*Daily Forex market overviews by MasterForex.com* - page 38
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Overview of the main economical events of the current day - 09/04/2013
Both USD and JPY are under pressure which falls under recent trends
JPY continues its decline, trading at 2009 levels on rumors that measures proposed by Bank of Japan last week will result in further decline of the currency. This comes as no surprise as new Head of Bank of Japan is a supporter of aggressive measures – and that’s a fact the market knew well ahead of him actually taking the position. Basically what we see here falls perfectly under JPY downside trend first occurred when Mr Kuroda was announced as a candidate for the Head position.
USD is also trading down vs EUR as market participants are waiting for FOMC meeting today, with the next one due on April 30th – May 1st. Currently FOMC buys USD 40bn of mortgage backed securities and USD 45bn of treasures per month which is part of the attempt to stimulate mortgage market and economy in general – and it looks like FOMC does not plan to stop these measures any time soon.
Another thing helping EUR was surprisingly strong German PMI data, which shows that the largest EU economy is slowly recovering after a decline in 4Q12.
By MasterForex Company
Overview of the main economical events of the current day - 10/04/2013
Tuesday was quite a slow day; keep your eyes on FOMC message today
Yesterday was rather calm days in terms of trading volatility and most currencies traded basically either flat or under the known trends. EUR showed some gains vs USD thanks to strong headline Germany trade balance figures, which came above expectations. And while the reason for that is actually a visible decline of import/export operations, EUR still was able to demonstrate some modest growth.
GBP was also showing some gains vs USD on a surprising rise in industrial production that rose 1.0% over February, beating expectations for 0.4% and up from the revised 1.3% decline in production in January. And while this adds up to the sector showing some real recovery, trade balance was shockingly weak, which stopped the rise of the currency.
JPY trades more or less flat at newly found lows which comes as no surprise given the aggresive measures announced by Bank of Japan. Moreover, Japanese officials are saying that the current devaluation of the national currency does not trouble them at all, meaning we can expect a further decline.
FOMC message today is likely to be more dovish than not, despite the mixed signals, so get ready for that. While some Fed members are quite optimistic in their comments, a bunch of weak data points out that the jobs recovery could be stalling and that Fed would continue its easy policies for quite a while.
By MasterForex Company
Overview of the main economical events of the current day - 11/04/2013
Trading remains quite calm as investors are waiting for newsflow
Trading activity remains somewhat low with most of the currencies trading more or less flat.
The most important thing yesterday was probably FOMC minutes leaked accidentally earlier than expected. The document revealed that “many” FOMC member would like to slow the pace of purchases over the next several meetings, while only “a few” deemed it necessary to continue at current pace “at least until late in the year”. It’s important to add, that these comments were made well before a soft patch in growth that US has recently hit, which has clouded the outlook. As a result, we would not expect any major changes in asset purchases at least until autumn.
JPY depreciation continues even despite Bank of Japan’s Head Kuroda saying that all “necessary” and “possible” measures have already been taken. Nonetheless, Kuroda also reiterated his commitment to achieve a 2% inflation goal – which potentially keeps the door open for further easing.
Today is going to be a rather quite day in terms of newsflow, however there are some stories worth following today. First of all, there is some employment data from USA and while it is bound to be somewhat skewed due to Easter holidays, it is still an important indicator. Next big market mover will be US retail sales for March tomorrow, which will give us more insight on how soft the soft patch may actually be. Finally, another important thing is Bank of Japan meeting – and while we are unlikely to hear any surprises, we recommend to check it out anyways.
By MasterForex Company
Overview of the main economical events of the current day - 12/04/2013
Currencies remain in a coma mode
Thursday trading was quite similar to what we’ve been seeing during the week with currencies pairs basically trading flat with little movement in either direction or, alternatively, following the previous trends.
EUR was showing some growth vs USD in the beginning of the day, however the European currency declined after surprisingly strong jobless claims data from USA, which might be a hint that US economy is actually recovering.
GBP continues its climb vs USD which is probably investors playing the currency as a defensive option against JPY aggressive depreciation, Cyprus problems and concerns regarding US hitting a soft patch.
Speaking about JPY, Head of Bank of Japan has suddenly slightly changed his rhetoric saying that they will be flexible in achieving a 2% inflation goal, which some market participants regarded as backing off after making extremely aggressive promises.
Today watch out for US retail sales and expect to find USD under serious pressure in case no growth is reported – and even worth if there is a major decline in numbers.
By MasterForex Company
Overview of the main economical events of the current day - 15/04/2013
Friday: a slow end to a slow week
Friday was in line with the rest of the week in terms of trading activity, with most currencies jumping back and forth in rather narrow corridors without any real breakouts.
EUR was under pressure due to concerns regarding Cyprus situation as EcoFin ministers limited their aid to only EUR 10bn, fueling investors’ panic regarding the region once again. This allowed USD to show some gains vs EUR, however most of them were erased later in the day after weak US retail sales data.
GBP was declining versus USD even after these disappointing results. However, market participants should remember that GBP was showing quite unexplainable gains recently (probably a defensive play) without any real catalyst – so, perhaps, on Friday we saw some market correction.
This week is likely to be a much more active one – lots of data releases as well as policy meetings are likely to stimulate market activity, which was surprisingly low last week. Watch out for CPI and Beige Book from USA as well as some FOMC speakers giving comments on the economy, Bank of England meeting, ZEW data from Germany and other news flow during the week.
By MasterForex Company
Overview of the main economical events of the current day - 16/04/2013
JPY rebounds, EUR still under pressure
JPY showed some impressive gains after somewhat disappointing Chinese GDP data, which suggest that the growth is slowing down, making JPY an attractive defensive option. And while JPY was trading at a 4 year low vs USD last week after BoJ’s announcement, Japanese currency has been rising vs USD for the last 4 days fueled by USA urging Japan not to make any aggressive steps as they might lead to trade wars of some kind, according to States.
EUR continues to feel pressure coming from Cyprus problems. Moody’s cut the rating of the largest Cypriot bank – Bank of Cyprus – by 2 notches as analysts expect huge losses from uninsured deposits in coming months.
At the same time EU, ECB and IMF made a joint announcement, saying that the government is ready to implement all and any measures needed to spark an economic growth in Greece by 2014, which seems to put at least this story to rest – or, at least, so it seems.
Finally, GBP was enjoying strong housing sales data, which showed another increase in April, which potentially decreases risks of another recession. Today expect an inflation report to come from UK, which is also likely to be a positive one.
By MasterForex Company
Overview of the main economical events of the current day - 17/04/2013
JPY and USD declines on a falling demand for defensive assets as stock and gold markets are up
A recovery in gold prices coupled with rising American stock market resulted in falling demand for defensive assets, destroying recent gains of both USD and JPY.
Euro climbed up to a 7 weeks high vs USD after stop orders placed on short EUR positions resulted in EUR showing highest growth rates since February and close to this year record daily gains.
GBP continues to fall, fueled by disappointing CPI data from UK, that shows that while inflation growth rates are quite stable, they still are higher than the speed of growth of the labor prices, which potentially creates quite a nasty gap for British economy.
This Thursday and Friday look out for a G20 banking leaders meeting in USA, during which we are likely to hear some more ranting regarding aggressive measures recently introduced by Bank of Japan. Nonetheless, it is unlikely that we’ll hear anything new as Japanese government stands firm on a statement that the measures are aimed exclusively at fighting deflation and not at decreasing the exchange rate of JPY.
By MasterForex Company
GBP/USD DAILY as of Thursday, 18 April, 2013
GBP/USD yesterday closes with a daily big black candle has formed. This is a bearish candle as prices closed significantly lower than they opened. If the candle appears when prices are "high," it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trend line, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
A Daily engulfing bearish line has formed. The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with British Pound / US Dollar). It signifies that the momentum may be shifting from the bulls to the bears. If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle's real body.
Stochastic trigger a Sell signal 2 days ago.
Directional Movement Indicators (DMI) and Parabolic SAR signal a BUY 9 days ago.
The close is currently
BELOW its 200 daily moving average
BELOW its 50 daily moving average
BELOW its 20 daily moving average
The current market condition for British Pound / US Dollar is Very Bearish
The present wave patterns are:
fast amplitude (8%): bullish wave 2
Elliott Waves High Volatility has detected a Gann Swing or Pullback that is usually a bearish pattern!
British Pound / US Dollar is long term Bearish as the 144 days moving average of 1.56 is decreasing. The Relative Strength Index is at 49.88 in the neutral territory. The Relative Momentum Index is at 56.89 in the neutral territory. An important indicator for Elliott waves, the Elliott oscillator is at 0.00, in positive territory; this is a bullish sign. An equally important indicator, the STORSI is at 38.00. This value is in the neutral territory.
Overview of the main economical events of the current day - 18/04/2013
USD rebounds, EUR and GBP are still under pressure
EUR continues to decline after an interview with the head of Bundesbank, who admitted that ECB might cut the rates if the economy continues to slow down, which set the union currency in a free fall. At the same time he said that monetary policy is not the key question and rather prefers to concentrate on reforms in Germany and EU, saying that the full recovery might take as long as 10 years.
GBP continues its decline, showing a record loss in 6 weeks vs USD after disappointing statistics from UK, that suggest rising unemployment level on the back of declining wages growth. British currency declined vs most of the major currencies after Bank of England meeting minutes were released, showing that Head of BoE supports the idea of expanding the asset purchase program by another GBP 25bn.
This comes as almost no surprise, given the fact that yesterday IMF cut the growth forecasts for UK and announced that BoE needs to increase its measures. Given the condition of the economy, we’d say that it is a really possible scenario – in that case, expect GBP to fall even further.
By MasterForex Company
Overview of the main economical events of the current day - 19/04/2013
EUR can’t find its place, USD shows some minor gains
EUR is trading up and down vs USD on a not-so-straightforward statistics and conflicting market rumors. It all started with news of large losses allegedly booked by Societe Generale (which turned out to be a false rumor) and continued with Beige Book data from USA, that showed that while business activity is still in a positive zone, it does slow down, adding to the worries regarding the slowdown of an American economy.
GBP continues to fall reaching a 4 weeks low vs EUR on a disappointing retail sales data from UK, which is another proof of rising pressure on the consumers’ income – a negative factor which threatens economy’s recovery. Nonetheless, there were some positive hints as well – for example, the volume of sales was rising in 1Q13, which potentially supports the theory that UK might avoid another recession.
JPY declines as usual after aggressive measures introduced by a new Head of Bank of Japan and, quite as we expected, we haven’t really heard any market moving news coming form a G20 meeting yet, but it might change today.
Also look out for EU trade balance and German manufacturing prices, as well as some data from Spain and Italy that is due today and don’t forget that there is an IMF meeting over the weekend – expect somewhat increased volatility on Monday.
By MasterForex Company