Market analysis and trade recommendations by FBS

[riki143]

MARKET NEWS

July 9: Asian session

US dollar remained lower before the Federal Reserve releases minutes of its most recent meeting at 18:00 GMT amid speculation an uneven economic recovery will prompt policy makers to hold borrowing costs near zero. The greenback held losses from yesterday that came as Minneapolis Fed President Kocherlakota said yesterday inflation may run below the central bank’s target, while his Richmond counterpart Jeffrey Lacker tempered his previous expectation for more robust growth.

USD/JPY recovered to 101.64 after dipping to 101.44 earlier today. AUD/USD met resistance at $0.9415. Chinese CPI came a bit lower than expected. NZD/USD is trading just below $0.8800, not far from the pair’s record high of $0.8841 reached in 2011, as Fitch Ratings raised the New Zealand’s credit outlook from stable to positive.

EUR/USD is trading in the $1.3615 area after dipping to $1.3587 yesterday. GBP/USD is trading in the $0.7130 area after dipping to $1.7085 yesterday.

More:
http://fxbazooka.com/en/news/show/1436

 

[riki143]

MARKET NEWS

Key option levels (July 9)

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: $1.3600 (large), $1.3615, $1.3650;

GBP/USD: $1.7125;

USD/JPY: 101.75 102.00 102.25;

AUD/USD: $0.9350, $0.9400, $0.9450;

USD/CAD: 1.0625, 1.0675 (large), 1.0700 (large), 1.0725 (large), 1.0730;

EUR/GBP: 0.7925, 0.8000, 0.8050.

More:
http://fxbazooka.com/en/news/show/1437

 

[riki143]

MARKET NEWS
9 July 2014

China used to support EUR

Analysts at Morgan Stanley point out that China still accumulates the biggest reserves in foreign currency approaching the $4 trillion mark. Such huge reserves have no doubt an impact on the market.

According to MS estimates, Chinese reserve managers bought more than $80 billion worth of euro from Q4, 2013, through Q1, 2014 as they were diversifying from the greenback. This helped to stabilize euro. In addition, they bought Canadian dollar and Japanese yen.

Looking ahead, Morgan Stanley thinks that China’s Forex reserve accumulation is likely to slow. Chinese managers are usually buying euro on dips and selling on rallies. So, euro might be able to drift lower in line with fundamentals and rate differentials.

More:
http://fxbazooka.com/en/news/show/1438

 

[riki143]

MARKET NEWS
9 July 2014

BOJ may lower forecasts

The Bank of Japan is to review its quarterly economic estimates next week when it meets on July 15.

The last time Japanese central bank issued its projections was in January. Then the BOJ expected to see domestic GDP rise by 1.1% in the fiscal year to March 2015. However, the 8% drop in y/y household spending last month may force the regulator to revise down its estimates for the nation’s economic growth. Analysts polled by Reuters estimate 0.9% GDP for the same period.

If the BOJ revised down its growth forecasts, it may initially push down USD/JPY. Then, however, of the market starts to think that the Bank of Japan may add monetary stimulus, USD/JPY may reverse up.

More:
http://fxbazooka.com/en/news/show/1439

 

[riki143]

MARKET NEWS
9 July 2014

Dragi is due to speak today

The ECB’s President Mario Draghi will speak today at 18:30 GMT in London, where he delivered his famous speech almost exactly 2 years ago pledging to do “whatever it takes” to save the euro.

Draghi takes the stage later in the day, and investors will be looking for signs the ECB could take further easing steps to support the euro zone economy.

EUR/USD is trading on the downside. Euro returned to $1.3600 after testing $1.3630 earlier today.

More:
http://fxbazooka.com/en/news/show/1440

 

[riki143]

MARKET NEWS

July 10: Asian session

US dollar weakened amid bets US interest rates will remain near zero this year after minutes of the Fed’s most recent meeting failed to offer clues on the timing of increases. Asian stocks outside Japan rose as investors speculated that increasing Chinese exports and imports signaled growth in the world’s second-largest economy is stabilizing. Japanese core machinery orders contracted by 19.5% in May and the nation’s tertiary industry activity came lower than expected. Japanese Nikkei 225 is down by 0.2%. USD/JPY slid to 101.50.

AUD/USD had a volatile session because of the mixed bag of Australia labor market data. Number of employed people increased by 15.9K in June (forecast: 12.3K, prior: -5.1K). Meanwhile, June unemployment rate rose to 6.0% (forecast: 5.9%, May figure has also been revised up to 5.9%). The Aussie dollar initially jumped to $0.9460 but then rapidly retraced to $0.9410/15. Disappointing China trade data pulled the pair lower to the $0.9360 area. NZD/USD trades in a narrow $0.8835/10 range.

EUR/USD is trading a bit on the upside, just below $1.3650. GBP/USD is little changed in the $1.7155 area.

More:
http://fxbazooka.com/en/news/show/1442

 

[riki143]

MARKET NEWS

Key option levels (July 10)

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: $1.3500 (large), $1.3525/35, $1.3615 (large), $1.2620-30 (large), $1.3650 (large);

GBP/USD: $1.7000, $1.7070, $1.7110;

USD/JPY: 101.35/45, 101.65/75, 101.85, 102.00, 102.30/35;

AUD/USD: $0.9300 (large), $0.9330 (large), $0.9375/85, $0.9400, $0.9440;

NZD/USD: $0.8760;

EUR/CHF: 1.2205;

EUR/GBP: 0.8000.

More:
http://fxbazooka.com/en/news/show/1443

 

[riki143]

MARKET NEWS
10 July 2014

FOMC minutes: what's new?

The minutes from the June 17-18 FOMC meeting, released on Wednesday, showed the US officials agreed to end the Fed's bond-buying program by October. The Fed’s officials also discussed strategies for exiting a period of low rates, with 13 of the 16 members indicating they expect to start seeing a higher federal funds rate next year. However, the US dollar weakened as with no indication of the rate hikes timing, the minutes make Fed continue to look dovish.

According to the regulator, it wants to see the US consumer prices increase and the labor market tighten before shifting the monetary policy to normal. Inflation and unemployment will be seen as the primary indicators for measuring the pace of economic recovery. The Fed promised to let the markets know their rate raising plans in advance.

According to Barclays Capital economists, the pace of economic recovery will be more rapid then the Fed expects. First rate hike will likely come in June 2015. Strategists expect the Fed to outline the rate increase timing on a press-conference following the September meeting.

More:
http://fxbazooka.com/en/news/show/1444

 

[riki143]

MARKET NEWS
10 July 2014

The BoE meeting to be a non-event

Bank of England will announce its monetary policy decision today at 11:00 GMT. The July meeting is expected to be a non-event for the currency market: interest rate is expected to stay at a record low of 0.5%, while the QE volume – at 375 billion. The British pound may use the absence of rate hike timing news as a reason for bearish correction. However, be careful with selling the pair: the overall trend still remains bullish.

Danske Bank: “Instead of the meeting itself the focus will be on the minutes from the meeting (released on 23 July), where we will see if there is some dissident vote among board members, advocating an earlier rate hike”.

More:
http://fxbazooka.com/en/news/show/1446

 

[riki143]

MARKET NEWS

July 10: European session

EUR/USD edged down to $1.3630. On the upside resistance is at $1.3650. French industrial production contracted by 1.7% vs. expected growth of 0.5%, while the nation’s consumer prices once again stagnated. European stocks are falling for a fifth day in a row. Euro Stoxx 50 index is down by 0.7%. According to the ECB’s monthly bulletin released today, the regulator’s monetary stance will continue to ease in the coming months.

GBP/USD slipped to $1.7110 as the UK trade balance came out worse than expected. Trade deficit extended from 9.0B to 9.2B in May, while the market consensus was only 8.8B. The data gives more arguments for a later policy tightening.

More:
http://fxbazooka.com/en/news/show/1447

 

[riki143]

MARKET NEWS

July 10: American Session

Tatiana Norkina, analyst at FBS

The U.S. dollar index is recovering in the 80.25 area today, after yesterday's collapse to the 80.00 figure. Positive mood has been set by the data on the labor market: the number of applications for unemployment benefits has dropped to 304 thousand in the past week, while analysts had expected 315 thousand. The index is adding about 0.20%. At the same time, there is a significant slide in stock markets that have reacted to the minutes of FRS yesterday's meeting which stated that QE will be completed in October this year. Thus, DJIA and S&P500 are losing around 0.80%.

Currency markets have reacted variously. EUR/USD, after consolidating at the highs of 1.3650 in the morning, has collapsed to the 1.3590 support. The GBP/USD pair was declining to 1.7100 again, but has eventually recovered to the 1.7120 level. The USD/CHF currency pair has found support at 0.8900 and rebounded to the 0.8930 mark. It is highly probable to renew the afternoon's upward trend. In the meantime, the USD/JPY pair was sliding to the 101.00 figure, from which it bounced to 101.20, but bearish mood of the market participants is likely to remain.

More:
http://fxbazooka.com/en/news/show/1448

 

[riki143]

MARKET NEWS

July 11: Asian session

Asian shares declined heading for the first weekly loss in 9 weeks. MSCI Asia Pacific Index slid 0.2%. Concern about financial risks in Europe worsened risk sentiment. Investors are worried, because a company linked to Portugal’s second-largest lender missed debt payments.

USD/JPY edged down to 101.20, but is trading above yesterday’s low in the 101.05 area. US dollar headed for its biggest weekly decline versus the yen since April as traders trimmed bets the central bank will raise interest rates.

AUD/USD consolidates in the $0.9375/90 range on Friday after the yesterday’s volatile trade. Australian number of new home loans granted came unchanged against the -0.6% forecast, but the prior month results have been revised down to -0.2%. NZD/USD touched the $0.8800 mark in the session, pulling down from the strong $0.8840 resistance area – this is the record high, hit in 2011. Gold price gained some pips.

EUR/USD is once again testing levels below $1.3600, but is trading above yesterday’s low at $1.3588. GBP/USD edged down to $1.7120 after dipping towards $1.7100 yesterday.

More:
http://fxbazooka.com/en/news/show/1450

 

[riki143]

MARKET NEWS

Key option levels (July 11)

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: $1.3600, $1.3620/30, $1.3640;

USD/JPY: 101.00 (large), 101.45/50, 101.70, 102.00 (large);

AUD/USD: $0.9300/05 (large), $0.9320, $0.9350, $0.9390, $0.9500;

USD/CAD: 1.0600, 1.0625 (large), 1.0725 (large);

EUR/GBP: 0.7900;

EUR/JPY: 138.50.

More:
http://fxbazooka.com/en/news/show/1451

 

[riki143]

MARKET NEWS

July 11: American Session

Tatiana Norkina, analyst at FBS

U.S. dollar index is once again showing positive dynamics today, adding about 0.10% by now. However, a report on administration of US budget is expected to appear later, and high volatility is possible. Stock markets are captured by bearish moods. Thus, DJIA is losing about 0.20%, S&P500 - 0.10%.

Currency pairs are consolidating in narrow ranges. The EUR/USD pair, after testing 1.3620, has returned to the 1.3590 support. GBP/USD is declining in the 1.7110 area. The USD/CHF currency pair has failed to break through the 0.8930 resistance, which has been supressing the bulls advance for the past three days. Meanwhile, the USD/JPY pair is moving in the flat in the 101.20-101.35 range.

More:
http://fxbazooka.com/en/news/show/1453

 

[riki143]

MARKET NEWS

July 14: Asian session

The market volatility is low with all the currencies stuck in tight ranges amid low trading volumes. Markets stay calm, waiting for the Fed’s Yellen testimony at Congress on Tuesday and Wednesday for some news on the Fed’s monetary policy outlook.

USD/JPY opened the week with a gap up and strengthened by 10 pips to 101.40, recovering from the last week’s low of 101.06. The dollar index edged slightly higher to 80.20, rising from a two-month low of 79.75 on July 1.

The MSCI Asia Pacific Index added 0.6% in the session. AUD/USD strengthened to the $0.9400 mark. Meanwhile, the RBA Governor Glenn Stevensreiterated that some investors may be underestimating the riskof "a material decline" in the currency at some point. NZD/USD touched $0.8820, but retraced some gains.

Monday’s economic calendar is thin – only the euro zone will release industrial production figure and the ECB president Mario Draghi will deliver a speech. EUR/USD consolidates in the $1.3597/3607 narrow range, while GBP/USD – in the $1.7110/20 range.

More:
http://fxbazooka.com/en/news/show/1454

 

[riki143]

MARKET NEWS
14 July 2014

Euro zone: industrial production

Eurostat will release monthly industrial production change data for May 2014 on July 14, 9:00 GMT.

Event: Industrial Production
Publication date: July 14, 2014, 9:00 GMT
Previous: 0.8%
Market forecast: 0.3%

Given the fact that German industrial production contracted and that the euro zone's manufacturing PMI was revised down, analysts expect that the figure will come in line with market forecast.

Chart. Industrial Production

Source: ForTrader.ru

More:
http://fxbazooka.com/en/news/show/1455

 

[riki143]

MARKET NEWS
14 July 2014

CFTC: USD bullish bets up

According to the latest CFTC report, released on July 11, large traders and speculators slightly increased their US dollar bullish bets on the week ended July 8 for the first time in four weeks. The overall USD long position increased from $8.65 billion registered on July 1 to $10.34 billion on July 8.

Large speculators increased bets on EUR, CHF, CAD and NZD, while there were weekly decreases for GBP, JPY and AUD positions.

Sources: CFTC, Reuters, CountingPips

More:
http://fxbazooka.com/en/news/show/1456

 

[riki143]

MARKET NEWS

July 14: American Session

Tatiana Norkina, analyst at FBS

The dollar is strengthening before ECB President Dragi's next speech, scheduled for 21:00 GMT+4. In the afternoon, the index went into the red zone, after industrial production data publication which turned out better than expected, but after the session opening it went back to the 80.25 mark and is now close to zero. Stock markets have opened with a significant upward gap, which has become quite common recently. DJIA is adding about 0.80%, S&P500 - 0.50%.

Currency pairs have broken through Friday's ranges today. The EUR/USD pair, after setting the high of the day at 1.3640, has corrected to the 1.3620 support. The GBP/USD currency pair was sliding to 1.7070, continuing the correction process. USD/CHF has found support at the 0.8900 figure and is correcting to 0.8920 now. The USD/JPY pair has grown to 101.60, having broken through the 101.35 resistance.

More:
http://fxbazooka.com/en/news/show/1457

 

[riki143]

MARKET NEWS

July 15: Asian session

Asian shares rose for the second day after Citigroup Inc. reported better-than-forecast profit, boosting confidence that earnings growth can sustain further gains in shares. The MSCI Asia Pacific Index advanced 0.4%. Nikkei 225 is up by 0.8%.

USD/JPY edged up to 101.60. Japanese yen was little changed as the Bank of Japan maintained record monetary stimulus. US dollar remained higher against the yen following its biggest one-day advance in a week before the Fed’s Chair Janet Yellen testifies before US lawmakers today and tomorrow.

Commodity currencies remained almost unchanged during the session. AUD/USD consolidates in a tight $0.9380/9400 range after the RBA minutes reiterated recent statements, giving no new information for traders. NZD/USD sits in the narrow $0.8800/15 range. Kiwi dollar slipped from the recent highs hit last week.

EUR/USD is little changed in the $1.3617 area. GBP/USD has frozen at $1.7080.

More:
http://fxbazooka.com/en/news/show/1458

 

[riki143]

MARKET NEWS

Key option levels (July 15)

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: $1.3550 $1.3600 $1.3675;

USD/JPY: 101.65/70 (large), 102.00;

AUD/USD: $0.9365 (large), $0.9375, $0.9400;

USD/CAD: 1.0675, 1.0750;

NZD/USD: $0.8725;

EUR/GBP: 0.7900 (large), 0.7950 (large).

More:
http://fxbazooka.com/en/news/show/1460