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Risk Appetite Returns Gradually Ahead of US CPI and Major Earnings

Good morning to all traders out there. This is our forex daily contribution. Today we will be expecting the meeting of the EU foreign ministers where they will decide new sanctions on Russia. Last night the US stocks declined amid growing tensions in Gaza and Ukraine despite that, Asian shares pushed higher. The Shanghai composite closed higher by 1.02%, Hang Seng advanced by 1.36% and NIKKEI 225 was up by 0.84%.


Moreover, the Japanese Yen softened against the US dollar as the NIKKEI 225 rose. Geopolitical risk-off does not seem to affect Asia at the time being. The USDJPY bounced up to 101.55 early on Monday as the demand was weakening for the samurai currency.


Elsewhere, the US dollar index is trading in the intraday in a tight range between 80.60/80.38 ahead of the CPI data release where it is expected to stand at 2.1% for June. In addition, investors are focusing on earnings report with companies like APPLE, COCA-COLA and Microsoft reporting their quarterly results today.


The Euro against the US dollar is trading at 1.3517, nears its recent low at 1.3490. Today’s meeting of the Foreign ministers could add some weight on the currency pair while higher than projected US CPI figure could strengthen the greenback and in turn could push lower the EURUSD. Also, the Euro against the Japanese Yen recovered from 136.71 to 137.34 but that bullish flash could be temporary as the longer term trading pattern is bearish and is likely to drive prices lower.


Lastly, as the tensions in Middle East continue the Oil would be supported. Yesterday the Crude Oil found support at 101.48 and jumped to 103.32. At the same time the Australian dollar against the greenback strengthened slightly and returned to cap at 0.94 as the RBA Governor Glenn Stevens at its speech did not say this time that the Aussie is overvalued.


Questions and suggestions:analytics@infinmarkets.com

22 July 2014 @ 09:18

Quiet FX Monday Ahead of a Likely Volatile Week

Good morning to all traders out there. This is our forex daily contribution. This week opened mostly quiet as the major forex currency pairs are trading in sideways. The US dollar index weakened slightly earlier on Monday but soon after recovered, it was lastly seen at 80.49. In the intraday is in an uptrend but the resistance at 80.89 could maintain any rising attempts. Looking ahead, we are expecting the US CPI data tomorrow, US Jobless Claims and New Home Sales on Thursday and finally Durable Goods orders on Friday. In addition to that there are some major US companies reporting earnings like Apple, Coca-Cola, Caterpillar etc.


The British pound versus the greenback was limited the previous week by resistance at 1.7179; rising structure is obvious the price pattern and the daily technical oscillators have reset which provides the chances for upside revival. During this week we will follow the Bank of England meeting minutes as well as Mark Carney speech on Wednesday. That would reveal some clues about BoE monetary path and could strengthen the British pound.


Elsewhere, the Euro against the US dollar declined to support at 1.3490 on Friday and today remains near that level. The Euro in general has been weaker as recent developments revealed financial vulnerabilities of the Euro-zone. In addition some further monetary enhancive steps could be taken by the ECB which could weigh on the common currency. Should the prices move below the support at 1.3476, downside momentum would strengthen and next support could be around 1.3298.


The US dollar against the Japanese Yen is approaching support at 100.77 and the currency pair could threaten to move to lower prices. The longer term descending triangle formation is providing some ground to believe that bearish development is about to be triggered should the support at 100.77 is violated. Some data releases that could affect the USDJPY trading apart from US releases that we referred above, we would be expecting Japan’s Trade Balance and Manufacturing PMI on Thursday as well as Chinese HSBC Manufacturing PMI and lastly the Japan’s CPI data release on Friday.


Questions and suggestions:analytics@infinmarkets.com

21 July 2014 @ 10:55

European Concerns Ease ahead of the Weekend

Good morning to all traders out there. This is our forex daily contribution. The US stocks last night closed in red for one more trading session. In Asia, NIKKEI 225 was also lower but the ASX and the Shanghai Composite were closed in positive ground.


There have been concerns in Europe’s financial stability after a Portuguese bank, the Banco Espirito Santo and its largets shareholder the Espirito Santo Financial Group failed to make payments on short-term debt. That reveals the vulnerabilities of the European financial system and has increased uncertainty.


The Japanese Yen rallied on risk-off trading with the USDJPY falling below support at 101.44 and going as low as 101.06. Currently is trading at 101.30. Forex market has stabilized after the ugly financial events in Portugal. European stocks are trading now in positive ground. The EURUSD declined yesterday evening to 1.3594 but now is pressing to the upside. We do not expect much for today to happen.


The Bank of England yesterday left the monetary policy unchanged in line with expectations. The GBPUSD remain in sideways trading between 1.7178/1.7096, the uptrend prevails in the chart pattern and for that reason we would expect the bullish development in the longer term to continue. Next week we would be focusing on UK CPI releases and Mark Carney speech on Tuesday also on UK employment report on Wednesday.


Questions and suggestions:analytics@infinmarkets.com

11 July 2014 @ 11:42

Aussie Falls Increasing Downside Potentials Against the Greenback

Good morning to all traders out there. This is our forex daily contribution. The US dollar weakened after the release of the FOMC minutes for the 17-18 June meeting. The FOMC report revealed that all the members voted for the reduction in monthly asset purchases to $15 billion and reiterated that the monetary policy path will depend on the “dual mandate” of 2% inflation and full employment. However, we must have in mind that this decision was before the unexpected decrease of the unemployment rate to 6.1%. Also the members projected that PCE inflation will be between 1.5%-1.7% in 2014. We would not expect a rate hike before the 2015 and in our understanding a rate hike would be seen only if PCE inflation further approach the 2.0% target.


The US dollar index declined to support at 79.94 yesterday and early today recovered slightly, it was lastly seen at 80.02. The greenback in general remains quiet since the FOMR minutes were mostly as expected.


The US dollar against the Japanese Yen declined back to support at 101.44 but mainly in intraday is in sideways. Risk appetite is mildly underscored as speculation for an earlier Fed rate hike eased.


Additionally, in the next week earnings session continues with some important releases like Intel, JP Morgan, Yahoo, Goldman Sachs etc and for that reason we would expect the US dollar currency to be quiet.


Lastly, the Australian dollar weakened due to unemployment rate unexpectedly increased to 6.0% for June, despite those persons employed during this month increased more than projected. The AUDUSD jumped initially to 0.9456 but then declined to 0.9367. Should the pair drop below 0.9331 that would confirm a potential head and shoulders trading pattern and then chances would favor downside development. Looking forward, investors are focusing on Bank of England monetary decision and on US Jobless Claims.


Questions and suggestions:analytics@infinmarkets.com

10 July 2014 @ 09:31

Eyes Turn to FOMC Meeting Minutes

Good morning to all traders out there. This is our forex daily contribution. Investors are looking towards FOMC meeting minutes today which is expected to reveal clues about when the Fed will increase key rate. After the unemployment rate decline to 6.1% for June, market participants are speculating that Fed interest rate could be raised by the 1st quarter of 2015 and that is underpinning the greenback.


However, yesterday the Minneapolis Kocherlakota Fed voting member said that there is no need to raise rates as long as inflation is below target of 2%. At the same time, last night the US equities were declined and closed in red light. That together with dovish comments by Kocherlakota weighed on the US dollar index which moderated from 80.31 to 80.08 in the last two daily trading sessions.


On the other side of the Pacific, the Asian shares were under pressure as well. That was partly due to risk off from US traders and also because of the disappointing Chinese inflation data release that stood at 2.3%. The NIKKEI 225 dropped by slightly by 0.08%, the Hong Kong Index closed lower by 1.46% and the Shanghai Composite fell by 1.03%. Despite that the US dollar against the Japanese Yen found support at 101.44 and bounced up mildly earlier today at 101.64.


Elsewhere, the Euro against the greenback was somewhat stronger in the morning with the currency pair going as high as 1.3629. The British pound versus the US dollar still trades in the 1.7178/1.7096 range, while the yesterday release of disappointing Manufacturing and Industrial production failed to push the prices lower and that indicates the bulls are strong. Should the toady’s FOMC minutes come to be more dovish than expected by market participants we would likely see the GBPUSD rising above 1.7178.


Questions and suggestions:analytics@infinmarkets.com

9 July 2014 @ 09:11

British Pound Slightly Below 5-Year Peak Ahead of Manufacturing and Industrial Index

Good morning to all traders out there. This is our Forex daily contribution. Last night the US indices closed in red light, correcting from record peaks after employment report. The Dow Jones retreated to 17,024, falling by 0.26% and the S&P 500 declined by 0.39% and closed at 1,977. The Japanese Yen recovered slightly after the fall in equities, NIKKEI 225 also closed lower by 0.42% in the Asian session. The US dollar against the Yen bounced up to 101.84 as investors turned to a safer place for their funds.


The US dollar index remains in the 80.33/80.14 sideways tunnel and is likely to stay like that until the FOMC meeting minutes on Wednesday. Elsewhere, the Australian dollar recovered as well against the US dollar after the NAB Business Confidence index stood higher than projected. The AUDUSD jumped from support at 0.9335 to cap at 0.9395. The greenback versus the Canadian dollar climbed slightly higher to resistance at 1.0693. Technically the currency pair was oversold as indicators dropped to extreme low levels and on Monday evening the release of mixed data weakened the Canadian. The retracement in the USDCAD could go higher, first resistance is at the 38.2% Fibonacci level of 1.0960 to 1.0630, at 1.0750.


Lastly, the British pound against the greenback could be the moving major pair today. The GBPUSD holds its ground near the recent peak at 1.7178, currently the currency pair is trading at 1.7135, not far away from peak. Rising structure prevails and later today we expect Manufacturing and Industrial Production indices and should that indicators come to be surprisingly higher then we could see a penetration of the resistance at 1.7178, the next daily resistance is around 1.75.


Questions and suggestions:analytics@infinmarkets.com

8 July 2014 @ 09:02

US Dollar Maintains Gains at the Beginning of the New Week

Good morning to all traders out there. This is our forex daily contribution. The US dollar maintains its upside bias against is major counterparties. The US dollar index peaked earlier on Monday at 80.32 which is the 50.0% of the previous down move from 80.89 to 79.71, thus the currency pair may find a strong cap there. The US market opens today again after the 4th of July holiday and the latest news for the US economy was the surprisingly stronger employment. Later in the week FOMC meeting minutes will be released which could give more clues on FED monetary path.


The Euro began the week by weakening against the greenback and went as low as 1.3575. Bearish bias was dominant in the last week in the EURUSD trading and short term indicators have become oversold. Therefore, we could expect to see some sideways around 1.3575 in intraday trading.


The British pound has been trading in 1.7178/1.7130 tunnel in recent trading against the US dollar, it managed to maintain its ground despite that the greenback strengthened significantly the previous week. The Bank of England will decide this week on its monetary policy and until then we do not expect much of volatility.


Lastly, the Australian dollar against the greenback early on Monday found support around 0.9335 and extended into a sideways trading. Bearish bias prevailed the previous week due to stronger dollar but this morning the shining Aussie Job Advertisement indicator provided some support. The USDCAD currency pair would be in focus later today because of Canadian Ivey PMI release and Building Permits. The US dollar versus the Canadian is in a down trend but the previous week due to increased demand for the greenback the currency pair bearish development was limited.


Questions and suggestions:analytics@infinmarkets.com

7 July 2014 @ 10:07

US Dollar Rises on Shining US Employment Report

Good morning to all traders out there. This is our forex daily contribution. Yesterday the stronger than expected Non-Farm Payrolls and the surprising decline of the unemployment rate to 6.1% from 6.3% triggered risk appetite. The Dow Jones closed last night at a new historical record at 17,068 and the S&P 500 also rose to new high at 1985.


The US dollar index jumped to 80.28 after the employment report release. The greenback was in general supported by the data which triggered speculation that the FED may increase its key rate sooner than expected. Today is the Independence Day in the US and thus we do not expect much of movement for the US currency.


Moreover, the European central bank yesterday kept its main refinancing rate at 0.15%. The ECB President Mario Draghi said that will hold rates at record low as long as it is needed for the economy to revive. The EURUSD declined sharply from previous resistance at 1.3644 to 1.3595 and we would expect the downside bias to continue the following week as well.


The British pound against the US dollar on the other hand dropped to 1.7103 but managed to recover fast and returned to recent peak at 1.7178. Bulls appear to be strong in the GBPUSD pair trading and for that reason we are expecting higher prices for the next week. Lastly, we are highly anticipating the Bank of England decision next Thursday.


Questions and suggestions:analytics@infinmarkets.com

4 July 2014 @ 09:10

All Eyes are on US Non-Farm Payrolls and ECB Monetary Release

Good morning to all traders out there. This is our forex daily contribution. The US dollar was supported by stronger ADP Employment report yesterday. The US dollar index bounced up from support at 79.71 to cap at 79.98 and maintained its gain at that level. Market participants are expecting today the US Jobless Claims but most important is the US Non-Farm payrolls planned to be released today due to US Bank Holiday on Friday.


The stronger ADP employment release yesterday evening signaled a potentially positive NFP which is expected to stand at 214K. The unemployment rate which is explicitly connected with the FED monetary policy is projected for May to be at 6.3%. Stronger than expected releases would increase demand for the greenback but until this evening we would expect the FX market to remain in sideways as investors will not be willing to take unnecessary risk.


The Australian dollar against the greenback declined sharply from 0.9462 to 0.9367, after the speech of the Governor of the Reserve Bank of Australia, Glenn Stevens. Stevens said that they still have ammunition on interest rate and that the exchange rate remains high by historical standards. The AUDUSD is up trending and for that reason we would expect the bullish bias to revive again although sideways are more likely in the immediate term due to high risk US employment report.


Looking ahead, today there are a lot of major economic releases for major economies and as a consequence we do not anticipate much of volatility. The European Central Bank would release its monetary policy where key rates are expected to remain at 0.15% historical record. The Euro against the greenback retraced from peak at 1.3697 to support at 1.3644. Lastly, US employment report is highly waited by everyone in the forex market and after that US ISM Non-Manufacturing PMI is going to close the market.


Questions and suggestions:analytics@infinmarkets.com

3 July 2014 @ 09:20

US Dollar Fades ahead of ADP and Janet Yellen Speech

Good morning to all dear traders out there. This is our forex daily contribution. The US dollar was broadly weaker against its major counterparties in recent trading. The US dollar index declined to almost two month low at 79.71. At the same time risk appetite was high with US equities closing higher and specifically the Dow Jones and the S&P 500 ended last night at a new record high at 16,956.07 and 1973.32 respectively. The ISM Manufacturing index rose less than expected yesterday and that perhaps increased pressure on the greenback, investors look now at ADP Non-farm Employment Index, Factory Orders release and Janet Yellen’s speech later today.


The British pound against the greenback climbed to fresh new highs since October 2008 at 1.7164, underpinned by weaker US dollar and by higher the projected UK Manufacturing PMI. Moreover, technically the currency pair is at a rising formation and that adds to bullish bias. For sterling traders Construction PMI is eyed.


Elsewhere, the Euro against the US dollar remained slightly below its recent peak at 1.3697 as Euro-zone Unemployment rate was slightly below projections and that provided some support to the EURUSD. Market participants are in anticipation of the EZ Final GDP announcement for the first quarter as well as monitoring US employment report. Technically the currency pair is most likely in a falling pattern with the support at 1.3697 being a major one.


Lastly, the Australian dollar versus the US dollar rose as high as 0.9505 yesterday evening as the greenback got weaker but earlier today returned back below 0.9462 amid disappointing Trade Balance figures. In addition, high risk of employment reports coming from US could have induced the currency pair to consolidate. The AUDUSD is at a rising pattern and given recent comments from RBA that key rate will remain stable we would expect a bullish dominance however that will depend on tomorrow morning Aussie Retail Sales and on US NFP at the end of the week.


Questions and suggestions:analytics@infinmarkets.com

2 July 2014 @ 09:07

 

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