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[OctaFX_Farid]

GBP/USD retreats from highs




FXStreet (Edinburgh) - After climbing as high as the vicinity of 1.5270, GBP/USD is now running out of steam and returning to the id-1.5200s.

GBP/USD focus on BoE

The pair has picked up pace following a softer tone from the greenback, lifting the sentiment around the risk-associated universe. The sterling keeps consolidating above the 1.5200 handle ahead of the critical BoE Quarterly Inflation Report due tomorrow, followed by a speech by Governor M.Carney.

Spot managed to leave behind mixed results from the Industrial and Manufacturing Production in the UK economy during December, managing to bounce off the area of 1.5210.

GBP/USD significant levels

At the moment the pair is up 0.17% at 1.5243 with the next up barrier at 1.5282 (40-d MA) followed by 1.5353 (high Feb.6) and then 1.5355 (high Jan.5). On the other hand, a breach of 1.5170 (low Feb.5) would aim for 1.5162 (200-h MA) and finally 1.5149 (21-d MA).

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Feb 10,2015
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[OctaFX_Farid]

US headline retails sales likely to be depressed BBH




FXStreet (Barcelona) - The Brown Brothers Harriman Team previews tomorrows US data release, expecting the headline retails sales to likely to be depressed due to the fall in gasoline prices.

Key Quotes

In the US, the focus is on tomorrows retail sales. The headline will likely be depressed by the fall in gasoline prices, and we already know there was a slight slowing in auto sales, but the core measure should reverse the 0.4% decline in December.

At the same time, the recent trade and inventory data is spurring economists to cut Q4 GDP estimates toward 2% or just below.

However, the strength of the labor market and the recovery in hourly earnings has seen ideas of a mid-year rate hike strengthen, and this has been encouraged by several Fed officials that have spoken this week.

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Feb 11,2015
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[OctaFX_Farid]

Japanese inflation might reach BoJ’s 2% target by 2016 – BNPP




FXStreet (Barcelona) - Raymond Van der Putten of BNP Paribas, views that Japanese macro wage growth in 2015 and 2016 might aid inflation to reach BoJ’s 2% target by 2016.

Key Quotes

“In addition to energy prices, wages are an important determinant for price trends. In 2014, they rose by 0.7% higher. All attention is now on the spring wage offensive (shunto).”

“As last year, the government is calling on enterprises to do their utmost to implement pay hikes. As the labour market has become very tight, we expect that at the shunto wages will be hiked in FY 2015 by an overall 2.6% (against 2.2% in FY 2014). These talks affect union workers only at relatively large companies and account for just 17.5% of the country’s labour force. It is, however, likely that these increases will also spread to other sectors.”

“Macro wage growth could reach 1.6% in 2015 and 2.8% in 2016. In this scenario, inflation could reach the BoJ’s 2% objective in the course of 2016.”

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Feb 11,2015
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[OctaFX_Farid]

Comex copper erases gains




FXStreet (Mumbai) - Comex Copper has erased part of its gains as investors turn cautious ahead of the Greece’s finance minister Yanis Varoufakis meeting with other finance ministers of the euro zone to discuss a solution to Greece's bailout program.

Trades below 5-DMA and 10-DMA

Copper prices faced rejection at the 5-DMA and the 10-DMA located at USD 2.571 and USD 2.559 respectively. The red metal declined from the session high of USD 2.583 as markets do not expect any long term solution to the Greece’s debt problems from the Eurogroup’s meeting today. However, a short-term fix is likely, which means the Greece-related uncertainty is here to stay for a while.

Meanwhile, the metal remains supported on the expectation of fresh stimulus measures from China, especially after the inflation printed at the lowest level since November 2009.

Comex Copper Technical Levels

The metal currently trades at USD 2.552/pound. The immediate resistance is seen at 2.571 (5-DMA), above which gains could be extended to 2.619 (Feb. 4th high). Meanwhile, support is seen at 2.526 and 2.489 levels.

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Feb 11,2015
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[OctaFX_Farid]

Oil the major driver for CAD’s weakness – Scotiabank




FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that CAD is weak with a stronger USD, weaker oil prices & a dovish BoC, the risk is ongoing depreciation but oil remains the core driver.

Key Quotes

“USDCAD is higher, flirting with a break above its seven-session range of 1.2352 to 1.2644.”

“The shift higher has come from falling oil prices, a broadly stronger USD and yesterday’s dovish tone from the BoC’s Wilkins. There are no fundamental releases today.”

“the economic outlook from the perspective of the BoC is one that likely justifies further interest rate cuts. The market is pricing in a 50% chance of a cut at the March 4th meeting.”

“As oil comes under renewed pressure we would expect both the expectations for interest rate cuts in Canada to increase and CAD to weaken.”

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Feb 11,2015
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[OctaFX_Farid]

USD/CAD rises to session highs




FXStreet (Mumbai) - The slide in crude prices pushed the Canadian dollar lower, taking the USD/CAD pair to the session high of 1.2645 levels.

Loonie weakens as Crude extends losses

Crude prices in the US fell to a low of USD YSD 49.13/barrel ahead of the weekly supply report in the US, which is expected to show inventories rose by 3.8 million barrels last week. Consequently, the USD/CAD pair rose to a high of 1.2645.

Moreover, the rally in the Canadian dollar stalled as crude prices resumed the fall on fears of rising supply glut and a slowdown in China. Meanwhile, a strong US jobs data and the subsequent rise in the US Treasury yields further added to the bullish momentum in the USD/CAD pair.

USD/CAD Technical Levels

The pair currently trades 0.44% higher at 1.2642 levels. The immediate resistance is seen on the 4-hour chart at 1.2675 levels, above which the pair could rise to 1.2771 levels. On the flip side, support is seen on the 4-hour chart at 1.2589 and 1.2539 (hourly 200-SMA) levels.

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Feb 11,2015
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[OctaFX_Farid]

Gold falls below USD 1230/Oz




FXStreet (Mumbai) - Gold prices extended the decline to trade well below USD 1230/Oz levels, after hovering around the 50-DMA located at USD 1234 levels in the last couple of hours.

Gold prices weighed down by USD strength

The latest bout of weakness may have been triggered largely due to an across the board strength seen in the US dollar. The USD index is up 0.31% at 95.16 levels. Meanwhile, the repeated struggle to rise above 50-DMA at USD 1234 could have triggered a technical sell-off as well.

Moreover, Gold and other safe haven assets like the Japanese Yen and the US Treasuries have failed to gain despite the Greek led uncertainty in the markets and concerns of escalating tension in Ukraine. The metal may extend losses even further if the US equity markets manage to recover losses later in the day.

Gold Technical Levels

At the moment, the metal trades 0.59% lower at USD 1224.90/Oz levels. The immediate support is seen at 1223.2, under which a major support is seen at 1207.5 levels. On the flip side, resistance is seen at the 50-DMA located at 1234 and at the 200-DMA located at 1244 levels.

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Feb 11,2015
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[OctaFX_Farid]

BoE could hike rates by year-end – Investec




FXStreet (Edinburgh) - The start of the hiking cycle in the UK could start as soon as Q4 2015, according to D.Theodosiou at Investec.

Key Quotes

“Although subject to varied interpretation, interest rate markets point to the first interest rate hike in the UK being priced in for Q2 2016, with a second priced in Q4 2016”.

“Part of this expectation has likely been skewed by ‘safe haven’ flows, with many countries charging negative yields on deposits and investors looking for safe places to invest, particularly in light of recent Greek events”.

“Therefore, if the MPC continue to hold the line that medium term inflation goals remain on target, the market could find itself scrambling to adjust expectations more in-line with the Investec Economics team, that are currently looking for a November 2015 first rate rise”.

“This would certainly help Sterling trade stronger across the board with investors factoring in higher future yield for holding Pounds. The only question is, if investors sell Gilts (UK Bonds) to price in an earlier rate rise in the UK, then where do they invest instead?”.

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Feb 11,2015
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[OctaFX_Farid]

Pragmatic BOE postures next move in rates is up ANZ




FXStreet (Barcelona) - Brian Martin of ANZ, comments on the inflation and easing expectations for UK whilst reviewing the BOEs inflation report.

Key Quotes

The Bank of England (BoE) expects inflation to fall further, possibly into negative territory in coming months and hover around zero for much of this year, but the central bank is looking through this volatility: as unusual as that is, it arguably isnt the main story. The headlines today mask stronger underlying dynamics which will determine UK output and inflation tomorrow.

..whilst the tone of the report was more upbeat than the market had anticipated, it did contain the usual caveats and the BoE is in no rush to raise interest rates.

The risks to the forecasts remain balanced and the inflation target is symmetric. The BoE cares as much about inflation below target as above target.

With inflation below target and unemployment above its long-run sustainable rate, there is no immediate trade-off between returning inflation to target and supporting economic activity. In fact, to return inflation to target it is necessary to eliminate the remaining degree of economic slack, Carney said before qualifying during the press conference that returning inflation to target would probably require a gentle and gradual rise in interest rates

Acknowledging the pragmatic nature of monetary policy, Carney did state that the BoE is vigilant to the risks that disappointing global growth and evidence that persistently low inflation could negatively impact on inflation expectations. Were those risks to materialise, it could require additional stimulus.

The BoE can therefore respond in either direction, but the inflation report states that under the central case, the MPC judges it more likely than not that Bank Rate will increase over the forecast period.

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Feb 12,2015
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[OctaFX_Farid]

EUR/USD hits 1.1400 amid Greek headlines




FXStreet (Córdoba) - EUR/USD jumped to 1.1400 and scored a fresh 6-day high at the beginning of the New York session as the euro benefitted from a report suggesting Greece is getting an extension of the emergency liquidity assistance (ELA), which the ECB authorized as a temporary expedient when it stopped accepting Greek bonds as collateral for funding last week.

EUR/USD peaked at 1.1400, also supported by a weaker USD following a retail sales miss, but lacked follow-through to break above the psychological level and pulled back. At time of writing, EUR/USD is trading at 1.1370, still up 0.35% on the day.

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Feb 12,2015
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[OctaFX_Farid]

GBP/USD retreats from fresh 6-week highs, back below 1.5400



FXStreet (Mumbai) - GBP/USD erased previous gains and edged below 1.5400 levels during the European session largely on US dollar weaknesses following tepid macro data.

GBP/USD declines from 1.5408 levels

The GBP/USD pair trades flat at 1.5385 levels, retreating from fresh six-week highs posted at 1.5419 levels earlier in the day. GBP/USD remained little changed as traders moved past Bank of England's (BoE) inflation report induced gains and now turned their attention towards another set of US data due later today for fresh directions on the pair. Moreover, generalized weakness in the US dollar also failed to lift the GBP/USD pair.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.5420 above which gains could be extended to 1.5500 levels. On the flip side, support is seen at 1.5354 below which it could extend losses to sub 1.5300 levels.

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Feb 13,2015
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[OctaFX_Farid]

China FX policy survey: No band widening expected in next 3m – Nomura



FXStreet (Barcelona) - Research Analysts at Nomura, share the results of their China FX policy survey, and further note their forecast for the USD/CNH trading band, and policy rates.

Key Quotes

“On the USD/RMB forecasts and positioning, the largest proportion of survey participants expect the USD/CNY fixing to be 0.5% higher (than the 6.1311 on 9 February) in the next three months, while most see the USD/CNH deviation from its fixing at +2.0% over the same period.”

“Our view is not much different from this result and we see some value in the forward curves with USD/CNY 3M NDF at 6.2050 and USD/CNH 3M forward at 6.3142 (as of 1930 SGT).”

“In addition, survey participants expecting a band widening forecast USD/CNH to be trading at +2.2% (on average) above the fix in three months.”

“On positioning (-5 to +5, +ve implies long USDs), the largest proportion of survey participants expect the market to be long USD/CNY NDF (at +2, based on +/- 5 scale, where positive implies long USDs) and long USD/CNH with a high concentration of participants in the +1 and +2 bucket for USD/CNH.”

“Lastly, on stimulus, most participants expected a 25bp benchmark rate cut and 50bp RRR cut in the next three months.”

“Almost all survey participants believe there will be further liquidity injections and lending facilities in the next three months.”

“Nomura Economics forecasts a 25bp rate cut and 50bp RRR cut in Q2 2015.”

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Feb 13,2015
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[OctaFX_Farid]

EUR/GBP hovers close to fresh highs, Euro zone data eyed



FXStreet (Mumbai) - EUR/GBP bounces off seven year lows and inched higher during the European session, as traders digested surprisingly good German GDP and a ceasefire agreement in Ukraine.

EUR/GBP rises from 0.7413 levels

The EUR/GBP pair trades higher by 0.24% at 0.7430 levels, having posted session highs at 0.7434 levels an hour ago. EUR/GBP rose to fresh session highs, in a delayed reaction to the stellar German growth number confirming that the Euro zone’s economic powerhouse is well away from recessionary phase. On the other side, pound remained flat against the US dollar as BOE Inflation report-backed gains reversed as traders now eyed US macro data.

At the moment, EUR/USD held 0.25% higher at 1.1432 levels, while GBP/USD traded flat at 1.5387 levels.

EUR/GBP Levels to consider

To the upside, the next resistance is located at 0.7460 and above which it could extend gains to at 0.7499 levels. To the downside immediate support might be located at 0.7400 and below that at 0.7383 levels.

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Feb 13,2015
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[OctaFX_Farid]

Eurozone GDP slightly stronger than expected in fourth quarter 2014



FXStreet (London) - Seasonally adjusted GDP rose by 0.3 percent in the Eurozone and by 0.4 percent in the EU during the fourth quarter of 2014, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union.

The growth was slightly stronger than expected, with consensus expectations of a 0.2 percent growth in the fourth quarter.

In the third quarter of 2014, GDP grew by 0.2 percent in the Eurozone and by 0.3 percent in the EU. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 0.9 percent in the Eurozone and by 1.3 percent in the EU in the fourth quarter of 2014, after +0.8 percent and +1.3 percent respectively in the previous quarter.

During the fourth quarter of 2014, GDP in the United States increased by 0.7 percent compared with the previous quarter (after +1.2 percent in the third quarter of 2014). Compared with the same quarter of the previous year, GDP grew by 2.5 percent (after +2.7 percent in the previous quarter). Over the whole year 2014 , GDP rose by 0.9 percent in the Eurozone and by 1.4 percent in the EU.

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Feb 13,2015
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[OctaFX_Farid]

EUR/JPY muted post EMU data



FXStreet (Mumbai) - EUR/JPY little changed during the mid-European session, after EMU Q4 2014 GDP figures showed that the Euro zone economy accelerated during the final quarter of 2014, outpacing estimates.

Hovers below 136 levels

Currently, the EUR/JPY pair traded flat at 135.88 levels, striving for 136 levels. The EUR/JPY traded muted, with no reaction to the upbeat EZ data which showed that the 19-nation bloc’s grew by 0.3% in Q4 2014, following the 0.2% uptick in Q3, beating expectations for a 0.2% expansion. On yearly basis, the bloc's GDP expanded 0.9%, after a 0.8% growth in previous quarter. The reading also managed to outpace forecast of an unchanged figure.

The pair remains stuck below 136 levels as both the EUR and JPY is gaining equally against the USD on a broad based greenback weakness. Meanwhile, traders now focus on the crucial US macro data due later today for fresh cues on the cross.

EUR/JPY Levels to consider

To the upside, the next resistance is located at 136.30 and above which it could extend gains to at 136.70 levels. To the downside immediate support might be located at 135 levels below that at 134.77 levels.

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Feb 13,2015
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[OctaFX_Farid]

ECB minutes this week, an important step in transparency BBH



FXStreet (Barcelona) - The Brown Brothers Harriman Team comments that with a number of central banks scheduled to release its policy meeting minutes, the ECB minutes will likely be the most interesting and also an important step in the transparency, further adding that ECBs review of ELA authorization to Greece this week will also remain in focus.

Key Quotes

The most interesting central bank meeting report will come from the ECB. Until now the ECB has been reluctant to provide some record of its policy making discussions. This is expected to change this week. Neither the content nor format is understood yet, except that individual names will not be cited.

It was at the January meeting that the ECB decided to expand its asset purchase program from about 10 bln euros a month to 60 bln, which will include sovereign bonds.

While recognizing this is an important step in the transparency of the ECB, it is also a new channel of communication. Since the record can only be a partial summary of what happened, the ECB, like other central banks, will reveal what it wants.

The ECB is also expected to review its ELA authorization to Greece. Some claim the ECB's decision to no longer accept Greek government bonds as collateral was aimed not so much at Greece as to force both sides together. However, it took place immediately following Draghi's meeting with Greece's new finance minister and not after Draghi's discussions with Berlin."

Surely the two sides would have been engaged in tough negotiations even if the ECB continued to accept Greek bonds.

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Feb 16,2015
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[OctaFX_Farid]

EUR/GBP extends gains



FXStreet (Mumbai) - The EUR/GBP pair extended gains to hit a fresh session high of 0.7425 as the British Pound continues to weaken in anticipation of negative inflation data due for release tomorrow.

Gains capped by Greek debt issue

The shared currency managed to strengthen against the British Pound as market price-in an expected fall of 0.8% in UK CPI in January. The data is due for release tomorrow and may show cost of living fell below zero levels in January. Meanwhile, a sharp rise in the Eurozone trade surplus also helped the shared currency strengthen.

However, broader gains have been capped due to uncertainty surrounding the Greek debt issue. The markets expect the Eurogroup to reach a short-term fix, however, caution still persist, which has capped gains in the pair.

EUR/GBP Technical Levels

The pair currently trades at 0.7415. The immediate resistance is seen at 0.7425 and 0.7446 levels. On the flip side, a break below 0.7411 could push the pair down to 0.7390 levels.

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Feb 16,2015
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[OctaFX_Farid]

GBP/JPY is threatening to break below 182.00



FXStreet (Mumbai) - The GBP/JPY pair is threatening to fall below 182.00 levels, as it hovers around 182.10 levels after having hit a low of 182.03 few minutes back.

Pound hit by weak inflation expectation

The British Pound has weakened a day ahead of the data in the UK, which is likely to show inflation in January fell below zero level. The month-on-month CPI in January is seen at -0.8%, down from the previous month’s print of 0.0%. Meanwhile, year-on-year the CPI is seen slowing down to 0.4% from the previous month’s 0.5%.

The Bank of England, in its Quarterly Inflation Report, released last week did express a high possibility of inflation falling below zero levels in the short-term. Consequently, the GBP is being sold amid weak inflation expectations and the absence of fresh fundamental triggers today. On the other hand, the Japanese Yen is moderately up on caution ahead of the Eurogroup meeting.

GBP/JPY Technical Levels

The immediate resistance is seen at 182.31 (5-DMA), above which the pair could re-test 182.50 levels. On the flip side, support is seen at 182.00, under which losses could be extended to 181.78 levels.

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Feb 16,2015
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[OctaFX_Farid]

EUR/USD back around 1.1400




FXStreet (Edinburgh) - The European currency is clinging to the positive ground vs. the US dollar on Monday, with EUR/USD now returning to the 1.1400 neighbourhood.

EUR/USD near 1.1400, Eurogroup looms

Spot remains in a sideline pattern ahead of the key second meeting between the Greek finmin Y.Varoufakis and the Eurogroup officials. Despite opinions remain pretty divided in regard of the probable outcome, market participants do agree that another meeting could be necessary later this month.

Ahead in the week, the FOMC minutes on Wednesday and the ECB ‘accounts’ (its version of the minutes) will set the pace in the pair.

EUR/USD levels to consider

At the moment the pair is up 0.05% at 1.1405 facing the next up barrier at 1.1443 (high Feb.13) ahead of 1.1485 (Kijun Sen) and finally 1.1499 (high Feb.5). On the downside, a drop beyond 1.1380 (low Feb.16) would open the door to 1.1367 (200-h MA) and then 1.1303 (low Feb.12).

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Feb 16,2015
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[OctaFX_Farid]

Varoufakis arrives (late) at Eurogroup meeting to discuss Greece




FXStreet (London) - Greek Finance Minister Yanis Varoufakis has now arrived at the Eurogroup meeting in Brussels, arriving late for the 2:30 GMT start. The discussions focussed on Greece’s continuing membership of the Eurozone and the newly-formed Greek government’s demands for significant haircuts on their existing debts as well as the pressing need for short-term credit service payments are set to commence at 4:30 GMT.

Writing in a New York Times op-ed this morning, Varoufakis said that: “As finance minister of a small, fiscally stressed nation lacking its own central bank and seen by many of our partners as a problem debtor,” adding: “I am convinced that we have one option only: to shun any temptation to treat this pivotal moment as an experiment in strategizing and, instead, to present honestly the facts concerning Greece’s social economy, table our proposals for regrowing Greece, explain why these are in Europe’s interest, and reveal the red lines beyond which logic and duty prevent us from going.”

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Feb 16,2015
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[OctaFX_Farid]

Carry-trade could benefit HUF Danske Bank




FXStreet (Edinburgh) - Chief Analyst at Danske Bank Lars Christensen noted the probable appreciation of the Hungarian currency backed by the countrys good external position.

Key Quotes

Growth has been picking up in Hungary and, after years of stagnation, it is becoming one of the fastest growth economies in central and Eastern Europe.

The HUF has fairly attractive long-term fundamentals and the relatively large current account surplus is particularly helpful.

We continue to believe that Hungarys fairly strong external position is likely to be supportive for the HUF in the medium term.

Furthermore, fairly strong growth and an expected pick-up in inflation are likely to keep the carry on the forint relatively attractive, and we therefore continue to expect near-term appreciation of the forint.

We lower our 1M, 3M, 6M and 12M EUR/HUF forecasts to 305, 305, 300 and 300, respectively from 320, 325, 325 and 320, previously.




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Feb 17,2015
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[OctaFX_Farid]

USD/CAD assaulting 1.2400



FXStreet (Edinburgh) - USD/CAD is extending its bounce off session lows, now looking to retake the 1.2400 key mark.

USD/CAD indifferent on data

The pair continues to trade in the red territory amidst better risk sentiment and a firmer tone from the crude oil prices. Data wise in North America, the manufacturing gauge tracked by the Empire State index dripped to 7.78 during the last month vs. estimates at 8.50; on the other side, Canadian transactions in foreign securities climbed to $13.89 billion during December.

Upcoming results will include the Housing Market index measured by NAHB, TIC Flows and the speech by Philly Fed Plosser.

USD/CAD key levels

The pair is now retreating 0.53% at 1.2398 and a dip beyond 1.2353 (low Feb.3) would open the door to 1.2302 (Kijun Sen) and then 1.2286 (23.6% of 1.0620-1.2800). On the flip side, the initial up barrier lines up at 1.2477 (21-d MA) ahead of 1.2536 (Tenkan Sen) and finally 1.2646 (high Feb.12).






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Feb 17,2015
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[OctaFX_Farid]

Expectations for a March rate cut by BoC increasing – BAML



FXStreet (Barcelona) - The Research Team at BofA-Merrill Lynch, forecasts Canada to see a 25bp rate cut in March, with market pricing for the rate cut by BoC increasing significantly to around 60% from previous 20%.

Key Quotes

“In our view, not only would the further decline in oil prices that we expect maintain pressure on CAD valuations, it would also raise risks for the BoC to engage in significant easing.”

“The BoC eased policy in January to “provide insurance” against downside risks emanating from the oil price shock on growth, inflation, and financial stability. According to the Bank’s January Monetary Policy (MPR) report, its forecast assumes WTI prices of $60/bbl.”

“Prices still remain over 10% below the Bank’s forecast level, likely meaning the BoC will have to ease further if they stay near current levels or fall further toward our $32/bbl forecasts.”

“As Senior Deputy Governor Carolyn Wilkins noted last week, “If oil prices were to average $60 per barrel and monetary policy did not respond, gross domestic income would be about 4 1/2 per cent lower by the end of 2016”1 implying prices below that level would require further easing, consistent with our call for another cut in March.”

“Since the January meeting, policy expectations have shifted aggressively. Prior to the meeting, less than a 20% chance of a cut was priced in over the next six months. Now, the market is pricing in roughly a 60% chance of a cut at the March meeting.”

“Given our call for a 25bp cut, we would expect CAD to come under pressure as this gets fully priced.”

“Additionally, the probability of a further cut (not our base case) is less than 50%.”






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[OctaFX_Farid]

AUD/USD short-term bullish – FXStreet



FXStreet (Barcelona) - Valeria Bednarik, Chief Analyst at FXStreet, notes technicals suggest the short-term outlook for AUD/USD favours the upside, with the pair in need of a push above the resistance at 0.7830 to confirm further advances.

Key Quotes

“The AUD/USD pair surged above the 0.7800 figure, pressuring the top of its latest range, and with the short term picture favoring the upside, as the 1 hour chart shows that the price extends above its 20 SMA and the technical indicators aim higher above their midlines.”

“In the 4 hours chart the 20 SMA also presents a bullish slope below current price, offering dynamic support around 0.7780, while the indicators bounced strongly from their midlines and maintain their bullish slopes, supporting the shorter term view.”

“Some follow through above 0.7830 however, is required to confirm further advances today.”

“Support levels: 0.7780 0.7750 0.7720"

“Resistance levels: 0.7830 0.7865 0.7900”








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[OctaFX_Farid]

Positive effects of weak yen seen bigger than negatives for now – BTMU



FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, shares the comments that Japanese policy makers prefer a gradual rather than a sharp weakening of the Yen.

Key Quotes

“In an interview with reporters overnight Japanese Economy Minister Amari stated that the positive effects of a weak yen are currently bigger than the negatives. He added that an excessively weak yen would diverge from fundamentals but couldn’t say what line represents an excessive level of yen weakness.”

“An excessively weak or strong yen, and excessively rapid moves in foreign exchange are not viewed as good for the Japanese economy.”

“The comments suggest that the Japanese authorities are not yet concerned over the scale of yen weakness.”

“In a recent report from Bloomberg, it reported that the BoJ views further monetary easing as counterproductive for now with the risk that further yen weakness could undermine confidence in the economy.”

“Taking the two views together it suggests that the Japanese policymakers would be uncomfortable if the yen was to weaken sharply again, although are not opposed to a further gradual weakening of the yen.”





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