FBS Posted January 13, 2014 Share Posted January 13, 2014 Key currency options (Jan. 13) 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 (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3540, $1.3550, $1.3600, $1.3625; GBP/USD: $1.6400; USD/JPY: 102.50, 103.50, 104.00, 105.00, 106.00 (large); EUR/GBP: 0.8270; EUR/CHF: 1.2370. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 13, 2014 Share Posted January 13, 2014 CFTC: USD longs increased Here are the essentials of the latest Commitments of Traders (COT) report, released on Jan. 10 by the Commodity Futures Trading Commission (CFTC) for a week ended on Jan. 7. According to the report, large speculators increased their net long USD positions from $17.5 billion on Dec. 31 to $21.1 billion on Jan. 7. This is the best level since Sep. 10 when the US dollar bullish bets equaled to $22.0 billion. EUR/USD GBP/USD USD/JPY AUD/USD NZD/USD USD/CAD USD/CHF Gold Quote Link to comment Share on other sites More sharing options...
FBS Posted January 15, 2014 Share Posted January 15, 2014 Jan. 15: Asian session Asian shares were mostly higher on Wednesday as the World Bank upgraded its outlook for the global economy. US dollar extended gains versus its counterparts due to surprising strength in US consumer spending. Japanese Nikkei bounced by 1.8% after suffering its sharpest daily drop in 5 months on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. USD/JPY recovered to 104.40. AUD/USD slid to $0.8915. NZD/USD slipped to $0.8333. EUR/USD fell to $1.3630. GBP/USD is trading at $1.6422. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 17, 2014 Share Posted January 17, 2014 Jan. 17: Asian session Asian stocks swung between gains and losses before China reports economic data next week. Nikkei fell by 0.8% following Wall Street lower on the disappointing US corporate earnings, while exporters sagged as the weak-yen trend took a pause. MSCI Asia Pacific Index erased a 0.4% drop. USD/JPY is trading at 104.33 after testing 104.92 yesterday. Japanese consumer confidence declined. AUD/USD is consolidating in a tight $0.8830/00 range after having hit a low of $0.8878 yesterday (lowest since August 2010). NZD/USD is the main loser of this Asian session, falling by more than 60 pips to $0.8285. Despite the recent NZD decline, the market remains generally long on the kiwi in expectations of RBNZ rate hike in the near future. EUR/USD is in the $1.3625 area, down from yesterday’s high at $1.3649. GBP/USD is down to $1.6333, but above yesterday’s low at $1.6314. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 17, 2014 Share Posted January 17, 2014 FBS Forex Outlook 2014 FBS analytical team prepared a report on 2014 Forex market prospects. What currency pairs deserve traders’ attention in the coming year? Which economic and political events will influence the market? What to expect from the major central banks? Find the answers to these questions and many more in the FBS Forex Outlook 2014. Contents * 2013: A year to remember * 2014: Highlights * Analysis by currency DOWNLOAD REPORT Quote Link to comment Share on other sites More sharing options...
FBS Posted January 20, 2014 Share Posted January 20, 2014 Jan. 20: Asian session Asian shares dropped to a 6-month low as a bit better China GDP was not enough to overcome risk aversion. Q4 GDP grew by 7.7% (down from 7.8% of Q3, but barely above the forecast of 7.6%). China December industrial production rose by 9.7% y/y (slightly below the expected 9.8%) while retail sales climbed 13.6% as expected. Nikkei index dropped to a one-week low, tracking declines in US shares. MSCI Asia Pacific has pared some losses, but is still down by 0.2%. Market liquidity is thin as the US markets are closed in observance of Martin Luther King Day. USD/JPY found support at 103.90 after a sell-off in the Asian trade. AUD/USD has recovered a bit after hitting $0.8760 (lowest since July 2010). Aussie is slightly supported by China GDP figures. NZD/USD is trading in a narrow $0.8265/30 range. EUR/USD is hovering in the $1.3510/30 range, a little bit below the Friday low. GBP/USD is trading around $1.6415. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 20, 2014 Share Posted January 20, 2014 EUR/USD with Commerzbank Analysts at Commerzbank point out that EUR/USD eroded 6-month uptrend and the Ichimoku Cloud support at $1.3564. The specialists say that the 4-month support line at $1.3516 has become vulnerable. If euro falls below this level, it will make another leg lower. The bank has set targets at $1.3348/1.3295 (recent low, Fibo and 200-day MA). Support lies at $1.3525 (Dec, 2 low) and $1.3458 (38.2% retracement of the move up from July). The pair will consolidate at the latter. Resistance is at $1.3607/29 (short term downtrend). Quote Link to comment Share on other sites More sharing options...
FBS Posted January 22, 2014 Share Posted January 22, 2014 Jan. 22: Asian session Asian shares swung between gains and losses as the Bank of Japan pledged to maintain economic stimulus and the International Monetary Fund raised its global growth forecast. The MSCI Asia Pacific Index added 0.1%. Japanese Nikkei rose by 0.3% after an initial dip. China’s Shanghai Composite Index rose 1.7%. USD/JPY rose to 104.50. The Bank of Japan has refrained from signaling additional stimulus today. The regulator downgraded the nation’s GDP forecast for 2014/2015 financial year from 1.5% to 1.4%. The BOJ governor Haruhiko Kuroda is due to hold a press conference later today. AUD/USD jumped by more than 80 pips to $0.8870 on higher than expected Australia inflation data. Q4 CPI came at 0.8% q/q vs. expected is 0.4% and prior 1.2%. January Westpac consumer sentiment fell less than expected (-1.7% vs. -4.8% in December). Market expectations of RBA rate cut fell after the today’s releases. NZD/USD is trading in a narrow $0.8300/25 range. EUR/USD tested $1.3580 before sliding to $1.3560. GBP/USD reached $1.6490. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 27, 2014 Share Posted January 27, 2014 Jan. 27: Asian session USD/JPY tested 7-week low at 101.75, but then recovered to 102.50. Demand for yen as a safe haven increased because of a selloff in emerging-market assets. The MSCI Emerging Markets Index of shares fell 1.2%, extending last week’s 2.3% slump. Investors are worried that troubles in EM could lead to financial crisis. Turkey suffers from political turmoil, while Argentina abandoned support of its peso on the open market. The expectations of the Fed’s policy tightening and tightening credit conditions in China also encourage fears about the EM economic slowdown. Commodity currencies met buyers in the Asian trade. AUD/USD opened the week slightly above the Friday’s minimum of $0.8660 and strengthened to $0.8740. Australian markets were closed for a holiday. NZD/USD still didn’t close the morning a bearish gap, trading below $0.8225. Kiwi remains well-supported by the $0.8200 mark. On Sunday Forbes published an article saying China halts cash transfers. However, the PBOC statement clarified the issue: the move only covers some Internet transfers and those for small amounts and is due to regular system maintenance. EUR/USD is trading in the $1.3680 area after it spiked to $1.3740 on Friday. GBP/USD tested $1.6472, but then returned to the levels above $1.6500. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 Jan. 28: Asian session Asian shares weakened to nearly 5-month lows on Tuesday on concerns about the emerging markets, but then managed to recover on some encouraging news from Turkey and China. Turkey’s central bank may raise interest rates at an extraordinary meeting today, while China’s largest lender said that investors in a troubled high-yield trust can recoup funds. Nikkei hit 2 1/2-month intraday low before recouping the losses to trade 0.2% above its previous close. MSCI Asia Pacific Index of shares was little changed after dropping 3.7% over the previous 3 days. USD/JPY is trading in the 102.60 area, below yesterday’s peak at 102.93. The greenback rose against yen before the Fed begins a 2-day meeting amid forecasts it will cut monthly asset purchases by $10 billion. Commodity currencies are trading to the upside. AUD/USD extends growth for a second day in a row, but faced resistance at $0.8800. Australia NAB business confidence for December came at 6. The prior reading was revised up from 5 to 6. Business conditions index for December rose from -3 to a 2.5-year high of 4. NZD/USD strengthened to $0.8275 after forming a long-legged doji candle with a low at $0.8200 on Monday. EUR/USD is trading in the $1.3670 area, below yesterday’s peak at $1.3717. GBP/USD rose above $1.6600. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 Emerging markets: what’s the problem? There were a lot of concerns about emerging markets during the recent days. Why there are problems in so many countries simultaneously? There are the following general reasons behind the depreciation: a contraction in Chinese manufacturing, concerns about the impact of the Fed’s stimulus tapering, a variety of more local problems, ranging from troubled economic institutions to political unrest. Argentina Argentinean peso survived the biggest depreciation 12 years. In lost 15% of its value last week when the central bank briefly stopped supporting the national currency. Earlier the central bank spent huge sums to slow down peso’s fall. These efforts reduced Argentina’s foreign-currency reserves to about $29 billion from around $43 billion a year ago. Inflation is believed to account for 30%. There’s a big gap between the official exchange rate (around 8 peso per USD) and the black market rate (more than 12 peso per USD). This gap reinforces expectations that peso will devalue even more. Turkey Turkish lira has lost about 16% against dollar since Dec. 17, when the arrest of the sons of 3 cabinet ministers exposed a corruption investigation which threatens Prime Minister Tayyip Erdogan and his government’s standing. The nation’s central bank has persistently refused to raise interest rates to defend the currency. Erdogan was opposing the hike, because he wanted low rates to boost economic growth as elections approach. As a result, the central bank had to reduce its foreign currency reserves to give lira some support. Still, it’s clear that it doesn’t work and the regulator has an emergency meeting today. A rate hike’s widely expected. Currencies likeSouth African rand, Russian ruble, Unraine hryvnia, Chilean peso continue their fall. Pimco thinks that once the risk aversion abates, people will start to differentiate again and currencies would recover. Others say the declines are sowing the seeds of problems for developing nations because weaker currencies would push up overseas debt payments for countries, damping the outlook for their economies. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 Key currency options 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 (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3590, $1.3670, $1.3680, $1.3700; USD/JPY: 102.00, 102.40, 102.90, 103.00, 103.80, 104.00; AUD/USD: $0.8700, $0.8875; USD/CAD: 1.0940; EUR/GBP: 0.8265; EUR/JPY: 141.20; AUD/JPY: 91.30. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 China: the imminent debt crisis? The risk of a credit crunch is hanging over China. The pace of the nation’s debt increase is extremely high. China’s local governments have public debt of $3 trillion. This week one of Chinese trusts has managed to avoid default, presumably, thanks to a bailout. Still, this raises many questions about the nation’s financial future. The nation’s extraordinary economic growth used to be a wonder and an example for others. However, it seems that this growth is now being built on the growing reliance on debt that will be difficult to repay. The existence of a huge shadow banking sector which, according to some estimates, equals 40% of GDP, makes the problem ever more serious. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 Morgan Stanley: short on USD/JPY USD/JPY extends the upside, breaking above the sell orders around 102.80. Will the buyers manage to push through the 103.00 mark or the bearish correction will deepen further? Morgan Stanley expects the pair to move even lower. They opened a sell-limit USD/JPY order at 103.00, with a stop at 104.00 and a target at 100.60. "We expect JPY to regain support as broader risk appetite is tested. Signs of Chinese growth slowing are likely to impact Asia regional risk appetite in particular, which will be JPY-supportive, in our view", analysts clarify. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 FX BAZOOKA: technicals (Jan. 28) EUR/USD EUR/USD remained between $1.3700 and $1.3650, 50% and 38.2% Fibo of the decline from $1.3890 to $1.3507. MAs remain horizontal, so do the lines Tenkan and Kijun. MACD is in the positive area, but below the signal line and declining. The desire of the bulls to move higher is confronted by the expectations of another $10B reduction in the Fed’s QE. The pair needs some additional drivers. Resistance: $1.3700, $1.3750, $1.3800 Support: $1.3670, $1.3640, $1.3600 Chart. H4 EUR/USD Upcoming events EUR - All day - ECOFIN Meetings USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders USD - 14:00 GMT - S&P/CS Composite-20 HPI USD - 15:00 GMT - CB Consumer Confidence Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 GBP/USD GBP/USD extends growth for a second day in a row, breaking above $1.6600. The pair is moving towards the recent high of $1.6670. Cable remains supported by the January rising trend line ($1.6515 as of writing). General market sentiment is bullish. MACD histogram rose above the signal line. RSI is close to the overbought zone. Watch the UK Q4 GDP today – the forecast is a little bit to the downside. Support: $1.6600/6590, $1.6565, $1.6470 Resistance: $1.6670, $1.6740 Chart. H4 GBP/USD Upcoming events: GBP – 9:30 GMT – Preliminary Q4 GDP, Index of Services Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 USD/JPY USD/JPY keeps consolidating below 102.80. The pair needs to rise above 102.85 to extend the recovery. The negative MACD crossed the signal line to the upside (bullish signal). On the daily chart the pair is supported by the bullish Cloud. Support: 102.40, 102.00, 101.75, 101.60 Resistance: 102.85, 103.00, 103.60 Chart. H4 USD/JPY Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 USD/CHF The pair still looks bearish as long as it holds below $0.8985. We expect the greenback to extend the downside. The negative MACD crossed the signal line to the upside (bullish signal). Ichimoku Cloud remains bearish. 55-period MA crossed the 100-period MA to the downside. Support: $0.8900, $0.8800 Resistance: $0.8985,$0.9030, $0.9090, $0.9130 Chart. H4 USD/CHF Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 AUD/USD AUD/USD recovered to the 55-period MA just below $0.8800. Aussie was supported by higher NAB business confidence. The pair’s trying to rise above the horizontal Kijun-sen. MAs are sloping down. All in all, the pair was quite oversold after hitting a multiyear low last week and it may correct a bit more within the general downtrend. The Ichimoku Cloud represents a hurdle at $0.8825. The upper Bollinger band lies here as well. Resistance: $0.8800, $0.8825, $0.8865, $0.8890 Support: $0.8758, $0.8740, $0.8700, $0.8663 Chart. H4 AUD/USD Upcoming events USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders USD - 14:00 GMT - S&P/CS Composite-20 HPI USD - 15:00 GMT - CB Consumer Confidence AUD - 23:30 GMT - MI Leading Index Quote Link to comment Share on other sites More sharing options...
FBS Posted January 28, 2014 Share Posted January 28, 2014 USD/CAD USD/CAD is consolidating within its medium-term upward trend. Tenkan-sen and Kijun-sen are horizontal and act as support. USD/CAD is trading around the middle Bollinger band. The pair has made a lower high at 1.1118 and the bulls have lost momentum. They might need a day to gather strength. Resistance: 1.1118, 1.1175, 1.1230 Support: 1.1050, 1.0100, 1.0950 Chart. H4 USD/CAD Upcoming events USD - 13:30 GMT - Core Durable Goods Orders, Durable Goods Orders USD - 14:00 GMT - S&P/CS Composite-20 HPI USD - 15:00 GMT - CB Consumer Confidence Quote Link to comment Share on other sites More sharing options...
FBS Posted January 29, 2014 Share Posted January 29, 2014 Jan. 29: Asian session Asian markets rallied on Wednesday after Turkey raised the benchmark interest rate from 7.75% to 12%, stirring hopes the drastic action would short-circuit a vicious cycle of selling in emerging markets and revive risk appetite generally. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 1.2% after three sessions of falls. Nikkei rose by 2.2%. USD/JPY recovered to 103.44. Commodity currencies strengthened on the Turkish rate hike. AUD/USD extends the recovery for a third day in a row. Aussie rose to $0.8830 before retracing in the late Asia. NZD/USD also remains supported, but was unable to overcome the $.8300 handle for now. Investors wait for the RBNZ meeting at 20:00 GMT (an hour after the FOMC announcement). There is a market expectation for a rate hike or at least for a rate hike promise by the RBNZ Governor Wheeler. EUR/USD is testing $1.3650 to the downside. GBP/USD is little changed in the $1.6575 area. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 29, 2014 Share Posted January 29, 2014 RBA won't cut rates The recent article in Wall Street Journal argues that the Reserve Bank of Australia wouldn’t cut interest from the record low of 2.5% on Feb. 4. Recent data showed Australia’s inflation cam at 0.8% in Q4 (forecast: 0.5%). For the full year, inflation ran at 2.7%, toward the top of the RBA’s 2%-3% target band. NAB business confidence showed that business conditions are at their best levels in close to 3 years. Housing construction and house prices also are responding to the low rates, and there’s compelling evidence that retail sales are growing quickly, says WSJ. Surely, not everything is well. Economic growth this year is still forecast to be below its long-term average of 3.0%. The biggest problem is the slowdown in the mining sector: falling commodity prices have forced mining companies to cancel investment plans, shut mines and lay off workers. Australian payrolls contracted in Dec. Still, even if the RBA’s still thinking about cutting the benchmark rate it wait for now and take time to plan its next move. Quote Link to comment Share on other sites More sharing options...
FBS Posted January 29, 2014 Share Posted January 29, 2014 Commerzbank on AUD/USD Commerzbank says AUD/USD visit $0.8870 (20-day MA) before resuming decline. Analysts say that the pair has reached its interim target at $0.8710/.8671 (the base of the channel in 2011-2014 and the 38.2% retracement of the advance from 2001 to 2011) and is correcting higher. After visiting $0.8870 AUD/USD will continue its descent to the next target at $.8550 (50% retracement of the move from 2008) and then to $.8068 and $0.7950/25. The outlook for Aussie will remain negative as long as it’s trading below the resistance line at $0.8957. Quote Link to comment Share on other sites More sharing options...
FBS Posted February 3, 2014 Share Posted February 3, 2014 Feb. 3: Asian session - Asian shares declined - Lower liquidity, higher volatility Asian shares declined as strains in emerging markets show little sign of abating. Chinese official Purchasing Managers’ Index (PMI) dipped from December’s 51 to 50.5 in January. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3%. Japanese Nikkei again led the way with a loss of 1.5% and fell to November lows. Liquidity is lower than usual because of Chinese banks are closed due to the ongoing Lunar New Year holiday. USD/JPY recovered to 102.40. AUD/USD opened with a bullish gap at $0.8770, faced resistance a bit above this level and then weakened to $0.8750. Aussie has had quite a calm session despite a bunch of statistics from Australia and the downbeat China PMI. RBA is widely expected to leave rates unchanged on the tomorrow’s meeting. NZD/USD strengthened to $0.8115. Kiwi is supported by expectations of an RBNZ rate hike in March. EUR/USD is little changed in the $1.3480 area near the 10-week low after its fall on Thursday and Friday. GBP/USD is consolidating above $1.6400. Quote Link to comment Share on other sites More sharing options...
FBS Posted February 3, 2014 Share Posted February 3, 2014 Feb. 3: European session EUR/USD recovered to $1.3500. Euro zone’s final manufacturing PMI for January was revised a bit higher from 53.9 to 54.0. German final January manufacturing PMI was revised up from 56.3 to 56.6. Spanish index came better than expected, but Italian index disappointed though they both were in the positive area above 50. GBP/USD dropped to $1.6360. UK January manufacturing PMI came below the expectations at 56.7 (forecast: 57.1, prior: revised down to 57.2). EUR/GBP rose to 0.8260. European shares are on the downside hurt by brewing worries over emerging markets and data showing China’s economy losing momentum. Quote Link to comment Share on other sites More sharing options...
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