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USD/CAD: comments from Credit Agricole, TD
Credit Agricole: in the near term USD/CAD will keep trading sideways between 1.0250 and 1.0065 given the Bank of Canada’s tightening bias on the one hand and no clear resolution on the euro zone crisis and slower growth in the US on the other.
TD Securities: USD/CAD failed to deliver on the bull flag formation. The pair may still be consolidating after advance in May/June. As a result, the move higher may eventually resume: the bulls need to break above the channel resistance around 1.0270.
Chart. Daily USD/CAD
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EUR and GBP jumped on Draghi's comments
On Thursday the ECB president Mario Draghi pushed the single currency up by optimistic comments about the euro and the resolution of the crisis. “The ECB is ready to do whatever it takes to preserve the euro,” Draghi said during a speech in London today.
Moreover, US published a bunch of mixed data today:
June core durable goods orders: -1.1%(consensus: +0.1%; previous: +0.7%);
Unemployment claims: 353K (consensus: 381K; previous: 386K)
EUR/USD surged by more than 180 pips making the biggest advance versus the greenback in almost a month. The pair stalled around rather strong psychological resistance around $1.2300. Next resistance levels lie at $1.2315, $1.2330/40 and $1.2400, while support levels are found at $1.2285, $1.2250 and $1.2220.
GBP/USD rocketed above $1.5712 from today’s low $1.5470. Next resistance for the pair lies at $1.5715, $1.5736 and $1.5800, while support – at $1.5661, $1.5600, and $1.5595/80.
Chart. H1 EUR/USD
Chart. H1 GBP/USD
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July 27: forex news
Investors’ sentiment improved, MSCI Asia Pacific Index added 1.6% today, while S&P 500 rose by 1.7% yesterday. High-yielding currencies like Aussie and kiwi are trading on the upside.
EUR/USD edged slightly higher, but its rate little changed during the Asian session and the pair’s hovering below resistance at $1.2300 which has stopped its advance yesterday. Spanish 10-year yields subsided on Thursday by 45 bps to 6.95%.
In Japan core CPI fell by 0.2% in June y/y (cons.: 0.0%). Tokyo core CPI, as expected, declined by 0.6% in July. The data shows that the nation is struggling to defeat deflation and the odds are that Japanese monetary authorities will do more monetary stimulus. Yen went lower against most of its major peers. USD/JPY remains trapped in the 78.30/00 area.
The day of US GDP has finally come. Advance data for Q2 q/q are released at 12:30 GMT (Prev.: 1.9%, cons.: 1.5%) – this is surely the key publication of the day. The market’s speculating that the Fed may start QE3, so the greenback weakened versus the majority of its counterparts this week. Also watch for German prelim CPI m/m during the European morning and Spanish unemployment figures at 07:00 GMT. Italy will try to sell up to 8.5 billion euro in 6-month bills. Italian 10-year yield eased down to 6.04%.
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EUR: Draghi was very convincing
The ECB President Draghi has boosted the single currency yesterday saying that the ECB will do “whatever it takes to preserve the euro.” Some experts argue that Draghi sounded very confident of himself saying “Believe me, there will be enough” that he’s surely preparing something and won’t go back on his word.
Image from api.thejournal.ie
UBS: Markets are trading on a generally buoyant note as investors seek to consolidate yesterday’s gains. “The sharp rally has seen the momentum turn higher, suggesting the risk is for the strength to continue. Resistance is at 1.2402, support lies at 1.2118.” The specialists expect EUR/USD to trade in range between $1.2170 and $1.2370 until ECB’s meeting next Thursday. In their view, as Draghi's comments came just a week before the meeting, “it was a very good reminder to the market that he does mean business.”
At the same time, although the pessimism subsided for now, it still hasn’t gone far.
Standard Chartered: There’s a combination of concerns in Europe: the economic cycle, which is still pointing down, and the European crisis. “We’re still looking for $1.18 for the euro for the end of the quarter.”
Chart. H4 EUR/USD
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NZD/USD: technical comments
On Friday NZD/USD strengthens for a third consecutive day after Thursday’s surge. As can be seen from the daily chart, yesterday bulls managed to fix above $0.8000: the pair overcame strong resistance at $0.7955/60 (100-and 200 MAs). On the H4 chart the 200-, 100- and 50-period MAs are heading to converge and to create a strong support area. The pair trades sideways in a $0.7841-0.8075 range after an early June uptrend.
In our view, NZD/USD is likely to overcome the $0.8075 resistance and to leave the flat range. When this occurs, the doors will be open for a further rise to $0.8232. On a downside, a strong support is seen in the $0.7930/60 area.
Resistance: $0.8053 (July 19 maximum); $0.8075 (July 5 maximum); $0.8231/33 (April 27 and 30 maximums); $0.8316 (April maximum); $0.8469 (2012 maximum)
Support: $0.7935/60 (100-and 200-day MAs and MAs on the H4 chart); $0.7841 (50% Fibonacci retracement); $0.7826/14 (50-day MA and July 25 minimum); $0.7748 (38.2% Fib. retracement); $0.7638 (23.6% Fib. retracement); $0.7454 (2012 minimum)
Chart. Daily NZD/USD
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Key options expiring today
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 (2 p.m. GMT).
Here are the key options expiring today:
EUR/USD: $1.2245, $1.2300;
USD/JPY: 78.15, 78.30, 78.50, 78.70;
GBP/USD: $1.5720, $1.5725, $1.5750;
AUD/USD: $1.0395.
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UBS: bearish on EUR/GBP
On Friday bears are trying to pull EUR/GBP down after the pair peaked 0.7860 (highest since July 18) yesterday. The pair trades in a downward channel since July 2011.
Analysts at UBS expect GBP to perform well in the current economic environment, especially in comparison to EUR. According to specialists, the pair is likely to slide to 0.7700 in a month.
Chart. Weekly EUR/GBP
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AUD/USD: technical comments
AUD/USD trades above $1.0400, moving up for a third consecutive day. The pair trades above the 200-day MA. On the H4 chart the pair trades close above the up-directed 200-, 100- and 50-period MAs.
In our view, a medium-term uptrend looks rather resilient: further advance of the Aussie may lead AUD/USD to $1.0473 (April maximum) and probably even higher. On a downside, a break below the 200-day MA ($1.0280) will pave the ground for a further decline to $1.0176 (July 25 minimum) and to $1.0100 (July 12 minimum).
Resistance:; $1.0443 (July 19 maximum); $1.0450 (April 12-13 double top); $1.0473 (April maximum); $1.0500; $1.0557 (March 27 maximum); $1.0635 (March 19 maximum); $1.0750/60 (Sep. and Oct. 2011 maximums); $1.0855 (2012 maximum)
Support: $1.0330(50-period MA on the H4 chart); $1.0281 (200-day MA); $1.0272 (100-period MA on the H4 chart); $1.0200 (100-day MA); $1.0184 (200-period MA on the H4 chart); $1.0100 (July 12 minimum); $1.0070 (50-day MA); $0.9968 (June 22 minimum); $0.9579 (June 1 minimum)
Chart. Daily AUD/USD
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USD/JPY: technical update
The picture for USD/JPY didn’t change much from what we’ve seen yesterday. The pair keeps trading sideways in the narrow 30-pip range between 78.30 and 78 yen. The bulls have made several attempts to move to the upside, but the pair kept returning to the levels around 78.15.
The general picture remains negative. Investors are waiting for US GDP release at 12:30 GMT – the uncertainty obscures the outlook for the pair. If the bulls manage to push US currency 78.45, it will get chance to 79.00, though one would be able to speak about the recovery only above 80.00. On the downside, 78.00 remains the key level below which one may expect a slide to 77.65, though the pair will be supported by demand from Japanese importers below 78.00 and the risk of the BOJ intervention.
Resistance: 78.45 (July 20 minimum, 50-period MA on H4 chart), 78.80 (July 20 maximum), 79.00, 80.00.
Support: 78.00, 77.94 (July 23 minimum), 77.65 (June minimum), 77.35 (February 15 minimum, January 6 and 19 maximums).
Chart. H4 USD/JPY
UBS: trading comments on AUD/USD
Analysts at UBS recommend going long on AUD/USD above $1.0350, targeting $1.0550 and with a stop at $1.0170.
According to specialists, the Aussie may climb to $1.0557 (Match 27 maximum) as its MACD holds above zero line, reflecting a bullish condition. It is advisable to wait until the other momentum indicators such as stochastic oscillator confirm the signs of strength.
Chart. Daily AUD/USD
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