Updated Apr 4, 2011 1:40:00 AM
Asia saw a rather peaceful open to the new week, with the yen remaining on the defensive and the Euro pushing to new highs amidst a session of quiet consolidation. The EUR/USD struck fresh five month highs near 1.4267 as it pushed through some resistance at 1.4260 but lacked the follow-through for further advancement. The pair then slid into a consolidating pattern between 1.4220 and 1.4230 for the remainder of the day. Many investors continue to trade their bullish view on the single European currency ahead of this weeks ECB rate decision on Thursday which is expected to produce a 0.25% hike to bring the overnight rate to 1.25%. The main caveat to this view however, is first and foremost that the ECB does not practice what their hawkish [...] Continue Reading ...FX TECH LAB: Technical Implications for EUR/USD in the week ahead
Updated Apr 1, 2011 5:25:00 PM
The greenback gained some traction midweek as hawkish rhetoric from Fed members Lacker and Kocherlakota led market participants to begin pricing in Fed policy normalization. Broad based USD strength followed suit as the apparent shift in Fed policy direction lifted expectations for tighter relative rate differentials between the U.S. and other economies. The greenback looked set to extend gains into the weekly close as U.S. labor data printed on the positive side - U.S. March NFP rose more than expected (+216k vs. consensus +190k) and the unemployment rate declined to 8.8%. EUR/USD plunged to lows near 1.4060 following the spate of positive U.S. data surprises but USD strength proved unsustainable. EUR/USD completely reversed course to end the week above the 1.4200 figure. The main driver behind the sharp reversal [...] Continue Reading ...Week of April 3, 2011
Updated Apr 1, 2011 4:15:00 PM
Fed hawks squawk, but doves carry the tune A number of Fed speakers offered quite hawkish comments in speeches late in the past week. Minneapolis Fed’s Kocherlakota, Phila.’s Plosser, KC’s Hoenig, Dallas’s Fisher, and Richmond’s Lacker all suggested the economy was strong enough, and inflation threatening enough, that extraordinary accommodation should be removed. Kocherlakota went so far as to suggest rates should be ¾% higher. Importantly, only Kocherlakota and Plosser are 2011 FOMC voting members, and even more importantly, they’re all known hawks, so such comments deserve to be discounted, especially with unemployment still at 8.8% (and U6 underemployment at 15.7%). NY Fed pres. Dudley countered with a distinctly cautious view of the recovery and indicated in no uncertain terms QE would be completed on schedule and that it’s [...] Continue Reading ...TECHNICAL UPDATE: Update 1 - AUD/JPY - is the carry trade rebuilding momentum?
Updated Apr 1, 2011 2:00:00 PM
In Wednesday’s update, we noted the rising AUD/JPY as it was breaking above the 200-week sma. The pair looks to be comfortably above the 200-week sma which suggests upside potential, however it may face near term resistance at the long-term pivot level of around 87.70. This key pivot level is the 61.8% Fib retracement of the decline from 2007 highs to the 2008 lows – the time of massive unwinding of the carry trade. This horizontal pivot area contained the highs of 2010 and lows of 2007 (see chart below). While the bias remains higher, we would be cautious at current levels as the pair nears significant resistance and would view pullbacks as long opportunities as long as the pair remains above the 200-week sma which is currently around the [...] Continue Reading ...MORNING UPDATE: One to Watch: AUDCHF
Updated Apr 1, 2011 7:30:00 AM
A strong payrolls report today would be negative for safe haven currencies such as the Swiss franc and would pile more downward pressure on the yen. In contrast the winners would most likely be the Aussie and the Cad in our opinion. This made me look at AUDCHF. Essentially the pair has been a massive headache for traders. The risk-on/ risk-off environment that gripped the markets in the past year has made this pair extremely erratic and it has experienced sharp moves on the up and down side. We would recommend this as a short-term trade ONLY. A strong payrolls report should help AUDCHF, which recently passed through the 0.9450 mark – the 200-day moving average. It is currently testing the 100-day moving average at 0.9540 – above here we [...] Continue Reading ...Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
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