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Janet Yellen’s Statement Hurdled US Dollar’s Upside

The US dollar has recently strengthened due to the surprisingly higher reported GDP figure but was pressed down by the FOMC Statement. Janet Yellen played down the recent decrease in the unemployment rate and said that the “outlook for the economic activity and the labor market as nearly balanced”. In other words the FOMC report tone was less hawkish than expected, despite that the monthly asset purchases decreased to $15 billion as projected.


The US dollar index rose near 11-month high at 81.51 and then retraced slightly, the greenback has been broadly stronger against its major peers. Against the Japanese Yen, the greenback inched above the longer term 102.80/101.09 range but returned back to that level. We would be watching the reaction of the USDJPY there for further clues. Today we will be focusing on the US Jobless Claims.


The common currency dipped to 9-month low against the US dollar at 1.3370 but then retraced to 1.3400 amid covering of short positions and the Janet’s comments on economic activity. Concerning Euro-zone we will watch the CPI data and Unemployment Rate. There are still expectations that the ECB would increase monetary stimulus while the Fed expectations for rate hike stay firm after the increasing GDP in the 2nd quarter.


The Canadian has been one of the biggest losers against the greenback with the USDCAD rising to 1.0915 in recent trading. That is a big retracement threatening the downtrend status. Technical oscillators are overbought and that increase expectations for downside revival. On the data front Canadian GDP is included for today concerning May and is expected to be reported at 2.3% up from previous at 2.1%.


Questions and suggestions:analytics@infinmarkets.com

31 July 2014 @ 09:24

US Dollar Strengthens Ahead of FOMC, ADP and GDP Reports

Good morning to all traders out there. This is our daily forex contribution. Two of the most important events will happen today, the US GDP data and the FOMC Statement. Apart from that, we expect the US ADP Employment report which would provide more information on US employment data.


The US dollar index is trading at almost 6-month peak at 81.20 and is some pips away from 1-year fresh high. Market participants seem optimistic about the US reports outcome by end of the week when the Non-Farm Payrolls would be released. Moreover, it’s widely expected that today the Fed would reduce asset purchases to $25 billion. The US economy is expected to show a rebound for the second quarter, the growth in 2Q is projected to stand at 3.1% up from previous revised quarter of -2.9%.


Elsewhere, the Euro against the US dollar declined to 1.3400 and is now consolidating around that level with investors expecting the releases. Today regarding Euro-zone Germany would release CPI data where the yoy figure is forecasted to stand at 0.8%. The EURUSD has been declining in the medium term and we would expect the prevailing trend to continue lower.


That week belongs to the US dollar, the major currency pairs would depend on the US reports. In the recent trading the US dollar has been strengthening across the board. Against the greenback the biggest losers have been the Aussie, the Kiwi and the Loonie. The Aussie dropped as low as $0.9366 and is heading towards support at $0.9328. The NZDUSD continues its downtrend from previous week drawing earlier today support at 0.8493. The USDCAD breached downtrend line and went up to 1.0864.


Questions and suggestions:analytics@infinmarkets.com

30 July 2014 @ 09:28

Major Currencies in Slow Motion Ahead of Major Reports

Good morning to all traders out there. This is our forex daily contribution. The currency market is not so busy early on Monday with major currency pairs moving in sideways mostly. Moreover, previous week Asian equity indices closed at fresh highs with traders now collecting their profits we would not expect more gains. In addition, Japanese Banks will be closed in observance of Marine Day, while there are not any important news from elsewhere.


The Euro against the US dollar declined to support at 1.3422 and is extending in a tight range between 1.3439/1.3422 since Friday. Previous week latest US data was the surprisingly stronger Jobless Claims and Durable Goods orders which increased the demand for the greenback and pushed the EURUSD lower. The Euro also remains under pressure amid expectation the tha European Central Bank will expand is stimulus program.


The British pound against the US dollar has been on the downside as well, reaching lower barrier at 1.6960 in the last Friday trading. The couple moved below the major level of 1.70 after weaker than expected Retail Sales and less hawkish BOE. Looking forward tomorrow we will be expecting mortgage approvals report.


Elsewhere, the US dollar versus the Japanese Yen rose back near the cap at 101.93 and s up trending in the intraday. However in the daily the USDJPY range trading is well established. Tomorrow the main focus would be for the Japan’s Retail Sales and unemployment rate. The Australian dollar is also extended in a daily consolidation zone, surrounded by resistance at 0.9435 and support at 0.9326.


That week’s main attention would be US reports by many different parts. Firstly, on Wednesday the ADP Private sector employment will be released followed by GDP report for the second quarter projected at 3.1% and then the Fed will report is FOMC statement where asset tapering is expected to continue. On Thursday we have the US Jobless Claims and on Friday the epicenter which is the Non-Farm Payrolls. Apart from US other major economies are releasing important reports like Cana GDP, Euro-zone CPI and Unemployment Rate. So get ready for a shaking week.


Questions and suggestions:analytics@infinmarkets.com

28 July 2014 @ 10:22

Lid at 80.85 Limits US Dollar Index Ahead of Durable Goods

Good morning to all traders out there. This is our daily forex contribution. Early on Friday, during Asian session the Japan’s national Core CPI report showed a rise by 3.3% in July as it was expected, compared with previous month rise of 3.4%. The Tokyo index of the CPI stood at 2.8% in July, beating estimates of 2.7%. The NIKKEI 225 closed higher by 1.13% as market participants were taking more risk.


Moreover, the US dollar against the Japanese Yen jumped to resistance at 101.85 in yesterday trading due to lower US Jobless Claims mainly. Improved risk appetite would likely further support the USDJPY. Nevertheless investors are currently looking to US Durable Goods Orders estimated to stand at 0.4%.


The US dollar was in general stronger against its major counterparties in the recent trading. The index found an upside hurdle at 80.89 for the time being. Nonetheless, bullish sentiment seems strong especially after the stronger than expected Jobless Claims. However, the US Manufacturing PMI and the New Home Sales reports missed estimates.


The British pound against the greenback clawed back its previous gains after the UK Retail Sales report revealed a lower than projected figure. The currency couple dropped below support at 1.7034 and went even lower than 1.70, it is currently trading at 1.6980. Looking ahead, traders are watching Preliminary GDP report for the second quarter. In the daily the trend is upward but in the hourly timeframe the structure became negative after a double top formation. The GDP report could push the currency pair to a decisive direction, however should the prices drop below 1.6951 downside momentum could strengthen. Please keep in mind that we expect key reports on the US side that will influence the pair as well.


Questions and suggestions:analytics@infinmarkets.com

25 July 2014 @ 09:37

Euro Fades Ahead of PMI Reports

Good morning to all traders out there. This is our forex daily contribution. Early on Thursday trading the HSBC/Markit Flash China Manufacturing PMI released at 52.0, which was higher than projected and more than the previous figure. That increased risk appetite and as we have been expecting bolstered the Australian dollar. The AUDUSD jumped to a 3-week high at 0.9472 but then dipped lower because it was influenced its weakening neighbor, the kiwi.


The New Zealand’s dollar declined despite that the RBNZ raised the official cash rate to 3.50% from 3.25% as it was expected. The RBNZ Governor Graeme Wheeler signaled a pause for the rate hikes and said that the current exchange rate for the kiwi is “unjustified and unsustainable”. The NZDUSD fell to 0.8566 and breached previous support at 0.8645, forming a down trend pattern in the intraday. The downward structure establishment suggests that lower price levels are becoming more likely.


Elsewhere, the British pound was under pressure yesterday as the meeting minutes release were less hawkish than expected, as members of the BoE were divided on when a rate hike would be appropriate. The GBPUSD eased to support at 1.7034 and is trading around that level. Looking ahead we would watch Retail Sales report which could provide some support to the currency couple. In the daily pattern the pair remains in an uptrend and recent weakness could be considered as a retracement, thus this could be considered a good chance for the bulls to reposition in the market.


Lastly, the Euro versus the greenback remains below the cap at 1.3475 and the falling structure prevails in the short-term as well as in the medium-term timeframes. On the data front the Common currency traders would be overwhelmed today by European manufacturing and services PMI reports for the member states and Euro-zone in total. Weaker than expected PMI figures, could push the couple lower towards the next support at 1.3407. Later on the US Jobless Claims and US New Home Sales will be the main focus.


Questions and suggestions:analytics@infinmarkets.com

24 July 2014 @ 09:14

Euro Declines to 8-month Low, Falling Pattern Unveils

Good morning to all traders out there. This is our forex daily contribution. The Euro against the US dollar declined yesterday below key support at 1.3480 and went as low as 1.3458. There is speculation that the European Central Bank would add to monetary stimulus and that will diverge its monetary stance further away from FED’s monetary policy. As the FED is moving towards ending asset purchases era and likely raising its key rate be the second half of 2015 the US dollar would get stronger.


The Euro on the other hand has more reasons to get weaker, as the Banco Espirito Santo development showed. The EURUSD is down trending and the recent break of the earlier support at 1.3480 increases bearish expectations. Lastly, the common currency remained under pressure as EU foreign ministers agreed to impose new sanctions on Russian.


Elsewhere, the Australian dollar jumped to a two week high at 0.9440 against the greenback after inflation data release. The Australian CPI for the second quarter rose to 3% compared to previous quarter figure at 2.9%and CPI trimmed mean unexpectedly jumped to 2.9% from projections at 2.7%. The AUDUSD maintains a longer term rising trend and that could lift prices to next resistance at 0.9500, above that the uptrend would be confirmed. Looking ahead, tomorrow morning China would release manufacturing PMI expected to stand at 51.9, higher than that could raise the AUDUSD amid risk-on.


Major focus today falls on the Bank of England meeting minutes and on Mark Carney’s speech. The British pound against the greenback has been in sideways trading between 1.7179/1.7034, more clues on the monetary path to be followed would impact currency pair prices. Later on Canadian Retail Sales for May are going to be released, the USDCAD bounced up recently but the falling development could be triggered in case Retail Sales come stronger than projected. Lastly, the New Zealand’s central bank would release its rate statement, key rate is expected to be raised to 3.50% from 3.25%.


Questions and suggestions:analytics@infinmarkets.com

23 July 2014 @ 09:29

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

 

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