressure in the nearest future.

Key quotes

"There is also a strong support at 126-00 and 125-21 (50-day MA), which seems likely to limit dips for now."

"Hence we favour taking profits on outright TY shorts, but to keeping short US into Europe trade."

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Oct 30, 2014

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[OctaFX_Farid]

Gold inches closer to USD 1200 ahead of the US GDP data

FXStreet (Mumbai) - Gold prices continued to weaken slowly during the European session today, inching closer to the USD 1200 mark.

Gold is trading 1.85% lower at USD 1201.90/Oz levels, threatening to breach the 1200 mark ahead of the US GDP data release. The prices declined sharply after the Federal Reserve (Fed) policy statement released yesterday titled towards the hawkish side. Moreover, the central bank acknowledged the improvement in the labor market sounding upbeat about the US economy.

The yellow metal is likely to extend its fall if the preliminary US 3 GDP prints higher than the market expectation of 3.0% growth. Moreover, a strong data is likely to reinforce the FeD’s upbeat view on the US economy. On the other hand, a weak print can revive Gold prices.

Gold Technical levels

Gold has an immediate support at 1190, below which prices can fall to 1183 levels. Meanwhile, the resistance is located 1208 and 1217 levels.

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Oct 30, 2014

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[OctaFX_Farid]

US: GDP expanded 3.5% YoY in Q3

FXStreet (Edinburgh) - The Commerce Department has informed that the US economic activity expanded at an annual pace of 3.5% during Q3, exceeding forecasts for an expansion of 3.0% albeit lower than the previous 4.6% gain.

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Oct 30, 2014

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[OctaFX_Farid]

GBP/USD down to 1.5950 amid upbeat US GDP

FXStreet (San Francisco) - The Dollar is advancing across the board amid a better than expected US GDP in the Q3. So the GBP/USD fell to test 1.5950 area just after the report. However the pair managed to bounce and it returned to pre-data levels.

US GDP rises 3.5% in the Q3; above 3.0% expected. Previous last 4 quarters: +4.5%, +3.5%, -2.1%, & + 4.6%. Consumption down to 1.8% from 2.5%, while core PCE down to 1.4% from 2.0%. The statement acknowledges too much government spending.

Currently, GBP/USD is trading at 1.5980, down -0.19% on the day, having posted a daily high at 1.6020 and low at 1.5951. GBP/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index also is neutral.

GBP/USD levels

If the pair extends bounce above 1.6000, it will find next resistances at 1.6010 and 1.6020. To the downside, supports are at 1.5950, 1.5900 and 1.5875.

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Oct 30, 2014

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[OctaFX_Farid]

German Ten-year yield at day’s low on weak German CPI

FXStreet (Mumbai) - The German ten-year is trading at a day’s low after the official data showed a slowdown in the price pressures in October.

The ten-year yield is trading at 0.845%, down from the day’s high of 0.903%. The yields have been falling since the early morning trade tracking weakness in the equity markets. The CPI in October rose 0.7% year-on-year, compared to the market expectation of 0.9%. Moreover, the markets were expecting an increase in the price pressures. However, given the slump in the energy prices, it was unlikely that the CPI would rise more than expected. Month-on–month the prices fell 0.3%, compared to the expectation of 0.1% fall.

Ten-year yield Technical levels

The yield has an immediate support at 0.824%, under which it can fall to 0.811%. On the other hand, a strong resistance is seen at 0.9%.

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Oct 30, 2014

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[OctaFX_Farid]

German Ten-year yield at day’s low on weak German CPI

FXStreet (Mumbai) - The German ten-year is trading at a day’s low after the official data showed a slowdown in the price pressures in October.

The ten-year yield is trading at 0.845%, down from the day’s high of 0.903%. The yields have been falling since the early morning trade tracking weakness in the equity markets. The CPI in October rose 0.7% year-on-year, compared to the market expectation of 0.9%. Moreover, the markets were expecting an increase in the price pressures. However, given the slump in the energy prices, it was unlikely that the CPI would rise more than expected. Month-on–month the prices fell 0.3%, compared to the expectation of 0.1% fall.

Ten-year yield Technical levels

The yield has an immediate support at 0.824%, under which it can fall to 0.811%. On the other hand, a strong resistance is seen at 0.9%.

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Oct 30, 2014

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[OctaFX_Farid]

US Equities to open on a weak note

FXStreet (Mumbai) - The equity markets in the US are likely to open on a weak note taking cues from the weakness in the European equity markets. The US Equity futures have been trading in the red since the start of the European session today.

The DJIA December futures are trading 0.10% lower at 16,909 , while the S&P December futures are trading 0.16% lower at 1969.15. Meanwhile, the Midcap Russell 2000 index December futures are trading 0.21% lower at 1139.30 levels.

Elsewhere, the Dax is trading 0.88% lower at 9000 levels, while the Ftse is trading 0.56% lower at 6418 levels.

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Oct 30, 2014

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[OctaFX_Farid]

Fed's Yellen calls for more diversity in economics

FXStreet (Łódź) - Fed Chair Janet Yellen, who spoke on Thursday at the National Summit on Diversity in the Economics Profession in Washington didn't make comments on monetary policy in her opening remarks.

Yellen suggested that a greater number of women in economics could contribute to the profession with different views and approaches and that the Fed has been promoting this stance for some time now.

“Often, in the things economists study and the methods we use, diversity is a good thing,” Yellen said. “I believe decisions by the Federal Reserve Board and the Federal Open Market Committee are better because of the range of views and perspectives brought to the table by my fellow policymakers, and I have encouraged this approach to decision making at all levels and throughout the Fed system.”

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Oct 30, 2014

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[OctaFX_Farid]

USD/JPY wobbling around 109.00

FXStreet (Edinburgh) - USD/JPY is sidelining around the 109.00 handle on Thursday, keeping the trade between 108.80 and 109.40 so far.

USD/JPY looks to Japanese CPI

Spot remained practically indifferent to the improvement of the US GDP during Q3, expanding above forecasts 3.5% on a yearly basis. Instead, market participants are now focusing on the critical inflation figures in Japan, due tonight. Consensus expect the key National CPI Ex-Fresh Food to rise at an annual pace of 3.0% in September, a tad lower than August’s 3.1% advance. Robert Rennie, Strategist at Westpac, suggested, “We… hold a buy bias for another week but remain unconvinced that USD/JPY will drop much below 107”.

USD/JPY levels to watch

As of writing the pair is up 0.10% at 109.00 facing the next resistance at 109.85 (high Oct.6) ahead of 109.91 (high Oct.3) and finally 110.09 (2014 high Oct.1). On the flip side, a breakdown of 108,75 (low Oct.30) would aim for 107.94 (low Oct.29) and then 107.71 (Tenkan Sen).

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Oct 30, 2014

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[OctaFX_Farid]

USD/JPY wobbling around 109.00

FXStreet (Edinburgh) - USD/JPY is sidelining around the 109.00 handle on Thursday, keeping the trade between 108.80 and 109.40 so far.

USD/JPY looks to Japanese CPI

Spot remained practically indifferent to the improvement of the US GDP during Q3, expanding above forecasts 3.5% on a yearly basis. Instead, market participants are now focusing on the critical inflation figures in Japan, due tonight. Consensus expect the key National CPI Ex-Fresh Food to rise at an annual pace of 3.0% in September, a tad lower than August’s 3.1% advance. Robert Rennie, Strategist at Westpac, suggested, “We… hold a buy bias for another week but remain unconvinced that USD/JPY will drop much below 107”.

USD/JPY levels to watch

As of writing the pair is up 0.10% at 109.00 facing the next resistance at 109.85 (high Oct.6) ahead of 109.91 (high Oct.3) and finally 110.09 (2014 high Oct.1). On the flip side, a breakdown of 108,75 (low Oct.30) would aim for 107.94 (low Oct.29) and then 107.71 (Tenkan Sen).

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Oct 30, 2014

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[OctaFX_Farid]

EMU: Annual CPI ticks up to 0.4% in October

FXStreet (Łódź) - According to preliminary data released today by Eurostat, Eurozone annual climbed to 0.4% in October from 0.3% in September, as expected.

Year-over-year CPI-Core slid to 0.7% in October from 0.8% in September, against forecasts of remaining unchanged.

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Oct 31, 2014

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[OctaFX_Farid]

Gold extends fall, ignores the Swiss vote

FXStreet (Mumbai) - Gold has slipped to four year low today along with a slide in the holdings in the exchange traded funds backed by Gold. The metal has weakened as markets continue to ignore the Swiss vote.

The Gold prices are trading at USD 1163/Oz levels, down 3% for the day, The weakness has been extended ahead of the US opening, as markets expect a strong performance of the US equities.

Moreover, the Gold prices continue to slide as the swiss population goes for a vote on the “save out swiss gold initiative”, a proposal which, if passed, would require the Swiss National Bank (SNB) to hold hold a fifth of its nearly $550 billion assets in Gold. The poll will held on Nov 30th. Moreover, a yes vote would require the SNB to buy 1500 tons of gold over a period of five years. Furthermore, the bank would be banned from selling Gold in future, which makes the purchases permanent.

However, the markets are currently ignoring the Swiss vote, as Gold continues to fall on a strong US Dollar.

Gold Technical levels

Gold has an immediate support at 1158 levels, while the immediate resistance is located at 1183 levels.

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Oct 31, 2014

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