EUR/USD Technical Analysis: Corrective Bounce Seen Ahead (based on dailyfx article)
The Euro may be preparing correct upward against the US Dollar
after putting in a bullish Morning Star candlestick pattern. A daily
close above falling trend line resistance at 1.1339 exposes the 23.6%
Fibonacci retracement at 1.1444. Alternatively, a reversal below the
14.6% Fib expansion at 1.1206 opens the door for a challenge of the
23.6% threshold at 1.1074.
Gold To Trade Flat, Palladium To Outperform In 2015 (adapted from kitco article)
The London Bullion Market Association (LBMA) rounded up a panel of
experts to forecast precious metal prices in 2015 -and while prospects
may be neutral for gold they are bullish for silver, platinum and
he panel, made up of analysts from various banks and research firms
worldwide, is predicting that the gold price will remain broadly flat
for the year, with an average forecast of $1,211 an ounce. Ross Norman
of Sharps Pixley is the most bullish analyst with a gold forecast of
$1,321 and Adam Myers of Crédit Agricole, London was the most bearish
However, the market experts are forecasting
silver to have an average price of $16.76/oz., platinum $1,294/oz. and
palladium at $838.40 for the year. This marks a 2.1% increase for
silver from last year’s price projections, a 5.6% increase for platinum
and a 5.3% hike for palladium.
The reasons cited by the experts for the
restrained gold price were the possible strengthening in the U.S.
dollar, interest rate hikes by the Federal Reserve in the second half of
2015, quantitative easing in Europe and a weak oil price reducing
gold’s attraction as a hedge against inflation.
Russian Forex traders displeased with 1:50 leverage cap (adapted on leaprate article)
Russian retail Forex traders are broadly unsupportive of the leverage cap of 1:50, outlined in the Forex law, a recent survey has shown.
In December 2014, Russia’s “Centre for Regulation in OTC Financial Instruments and Technologies” (CRFIN) conducted a survey amid
retail Forex traders in the country, asking them to voice their opinion
on the maximum leverage limit set by the lawmakers. The list of
questions covered matters like who should be responsible for determining
leverage limits and what should the optimal cap be. The results of the
survey became known earlier today, with the overwhelming majority of
respondents viewing a cap on leverage of 1:50 as too strict and,
instead, supporting way higher levels of up to 1:500.
Meager 6% of those surveyed said they approved a maximum leverage limit
of 1:50. The bulk of respondents supported more generous leverage. The
optimal maximum leverage should be at 1:100, according to 25% of
respondents, and at 1:200, according to 26% of the respondents. The
favorite maximum leverage level for 30% of those surveyed is 1:500.
You can view details below:
At least 38% of the
respondents disapproved of the narrowing of the current level of
leverage they use. These percentage of respondents claimed that such a
move would have a negative effect on their trading results. And yet they
do not expect that a leverage cut would lead to a massive outflow of
participants from the Forex market.
The survey also showed that
Russian FX traders seek as much freedom as possible when it comes to
trading conditions. Whole 47% believe that the maximum leverage level
should not be stipulated in a law or by a regulator, and that instead
traders should determine the leverage cap they need. A more humble
portion of the respondents – 27%, approved the idea that the law should
determine the leverage cap. Only 17% said the self-regulatory
organization should set the leverage limit, while 9% said this right
should be given to Forex companies.
Approximately 1,500 traders took part in the survey.
The chapter of the Russian
Forex law that imposes a leverage cap of 1:50 on Forex trading comes
into force on October 1, 2015. The Bank of Russia is allowed to raise
that level to 1:100 when it sees fit.
Gold Slips as Crude Oil Prices Rebound (based on wsj article)
Gold futures eased Monday as higher oil prices tempered investor appetite for haven assets.
most actively traded gold contract, for April delivery, was recently
down $4.50, or 0.4%, at $1,274.70 a troy ounce on the Comex division of
the New York Mercantile Exchange.
Gold has drawn support from
tumbling crude-oil prices in recent weeks, as concerns about the impact
on the wider energy market sent investors in search of ways to protect
their wealth. Some traders view gold as a haven from political and
economic turbulence, believing it will keep its value better than other
On Monday, oil prices rebounded, with the U.S. benchmark
recently trading up 36 cents, or 0.8%, at $48.60 a barrel on the Nymex.
“The rally in oil took some of the pressure off the reasons to
buy gold,” said Ira Epstein, a broker with the Linn Group in Chicago.
Epstein added that the recent surge in gold prices, which took futures
up 8% in January, made the market vulnerable to correct lower as
investors move to lock in profits.
“This is a necessary pullback, but it’s not showing any signs that the rally is over,” he said.
gold’s slide was limited by weaker U.S. economic data. The ISM
manufacturing purchasing managers’ index fell to 53.5 in January from
55.1 in December, and missed forecasts of 54.3. A reading above 50
points to expansion in factory activity, while a print below that level
The data underscore the uneven nature of
the U.S. economic recovery, which has struggled to fire on all cylinders
since the 2008 financial crisis.
EUR/USD Monthly Technical Analysis for February 2015 (based on fxempire article)
The EUR/USD finished sharply lower during January after the European
Central Bank announced it will begin buying Euro Zone sovereign debt in
an effort to revive the economy and prevent it from sliding into
The plan is for the ECB to buy 60 billion Euro, or $69 billion, of
government bonds a month until at least September 2016, or until there’s
a “sustained adjustment in the path of inflation” toward the central
bank’s target of 2 percent. The total stimulus package amounts to about
1.1 trillion Euros.
With the central bank planning to use newly printed Euros to fund its
program, the Euro is expected to remain under pressure against the U.S.
Dollar for close to two years. Sure there may be a few short-covering
rallies along the way, but until there is meaningful improvement in the
Euro Zone economy, the bias should be to the downside for this Forex
The key fundamental factors driving the ECB into its decision are
weak Euro Zone inflation of about -0.2 percent and 11.5 percent
unemployment that may still be trying to find a bottom.
On January 29, the U.S. Federal Open Market Committee maintained its
pledge to be “patient” on raising interest rates. Fed members noted
global risks, saying they will monitor “international developments” when
deciding how long to keep rates low. It also raised its view of the
economy and labor market, but expressed concerns about low inflation,
saying it even anticipates inflation to fall further in the near term.
Traders interpreted the Fed’s statement to signal the central bank
will begin raising rates perhaps as early as June. With the Fed set to
raise rates and the ECB just starting its quantitative easing program,
the interest rate differential is heavily favoring the U.S. Dollar at
Chinese banks to join new gold fix from March (based on ft article)
replacement for the near-century-old London gold fix will start in
March, with the hope of attracting at least 11 members, including
Chinese banks for the first time.
UK financial authorities are undertaking an
assessment of financial benchmarks in the wake of a series of scandals,
including over the gold fix.
The presence of Chinese banks would give the world’s second-largest consumer of the precious metal a greater say in the global gold price. Participants in the fix aggregate orders from clients on to a platform to determine the price.
“Interest has been very positive and creates a more diverse pool of
participants, which includes Chinese banks,” said Ruth Crowell, chief
executive of the London Bullion Market Association, a trade body for
London’s gold and silver markets.
if actual > forecast (or previous data) = good for currency (for AUD in our case)
[AUD - Cash Rate] =Interest rate charged on overnight loans between financial intermediaries. Short term interest rates are the paramount factor in currency valuation
- traders look at most other indicators merely to predict how rates
will change in the future.
The Reserve Bank of Australia cut its cash rate on Tuesday at its
February meeting, with the decision premised on the central bank's
downgraded growth outlook and the impact of falling oil prices.
The Monetary Policy Board lowered the cash rate to 2.25 percent from 2.5 percent. The markets
were divided over their expectations concerning a rate cut, although
the equity market did price in a rate cut and advanced on Monday despite
the broad based weakness in Asia.
Ahead of the decision, the cash rate had been maintained at 2.5 percent since August 2013.
bank said that commodity prices declined sharply and that the price of
oil has fallen significantly over the past few months.
trends appear to reflect a combination of lower growth in demand and,
more importantly, significant increases in supply. The much lower levels
of energy prices will act to strengthen global output and temporarily
to lower CPI inflation rates, the bank noted.
Gold Price Forecast Based on Algorithms: An Average Return Of 1.23% In 14 Days (based on gold-prediction article)
A top Federal Reserve official on Tuesday downplayed the Fed's nod to
international developments in its latest policy statement, saying it was
simply an acknowledgement of constant U.S. central bank discussion on
the potential impact of global market events.
St. Louis Federal Reserve Bank
President James Bullard said the Fed always takes international events
into account and, in his view, the insertion of the word "international"
was a recognition of that.
repeated his view that the Fed needs to raise rates sooner and then
move gradually higher after that. He also said that the oil price
plummet is distorting market-based inflation expectation measures, and
that these measures should be set aside until energy prices stabilize.
Bullard was speaking at the annual Delaware Economic Forecast event at the University of Delaware.
Fed should delete 'patient' from next policy statement: Bullard (based on reuters article)
The Federal Reserve should delete the word
"patient" from its next policy statement, a top Fed official
said on Tuesday, which would give the central bank more
flexibility on when to raise interest rates.
St. Louis Fed President James Bullard said if the Fed
removes "patient" from its next policy statement in March, it
does not mean the central bank has to hike at the next meeting.
Removing the word at the next meeting gives the Fed better
"optionality", Bullard said.
Bullard is not a voting member on this year's policy-setting