Daily Markets News From FBS

[⭐ kaito kid]

EUR/USD: Elliot wave analysis


Monthly. The pair may have finished forming the wave B of the rising Zigzag А-В-С. Wave B is in the form of the Triple Three [w]-[x]-[y]-[x]-[z]. EUR/USD currently keeps forming wave C. Let’s analyze the wave’s structure in detail.


Daily. The pair will soon finish the wave II of ©. When the wave II is complete, we’ll see a decline in the wave III.


H4. The marking on H4 shows that the wave (3) is almost over. When this wave is formed, we’ll see a corrective wave (4) which may take form of a flat as it often happens with the fourth waves of the impulses. Then the pair will rise in the wave (5) and the formation of II will be over. See the projected trajectory on the picture.


Roman Petuchov for FBS

[⭐ kaito kid]

GBP/USD: Elliot wave analysis


Weekly. On the weekly chart there’s a global Zigzag A-B-C. The pair keeps forming the wave С which aims at the level 1.1 where the pair was last seen in 1985.


H12. The wave (II) is still forming. Let’s examine its structure in detail.


H4. The wave (II) is probably taking form of the a-b-c Zigzag. The impulse a is close to an end. We’ll likely see the formation of the wave (4) in the near term. After that the market will rise in the fifth wave and the whole impulse will be complete. When it happens, the market will start a decline in a corrective wave b.


Roman Petuchov for FBS

[⭐ kaito kid]

USD/JPY: Elliot wave analysis


Daily. The wedge is complete and global corrective wave 2 is now enfolding. This wave may take a form of a Zigzag or a double Zigzag. Let’s examine its structure in detail.


H4. We are witnessing the formation of the first (a)-(b)-© Zigzag. We assume that the waves (a) and (b) are complete and the wave © has already started forming. At the moment the downside impulse wave [3] of © is still developing.

H1. Watch the detailed marking on H1. We expect the continuation of the monotonous decline in the wave [3].

Roman Petuchov for FBS

[⭐ kaito kid]

AUD/USD: Elliot wave analysis

Weekly. The pair keeps forming the wave III of the downside impulse.


Daily. At the moment we are witnessing the formation of the corrective wave (4). Then the market will start a decline in the wave (5).

H8. The wave (4) is taking form of a long horizontal correction. As it always happens with such waves, it’s aimed upwards, against the dominant trend of the higher wave level. When this wave is complete, we expect a decline in the wave (5).


Roman Petuchov for FBS

[⭐ kaito kid]

July 30: Asian session



EUR/USD remained capped by $1.3300 yesterday and slid to the $1.3250 area today. Euro stayed lower before the ECB policy meeting on Thursday. The Federal Open Market Committee starts a 2-day meeting today. In addition, the contraction in US pending home sales (data were released yesterday) wasn’t as big as expected. In the euro area watch today for GfK German consumer climate and preliminary CPI, Spanish GDP and Italian 10-year bond auction (see the economic calendar). GBP/USD didn’t manage to overcome $1.5400 and is trading around $1.5340 today.

USD/JPY got support around 97.65 yesterday and recovered to 98.40. Yen weakened against most of its major peers as rallying Japanese shares damped demand for haven assets and weaker-than-forecast production data backed the case for the Bank of Japan to expand stimulus. USD/CHF is trading above 0.9300 after an advance made yesterday.

AUD/USD dropped below $0.9100 to $0.9060. Australian building approvals slumped by 6.9%, while economists expected growth by 2.2%. The Reserve Bank of Australia Governor Glenn Stevens signaled there is still room for interest rates and the currency to fall. NZD/USD is declining for the second day in a row. The pair’s now testing levels below $0.8000. New Zealand’s building consents also contracted. USD/CAD keeps consolidating in the 1.0285/50 area. Canadian dollar remains near 1-month high as crude oil, the nation’s largest export, remained above $100 per barrel for the 18th day.

Edited July 30, 2013 by kaito kid

[⭐ kaito kid]

Key currency options

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3100, $1.3200, $1.3250, $1.3285, $1.3325;

USD/JPY: 97.00, 97.50, 98.00, 98.05, 98.20, 98.25, 98.40, 98.50, 98.75, 99.00, 100.00;

GBP/USD: $1.5200, $1.5300, $1.5325, $1.5350;

AUD/USD: $0.9150, $0.9215, $0.9265;

USD/CAD: 1.0200, 1.0270;

EUR/JPY: 130.00;

EUR/GBP: 0.8630.

[⭐ kaito kid]

GBP/USD: some bearish views

Bank of America Merrill Lynch: Gains should fail to exceed $1.5438, worst case the 200-day MA at $1.5570 before the longer term bear trend resumes for $1.4783/1.4767 and below. An impulsive break of $1.5269 will confirm a top and bear trend resumption.

Standard Bank: Sell GBP/USD at current levels targeting levels below $1.5000 as the Bank of England will meet on Thursday and may take a harder stance on forward guidance, similar to the Fed’s.



Chart. Daily GBP/USD

[⭐ kaito kid]

USD/JPY: daily update

USD/JPY found support in the 97.60/65 area yesterday (50% retracement of an advance from June to July). On the upside the pair’s for the second day capped by the 100-day MA at 98.45. The pair’s inside the daily Ichimoku Cloud with top at 98.75 and bottom at 97.50. The picture is mixed and the fate of the pair will depend on to which direction US dollar will break the Cloud. Further resistance lies at 99.25, 99.70 and 100.18, while support is at 96.75 and 95.60.

Macquarie Bank: “We have run into pretty important support levels just below 98.00, and they’ve held. Technical traders will be thinking that signals a potential bounce in a short term.”

Still, Bank of America keeps targeting 93.65/93.73 and potentially the larger range lows at 90.91 before renewed basing.



Chart. H4 USD/JPY

[⭐ kaito kid]

31 July 2013

Key currency options

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3100, $1.3125, $1.3150, $1.3200, $1.3230, $1.3250, $1.3270, $1.3300, $1.3320, $1.3350;

GBP/USD: $1.5300;

USD/JPY: 97.40, 97.50, 97.65, 98.00, 98.30, 99.25, 100.00, 100.20;

USD/CHF: 0.9400;

AUD/USD: $0.9000, $0.9050, $0.9100, $0.9125, $0.9150, $0.9175, $0.9200;

USD/CAD: 1.0250, 1.0300;

AUD/JPY: 90.95, 91.25.

[⭐ kaito kid]

MS: USD may weaken more

Morgan Stanley thinks that US dollar will continue correcting down against most currencies. The specialists point out that market players are still very long on USD.

In addition, news reports suggest that the FOMC will consider strengthening its forward rate guidance to incorporate some of Chairman Bernanke’s dovish sentiments.Specifically, the FOMC may lower its unemployment target to 6%. “By formalizing Fed’s recent concern about too-low inflation and a premature tightening in financial conditions, the new guidance framework should extend the USD depreciation. Italso should further underline the data-dependency of Fed policy, increasing the market sensitivity to downside US data surprise.”

However, MS thinks that USD may be bottoming versus Japanese yen and British pound. “The prospect of the Bank of England formally adopting a forward rate guidance framework with the publication of its Inflation Report on August 7 suggests that short cable positions would soon be attractive. And the third straight week of sizable foreign bond purchases hints that the next leg of JPY weakness driven by Japanese investors may be at hand,” says the bank.

[⭐ kaito kid]

USD/JPY: daily update

USD/JPY hit a fresh 1-month low at 97.58 before returning above 98.00. US dollar touched 98.50 on better-than-expected US GDP growth.

The pair remains inside the daily Ichimoku Cloud with top at 98.75 and bottom at 97.50. The picture is mixed and the fate of the pair will depend on to which direction US dollar will break the Cloud. Further resistance lies at 99.25, 99.70 and 100.18, while support is at 96.75 and 95.60.

OCBC Bank: “Tonight, if the FOMC fails to surprise on the hawkish end, the pair may lose its foothold at 98.00 and slide to 97.50/60 before 97.00.”



Chart. Daily USD/JPY

[⭐ kaito kid]

August 2: Asian session

US dollar headed for weekly gains against all its major peers as improvements in the US economy added to the case for the Fed to start tapering bond purchases which tend to debase the currency. ISM Manufacturing PMI rose in July to 55.4, the highest level since April 2011. Today watch for US non-farm payrolls data at 12:30 GMT (forecast: 184K; previous: 195K).

EUR/USD is trading around the psychological support of $1.3200 after it lost about 100 pips yesterday. Demand for euro was limited after the ECB President Mario Draghi said yesterday policy makers expect interest rates in the region to stay low for an extended period.

GBP/USD is trading just above $1.5100 after it slid by about 90 pips yesterday. The Bank of England left investors waiting for an expected announcement next week of a new strategy to get British economy back in shape.

USD/JPY is around 99.55 after it gained about 170 pips yesterday. USD/CHF is trading above the 200-day MA at 0.9360 after it gained more than 100 pips yesterday.

AUD/USD slid to the new almost 3-year low at $0.8889 as the Reserve Bank of Australia is expected to cut rates next week. Australian producer inflation turned out to be lower than expected (0.1% vs. 0.5%). NZD/USD fell by more than 100 pips yesterday and is trading in the $0.7887 area. USD/CAD rose to 1.0350.

[⭐ kaito kid]

Key currency options

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3100, $1.3190, $1.3200, $1.3250, $1.3270, $1.3300;

GBP/USD: $1.5100, $1.5200;

USD/JPY: 98.00, 98.35, 99.00, 99.50, 100.00, 100.50;

AUD/USD: $0.8900, $0.9000, $0.9030, $0.9080;

USD/CHF: 0.9350, 0.9380;

USD/CAD: 1.0320, 1.0350, 1.0400, 1.0450.

[⭐ kaito kid]

Bank of England: “forward guidance”?

As it was expected, the Bank of England decided to leave its interest rate unchanged at 0.5% and the amount of asset purchases at 375 billion pounds.

Unlike last month, the central bank didn’t issue a long statement. Instead the regulator reaffirmed its intention to improve communication and provide forward guidance.

Analysts believe that Governor Carney will announce new forward guidance for UK monetary policy at the quarterly inflation report due for release on Wednesday, August 7. The guidance is likely to pin future rate rises to specific targets for unemployment in order to try and keep market interest rate expectations low and allow the fragile recovery to become stronger and more sustainable.

[⭐ kaito kid]

GBP/USD: daily update

GBP/USD is rose after 4 days of declines from Monday’s high above $1.5400 to today’s low at $1.5102.

The pair’s oversold on H4, so there is a corrective bounce. Resistance is at $1.5200, $1.5240, $1.5300. British home price data was positive. UK construction PMI jumped to 57.0, the highest levels since 2010.

Yet, we stick to the view of selling sterling on the rallies, around $1.5250. Downside targets lie at $1.5055 (61.8% Fibo), $1.5000 (psychological level), $1.4960 and $1.4813 (July low). An increase above $1.5300 will make us review the short-term outlook.

Chart. H4 GBP/USD

[⭐ kaito kid]

EUR/USD: daily update

EUR/USD made a big decline yesterday closing by 95 pips below the opening level. The pair has found support around $1.3200/3190.

In our view, the bias is to the downside and will remain so until the single currency is trading below $1.3345. Euro has reached resistance line connecting February and June highs around $1.3325. Further support lies at $1.3180, $1.3160, $1.3106 and $1.3085. Resistance is at $1.3260, $1.3325/45 ahead of $1.3415.

Still though, UBS says that the bullish trend is for now intact and potential is for the pair to move above $1.3302 to test the key resistance at $1.3417 as long as support at $1.3120 holds. Commerzbank underlines, that a close below $1.3205 is needed to alleviate upside pressure and for EUR/USD to target $1.3000.

Chart. H4 EUR/USD

[⭐ kaito kid]

USD/CHF: Commerzbank

USD/CHF rose yesterday by more than 100 pips and close above the 200-day MA at 0.9360. Analysts at Commerzbank say that the bulls have now strength to bring US dollar to the 55-day MA at 0.9440. At this point the specialists expect the pair to fail and reverse down. In their view, support lies at 0.9227 (July low) and 0.9130 (June low). If the pair manages to overcome 0.9440, it will target 0.9566 (March high) and 0.9750 (July high).

Chart. Daily USD/CHF

[⭐ kaito kid]

USD/JPY: daily update

USD/JPY rose yesterday by almost 170 pips. Today the pair rose to 99.85. The greenback’s approaching resistance in the 100.00 area.

Bank of Tokyo Mitsubishi UFJ says that the outlook USD/JPY looks neutral ahead and is set to range between 97.50 and 100.50. The pair will be supported unless US NFP data comes much worse than expected. At the same time, the upside will be limited because of the lack of important news from Japan next week.

Such outlook is in line with daily technical indicators. An increase above 100.50 is needed for the bulls to regain their strength.

Bank of America Merrill Lynch will revise bearish outlook on USD/JPY if it rises above 100.15 (channel resistance). In this case the bank will target 101.55 and potentially 103.73.

Chart. Daily USD/JPY

[⭐ kaito kid]

August 5: Asian session

US dollar is struggling to gain traction after data on Friday showed that US employers slowed their pace of hiring in July.

EUR/USD is trading around the opening level at $1.3278 after it rose by more than 70 pips on Friday. Today watch for Spanish and Italian services PMI, euro zone’s final services PMI and the region’s retail sales. GBP/USD is in the $1.5270 area after it gained about 170 pips on Friday. Britain will also release services PMI. USD/JPY is trading to the downside, touching 98.65. The pair extends the decline from the Friday’s peak at 100.00. USD/CHF edged lower after touching the 0.9300 mark.

AUD/USD touched a fresh low of $0.8850 before recovering to $0.8890. Market sentiment towards the Aussie remains bearish ahead of the tomorrow’s RBA meeting: the probability of a 0.25 bps rate cut is pretty high. Today’s data showed Australia retail sales came flat in June at 0.0% m/m (vs. +0.4% expected). NZD/USD opened the week with a large bearish gap at $0.7750, pressured by the news that China banned New Zealand contaminated milk powder imports. Later on kiwi recovered to $0.7790, partially filling the gap. USD/CAD edged up and is in the 1.0400 area. It’s a bank holiday in Canada today.

[⭐ kaito kid]

Key currency options

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3120, $1.3225, $1.3250, $1.3300, $1.3370;

GBP/USD: $1.5100, $1.5175;

USD/JPY: 97.00, 97.50, 98.00, 99.00, 100.00, 100.50;

AUD/USD: $0.8900, $0.9000, $0.9005, $0.9050, $0.9065;

EUR/GBP: 0.8700.

[⭐ kaito kid]

EUR: factors to watch (August 6-9)

[⭐ kaito kid]

USD: factors to watch (August 5-9)

[⭐ kaito kid]

GBP: factors to watch (August 6-9)

[⭐ kaito kid]

JPY: factors to watch (August 5-9)

USD/JPY almost reached 100.00 last week, but then closed at 98.85 on Friday. Here are the most important releases which will influence the pair:

[⭐ kaito kid]

Trade signals from Danske Bank

EUR/USD: Short at $1.3257 with a target of $1.3164 and a stop at $1.3313

GBP/USD: Buy at $1.5215 with a target of $1.5364 and a stop at $1.5140

USD/CHF: Buy at 0.9262 with a target of 0.9395 and a stop at 0.9226

AUD/USD: Sell at $0.8935 with a target of $0.8770 and a stop at $0.9015

USD/CAD: Long at 1.0290 with a target of 1.0445 and a revised stop at 1.0260