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[OctaFX_Farid]

United States Producer Price Index ex Food & Energy (YoY) in line with expectations (1.8%) in November


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Dec 12, 2014
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[OctaFX_Farid]

India Manufacturing Output fell from previous 2.5% to -7.6% in November


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Dec 12, 2014
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[OctaFX_Farid]

Gold trades marginally lower ahead of the US session


FXStreet (Mumbai) - Gold prices recovered intraday losses on weak European equities and weak US index futures.

Gold now trades 0.06% lower at USD 1224.90/Oz levels, after having recovered from the low of USD /Oz hit earlier today. Prices recovered during the European session after the bearish Oil demand forecast from the International Energy Agency pushed the European stock markets lower. The German DAX is down 1.32%, while the Ftse is down 1.39%. Meanwhile, weakness in the European equities has pushed the US index futures into the negative territory. The S&P futures have weakened % at the time of writing.

Furthermore, the falling US treasury yields are supporting Gold prices as well. The 10-yr Treasury yield in the US retreated 5.6 basis points to trade at 2.122%. Consequently, the US dollar index too, has declined 0.30% to trade at 88.32 levels.

Gold Technical Levels

Gold has an immediate support located at 1221.18 (5-DMA), under which prices could test 1210.18 (10-DMA). Meanwhile, resistance is seen at 1233 and 1237 levels.



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Dec 12, 2014
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[OctaFX_Farid]

AUD/USD consolidates below 0.8300


FXStreet (Córdoba) - AUD/USD entered a consolidation phase after the latest upside attempt faltered just ahead of 0.8300 as investors remain mostly sidelined ahead of the weekend with the latest string of US data having no impact on the greenback.

AUD/USD touched a fresh 4 ½-year low of 0.8216 Thursday after RBA Governor Stevens said he now saw a fair value for the currency around 0.7500. However, market decided to ignore Stevens and AUD/USD managed to recover some ground and reached a daily high of 0.8298 before finding resistance.

Having spent most of the day in a narrow range, AUD/USD is currently trading at 0.8265, virtually unchanged on the day.




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Dec 12, 2014
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[OctaFX_Farid]

GBP/USD remains in bearish territory


FXStreet (Guatemala) - GBP/USD is trading at 1.5735, up 0.11% on the day, having posted a daily high at 1.5747 and low at 1.5695.

GBP/USD is up on the greenbacks weakness, lower US yields and sharp losses in equities all due to oil losses. The major has risen again and away from the supporting area of low 1.57’s, breaking up through the 1.5740 resistances and five-month downtrend.

Above here, key resistance remains at 1.6184, which is the October high as noted by Karen Jones, chief analyst at Commerzbank who explained while below here the market remains bearish.

Next week is packed on the calendar and markets will be turning towards, UK CPI, UK MPC Minutes, UK Unemployment, US CPI, US FOMC and UK Retail Sales.




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Dec 12, 2014
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[OctaFX_Farid]

GBP/USD technicals are mixed ahead of key week - Scotiabank


FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted the recent developments of GBP/USD while we await for next week’s key data releases from US and UK.

Key Quotes:

"GBP had a quiet Asian and European session, trading in a relatively narrow 40‐point range. Data today was limited, but disappointing with construction output falling –2.2%m/m and up just 0.7%y/y; however there was a large upside revision to the September print."

"GBP/USD short‐term technicals: mixed—The chart pattern suggest a temporary period of rest. Support lies within the recent range of 1.5652 to 1.5757."




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Dec 12, 2014
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[OctaFX_Farid]

EUR/JPY fails to hold above 148.00


FXStreet (Córdoba) - EUR/JPY jumped after the beginning of the American session as the yen weakened across the board and climbed to 148.16 reaching the strongest level since Wednesday.

But the pair failed to hold above 148.00 as the USD/JPY retreated from 119.10 to 118.65 while EUR/USD remained steady above 1.2450, near daily highs.

EUR/JPY unable to erase losses

Despite rising for the second day in a row on Friday the euro is headed toward a weekly decline versus the yen ahead of Japanese elections as currently trades at 147.80.

The pair is about to post the first weekly loss after rising consecutively during the previous eight weeks.




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Dec 12, 2014
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[OctaFX_Farid]

Policy divergence to be the clear theme for USD strength in 2015 BAML


FXStreet (Barcelona) - The Research Team at Bank of America-Merrill Lynch, note that Fed acknowledging inflation concerns due to declining oil prices may temper their USD-positive base case in the near term, but see policy divergence to remain the key catalyst for a strong USD in 2015.

Key Quotes

Our base case has the Fed largely looking past the big drop in oil prices and breakevens, expecting inflation to rise toward target next year. New York Fed President Bill Dudley articulated that view last week. That said, a few other Fed officials have sounded more concerned about low inflation recently, and the low inflation risks continue to grow, particularly abroad. Thus, a lower-probability but dovish risk to our base case would arise if the FOMC were to acknowledge risks from persistently low inflation, or if Yellen mentions it in her press conference.

Right now, the decline in TIPS breakevens may be, in part, a consequence of the Fed not giving them much attention. In our base case, breakevens can decline further and put downward pressure on the long end, with the 5s-30s curve flattening further and perhaps 10y yields declining outright. However, if this meeting were to suggest greater policy emphasis on low inflation going forward, that would support the 2y-5y part of the curve and likely push out of the market implied timing of the first rate hike, resulting in a steeper curve.

In FX markets, elevated concern about low inflation could temper the USDpositive signals of our base case in the near term. But, despite the risks at this particular meeting, policy divergence is a clear market theme and the pieces remain in place for a strong USD in 2015.




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Dec 15, 2014
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[OctaFX_Farid]

Ongoing fall in oil is starting to affect risk assets – RBS


FXStreet (Barcelona) - John Briggs of RBS notes that the ongoing fall in oil is clearly affecting the risk assets with high yield debt markets suffering since October, and currencies – Yen and Swiss Franc gaining on equity and energy market declines.

Key Quotes

“Last week, particularly the trading sessions at the end of the week, were very interesting in that the oil price decline shifted from being a "good for growth and thus longer term inflation" versus "bad for inflation and tricky for the Fed" debate to a simple risk-off catalyst. At RBS we have had an ongoing belief that markets will not be able to transition from years of US quantitative easing to a rate hike cycle without any sort of hiccup. A 40% decline in crude oil over 3 months, however, was admittedly not at the top of the list.”

“The ongoing fall is clearly starting to affect risk assets and all that goes along with them. High yield debt markets have been suffering since October, but one can tell how sentiment is shifting to broader markets such as global equities and currencies. On Friday, even FX had a tone of classic risk-off, with the yen and Swiss franc strengthening (a bit) on equity market and energy market declines. The overnight action this morning is no different – an oil rally causing US stocks to bounce and rates to retreat.”




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Dec 15, 2014
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[OctaFX_Farid]

EUR trading soft within Friday’s range – Scotiabank


FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that EUR is soft in the open as market rumours swirl on QE, trading weak within Friday’s range.

Key Quotes

“EUR has trended lower throughout the Asian and European sessions, but is still trading within Friday’s range. The ECB announced that €40bn in 3yr LTROs will be repaid, which warns that the overall take‐up of ECB TLTROs is relatively low and increases the risk of QE. This week’s EU Summit (December 18/19) is unlikely to create a notable EUR reaction; with the focus on the U.S. Fed meeting and the release of CPI. We expect EUR to trend lower overtime and hold a y ear‐end 2015 forecast of 1.18.”




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Dec 15, 2014
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[OctaFX_Farid]

United States Capacity Utilization came in at 80.1%, above forecasts (79.3%) in November


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Dec 15, 2014
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[OctaFX_Farid]

EUR/USD hits fresh highs above 1.2500


FXStreet (Córdoba) - EUR/USD finally broke above the 1.25 mark to hit its highest level in nearly 3 weeks, supported by better-than-expected European PMIs and pushed even higher following upbeat ZEW German survey and trade data.

After 3 days of infructuous attempts, EUR/USD gathered enough momentum to pierce the 1.2500 resistance area and stretched to a high of 1.2527, last seen Nov 26, extending its recovery from this year low of 1.2246. At time of writing, EUR/USD is trading at 1.2520, recording a 0.64% gain on Tuesday.

EUR/USD levels to watch

As for technical levels, EUR/USD could find immediate resistances at 1.2530/35 (Nov 26 high/50-day SMA) and 1.2575 (Nov 20 high). On the flip side, supports are now seen at 1.2414 (Dec 15 low), 1.2400 (psychological level) and 1.2370 (Dec 11 low).




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Dec 16, 2014
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[OctaFX_Farid]

German Economic Sentiment rises to highest since May 2014


FXStreet (Mumbai) - The Zew indicator of Economic sentiment for Germany rose to 34.9 in December, highest since May 2014. The indicator has moved well above its long-term average of 24.4 points.

The assessment of the current situation in Germany also improved to 10.0 points in November. Both the data for Germany easily surpassed the median estimates. Meanwhile, the Zew data also showed the sentiment indicator for the Eurozone increased to a reading of 31.8 points in December, while the indicator for the current situation in the Eurozone decreased in December to minus 62.8 points.

As per ZEW President, Professor Clemens Fuest, “Confidence in the German economy seems to be slowly returning among the financial market experts surveyed by ZEW. This increase is related to favorable economic conditions such as the weak euro and the low crude oil price. The recently published German export figures already show a positive trend. However, we should be aware that the current optimism is fuelled by factors that might change even over the short term.”




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Dec 16, 2014
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[OctaFX_Farid]

DAX climbs higher on Upbeat German data


FXStreet (Mumbai) - Germany’s benchmark index, the DAX, traded higher today, reversing losses from the previous session after Germany’s manufacturing sector as well as overall economic conditions improved in December.

Currently, the DAX 30 trades at 9397.80 levels, up 0.71%, compared to Friday’s close of 9334.01. The DAX gained strength after upbeat Germany’s PMI readings and ZEW Economic Sentiment Surveys pointed towards a stabilizing German economy. Germany's ZEW survey, the key measure of investors' sentiment, hit 31.8 points this month, a jump from November's 11.5, against market estimates of 20 points increase. The German flash PMI showed an expansion to 51.2 points after November's 49.5.

The index is trading with a positive market breadth, an advance decline ratio of 19:11. Among the major gainers, shares in Continental AG, Deutsche Telekom AG and ThyssenKrupp AG are up 0.70% to 1.55%. While, Commerzbank AG and RWE AG lost 0.50% to 0.78%.

DAX Technical Levels

The index has an immediate resistance at 9461.53 (Nov 18 High), above which gains could be extended to 9520 (Oct 1 High) levels. Meanwhile, support is seen at 9323.52 (Nov 18 Low) and 9268.63 (Nov 6 Low) levels.




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Dec 16, 2014
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[OctaFX_Farid]

AUD/USD hits 2-day highs


FXStreet (Córdoba) - The US dollar weakened in the currency market during the European session and pushed AUD/USD to the upside, amid better-than-expected data from the Eurozone.

The pair climbed to 0.8274, reaching the highest price since last Friday and currently trades at 0.8250/55, 45 pips above yesterday’s closing price.

AUD/USD rebounds from 0.8198

During the Asian session the aussie reached a fresh multi-year low versus the US dollar after the release of the Chinese HSBC PMI Manufacturing index that dropped in December, according to the preliminary reading to 49.5, from 50.0; reaching the lowest level in seven months. The pair bottomed at 0.8198 but rebounded and then gained bullish momentum after breaking above 0.8235.




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Dec 16, 2014
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[OctaFX_Farid]

Gold stuck at USD 1200


FXStreet (Mumbai) - The price of the yellow metal appears stuck at USD 1200 after it declined from the high of USD 1204 hit few minutes earlier.

Gold now trades 0.65% lower at USD 119.80/Oz levels. The yellow metal recovered from the low of USD 119.80/Oz levels hit during the Asian session after the HSBC PMI data showed a contraction in the Chinese manufacturing activity. The metal also received support from the weakness in the Asian equity markets.

However, the gains have been halted around USD 1200 during the European session since the HSBC data showed a rebound in the German manufacturing activity along with a rise in the German economic Sentiment to May 2014 highs in December. The Major European stock markets have moved higher which has reduced the demand for Gold. The Dax currently trades 1.005 higher, while the Ftse is up 1.21%. Meanwhile, the US dollar index has extended losses during the European session to trade 0.52% lower at 88.26 levels.

Gold Technical Levels

The metal has an immediate resistance at the daily high of 1204, above which prices face another resistance at 1208 levels. Meanwhile, support is seen at 1198.40 (10-DMA) and 1190.00 levels.




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Dec 16, 2014
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[OctaFX_Farid]

GBP/JPY trades near 1-month low levels


FXStreet (Mumbai) - The pound lost ground against the Japanese counterpart and fell close to one month low levels after Japanese yen regained strength versus US dollar.

Currently, the GBP/JPY pair trades at 183.05, down -0.65% on the day, after having hit day’s low of 181.66 levels couple of hours ago. The GBP/JPY pair remains pressured as the Japanese yen continues its rise against the US dollar, taking USD/JPY to 116.58 levels, down -1.06% on the day. Adding to the downside in GBP/JPY, the pound remained pressured on sharp deceleration seen in UK CPI inflation numbers.

GBP/JPY Technical Levels

To the upside, the next resistance is located at 183.60 (10-day SMA) and above which it could extend gains to 183.98 (20-day SMA) levels. To the downside, immediate support might be located at 182.46 (Nov 19 Low) and below that at 181.04 (Nov 17 Low) levels.



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Dec 16, 2014
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[OctaFX_Farid]

EUR/USD reaches 4-week highs


FXStreet (Córdoba) - EUR/USD managed to break above 1.2500 and climbed to fresh 4-week highs in a volatile session where the dollar rallies against emerging market currencies but falls against majors.

Better-than-expected Eurozone data acted as trigger, sending EUR/USD to a high of 1.2569, last seen November 20 and the euro has managed to hold onto gains despite the cautious tone among financial markets. At time of writing, EUR/USD is trading at 1.2545, recording a 0.92% gain Tuesday.

Investors also remain wary as tomorrow the Fed concludes its 2-day monetary policy meeting, with focus on the 'considerable time' description of the period the bank considers it’ll be appropriate to keep historical low rates.

EUR/USD levels to watch

Immediate resistances are now seen at 1.2575 (Nov 20 high) and 1.2600 (psychological level/Nov 19 high), while supports could be found at 1.2414 (Dec 15 low), 1.2400 (psychological level) and 1.2370 (Dec 11 low).



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Dec 16, 2014
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[OctaFX_Farid]

United States Building Permits (MoM) came in at 1.035M below forecasts (1.06M) in November


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Dec 16, 2014
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[OctaFX_Farid]

UK Inflation forecast for December 2014 – RBS


FXStreet (Barcelona) - Ross Walker of RBS forecasts the UK inflation readings for December 2014, anticipating CPI to fall to 0.6% from November’s 1.0%.

Key Quotes

“CPI inflation fell to a 12-year low of 1.0% in Nov from 1.3% in Oct, significantly below City forecasts (consensus & RBS: 1.2%).”

“CPI inflation is forecast to fall to 0.6% in December, with the core CPI inflation rate edging up slightly to 1.3%.”

“RPI inflation is forecast to fall to 1.6% in Dec from 2.0% in Nov.”

“Medium-term inflation forecasts lowered significantly: CPI <1% for almost all of 2015 and below target throughout 2016.”

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Dec 16, 2014
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[OctaFX_Farid]

FOMC expected to change its language in its statement – FXStreet


FXStreet (Barcelona) - FXStreet Analyst, Craig Drake, notes that high expectations revolve around Fed’s Wednesday meeting for a shift in its language, with the phrase “considerable time” anticipated to be dropped out of Fed’s communication.

Key Quotes

“The big expectation for the conclusion of the Federal Reserve’s Federal Open Market Committee meeting is for a shift in language. The FOMC is expected to drop the phrase “for considerable time” in reference to maintaining near-zero rates in favour of an emphasis on patience.”

“As part of the Fed’s reliance on forward guidance (something ushered in by Janet Yellen when deputy chairman of the Fed), the Fed has repeated the statement that “it likely will be appropriate to maintain the 0 to 0.25 percent target rate for the federal funds rate for a considerable time” after the end of its asset purchase programme – with the “considerable time” emphasis something that has been in place since 2012.”

“90-day Eurodollar implied probabilities of a Fed funds rate hike is being priced around mid-2015 in line with conservative consensus expectations from the majority of the big bank forecasts, however, we may see this being pushed later into the third quarter of 2015, with the Fed seemingly in no hurry to abandon its current ultra-loose monetary conditions despite an official Fed forecast of 2.8 percent GDP growth in 2015.”

“The Fed is also expected to downplay declines in inflation in view of recent sharp declines in oil prices”

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Dec 16, 2014
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[OctaFX_Farid]

FTSE gains almost 1%


FXStreet (Mumbai) - The Londons Ftse index opened higher following on the increased probability of a delay in the interest rate hike in the US, although part of the gains have been erased.

The Ftse traded 0.89% higher at 6391 levels at the time of writing, compared to the previous sessions close of 6336.48 levels. The index had opened higher at 6418.50 levels, before declining to the current level of 6391. The index breadth is positive with an advance-decline ratio of 88:11. The Ftse Oil Equipment Services and Distributions index gained 4.75%, while the Mining index is up 1.42%. All other sectors are trading in green, except the Telecom index, which has weakened 1.14%.

Among stocks, Petrofac and Tullow Oil have gained 5.64% and 4.43% respectively. Meanwhile, Cocacola and United Utilities have weakened 2.33% and 1.5% respectively. The index hit a low of 6358 levels before recovering on a stronger-than-expected UK retail sales data for November.

FTSE Technical Levels

The index has an immediate resistance at 6446, above which gains could be extended to 6544 levels. Meanwhile, support is seen at 6361 and 6294 levels.



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Dec 18, 2014
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[OctaFX_Farid]

FTSE gains almost 1%


FXStreet (Mumbai) - The Londons Ftse index opened higher following on the increased probability of a delay in the interest rate hike in the US, although part of the gains have been erased.

The Ftse traded 0.89% higher at 6391 levels at the time of writing, compared to the previous sessions close of 6336.48 levels. The index had opened higher at 6418.50 levels, before declining to the current level of 6391. The index breadth is positive with an advance-decline ratio of 88:11. The Ftse Oil Equipment Services and Distributions index gained 4.75%, while the Mining index is up 1.42%. All other sectors are trading in green, except the Telecom index, which has weakened 1.14%.

Among stocks, Petrofac and Tullow Oil have gained 5.64% and 4.43% respectively. Meanwhile, Cocacola and United Utilities have weakened 2.33% and 1.5% respectively. The index hit a low of 6358 levels before recovering on a stronger-than-expected UK retail sales data for November.

FTSE Technical Levels

The index has an immediate resistance at 6446, above which gains could be extended to 6544 levels. Meanwhile, support is seen at 6361 and 6294 levels.



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Dec 18, 2014
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[OctaFX_Farid]

EUR/USD moves off lows but lacks momentum


FXStreet (Córdoba) - EUR/USD briefly dropped below the 1.2300 level and hit a fresh 10-day low of 1.2277, from where it bounced to trim intraday losses.

EUR/USD managed to move off lows but the recovery lacked follow-through as the euro remains vulnerable amid prospects the ECB might take additional easing measures next month. At time of writing, the pair is trading at 1.2310, recording a 0.24% loss on the day.

EUR/USD levels to watch

As for technical levels, EUR/USD could find immediate resistances at 1.2350 (daily high), 1.2400 (psychological level) and 1.2415 (21-day SMA). On the other hand, supports could be found at 1.2277 (daily low), 1.2247 (2014 low Dec 8) and 1.2200 (psychological level).



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Dec 18, 2014
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[OctaFX_Farid]

Dollar mixed as markets digest FOMC and SNB – BBH


FXStreet (Barcelona) - USD trades mixed today as markets digest the FOMC rhetoric and SNB’s shift to negative rates, with AUD and NOK outperforming, and EUR and CHF underperforming.

Key Quotes

“Markets are digesting the FOMC outcome. Our heuristic approach to the Federal Reserve is that the policy thrust emanates from the core leadership, which presently is Yellen, Fischer and Dudley. What follows from that simple observation is that the FOMC statement is the clearest expression of policy. The forecasts (dot plot) and the minutes from the meeting dilute and distort that policy signal.”

“This is especially relevant now. There is a rotation of regional presidents with voting authority next year. Moreover, all three of the dissenting presidents (three of the five) have reportedly signaled plans to leave the Fed.”

“We continue to see the most likely scenario for the first rate hike in June. We acknowledge some risk that the hike is delivered in September instead. Barring a significant surprise, the choice between the two meetings will be data-driven.”

“The Swiss National Bank announced a negative 25 bp interest rate on sight deposits and lowered the 3-month Libor range to -0.75% to 0.25%. Although SNB President Jordan revealed that it was inflows from Russia that compelled it to intervene in recent days, the fact of the matter is that the negative rate goes into effect the same day as the ECB's next meeting, January 22.”

“The announcement took the market by surprise. The SNB had given no clues at last week's quarterly review. The euro immediately shot up to CHF1.21 from just above the floor of CHF1.20. Nearly as quickly the gains were retraced, leaving the euro near CHF1.2040.”



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Dec 18, 2014
OctaFX.Com News Updates