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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

 

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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 (3 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2800,$1.2850,$1.2870, $1.2920, $1.2950, $1.3000, $1.3050, $1.3125, $1.3250, $1.3350, $1.3360;

GBP/USD: $1.5050, $1.5100, $1.5200;

USD/JPY: 94.00, 95.00, 95.20, 95.25, 95.75, 96.00;

USD/CHF: 0.9450

AUD/USD: $1.0245, $1.0350, $1.0400;

EUR/JPY: 121.00,125.00,125.20;

EUR/CHF: 1.2200,1.2400.

 

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EUR/USD: technical levels

 

 

 

EUR/USD is trading around $1.2880 after hitting $1.2843 in the evening yesterday. Euro remains under pressure die to the Cyprus uncertainty. Monday’s gap remained only half filled.

 

Resistance lies at $1.2890, $1.2920 and $1.2950. Support is at $1.2868, $1.2843, $1.2800. We look to sell on the recovery attempts around the mentioned resistance levels targeting $1.2800 and ultimately $1.2680/60. Break of $1.3106 is needed to signal short term bottoming.

 

eurusd.sh1.png

Chart. H1 EUR/USD

 

 

 

 

 

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USD: looking forward to the Fed’s meeting

 

 

 

Today is the big day for the Fed and US dollar: the FOMC will release its updated economic projections (18:00 GMT), while Ben Bernanke will attend press conference (18:30 GMT).

 

According to consensus forecast, US central bank will continue buying $85 billion a month in mortgage and Treasury bonds to help economic recovery.

 

Analysts will be watching closely for any sign of optimism about the outlook for 2013, 2014 and 2015.

 

Current forecasts:

 

- Economic growth is to pick up to about 2.7% in 2013 from 2.2% in 2012, before surpassing 3% in 2014 and 2015.

- Unemployment rate will be at 6.8-7.3% in Q4, 2014, won't hit the 6.5% threshold needed for a rate hike until 2015.

 

Credit Suisse points out that a brighter outlook could spark expectation that the Fed will prematurely exit its current policy making USD strengthen vs. riskier currencies, so the central bank will be cautious and will only inch up its economic outlook.

 

Barclays, however, says that the committee’s updated economic projections may include slight downward revisions to near-term growth reflecting spending cuts. The specialists don’t expect any hints suggesting near-term plans to curb QE.

 

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Photo: Andrew Harrer/Bloomberg

 

 

 

 

 

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March 20: European session

 

 

EUR/USD rebounded from the daily lows of $1.2850 to the levels above $1.2900. Cypriot officials are discussing the possible loan extension with Russia. Euro zone’s current account surplus unexpectedly increased to 14.8B (forecast - 7.9B). Later in the day watch the German bond auction results and euro zone’s consumer confidence.

 

GBP/USD shot above $1.5140 area after testing levels below $1.5050. Trading is extremely volatile. According to the MPC March meeting minutes, 6 members of the Committee voted to keep the asset purchase program unchanged at 375 billion pounds, while 3 members (including Governor Mervyn King) once again voted to increase this amount by 25 billion pounds. The refi rate remained intact at 0.5%. The MPC expressed concerns about an “unwarranted depreciation of sterling.” UK jobless rate stayed at 7.8% in line with forecasts. The number of people claiming unemployment-related benefits (Claimant Count change) fell by 1.5K (forecast: -5.2K).

 

 

 

 

 

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March 21: Asian session

 

 

EUR/USD holds at yesterday’s close level at $1.2945. Euro remains relatively stable in the current uncertain environment. Cypriot parliament has got some more time to find a solution: banks will stay closed at least until the next Tuesday. The country is now negotiating with Russia and Greece to get financial support. Euro zone is scheduled to release a bunch of PMI indices today (8:00-9:00 GMT).

 

USD/JPY slid to 95.80 after reaching levels above 96.00 yesterday. The Bank of Japan’s new Governor Haruhiko Kuroda will speak today at 10:00 GMT together with new Deputy Governors Kikuo Iwata and Hiroshi Nakaso.

 

AUD/USD keeps struggling to stay above $1.0370 and push higher. Aussie got support from a rather good HSBC manufacturing PMI (51.7 versus forecast of 51.2). NZD/USD is trading back above $0.8250 after New Zealand’s GDP added 1.5% in Q4 (forecast: 0.9%; previous: 0.2%).

 

Yesterday US Federal Reserve pressed forward with its aggressive policy stimulus, saying it will continue to buy $85 billion in mortgage and Treasury bonds per month. The Fed’s Chairman Ben Bernanke said central bank would only slow the pace of its bond buying after the labor market showed sustained improvement.

 

GBP/USD trades sideways around the $1.5115 mark. Today UK will release retail sales and public sector net borrowing (9:30 GMT) and CBI industrial order expectations (11:00 GMT). USD/CAD sits at 1.0251. In the US session Canada will publish retail sales data.

 

 

 

 

 

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USD/JPY awaits for Kuroda's conference

 

 

USD/JPY slipped back to 95.70 as data showed Japan’s trade deficit narrowed (Jan.: 1.6 trln; Feb.: 777.5 bln). Yesterday the greenback climbed above 96.00 after the Fed announced the continuation of QE. Market got inspired by the expectations of a soon recovery in the US.

 

Today the traders will be carefully watching the new BoJ Governor Haruhiko Kuroda’s first official press conference (10:00 GMT). His dovish comments will trigger further yen depreciation. Next resistance for USD/JPY lies at 96.00/15, 96.60/70 and 97.00.

 

However, if Kuroda abstains from easing hints (what is, though, unlikely) USD/JPY will extend losses. Watch the 95.50, 95.00 and 94.50 support.

 

RBS: We doubt that Kuroda will say something new today: he is part of a board, and it's going to be a little difficult for him to go up there before the board has met, and promise to do anything. However, the market clearly wants to push USD/JPY higher.

 

usdjpy_12-18.gif

Chart. H4 USD/JPY

 

 

 

 

 

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March 21: European session

 

 

EUR/USD rebounded back above $1.2900 after having tested $1.2880 earlier. Euro fell on disappointing European PMIs. Euro area manufacturing PMI dropped to 46.6 (forecast - 48.2), while services PMI – to 46.5 (forecast - 48.2). Both French and, what is especially worrying, German indices came below the forecasts. Spain held a successful bond auction today (lower yields, amount – above target).

 

GBP/USD touched resistance at $1.5200, while EUR/GBP slid to 0.8500. UK retail sales rose by 2.1% (forecast: 0.5%; previous: 0.7%), rising in Feb. for the first month since Sept. In addition, British government borrowed last month less than expected.

 

EUR/JPY is down to 123 yen. EUR/CHF is trading on the downside, around 1.2200.

 

 

 

 

 

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AUD/USD recovered to $1.0400

 

 

AUD/USD rebounded to $1.0400 after having slipped to $1.0365 earlier in the day. The pair bounced from the March trend line support.

 

For now the upside remains capped by the $1.0415 resistance (daily Ichimoku, 61.8% Fibo, Monday’s gap). Investors remain indecisive as Cyprus woes keep pressuring the risky currencies.

 

We still remain bullish on the Aussie in the medium term and recommend buying on a break of $1.0415 with a target of $1.0480 and a stop at $1.0390. Next strong support lies at $1.0350.

 

audusd_14-08.gif

Chart. Daily AUD/USD

 

 

 

 

 

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March 22: Asian session

 

 

EUR/USD slipped back below $1.2900 after a failed attempt to climb higher. Market awaits news from Cyprus: Eurogroup ministers softened their stance and seem to be ready to make some concessions. Meanwhile, yesterday S&P’s lowered Cyprus’s rating from ССС+ to ССС with a negative outlook. Today the only important event on the euro zone’s agenda is the German Ifo business climate.

 

USD/JPY slid below 95.00. Japan's Nikkei stock average shed 1.5%, after hitting a 4-1/2-year high on Thursday. Yen strengthened as new leaders of the Bank of Japan to take aggressive measures to fight deflation bolster Japan’s economic growth.

 

AUD/USD broke through $1.0400 yesterday and today is trading 30 pips above this handle. Australian index of leading economic indicators rose, the RBA Assistant Governor Malcolm Edey played down the risks in the nation’s financial industry and investors decreased bets on the central bank’s rate cut. NZD/USD is trading above $0.8300 after spiking to $0.8350 yesterday as a private report showed a gain in job advertisements in New Zealand. Demand for both currencies was limited as prolonged negotiations on a bailout for Cyprus damped risk appetite.

 

GBP/USD edged up and is now trading slightly below $1.5200. USD/CAD holds at 1.0240 after yesterday’s quick test of the 1.0200 mark.

 

 

 

 

 

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

 

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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 (3 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2850, $1.2900, $1.2950, $1.2960, $1.3000;

GBP/USD: $1.5100, $1.5200, $1.5300;

USD/JPY: 94.75, 95.00, 95.50, 95.60, 96.00, 97.00, 98.00;

USD/CHF: 0.9500;

AUD/USD: $1.0250, $1.0265, $1.0325, $1.0390, $1.0400, $1.0420;

USD/CAD: 1.0200, 1.0250

EUR/GBP: 0.8550;

EUR/JPY: 123.00;

AUD/NZD: 1.2500;

GBP/CHF: 1.4350.

 

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EUR/USD: news from the battlefield

 

 

EUR/USD is trading sideways holding above support of $1.2880 and with resistance at $1.2930/50/70.

 

Cyprus continues being the main topic. The ECB gave the nation time until the start of next week to agree to a bailout package or lose emergency funding – the decision with probably come on the weekend. Cyprus finance minister Mr. Sarris said that the country failed to get the financial support from Russia.

 

BNP Paribas: “While we expect a constructive solution to emerge in the coming days, EUR/USD is likely to continue to face headline risk as capital controls will likely need to be imposed once banks re-open. There is also near-term risk for the euro from softer economic data”.

 

Watch German Ifo business climate index for March due at 09:00 GMT (forecast: 107.4; previous: 107.8).

 

Small short are possible at $1.2878, though taking the recent consolidative stance the bears probably won’t get much. The possible targets are $1.2856 and $1.2843 (Mar. 19 and 20 lows). The near-term bearish outlook will be neutralized only above $1.2995/3000.

 

eurusd.sh4.png

Chart. H4 EUR/USD

 

 

 

 

 

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Cyprus and its impact on EUR/USD

 

 

 

If Cyprus can’t agree on the deposit cuts and the ECB withdraws liquidity support from its banks, the nation’s banking system may collapse, even though Cyprus would likely imposing capital controls to limit monetary outflow. The specialists warn that the muted reaction to the developments in Cyprus demonstrates a worrying level of complacency in global market. Bad outcomes aren’t fully priced in yet, so the market’s reaction could be strong. According to Bank of New York Mellon, “within a matter of 1-2 months we could go below $1.25 or even $1.20 by the summer.”

 

But what would actually happen to EUR/USD is Cyprus agrees on a bailout package?

 

TD Securities: “EUR/USD has been pulled lower by the focus on Cyprus this week but relative central bank balance sheet positions suggest $1.35 is fairer value for EUR/USD currently. We look for EUR/USD to rebound if a Cyprus deal is reached.”

 

Bank of Tokyo Mitsubishi UFJ: Analysts believe that EUR/USD looks bearish ahead and will trade between $1.2750 and $1.3150. After the ECB’s threat to suspend the provision of emergency liquidity to Cypriot banks, Cyprus will reach an agreement helping to stabilize EUR. However, any scope for EUR rebound is only modest with evidence emerging that the euro-zone economy is still struggling to exit recession (weaker than expected euro-zone PMI surveys released this week).

 

JPMorgan Chase says EUR/USD needs to break above resistance at $1.3108 and $1.3135 in order to improve the near-term tone.

 

cyprus_2515762b.jpg

Photo: Reuters

 

 

 

 

 

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March 25: Asian session

 

 

EUR/USD opened the week with a bearish gap at $1.2960, but later strengthened to $1.3050. Euro was pushed up by the news that international creditors and Cyprus had finally worked out a bailout deal draft. The second biggest Cypriot bank Laiki Bank will be liquidated. Deposits below 100 000 euros are insured and will be transferred to Bank of Cyprus, while deposits above 100 000 euros will be frozen and used to resolve debt (the extent of depositors losses is still not defined). The plan doesn’t need the approval of the Cypriot parliament. EU ministers will vote on the draft today.

 

Asian stocks advanced – MSCI Asia-Pacific shares outside Japan climbed by 0.8%. AUD/USD remains close to 2-month high around $1.0460, though capped by this area for the third day in a row. NZD/USD is also high, but limited by the resistance at $0.8350. USD/JPY is trading 30 pips up after opening at 84.30. Yen weakened before Bank of Japan Governor Haruhiko Kuroda speaks to lawmakers tomorrow.

 

GBP/USD trades at $1.5245. Great Britain will release BBA mortgage approvals data at 9:30 GMT. USD/CHF returned to the levels just below 0.9400 after testing 0.9350 earlier today. The pair was driven by the swings between concerns and optimism about Cyprus. USD/CAD holds at 1.0230.

 

 

 

 

 

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

 

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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 (3 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2640, $1.2800, $1.2825, $1.2900, $1.2950, $1.3000, $1.3125;

GBP/USD: $1.5000, $1.5100, $1.5200;

USD/JPY: 92.00, 93.00, 94.00, 94.15, 96.00, 95.50, 95.60;

AUD/USD: $1.0350, $1.0360, $1.0400, $1.0450.

 

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Barclays: USD/JPY will rise to 103.00 in April

 

 

Analysts at Barclays expect USD/JPY to peak at 103.00 a few days after the BoJ announces aggressive easing on April 4 and to trade sideways at around those levels in the next six months.

 

However, USD/JPY can’t stay at this extra-high level without overshooting the 2% inflation target. For this reason, sooner or later, the BoJ will have to absorb the liquidity to contain inflation, bringing the yen closer to fair value.

 

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FX majors from top forecasters

 

 

Here are the forecasts for EUR/USD, GBP/USD, USD/JPY, USD/CHF and EUR/JPY from top forecasters. Data were submitted on Mar. 22.

 

4.png

Source: FX Week

 

 

 

 

 

 

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March 26: Asian session

 

 

EUR/USD treads water below the 200-day SMA around $1.2870. Yesterday the pair plummeted more than by 200 pips to $1.2830. Late Monday Cypriot president Anastasiades and “Troika” agreed on a 10B international rescue package that includes the restructuring of the two biggest Cypriot banks with losses for bigger depositors. Euro’s sharp drop came after the Eurogroup president Jeroen Dijsselbloem suggested that the Cyprus model, which involves a tax on bank deposits, could form a template in any future bailout. He later added a clarification saying that Cyprus was "a specific case with exceptional challenges", but failed to stop the market panic. Cyprus banks will remain closed until Thursday (28 March).

 

USD/JPY tested 83.85 today before rising to 94.45. The Bank of Japan Governor Haruhiko Kuroda outlined monetary easing options in parliament to achieve a 2% annual inflation goal in 2 years. According to him, the BOJ will consider extending the maturities of bonds it’s purchasing and scrapping a limit on such buying. Policy specifics will be discussed at the BOJ board meeting scheduled for April 3-4.

 

AUD/USD edged higher to $1.0460/70. The Reserve Bank of Australia’s Governor Stevens has delivered a speech now, but it had little relevance to Forex. NZD/USD is trading once again at $0.8350. Kiwi is unaffected by the data which showed trade surplus of NZD414M.

 

GBP/USD trades at $1.5180. USD/CAD returned to 1.0200 after 5 days of decline. USD/CHF is testing resistance of 0.9490.

 

 

 

 

 

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AUD/USD: buy on dips

 

 

AUD/USD’s uptrend remains capped at the 8-week high of $1.0480 (78.6% Fibo). This level also acted as a barrier on Monday.

 

We remain bullish on the Aussie, but expect some pullbacks ahead of the $1.0500/15 resistance. It makes sense to buy AUD/USD on dips to $1.0415 (61.8% Fibonacci. 100-day SMA). MACD divergence on the H4 chart is pointing to the correction.

 

Support: $1.0460, $1.0440, $1.0415, $1.0400

Resistance: $1.0500, $1.0515, $1.0580, $1.0600

 

audusd_13-41.gif

Chart. H4 AUD/USD

 

 

 

 

 

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EUR/USD: news from the battlefield

 

 

 

EUR/USD slumped by about 200 pips from yesterday’s high around $1.3050 and closed at $1.2850, below the 200-day MA and 50% Fibo.

 

On the H1 we see that the pair has once again found support in the $1.2840 area. There may be some more consolidation between here and $1.2880. One may try small longs from $1.2885 to $1.2930. The slide below $1.2840 will provoke more sells.

 

BNZ expects deeper correction to $1.2700. Societe Generale recommends “selling euro now and asking questions later”. UBS awaits a break under $1.2736 to $1.2662. Commerzbank says that the Elliott wave count on the daily chart is indicating a possible rebound to $1.3100/80 before the decline resumes. However, the bank wants to sell ahead of this area.

 

The main reasons cited for shorting euro are falling growth and inflation expectations, euro zone’s economic weakness and uncertainty about the region’s periphery. German Council of Economic Experts lowered its 2013 growth forecasts for German economy, mainly due to the weakening external demand expectation. As for Cyprus, the main thing which measures regarding capital control the nation’s Finance Ministry will introduce.

 

eurusd.sh1.png

Chart. H1 EUR/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 (3 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2750, $1.2850, $1.2875, $1.2900, $1.2925, $1.2950, $1.3040;

GBP/USD: $1.5100, $1.5240;

USD/JPY: 93.50, 94.00, 94.45, 95.00, 96.50, 97.00, 97.50, 97.95, 98.00;

AUD/USD: $1.0300, $1.0345, $1.0400, $1.0450, $1.0500;

EUR/JPY: 121.50, 121.85, 124.00;

EUR/CHF: 1.2150.

flatline.jpg

 

 

 

 

 

 

 

 

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If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here: http://www.fbs.com/analytics/2013-03-27/22201-key-options-expiring-today

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

 

fbsana.png

 

 

 

 

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 (3 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2750, $1.2850, $1.2875, $1.2900, $1.2925, $1.2950, $1.3040;

GBP/USD: $1.5100, $1.5240;

USD/JPY: 93.50, 94.00, 94.45, 95.00, 96.50, 97.00, 97.50, 97.95, 98.00;

AUD/USD: $1.0300, $1.0345, $1.0400, $1.0450, $1.0500;

EUR/JPY: 121.50, 121.85, 124.00;

EUR/CHF: 1.2150.

flatline.jpg

 

 

 

 

 

 

 

 

Have a profitable trade with FBS!

If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here: http://www.fbs.com/analytics/2013-03-27/22201-key-options-expiring-today

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

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March 28: Asian session

 

 

EUR/USD is trading at session lows at $1.2840. The pair holds close to 4-month low as euro sentiment remains strongly negative. Germany is scheduled to release GfK consumer climate at 7:00 GMT, while Italy will auction 7B euro of bonds.

 

USD/JPY rose to 94.90. Yen weakened on the speculation that the Bank of Japan’s new Governor Haruhiko Kuroda will add to monetary stimulus measures next week in order to end deflation.

 

MSCI Asia Pacific Index of shares edged a bit down. AUD/USD eased down to $1.0460. The RBA’s Broadbent said Aussie would remain elevated. NZD/USD slid to $0.8370 after it almost reached $0.8400 yesterday. New Zealand’s ANZ business confidence declined from 39.4 in Feb. to 34.6 in Mar.

 

GBP/USD hovers around $1.5150. Watch the British current account (forecast: -12.8B) and final Q4 GDP (forecast: -0.3%) at 9:30 GMT. USD/CAD trades 10 pips above the yesterday’s 5-week low of 1.0160. Watch the Canadian inflation figures at 12:30 GMT. USD/CHF is trading right under 0.9500.

 

 

 

 

 

Have a profitable trade with FBS!

If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here: http://www.fbs.com/analytics/2013-03-28/22223-march-28-asian-session

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

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euro1.jpg

 

 

 

 

March 28: European session

 

EUR/USD plunged to $1.2755 as the number unemployed in Germany rose in Jan. by 13K vs. 2K decline expected. The jobless rate in Germany stayed at 6.9% in March. German retail sales rose by 0.4% in February following 3.0% rise in January (forecast: -0.5%). Further data in the euro area showed that M3 money supply expanded by 3.1% y/y, while private loans contracted by 0.9%. EUR/USD found support around the 4-month low and is now up to $1.2770. The market is expecting news from Cyprus, where banks are expected to re-open doors today (exact time remains unclear).

 

GBP/USD rose to $1.5170. Demand for British currency rose ahead of the month’s end.

 

Fitch re-affirmed Australia’s top credit rating (AAA) with stable outlook. AUD/USD is trading around $1.0430 after dipping to $1.0415 earlier today.

 

 

 

 

 

Have a profitable trade with FBS!

If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here: http://www.fbs.com/analytics/2013-03-28/22233-march-28-european-session

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Market Analytics:FBS Markets Inc.

 

 

 

 

 

 

 

 

fbsana.png

euro1.jpg

 

 

 

 

March 28: European session

 

EUR/USD plunged to $1.2755 as the number unemployed in Germany rose in Jan. by 13K vs. 2K decline expected. The jobless rate in Germany stayed at 6.9% in March. German retail sales rose by 0.4% in February following 3.0% rise in January (forecast: -0.5%). Further data in the euro area showed that M3 money supply expanded by 3.1% y/y, while private loans contracted by 0.9%. EUR/USD found support around the 4-month low and is now up to $1.2770. The market is expecting news from Cyprus, where banks are expected to re-open doors today (exact time remains unclear).

 

GBP/USD rose to $1.5170. Demand for British currency rose ahead of the month’s end.

 

Fitch re-affirmed Australia’s top credit rating (AAA) with stable outlook. AUD/USD is trading around $1.0430 after dipping to $1.0415 earlier today.

 

 

 

 

 

Have a profitable trade with FBS!

If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here: http://www.fbs.com/analytics/2013-03-28/22233-march-28-european-session

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