Market Expectations
By Compass Global Markets | January 27, 2012
EUR/USD spent the day consolidating after peaking at 1.3183 yesterday. If the technical traders are right, we may have seen the high for a long while and the completion of a technical retracement which began from 1.2624 (16 Jan). However we’re not totally convinced and we cautiously think 1.3244 may be the top if 1.2950 holds. Fundamentally, the latest on the Greek saga is that the Institute of International Finance (which represents the creditors) and Greek officials continue negotiations and may well continue over the weekend. On the radar for the rest of the day is US Gross Domestic Product Q4 (annualised), GDP Price Index (1:.30 GMT) and the University of Michigan Confidence survey (14:55GMT). For US GDP, the market is expecting 3% (last 1.8%) and the Price index is expecting 1.9% (last 2.6%). For the U. Mich survey market expects no change from previous 74. From now until the end of the New York session we see a range of 1.3023 – 1.3170.
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Market Outlook for January 27, 2012
By Compass Global Markets | January 27, 2012
Recap of the Latest Global News
By Cory Vi & Andrew Su on Jan 27, 2012
In a week that the Federal Reserve announced it would keep interest rates low through till at least 2014 and Bernanke said that policymakers are considering further bond purchases to boost growth, markets continued to celebrate as it appears that more free money is about to be pumped into the financial system. Treasury yields dropped to an all time record low as PIMCO’s Bill Gross predicted a third, fourth and fifth round of quantitative easing. The USD has, not surprisingly, taken a pounding over the week as the QE junkies got the fix they had all prayed for. The EUR is trading higher at above 1.3150.
The surprise news by the Federal Reserve had markets reprice the likelihood of further quantitative easing and sparked a flurry of activity by investors to revalue assets. In our opinion, the reaction in the markets has been overdone and we will likely see a retracement of the USD move in the coming sessions. The impact on riskier currencies such as the Australian dollar has seen it rally to as high as 1.0665 in trade today.
US equities fell yesterday after the Dow Jones rose to its highest levels since May 2008 during the day. Financial stocks where hit by worse than expected new homes sales data which showed a fall in December, for the first time in 4 months. US jobless claims rose while orders for durable goods rose more than expected. Asian stocks closed marginally higher while European stocks are soft as the Greek debt swap negotiations continue.
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EUR/USD Classical Technical Report
By forexnews | January 26, 2012
EUR/USD: The market has finally managed to find some bids and although the broader underlying trend remains intensely bearish, the risks from here are for additional corrective gains back towards the 100-Day SMA in the 1.3400 area before the next lower top carves out. Some falling trend-line resistance has already been broken on the daily chart and the 10-Day SMA has now crossed back above the 20-Day SMA to provide added confirmation for short-term bullish structural shift. Setbacks should now be well supported ahead of 1.2800, while only a daily close back under this figure would negate short-term bull bias. A bullish reversal week further supports short-term constructive outlook.
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EUR/USD Classical Technical Report
By forexnews | January 26, 2012
EUR/USD: The market has finally managed to find some bids and although the broader underlying trend remains intensely bearish, the risks from here are for additional corrective gains back towards the 100-Day SMA in the 1.3400 area before the next lower top carves out. Some falling trend-line resistance has already been broken on the daily chart and the 10-Day SMA has now crossed back above the 20-Day SMA to provide added confirmation for short-term bullish structural shift. Setbacks should now be well supported ahead of 1.2800, while only a daily close back under this figure would negate short-term bull bias. A bullish reversal week further supports short-term constructive outlook.
Topics: Chart of the Day, Top Stories | Comments Off
EUR/USD Classical Technical Report
By forexnews | January 26, 2012
EUR/USD: The market has finally managed to find some bids and although the broader underlying trend remains intensely bearish, the risks from here are for additional corrective gains back towards the 100-Day SMA in the 1.3400 area before the next lower top carves out. Some falling trend-line resistance has already been broken on the daily chart and the 10-Day SMA has now crossed back above the 20-Day SMA to provide added confirmation for short-term bullish structural shift. Setbacks should now be well supported ahead of 1.2800, while only a daily close back under this figure would negate short-term bull bias. A bullish reversal week further supports short-term constructive outlook.
Topics: Chart of the Day, Top Stories | Comments Off
Market Outlook for January 26, 2012
By forexnews | January 26, 2012
Recap of the Latest Global News
After the U.S. Dollar sold off across the board late in North American trading yesterday, it appeared that some relief was on the horizon, with the Greenback clawing back in early Asian trading on Thursday. This was merely a short-term correction, and by the time European markets opened up, the higher yielding currencies continued to surge.
Ahead of yesterday, the U.S. Dollar was primed for a strong year; after the ill-advised policy decision, one that does little more than buy time for banks to shore up their balance sheets, the U.S. Dollar is poised to be one of the worst performing majors in 2012. The implications of the Fed’s decision go beyond this year, however. Now, with low rates indicated for the next two years, the groundwork for the American Lost Decade – no different than Japan’s – has been laid.
Of interest has been the price action displayed by gold, which has surged through the $1700 per ounce mark and maintained its gains ahead of trading in New York. To me, this is a clear indication that market participants are worried about the U.S. Dollar losing its value substantially over the next few months. The key to watch would be the short-end of the U.S. Treasury yield curve: if these rates turn negative, the demand for precious metals will pick up.
Commodities News
Overall, the commodity currencies, mainly the Australian and New Zealand Dollars, are up big on the day, pacing gains against the Greenback ahead of trading in New York. The European currencies were also slightly firmer, though it’s worth noting that they continue to lag the higher yielding currencies, as expected. With more easing expected out of the Bank of England and the European Central Bank, this is a trend that is expected to continue over the coming months.
FX News
EUR/USD
USD/JPY
The AUDUSD continues to soar and is nearing channel resistance (10700 today) as well as the October high at 10752. 10575 and 10620 are now supports.
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Market Outlook for January 26, 2012
By forexnews | January 26, 2012
Recap of the Latest Global News
After the U.S. Dollar sold off across the board late in North American trading yesterday, it appeared that some relief was on the horizon, with the Greenback clawing back in early Asian trading on Thursday. This was merely a short-term correction, and by the time European markets opened up, the higher yielding currencies continued to surge.
Ahead of yesterday, the U.S. Dollar was primed for a strong year; after the ill-advised policy decision, one that does little more than buy time for banks to shore up their balance sheets, the U.S. Dollar is poised to be one of the worst performing majors in 2012. The implications of the Fed’s decision go beyond this year, however. Now, with low rates indicated for the next two years, the groundwork for the American Lost Decade – no different than Japan’s – has been laid.
Of interest has been the price action displayed by gold, which has surged through the $1700 per ounce mark and maintained its gains ahead of trading in New York. To me, this is a clear indication that market participants are worried about the U.S. Dollar losing its value substantially over the next few months. The key to watch would be the short-end of the U.S. Treasury yield curve: if these rates turn negative, the demand for precious metals will pick up.
Commodities News
Overall, the commodity currencies, mainly the Australian and New Zealand Dollars, are up big on the day, pacing gains against the Greenback ahead of trading in New York. The European currencies were also slightly firmer, though it’s worth noting that they continue to lag the higher yielding currencies, as expected. With more easing expected out of the Bank of England and the European Central Bank, this is a trend that is expected to continue over the coming months.
FX News
EUR/USD
USD/JPY
The AUDUSD continues to soar and is nearing channel resistance (10700 today) as well as the October high at 10752. 10575 and 10620 are now supports.
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Lunar Year Celebrations vs. the Market
By Compass Global Markets | January 25, 2012
EUR/USD traded within a narrow range during Asian session (1.3014 – 1.3041) today perhaps due to the Lunar Year celebration. The same could be expected for the rest of the week for Asia if no surprises hit the market. At the time of writing, euro spiked up to 1.5050 as German IFO was released. Market was expecting 107.6 but actual came out as 108.3 (last 107.3). But the spike was very short-lived as it pulled back to the comfortable 1.3020 – 1.3040 zone awaiting for the US FOMC rate decision. Economists expect no change from 0.25% but the risk may be that if the Fed is more dovish than what the market thinks, then you may see dollar selling in the pipeline. For the rest of London and New York session, we are still waiting for 1.3145 and support at 1.2983.
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Lunar Year Celebrations vs. the Market
By Compass Global Markets | January 25, 2012
EUR/USD traded within a narrow range during Asian session (1.3014 – 1.3041) today perhaps due to the Lunar Year celebration. The same could be expected for the rest of the week for Asia if no surprises hit the market. At the time of writing, euro spiked up to 1.5050 as German IFO was released. Market was expecting 107.6 but actual came out as 108.3 (last 107.3). But the spike was very short-lived as it pulled back to the comfortable 1.3020 – 1.3040 zone awaiting for the US FOMC rate decision. Economists expect no change from 0.25% but the risk may be that if the Fed is more dovish than what the market thinks, then you may see dollar selling in the pipeline. For the rest of London and New York session, we are still waiting for 1.3145 and support at 1.2983.
Topics: Chart of the Day, Top Stories | Comments Off
Lunar Year Celebrations vs. the Market
By Compass Global Markets | January 25, 2012
EUR/USD traded within a narrow range during Asian session (1.3014 – 1.3041) today perhaps due to the Lunar Year celebration. The same could be expected for the rest of the week for Asia if no surprises hit the market. At the time of writing, euro spiked up to 1.5050 as German IFO was released. Market was expecting 107.6 but actual came out as 108.3 (last 107.3). But the spike was very short-lived as it pulled back to the comfortable 1.3020 – 1.3040 zone awaiting for the US FOMC rate decision. Economists expect no change from 0.25% but the risk may be that if the Fed is more dovish than what the market thinks, then you may see dollar selling in the pipeline. For the rest of London and New York session, we are still waiting for 1.3145 and support at 1.2983.
Topics: Chart of the Day, Top Stories | Comments Off