Daily Technical Analysis from ACFX

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MARKET BRIEFING – LONDON OPEN 12.10.2015




The annual Columbus Day holiday is once again upon us which means it’s a Bank holiday in the United States. With citizens of Japan and Canada also enjoying bank holidays, trading is typically erratic and low in liquidity.

Away from the celebrations, three of Chairwoman Janet Yellen’s colleagues on the committee will be giving speeches. The President of the Federal Reserve Bank of Atlanta, Mr. Dennis Lockhart will be addressing the Association for University Business and Economic Research’s Fall Conference, in Orlando on the subject that is of greatest concern to policymakers and the markets. This being his view on the United States economic outlook.

Later in the day, the President of the Federal Reserve Bank of Chicago, Mr. Charles Evans will address the 49th World Steel Association and this is followed by the Federal Reserve Governor, Mrs. Lael Brainard, will be speaking at the National Association for Business Economics, in Washington on the subject of the Economic Outlook and Monetary Policy.
With so many of her colleagues speaking about the economy the state of the US economy, the Columbus Day holiday will no doubt give the FOMC Chairwoman the time to contemplate the economic outlook.

With the October rate decision soon to be upon us there is a small possibility that the Federal Reserve will decide to increase interest rates. However, the Bank of England Governor, Mr. Mark Carney has expressed his viewed that a move on interest rates is not contingent on the Federal Reserve acting first. Carney expresses this view last Thursday when he said.

“The exact timing of the Fed move is not decisive for the timing of the move by the Bank of England”.

A much more hawkish view on interest rates, was expressed by a former Bank of England, Mr. Andrew Sentence when he said that Central Banks are giving too much significance to areas of concern that are short term in nature such as the current low price of Crude Oil.
Mr. Sentence went on to say,

“We have independent central banks because they are meant to be courageous, they are meant to try and get ahead of the curve, they are meant to do things that politicians might find difficult and they don’t seem to behaving in that way at the moment”.

With a more aggressive tone coming from both former and current Bank of England policymakers, it might be for the Janet Yellen to ditch her prudent attitude on interest rates and take the plunge.




EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1460

Target 2: 1.1260

Projected range in ATR’s: 0.0102

Daily control level: 1.1235




GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5410

Target 2: 1.5215

Projected range in ATR’s: 0.0098

Daily control level: 1.5260


USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 121.00

Target 2: 119.40

Projected range in ATR’s: 0.81

Daily control level: 119.60



USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9735

Target 2: 0.9560

Projected range in ATR’s: 0.0089

Daily control level: 0.9740



USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3060

Target 2: 1.2680

Projected range in ATR’s: 0.0102

Daily control level: 1.2990



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7400

Target 2: 0.7230

Projected range in ATR’s: 0.0085

Daily control level: 0.7300




GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1172.00

Target 2: 1139.00

Projected range in ATR’s: 16.45

Daily control level: 1136.50



OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 52.00

Target 2: 48.50

Projected range in ATR’s: 1.78

Daily control level: 48.00




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MARKET BRIEFING – LONDON OPEN 13.10.2015



Today, two of the biggest economies within the European Union are to release significant data. From the United Kingdom, we will have the latest inflation data and from the Euro Zones industrial engine, Germany we will have sentiment data which will be published after the damaging Volkswagen scandal has come to light.

UK CPI release

The action begins early this morning at 9:30 am London time, when the Office for National Statistics we will release the UK Consumer Price Index, which it is considered a benchmark for the U.K. economy inflation gauge as it measures the change in the goods and services purchased by the consumers.

The CPI is used for the Bank of England inflation target, which is currently set at 2%. The inflation rate is significant to a currency valuation because the rising consumer prices lead to the rising country’s interest rate.

The index inspects the weighted average of prices of a given basket, compounded out of consumer goods and services, which include items such food, medical services and transportation. The CPI is calculated by averaging the prices of the basket items, before categorising them by their importance.

The CPI number was steadily declining since the second half of 2011 when inflation hit the top of 5.2% in July. Last March the United Kingdom has officially entered “no growth zone” with the release coming to 0.0% for the first time in the index history. The May release disappointed the markets even further when it was published at -0.1%, entering the phase of deflation and prolonging the long-awaited interest rate hike further.The data is steadily fluctuating between -0.1% to 0.1%, the analysts expect the inflation indicator to remain near zero in the near future.

The British economy however still remains less susceptible to the economic slowdown than the rest of its European neighbours, since keeping own currency allows the UK for more freedom in market adjustments as well as to some extent prevents the spread of contagion from the destabilized recently Eurozone.

The recent hawkish comments on interest rates emanating from both current and past Bank of England officials has helped the British Pound appreciate over the past 5 trading sessions. This bullish feel to the Pound has continued into this morning. If a pickup in inflation is reported today the potential for an acceleration in the buying of the Pound should not be ruled out.



EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1455

Target 2: 1.1260

Projected range in ATR’s: 0.0099

Daily control level: 1.1345


GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5410

Target 2: 1.5215

Projected range in ATR’s: 0.0098

Daily control level: 1.5300



USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 120.80

Target 2: 119.25

Projected range in ATR’s: 0.78

Daily control level: 119.60



USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9715

Target 2: 0.9540

Projected range in ATR’s: 0.0088

Daily control level: 0.9595



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3095

Target 2: 1.2895

Projected range in ATR’s: 0.0102

Daily control level: 1.2900



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7440

Target 2: 0.7280

Projected range in ATR’s: 0.0081

Daily control level: 0.7300



GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1179.00

Target 2: 1146.00

Projected range in ATR’s: 16.57

Daily control level: 1136.50




OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 49.00

Target 2: 46.00

Projected range in ATR’s: 1.79

Daily control level: 50.55




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MARKET BRIEFING – LONDON OPEN 14.10.2015


According to data published yesterday by the Office for National Statistics, inflation dropped below zero. Although not a huge shock, the latest Consumer Price Index reports that inflation now stands at -0.1. This latest report places CPI data well below the Bank of England’s target of 2%. This would imply that the Governor of the Bank England, Mr. Mark Carney and his colleagues on the Monetary Policy Committee are now further away than ever in increasing the benchmark rate of interest.

For the ordinary person on the street of London and the rest of the United Kingdom, the drop off in inflation is not actually bad news. Deflation, however, is for many an economist is a nasty word. One only need to look at Japan which has suffered from deflation for over a decade.

However, the similarities between the Japanese and the United Kingdom’s economy are few and far between. The big difference being that of public debt, with the Japanese economy struggling to cope under a mountain off borrowings that equates to over 200% of GDP. The UK, on the other hand, has a much more manageable debt burden which is just under 90% of the country’s GDP.

Back in April of this year, inflation dropped beneath zero, however, since then, the level of CPI has hovered around 0.00%. This is not bad news for the average British citizen as this means that the cost of living has not risen. Additionally, average earnings in the UK have also risen and this has had the effect on making the majority of those in paid employment richer.

Prices in the UK have been pushed lower. The reason for this is due to the drop-off in the price of commodities such as Iron Ore, Copper and Tin. Furthermore, the glut in Crude Oil supply has also led to the cost of fuel and energy prices falling.

The well-publicized supermarket wars have also meant that the average price for the grocery basket is now lower than a year ago. The fall in food prices has coincided with the appreciation in the British Pound which has driven down the cost of food imports. A seasonal factor behind the decrease in food prices is due to good weather conditions creating an abundant supply of cheap food products.

With inflation flat lining, the pressure is now off the Bank of England to increase interest rates. The Bank of England’s is now predicting that inflation will reach 1% by the spring of 2016. It does seem a little optimistic that in a little under half a year that inflation will pick up by over 1%. Especially as news this morning out of the Far East, from the National Bureau of Statistics, indicated that Chinese CPI missed expectations by dropping to 1.6%




EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1470

Target 2: 1.1284

Projected range in ATR’s: 0.0093

Daily control level: 1.1355



GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5345

Target 2: 1.5150

Projected range in ATR’s: 0.0100

Daily control level: 1.5385



USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 120.45

Target 2: 119.00

Projected range in ATR’s: 0.74

Daily control level: 120.35



USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9660

Target 2: 0.9495

Projected range in ATR’s: 0.0083

Daily control level: 0.9645



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3135

Target 2: 1.2940

Projected range in ATR’s: 0.0100

Daily control level: 1.2900





AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7325

Target 2: 0.7160

Projected range in ATR’s: 0.0081

Daily control level: 0.7380



GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1189.45

Target 2: 1157.15

Projected range in ATR’s: 15.69

Daily control level: 1136.50



OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 49.00

Target 2: 45.50

Projected range in ATR’s: 1.84

Daily control level: 50.55







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MARKET BRIEFING – LONDON OPEN 15.10.2015






The countdown to the October 27-28 Federal Reserve Meeting has begun. However, for those in the FOMC who wanted to see an uptick in the United States economy, the data continues to be depressing.

Yesterday afternoon’s economic data from across the Atlantic missed both the market and analyst expectations by a wide mark with both the retail and PPI numbers reporting much lower than expected.

With respect consumer spending, the Core Retail Sales was expected to report a contraction to -0.1% but in reality the actual that was released was published as -0.3%. The Retail Sales number which also includes automobiles, the expectation that there would be an increase to 0.2%, however, the report published by the Census Bureau indicated that consumer spending had only increased by 0.1%.

The news data from the Bureau of Labor Statistics with regards to the PPI was much worse. The Core Producer Price Index which excludes, food, energy and trade was expected to be reported as a small increase to 0.1%, however, the release was reported as a very disappointing -0.3%. The PPI number was no better with the expected decline to -0.2% being obliterated by an actual of -0.5%.

The Federal Reserve will be hoping that it will have better news data this afternoon on both the jobs and inflation front with the weekly Unemployment Claims and both the CPI and Core CPI data.

The case for increasing interest rates this year, continues to wane and now seems impossible that we will see a hike in October and improbable that the FOMC moves in December. This view has been reinforced by two Federal Reserve Governors urging patience with respect to the timing of the first rate increase.

The Governors in question being Lael Brainard and Daniel Tarullo. Brainard on Tuesday even went as far to say that the risk of moving prematurely was greater than the risk delaying the first increase.

With the Federal Reserve unable to find a consensus on the timing of an interest rate increase it would surmise to say the markets views of pricing in of a rate increase in Q2 of 2016 would make good sense.




EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1565

Target 2: 1.1380

Projected range in ATR’s: 0.0093

Daily control level: 1.1355


GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5585

Target 2: 1.5370

Projected range in ATR’s: 0.0108

Daily control level: 1.5200



USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 119.55

Target 2: 118.10

Projected range in ATR’s: 0.74

Daily control level: 120.35




USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9675

Target 2: 0.9405

Projected range in ATR’s: 0.0084

Daily control level: 0.9645




USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3040

Target 2: 1.2830

Projected range in ATR’s: 0.0105

Daily control level: 1.2900


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7380

Target 2: 0.7210

Projected range in ATR’s: 0.0085

Daily control level: 0.7380




GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1200.00

Target 2: 1167.00

Projected range in ATR’s: 16.40

Daily control level: 1163.00




OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 49.00

Target 2: 48.50

Projected range in ATR’s: 1.80

Daily control level: 48.85







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MARKET BRIEFING – LONDON OPEN 16.10.2015




Wednesday’s rather disappointing US, Retail Sales, and PPI numbers had the effect of sending the US Dollar lower as traders and investors priced out the possibility of the Federal Reserve increasing its Fed Funds interest rate at the October or December meetings.

Although the possibility of an October decision to increase interest rates remains highly unlikely, yesterday’s inflation and jobs data increased the prospect of Janet Yellen and her colleagues at the Federal Reserve Open Market Committee moving on rates in December.
According to data released on Thursday, by the Bureau of Labor Statistics, CPI, as expected, reached -0.2%. However, there was positive news with respect to Core CPI number which excludes Food and Energy, increased to 0.2%.

On the job front, the Department of Labor published some very positive news with Unemployment Claims dropping to 255,000. The prior number stood 262,000 and the market had expected an increase to 262,000.

The positive news on the inflation and job front had the effect of reversing the previous bearish sentiment for the US Dollar. Traders from just one afternoon of positive data realigned themselves to the possibility that a December rate hike had increased.
The American economy is, of course, monitored and discussed more than any other major developed market. The last two days market data only goes to highlight the importance of the finances of this nation.

Even though interest rates have remained at record lows for a very long time, growth in the US economy has failed to take off. A rise in interest rates is, of course, inevitable and many analysts and market participants are pushing for this to happen now so that the US economy can get over what has become a psychological barrier.

The United States, very much like the Japanese and European Union economies has changed over the past twenty or so years. Technological has not only transformed how we work but also changed what we produce. Demographics are also having a huge impact with populations becoming older combined with a falling unemployment rate, the need to have such rigid targets for inflation, growth, and employment now look redundant.

There does seem from the outside a degree of excessive resistance by the FOMC in increasing interest rates. Many have said that the Fed Chairwoman, Janet Yellen has become a hostage to the data and is unable to act. However, the responsibility in the hands of the FOMC is, however, enormous. Not only must the decision makers take the correct action but also more importantly, avoid taking the wrong action.

If interest rates are prematurely raised in December, the shock to the market and the real economy will be tangible if the FOMC then has to reverse its decision, as was the case of Sweden, Norway and Canada where a hawkish stance on interest rates had to be abandoned due to a deteriorating domestic economy.

The understandably cautious stance taken by the FOMC continues to point to an interest rate increase in the spring of 2016. That is unless wage inflation begins to increase excessively.





EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1480

Target 2: 1.1290

Projected range in ATR’s: 0.0095

Daily control level: 1.1355



GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5560

Target 2: 1.5340

Projected range in ATR’s: 0.0110

Daily control level: 1.5200



USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 119.65

Target 2: 118.15

Projected range in ATR’s: 0.76

Daily control level: 120.35


USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9580

Target 2: 0.9415

Projected range in ATR’s: 0.0083

Daily control level: 0.9645



USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.2965

Target 2: 1.2825

Projected range in ATR’s: 0.0107

Daily control level: 1.2950


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7415

Target 2: 0.7235

Projected range in ATR’s: 0.0089

Daily control level: 0.7365


GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1198.00

Target 2: 1165.00

Projected range in ATR’s: 16.36

Daily control level: 1163.00


OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 49.00

Target 2: 45.50

Projected range in ATR’s: 1.82

Daily control level: 45.75


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MARKET BRIEFING – LONDON OPEN 19.10.2015




This morning’s news that Chinese growth data continues to decline has somewhat overshadowed the start of an official and high-profile visit by the Chinese President to the United Kingdom.

With growth rates exceeding 6%, most countries in the West would look with considerable envy at first glance what appears to be the very healthy growth numbers.

However, this morning’s announcement by the National Bureau of Statistics that Chinese quarterly GDP had dropped from 7.0% to 6.9% would be weighing on the mind of President Xi Jinping during his meetings with British Prime Minister David Cameron.

There was an expectation that that this morning’s Gross Domestic Product release would be lower than July’s release. However, the decline was less than the 6.8% that the market had expected. This had the effect of limiting the decline in Asia equity markets such as the Shanghai Composite, Hong King Hang Seng and Japanese Nikkei Index.

The drop off in growth has significance from an emotional standpoint in that the drop beneath 7.0% takes Chinses GDP to levels last seen at the beginning of 2009.

This follows a downgrading of 2014 from 7.4% to 7.3% which is the lowest level of GDP for 25 years. For 2015, the Chinese Governments growth target is in the region of 7%.

Although, in comparison to the rest of the world, growth numbers in the region of 7% are still very impressive, there was many who feared that the Chinese economy risked a hard landing.

That the decline was less than expected does lend itself to the view that the action taken by the Chinese Government to limit the impact of the recent slowdown will avert the risk of this hard landing taking place.

The Chinese Government, the Central Bank and Financial Regulators still have to address the big issues of ever increasing non-performing loans, industrial overcapacity and a lack of demand from the outside world for domestic produce.

Although this morning’s GDP number would have given both Chinese Government and the markets much encouragement there is still concern that the growth number could slip to 6.5%. If such a scenario was to play out the impact on jobs would be both measurable and painful.

The Chinese Government has already embarked on an aggressive program of stimulus. However, the benefit so far would seem to be one of delaying the inevitable much steeper slowdown.

The question many now are asking is what more can the Chinese authorities do in terms of stimulus and would further and more aggressive action bring the level of GDP back above 7%.






EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1445

Target 2: 1.1260

Projected range in ATR’s: 0.0093

Daily control level: 1.1395



GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5545

Target 2: 1.5330

Projected range in ATR’s: 0.0107

Daily control level: 1.5410


USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 120.10

Target 2: 118.60

Projected range in ATR’s: 0.75

Daily control level: 120.35


USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9600

Target 2: 0.9345

Projected range in ATR’s: 0.0083

Daily control level: 0.9555



USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3010

Target 2: 1.2795

Projected range in ATR’s: 0.0108

Daily control level: 1.2950


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7415

Target 2: 0.7235

Projected range in ATR’s: 0.0088

Daily control level: 0.7365



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1192.80

Target 2: 1160.00

Projected range in ATR’s: 16.32

Daily control level: 1185.00


OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 49.00

Target 2: 46.10

Projected range in ATR’s: 1.84

Daily control level: 45.75




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MARKET BRIEFING – LONDON OPEN 20.10.2015




This week, there will be a plethora of Central Bankers commenting. However, with the ECB road show heading to Malta, the focus this week will be on this Thursday’s press conference.

The European Central Bank, President, Mr. Mario Draghi and his colleagues on the Governing Council will hold their scheduled policy meeting on October 21st to 22nd against the backdrop of increasing uncertainty over the timing of a the United States, Federal Funds increase.

There has over the past few months, been increasing speculation that the ECB will expand its current large stimulus program Eurozone economies continue to struggle. The problems facing Greece have for now been discreetly brushed under the carpet and a German industrial giant in the form of Volkswagen has now been hit by a major scandal which could damage the German economy.

Furthermore, with Governing Council member, Ewald Nowotny stating that CPI data is “clearly” below target, the prospect of a QE2 program would seemingly look more and more inevitable.

There has been chatter amongst analyst that Light Sweet Crude has put in a bottom and would soon be trading above its 200 period’s daily moving average. Crude, however, has failed to make any headway above its major daily averages and with the US50.00 per barrel area offering stiff resistance, the view that higher Oil prices in the medium term will bring inflation back on track is rather premature and unproven.

Much like their colleagues across the English Channel at the Bank of England and further afield at the United States Federal Reserve, the Central Bankers at the ECB are very much dependent on the data.

As the data has yet to confirm that Euroland has returned to sustainable growth, the prospect of the ECB extending the duration of the current QE program past September 2016 or increasing the size of the assets to be purchased becomes a possibility.





EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1415

Target 2: 1.1240

Projected range in ATR’s: 0.0090

Daily control level: 1.1380


GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5565

Target 2: 1.5360

Projected range in ATR’s: 0.0104

Daily control level: 1.5410


USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 120.15

Target 2: 118.80

Projected range in ATR’s: 0.70

Daily control level: 120.35


USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9645

Target 2: 0.9485

Projected range in ATR’s: 0.0081

Daily control level: 0.9495



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3120

Target 2: 1.2910

Projected range in ATR’s: 0.0107

Daily control level: 1.2900


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7330

Target 2: 0.7160

Projected range in ATR’s: 0.0087

Daily control level: 0.7365



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1186.00

Target 2: 1155.00

Projected range in ATR’s: 15.66

Daily control level: 1178.00


OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 48.50

Target 2: 45.00

Projected range in ATR’s: 1.85

Daily control level: 45.75

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MARKET BRIEFING – LONDON OPEN 21.10.2015


The Canadian Liberal Party has been elected to power on an anti-austerity programme. With Greece having elected the leftist SYRIZA Party to power and with the British Labour Party also electing a traditional leftist leader in the shape of Jeremy Corbin, it would appear that there is a groundswell of opinion forming in many developed countries that reject the accepted mantra that austerity is the only medicine that can bring sustainable growth and jobs.

The real test for global populist left-leaning movements will happen later this year when the Spanish public vote in a general election that takes place on December 20. The fear within the corridors of European power that are located in Brussels, Frankfurt and Berlin is that the charismatic leader of Podemos, Mr Pablo Iglesias could cause enough damage to the traditional Spanish political parties that a seismic shock that is centred in Madrid ripples across the whole of the European Union.

After ten years of rule by the Conservatives, the citizens of Canada decided that a change was needed. This change was made with the young and charismatic leader of the Liberal Party Mr Justin Trudeau sweeping to power with a 54% landslide victory.

Mr Trudeau who comes from a political dynasty is the son of the former Prime Minister has vowed to increase public spending and invest in infrastructure as part of a plan to boost demand and growth in what has been a flagging economy.

With respect to taxation, the Liberal Party manifesto has identified wealth inequality as an issue and plan to address this problem by increasing taxes on the wealthy and reducing them on the middle classes.

The scale of the victory gives the Liberal Party a strong mandate. Governments are not known to be good at spending public money. This new Canadian experiment that promises fiscal stimulus will be watched closely by other developed nations.



EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1435

Target 2: 1.1260

Projected range in ATR’s: 0.0090

Daily control level: 1.1300


GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5540

Target 2: 1.5340

Projected range in ATR’s: 0.0103

Daily control level: 1.5410


USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 120.15

Target 2: 118.80

Projected range in ATR’s: 0.70

Daily control level: 119.40


USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9640

Target 2: 0.9480

Projected range in ATR’s: 0.0081

Daily control level: 0.9495


USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3080

Target 2: 1.2875

Projected range in ATR’s: 0.0106

Daily control level: 1.2900


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7340

Target 2: 0.7175

Projected range in ATR’s: 0.0084

Daily control level: 0.7310



GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1191.50

Target 2: 1160.00

Projected range in ATR’s: 16.05

Daily control level: 1167.15





OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 47.70

Target 2: 44.00

Projected range in ATR’s: 1.76

Daily control level: 45.75




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MARKET BRIEFING – LONDON OPEN 22.10.2015


The European Central Bank roadshow hits Valetta, Malta today. This latest ECB meeting and press conference will take place against a backdrop of increasing speculation that the President of the ECB, Mr. Mario will announce further stimulus measures.

Sluggish German manufacturing and export data has caused concern, however, this has been discounted by the German Economy Ministry that views these disappointing readings as being due to seasonal factors.

The main issue for the ECB, of course, is the outlook for Euro-Zone inflation. The recent dip of Euro-Area inflation to -0.1% has coincided with what seems to be an overly optimistic outlook expectation that inflation will reach 1.7% by Q4 in 2017.

The other main concern is what Janet Yellen and her colleagues on the committee of the Federal Reserve decide to do with respect to interest rate increases.

It would seem fairly obvious that the ECB would want to wait for the FOMC to either move first or at least offer further clarity on its future monetary policy. Only then will the ECB take further measures.

The fear being that an ECB decision to increase stimulus will not have any significant impact if this takes place prior to the Federal Reserve moving on rates.
The consensus for today’s press conference is that the ECB will not announce any changes to current policy. However, it would be likely that the downside risks will be emphasized in what should be a dovish press conference. This would be line with comments made by other members of the ECB board.

The ECB does have additional tools that it can implement and Mario Draghi has informed the markets that the Central Bank will do whatever it takes to bring back growth and inflation to the Euro-Area.

These measures could include extending the duration of the current programme or expanding the scope of asset purchases.

Although such move would be in line with the ECB mandate the German Bundesbank may offer some resistance to such a move as it would question why would more QE work?
If, as it is expected the ECB announces that no further measure will be taken today, it is clear that this is not the end of this story.

The ECB will leave the door ajar for further stimulus. It is to be expected that Mario Draghi and fellow board members will do their best to guide the market and talk down the value of the Euro.







EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1415

Target 2: 1.1260

Projected range in ATR’s: 0.0080

Daily control level: 1.1300




GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5515

Target 2: 1.5315

Projected range in ATR’s: 0.0101

Daily control level: 1.5410




USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 120.50

Target 2: 119.30

Projected range in ATR’s: 0.60

Daily control level: 119.40




USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9665

Target 2: 0.9520

Projected range in ATR’s: 0.0076

Daily control level: 0.9525




USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3245

Target 2: 1.3025

Projected range in ATR’s: 0.0111

Daily control level: 1.2935




AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7295

Target 2: 0.7120

Projected range in ATR’s: 0.0087

Daily control level: 0.7240




GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1182.75

Target 2: 1152.00

Projected range in ATR’s: 14.49

Daily control level: 1180.75




OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 47.50

Target 2: 44.00

Projected range in ATR’s: 1.72

Daily control level: 47.00






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MARKET BRIEFING – LONDON OPEN 23.10.2015





Yesterday afternoon, the ECB President, Mr Mario Draghi surprised the markets by the extremely dovish tone of the scheduled press conference that took place in Valetta, Malta.

As expected the ECB did not cut its key benchmark interest rate from the current 0.05% level. However, following on from comments made over the summer, that the ECB will do what it takes to get the Euro-Zones economy back on track, the announcement that the European Central Bank will now “re-examine” its Euro 1 trillion quantitative easing stimulus programme at the December meeting sent the Euro crashing against the US Dollar.

Draghi said during the press conference that “The degree of monetary policy accommodation will need to be re-examined at our December meeting.”

It would now appear that almost everything will be considered as a policy tool, that can introduce inflation and sustainable growth back into the Euro-Areas flagging economies.

By reading between the lines that ECB Governing Council must have some good insight from the United States Federal Reserve that it will not act on US interest rates before December. If this is the case and with the US Dollar continuing to depreciate in value, the ECB felt had to act now.

Yesterday’s comments can be seen as a passing shot across the bows of the market. The threat to expand European QE programme should see the markets now price this event into their forward outlook.

The reason why the ECB took this action now is due to the realisation that the current QE programme is not having the desired effect of boosting the Euro-Area. Although the current trend amongst the Euro-Zone economies is positive, the issue of soft inflation data continues to be a concern to Mario Draghi and his colleagues. Furthermore, the recent economic problems that are facing China and the Emerging Market has only added to the ECB’s worries as this could have an impact down the line on European economies.

The question many economist and analyst will of course ask is will an aggressive expansion of the ECB’s stimulus programme only squander more tax payers money?

The problem with QE is that it is not a one shot cure for an economy that is facing issues of chronic low inflation and stagnant growth. One only needs to look at older stimulus programmes that have been adopted by the United States and Japan. The Bank of Japan and the FOMC have continuously stimulated their economies by applying further QE.

The effect of adding further QE acts as a booster to the medicine that has already been administered. A failure to boost QE will see the positive effect of such a programme wear-off. In this context and with a degree of hindsight it was fairly obvious that the ECB would have to expand its programme.

This brings us to some more questions.

1. Are the major global economies now addicted to a diet of quantitative easing?
2. Furthermore, will we ever see the economies of the United States, Euro-Area and Japan ever move back to a situation which can be described as normal or is this the new normal?


Only time has the answer to these questions






EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1200

Target 2: 1.1015

Projected range in ATR’s: 0.0092

Daily control level: 1.1385


GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5495

Target 2: 1.5290

Projected range in ATR’s: 0.0104

Daily control level: 1.5505


USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 121.30

Target 2: 120.05

Projected range in ATR’s: 0.64

Daily control level: 119.60


USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9810

Target 2: 0.9650

Projected range in ATR’s: 0.0082

Daily control level: 0.9580



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3195

Target 2: 1.2980

Projected range in ATR’s: 0.0109

Daily control level: 1.2935



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7295

Target 2: 0.7120

Projected range in ATR’s: 0.0088

Daily control level: 0.7180


GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1190.00

Target 2: 1161.00

Projected range in ATR’s: 14.46

Daily control level: 1162.35


OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 47.00

Target 2: 44.00

Projected range in ATR’s: 1.69

Daily control level: 46.25


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MARKET BRIEFING – LONDON OPEN 26.10.2015



This morning at 10:00 London time Ifo Institute for Economic Research will release the German Ifo Business Climate number.

This report is released on a monthly basis and some three weeks into the current month.
The Ifo is a survey of current and future business sentiment with respondents also requested to rate their expectation six months forward from the survey date.

Due to the size and breadth of this report the result of this survey is highly respected. This is because some 7000 business across Germany which are active in diverse sectors from manufacturing, construction, wholesale and retail are requested to respond.

The German Ifo Business Climate Survey is a leading indicator of the economic health of the country. As businesses can quickly recognize and adapt to the constantly changing market environment, this survey has proven to be a timely leading indicator to possible future economic activity.

Germany is the 4th largest economy in the world and by far the biggest and the most dominant within the European Union. This makes what happens in Germany very important. The release of the German Ifo can affect economic expectations and values of financial instruments not only in Germany but throughout the European Union.
The Ifo furthermore can have a dramatic effect on the Euro and the Euro crosses. Market volatility around the time of the Ifo release can potentially increase.

The forecasts for this month release are projecting the slight increase to 108.1, as compared to the previous number of 108.5.

A result that is higher than expected could potentially have a positive effect on the Euro currency whereas an actual release that is lower than expected could see the single currency come under pressure.

The reason for this is an optimistic business outlook can precede an increase in business activity and economic growth whereas a pessimistic business outlook could indicate a future contraction in business activity and possible stagnation or drop off of economic growth.

As economic expansion is seen as being inflationary and economic contraction being deflationary the European Central Bank, (ECB) may step in an increase or decrease interest rates so as to ensure that the influential and dominant German economy does not grow or contract too quickly.







EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1100

Target 2: 1.0910

Projected range in ATR’s: 0.0094

Daily control level: 1.1140


GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5410

Target 2: 1.5200

Projected range in ATR’s: 0.0105

Daily control level: 1.5420


USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 122.15

Target 2: 120.75

Projected range in ATR’s: 0.70

Daily control level: 120.20


USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9875

Target 2: 0.9715

Projected range in ATR’s: 0.0083

Daily control level: 0.9710


USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3230

Target 2: 1.3055

Projected range in ATR’s: 0.0112

Daily control level: 1.3040


AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7295

Target 2: 0.7100

Projected range in ATR’s: 0.0086

Daily control level: 0.7180


GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1177.00

Target 2: 1148.00

Projected range in ATR’s: 14.65

Daily control level: 1158.75


OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 46.00

Target 2: 44.00

Projected range in ATR’s: 1.56

Daily control level: 45.90







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MARKET BRIEFING – LONDON OPEN 27.10.2015



Tomorrow’s Federal Reserve meeting will not be accompanied by a press conference. However, we will get from the FOMC a monetary statement.

The lack of a press conference should discount the possibility of the Federal Reserve Chairwoman, Mrs. Janet Yellen announcing a rise in interest rates.

Although a December rate move is not priced in by the markets, it would be expected that the Federal Reserve would like to keep its options open. The FOMC’s need for flexibility could, therefore, see the committee give the latest monetary policy statement a somewhat hawkish slant.

The outcome of Wednesday’s meeting could, therefore, see the Federal Reserve announce a US Dollar supportive statement.

Following the European Central Banks extremely dovish statement we have seen the Euro put a ceiling at its recent highs. Therefore, a statement by the FOMC that is seen by the markets as hawkish could potentially see the US Dollar experience a broad rally.

The Federal Reserve is not the only Central Bank that is due to meet during this week. The Bank of Japan will add to the debate when it meets on October 30. The Bank of Japan could decide to increase its QE programme, however, there is also a possibility that the Japanese Government decides to adjust its fiscal policy.

With so much news out during this coming week, combined with the expectation that the Fed will attempt to push the hawkish line in its monetary statement, there is potential for USDJPY to break above an area of resistance around the 121 level which ties in with a potential break above the 200 period daily moving average.





EURUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.1200

Target 2: 1.0950

Projected range in ATR’s: 0.0092

Daily control level: 1.1000



GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5450

Target 2: 1.5250

Projected range in ATR’s: 0.0100

Daily control level: 1.5380





USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 121.70

Target 2: 120.30

Projected range in ATR’s: 0.70

Daily control level: 121.10




USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9900

Target 2: 0.9745

Projected range in ATR’s: 0.0082

Daily control level: 0.9750



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3270

Target 2: 1.3050

Projected range in ATR’s: 0.0108

Daily control level: 1.3120



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7325

Target 2: 0.7160

Projected range in ATR’s: 0.0082

Daily control level: 0.7200


GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1177.00

Target 2: 1148.00

Projected range in ATR’s: 14.30

Daily control level: 1158.75



OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 45.50

Target 2: 42.50

Projected range in ATR’s: 45.62

Daily control level: 45.20








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MARKET BRIEFING – LONDON OPEN 28.10.2015








According to latest estimates, there is only a 4% chance that the United States Federal Reserve will increase interest rates this evening.

The market also sees a low likelihood that an increase in the Federal Funds rate will happen in December with this scenario priced into expectations by 25%.

The chances of a March hike increases notably with the market pricing in this expectation by 50%.

With the market making its own mind on the timing of the first interest-rate increase and if we discount anything happening today, it is, therefore, important to take a close look at the language of the report. Especially as we have been receiving conflicting messages from the FOMC with some Governors wanting to see a rate increase to happen this year and others want it to happen in 2016.

The Federal Reserve has what is known as a dual-mandate which is to look after interest rates and employment.

However over recent times the FOMC has begun to take into account issues that are external to the US economy. This can now be considered as the third mandate.

The question vexing many market analysts and no doubt the decision makers on the FOMC is should the Federal Reserve just stick to its dual mandates or is it right to look at the external factors?

In this modern, interconnected global economy, the FOMC has no choice but to take into external factors when it considers its monetary policy.

Furthermore, it is fairly obvious that all central banks are now actively briefing one another and where possible planning together so as to solve the problems facing the global economy.

The FOMC is obviously treading very carefully as it plans its next move with China, the Emerging Markets and Europe being of high consideration.

China for the past two decades has seen its economy expand at a phenomenal pace. However during 2015 the Chinese economy has grown at its slowest pace in 25 years.

The Chinese Government and Central Bank have taken steps to cushion the country’s economy from the first major contraction since the open door policy was brought into being.

The steps taken include a devaluation of this country’s currency and a cut in the rate of interest by 25 bp.

Europe is also high in the FOMC’s thinking. The European Central Bank President Mr. Mario Draghi has said that the ECB’s QE programme could be extended.

We now have a scenario of China / EU easing happening at a time when US rates will increase. The fallout from this is a strengthening US Dollar and its negatives implication for US competitiveness on the global markets.

Back to the dual mandate, the US economy and the employment outlook. The jobless numbers calculated on a three-month average have been good but not impressive.
There are two more payroll numbers to be released before the meeting in December together with inflation and manufacturing data.

The Federal Reserve, therefore, does have some time to look at the incoming data. The two most recent job numbers were below expectation. However, the FOMC could be tempted to act if it sees the next two NFP releases reach levels above 200,000.

Some would say that the FOMC has been overly cautious as it waits for all the boxes to be ticked before it moves ahead and tightens its monetary stance by increasing interest rates.

The problem for Chairwoman Janet Yellen and her colleagues on the committee is that whatever they do would is bound to displease someone.







EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1130

Target 2: 1.0950

Projected range in ATR’s: 0.0089

Daily control level: 1.1080



GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5400

Target 2: 1.5205

Projected range in ATR’s: 0.0098

Daily control level: 1.5380



USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 121.00

Target 2: 119.70

Projected range in ATR’s: 0.74

Daily control level: 121.00


USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9940

Target 2: 0.9785

Projected range in ATR’s: 0.0077

Daily control level: 0.9800



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3375

Target 2: 1.3155

Projected range in ATR’s: 0.0110

Daily control level: 1.3120




AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7280

Target 2: 0.7115

Projected range in ATR’s: 0.0085

Daily control level: 0.7255



GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1180.00

Target 2: 1152.00

Projected range in ATR’s: 14.08

Daily control level: 1160.60


OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 45.00

Target 2: 42.00

Projected range in ATR’s: 1.44

Daily control level: 45.20








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MARKET BRIEFING – LONDON OPEN 29.10.2015



The zero interest rate will last for at least month and a half, with no changes in the current rate, the Federal Reserve statement asserted last night. In their view, economic conditions have not altered significantly leaving the possibility for the hawkish move as soon as this December’s meeting.

As the investors had expected the Federal Reserve to remain dormant regarding the interest rate well until next year, the reference to the next meeting came as a surprise, sending the EURUSD pair to the new lows sharply.

The pair reached below 1.0900 mark within the first hour of the statement release, being the EURUSD two and a half month low. The US Dollar strengthened further, with the index yesterday’s high at 97.875, gaining more than 270 pips just within a week.

The line that was saying the global economic and financial developments “may restrain economic activities somewhat” was this time removed from the statement. It was also added that employment conditions are recovering at a satisfactory pace with “labour market indicators, on balance, show that underutilization of labour resources has diminished since early this year”.

Nevertheless, as the economy expanding at the “moderate pace”, there are still no improvements in the inflation rate outlook, with the inflation continue to run well below the 2% target set by the Federal Reserve. It was commented however that the indicator underperformance is due to the low energy prices and the prices of non-energy imports.

The votes came 9 to 1 with Richmond Federal Reserve Bank President Jeffrey M. Lacker expressed his view in favour of the interest rate hike once again.

The investors were expecting the next interest rate hike not earlier than the March 2016, with most views have now shifted towards the late January.

“The Fed statement was the first since 1999 in which policymakers pointed to a possible rate increase at the next meeting”, Michael Feroli, a previously economist at the US Central Bank, now at JPMorgan, commented to Reuters.

The Federal Reserve will now have some time to look at several important data before the next meeting on 15-16 December. Even though the two recent NFP releases were below expectations, FOMC could be tempted to act these numbers will improve before the middle of December.

The Bank will also closely observe the economic conditions outside the United States. The weakened markets such as China and Japan seeing the capital outflows to the more profitable venues, pushing the US dollar higher.

The likely additional quantitative easing measures in Europe, announced last week, are having similar consequences to the world’s major reserve currency. Stronger Dollar, therefore, could hurt the domestic exporters, and could make it even harder to reach the desired inflation target. It also sets additional obstacles for the jobs market to improve.

That might explain why the Fed might prefer to test waters and leave the door open, without making any solid commitments ate the moment.






EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1020

Target 2: 1.0830

Projected range in ATR’s: 0.0096

Daily control level: 1.1080


GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5370

Target 2: 1.5167

Projected range in ATR’s: 0.0099

Daily control level: 1.5380



USDJPY

The intraday technical outlook

Trend 1 hour: Down

Target 1: 121.90

Target 2: 120.30

Projected range in ATR’s: 0.812

Daily control level: 121.25



USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.0060

Target 2: 0.9820

Projected range in ATR’s: 0.0118

Daily control level: 0.9800




USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3320

Target 2: 1.3070

Projected range in ATR’s: 0.0127

Daily control level: 1.3275


AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7200

Target 2: 0.7000

Projected range in ATR’s: 0.0095

Daily control level: 0.7300



GOLD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1172.00

Target 2: 1140.00

Projected range in ATR’s: 15.95

Daily control level: 1180.00


OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 48.00

Target 2: 45.00

Projected range in ATR’s: 1.57

Daily control level: 46.50






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MARKET BRIEFING – LONDON OPEN 02.11.2015





The start of a busy week of financial data began on Sunday with news out from China.
The Chinese Federation of Logistics and Purchasing (CFLP) published data that indicated that the manufacturing sector is still declining.

According to the latest release, the Manufacturing PMI for October stood at 49.8. The market had expected a slight increase to the 50.0 level.

As PMI readings that are higher than 50.0 indicate an expansion in the manufacturing sector, the release of yesterday’s number which was below the 50.0 mark does reinforce the current negative view analysts have of the Chinese economy.

However, that yesterday’s release was in line with data for September does give those looking for signs of stabilization that a floor has been put under what has been a savage contraction.

This view has gained some ground this morning with the independent Caixin Manufacturing PMI that is released by Markit indicated that there was a slight uptick.

The actual number for this morning Caixin Manufacturing PMI being 48.3 against a forecast of 47.7 and prior 47.2.

The mixed data with respect to the Chinese Manufacturing will most probably force the Chinese authorities to take further measures that will help create a bottom and stabilizes this country’s economy.

In other news, PMI surveys dominate today’s releases. Japan this morning releases its monthly Final Manufacturing PMI. The latest release was reported as 52.4 beat the consensus forecast of 52.1 but was slightly below Septembers reading of 52.5.

Across to Europe, Spanish Manufacturing PMI disappointed with the actual of 51.3 missing the 51.9 forecast and 51.7 prior release.

However, there was better news from Switzerland which saw an expansion in the manufacturing sector with the latest report reported as 50.7. The October number was a strong beat on the 50.2 actual and 49.5 September reading.

As I write, PMI data will be released shortly for Italy, Germany, France and the Euro-Area and later today, we have PMI data from the UK and the USA.





EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1134

Target 2: 1.0932

Projected range in ATR’s: 0.0101

Daily control level: 1.1095


GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5543

Target 2: 1.5347

Projected range in ATR’s: 0.0098

Daily control level: 1.5240




USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 121.25

Target 2: 119.53

Projected range in ATR’s: 0.86

Daily control level: 120.00



USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9931

Target 2: 0.9767

Projected range in ATR’s: 0.0082

Daily control level: 0.9815



USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3185

Target 2: 1.2960

Projected range in ATR’s: 0.0115

Daily control level: 1.3190


AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7190

Target 2: 0.7036

Projected range in ATR’s: 0.0078

Daily control level: 0.7079



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1156.00

Target 2: 1127.00

Projected range in ATR’s: 14.70

Daily control level: 1150.00



OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 48.00

Target 2: 45.00

Projected range in ATR’s: 1.41

Daily control level: 45.85






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MARKET BRIEFING – LONDON OPEN 03.11.2015



Since the lows of August, the Exxon Mobil Corporation has seen its stock value rally off the lows it touched back in the summer.

In August, Exxon Mobil traded down to the US$ 66.50 area, however, this morning after what was a strong Monday trading, has seen this company’s stock value move above US$ 85.00.

The Exxon Mobil Corporation is public traded on the New York Stock Exchange as is a key component of the Dow 30.

Being the fifth largest company in terms of revenue and the third largest company in terms of market capitalization, the Exxon Mobil Corporation is seen as an important bellwether on the health of the United States equity market, the petrol chemicals sector and the Crude Oil market.

Following Friday’s better than expected third quarter earnings release the value of Exxon Mobil’s share price has experienced a large increase.

Furthermore, the rally that Exxon Mobil has experienced since August has seen the price action from a technical aspect put in place certain key indications which could imply that a significant low has created for the price of this stock.

As Exxon Mobil is such a dominant player in the petroleum sector, a reversal of sentiment from bearish to bullish could also indicate that the downtrend in the value of both WTI and Brent may be coming to an end.

The price action during the month of October has been significant in that Exxon Mobil has seen its share price accelerate higher as if it was a hot knife through butter as it slashed through is 50 and 100-period simple moving averages.

Of greater significance as that the price action has now broken through the key 200 periods daily moving average. As the 200-period moving average is used as an indicator by longer term investors to ascertain if an instrument is in bull or bear territory the breach of this average during yesterday’s trading would have been noted with interest.

Of further significance was that the share price of Exxon mobile was able to breach and close above the downtrend line that has defined the bearish trend that began back in July of 2014.

Finally, the share price of Exxon Mobil has been able to break above all key Fibonacci levels with little sign of resistance. A continuation of the move higher could see the May 5 high of US$ 90.07 being tested.

A breach of the US$90.07 level is important as it would turn the very long term weekly cycle from a technical perspective from down to up.

If we switch to a chart of OILUSD, the trend continues to point in a downward direction. However, the repeated breaches of the downtrend line could potentially indicate that base is being formed.

However, confirmation is required and this will be given if OILUSD can trade above its 200 periods daily SMA and the prior swing high of October 8 at the US$ 51.30 level.
We also have a similar scenario for Brent. In this case, there does seem to be a concerted effort to stay above the now broken downtrend line.

To end, the price action for Exxon Mobil is giving us clues on the future direction of price action for both WTI and Brent. However, we do need to see some follow-through in terms of price action confirmation before we can say with any certainty that a solid floor has been put in place







EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1105

Target 2: 1.0920

Projected range in ATR’s: 0.0096

Daily control level: 1.1075




GBPUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.5495

Target 2: 1.5325

Projected range in ATR’s: 0.0087

Daily control level: 1.5240



USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 121.55

Target 2: 119.95

Projected range in ATR’s: 0.81

Daily control level: 120.25



USDCHF

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.9935

Target 2: 0.9780

Projected range in ATR’s: 0.0079

Daily control level: 0.9890




USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3200

Target 2: 1.2985

Projected range in ATR’s: 0.0110

Daily control level: 1.3115



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7215

Target 2: 0.7065

Projected range in ATR’s: 0.0077

Daily control level: 0.7100





GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1146.00

Target 2: 1120.00

Projected range in ATR’s: 13.31

Daily control level: 1150.00





OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 48.00

Target 2: 45.00

Projected range in ATR’s: 1.42

Daily control level: 45.85







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MARKET BRIEFING – LONDON OPEN 04.11.2015




Yesterday in Frankfurt during an event that celebrated the European Cultural Day, the European Central Bank President, Mr. Mario Draghi gave the clearest indication yet that he and his colleagues on the Governing Council could launch an expanded stimulus programme as early as next month.

ECB President Draghi told reporters “Even though domestic demand remains resilient, concerns over growth prospects in emerging markets and other external factors are creating downside risks to the outlook for growth and inflation.”

Draghi went on to add “In this context, the degree of monetary policy accommodation will need to be re-examined at the Governing Council’s December meeting.”

“The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation.”

His comments at what was meant to be a fairly low-key event is a clear sign that the European Central Bank is going to act in December.

The question of timing is of course as always key. As had happened in September, the next key meeting for the ECB will take place before the United States Federal Reserve announces their next move.

With the possibility of the FOMC deciding in increased rates in December, is it really necessary for the ECB to act so soon?

If the Fed hikes, this will be a stimulus in itself and have a greater effect than the ECB expanding its own QE programme.

However, Mario Draghi does not have the luxury that allows him to second guess the outcome of the FOMC meeting. The ECB may, therefore, move anyway and increase stimulus independently of any FOMC decision.

The ECB indicated that they have many options to explore and implement.

These include:

A cut in the deposit rate.
A faster pace of asset purchases.
Expand what can be purchased.

All these measures will, of course, have the effect of weakening the euro which will help support growth by expanding exports. Furthermore, the cheaper Euro will also act as a tool that increases inflation through imports.






EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.1045

Target 2: 1.0865

Projected range in ATR’s: 0.0094

Daily control level: 1.0500





GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5500

Target 2: 1.5335

Projected range in ATR’s: 0.0086

Daily control level: 1.5445




USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 121.80

Target 2: 120.30

Projected range in ATR’s: 0.79

Daily control level: 120.60





USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.9950

Target 2: 0.9850

Projected range in ATR’s: 0.0079

Daily control level: 0.9835




USDCAD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.3170

Target 2: 1.2950

Projected range in ATR’s: 0.0111

Daily control level: 1.3165




AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7255

Target 2: 0.7115

Projected range in ATR’s: 0.0073

Daily control level: 0.7110




GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1131.00

Target 2: 1103.00

Projected range in ATR’s: 13.78

Daily control level: 1138.55





OIL

The intraday technical outlook

Trend 1 hour: Up

Target 1: 49.75

Target 2: 46.80

Projected range in ATR’s: 1.47

Daily control level: 46.65







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MARKET BRIEFING – LONDON OPEN 05.11.2015




During yesterday’s afternoon testimony to the House Financial Services Committee in Washington D.C, the Federal Reserve chairwoman laid out the case for an increase in the Federal Funds rate taking place on December 15-16.

In an interesting debate, Mr. Brad Sherman who is affiliated to the Democratic Party and a member of the United States House of Representatives for the state of California championed the need for delaying a rate increase until the Spring of 2016.

However, the line Mr. Sherman took was a somewhat unorthodox line as he called on the guidance of a higher authority in the form of God.

Sherman said. “God’s plan is that things rise in the spring, and so if you want to be good with the Almighty, you might want to delay until May.”

Yellen’s, however, ignored for calls of divine intervention by saying. “What the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labour market and to return inflation to our 2% percent target over the medium term. If the incoming information supports that expectation then our statement indicates that December would be a live possibility”.

Although Mr. Sherman’s comments might seem as an interesting sideshow to the real debate that is now taking place over the timing of the first interest-rate increase, the comments expressed by this politician does in some way highlight the divisions in opinion that is currently gripping the financial markets and to some extent the Federal Reserve Open Market Committee.

Janet Yellen is, of course, trying to prepare the ground for a rate increase. In itself, a more hawkish tone that was adopted yesterday will cushion the blow when rates do eventually increase.

The market is currently pricing a 50 / 50 coin toss chance that the FOMC will increase rates in December. However, we do have a lot a data to come before the committee members have to make their decision.

If we see an improvement in data then the possibility of a rate increase will be enhanced. We will get out first clues tomorrow afternoon when the Bureau of Labor Statistics publishes the latest job numbers with the Non-Farm Payrolls and Average Hourly Earnings as always being of paramount importance.









EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.0960

Target 2: 1.0770

Projected range in ATR’s: 0.0098

Daily control level: 1.1050




GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5470

Target 2: 1.5250

Projected range in ATR’s: 0.0088

Daily control level: 1.5445




USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 122.30

Target 2: 120.80

Projected range in ATR’s: 0.76

Daily control level: 120.60





USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.000

Target 2: 0.9850

Projected range in ATR’s: 0.0080

Daily control level: 0.9800



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3265

Target 2: 1.3030

Projected range in ATR’s: 0.0116

Daily control level: 1.3050



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7215

Target 2: 0.7100

Projected range in ATR’s: 0.0072

Daily control level: 0.7110



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1121.00

Target 2: 1093.00

Projected range in ATR’s: 14.15

Daily control level: 1138.55



OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 48.65

Target 2: 45.60

Projected range in ATR’s: 1.53

Daily control level: 48.85












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MARKET BRIEFING – LONDON OPEN 06.11.2015



Yesterday lunch time the Bank of England announced that they would keep their Official Bank Rate on hold at 0.50%.

The decision by the Monetary Policy Committee in favour of not moving to increase interest rates from the current levels was in line with expectations.

The official voting for the Bank Rate of 1-0-8 was also in line with expectations. The lone dissenter on the Bank of England Monetary Policy Committee was once again Ian McCafferty.

Mr. McCafferty argued in favour of increasing interest rates by 25 basis points from 0.50% that they have stood at since March 2009 to 0.75%.

However, what did surprise the markets, was both the Bank of England Inflation Report and the subsequent press conference which conveyed a message that was extremely doveish.

The Bank of England released some forecasts and revisions which were more or less in line with previous releases.

The Bank of England, however, did emphasize downside risk to inflation and assumed an interest rate of only 0.8% in early 2017. This is due to concerns surrounding global growth.

This is in stark contrast to the Federal Reserve which removed external country factors which have been identified in China, the Emerging Markets and closer to home in the Euro-Area.

This news sent traders long of the British Pound looking for cover as Cable crashed and EURGBP rallied.

Until recently, many commentators argued for and some expected the Bank of England to move on interest rates before Janet Yellen and her colleagues on the FOMC took action of their own.

However, the doveish surprise that was delivered yesterday has seemingly ended this scenario. With the Federal Reserve poised to increase its own Fed Funds interest rate, the divergence between the British and United States interest rate forward forecasts has become very apparent.

This divergence between the United States and United Kingdom interest rate expectations if confirmed by a December lift off by the FOMC has the potential to drive down Cable to levels below 1.5000.








EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.0975

Target 2: 1.0790

Projected range in ATR’s: 0.0097

Daily control level: 1.1050




GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5300

Target 2: 1.5100

Projected range in ATR’s: 0.0098

Daily control level: 1.5400




USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 122.50

Target 2: 121.00

Projected range in ATR’s: 0.78

Daily control level: 120.60



USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.0000

Target 2: 0.9865

Projected range in ATR’s: 0.0080

Daily control level: 0.9880




USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3275

Target 2: 1.3060

Projected range in ATR’s: 0.0109

Daily control level: 1.3140



AUDUSD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 0.7215

Target 2: 0.7070

Projected range in ATR’s: 0.0072

Daily control level: 0.7125



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1118.00

Target 2: 1090.00

Projected range in ATR’s: 14.26

Daily control level: 1111.00



OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 47.60

Target 2: 44.50

Projected range in ATR’s: 1.51

Daily control level: 47.20







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MARKET BRIEFING – LONDON OPEN 09.11.2015



Friday’s stunning United States Jobs Report saw both the Average Earning and Non-Farm Payrolls numbers catch many traders. This latest news has greatly increased the odds of the US Federal Reserve moving on rates at this coming December meeting.

Unless the December Jobs Report turns out to be a complete disaster, many market participants now expect that the FOMC Chairwoman, Janet Yellen, and her colleagues will increase the Fed Funds rate by 25 bp.

The certainty that such an event will happen has highlighted the growing divergence between the Federal Reserve and its counterpart across the globe which are either increasing stimulus or being extremely reticence in indicating when rates will increase.
The contrast is so obvious across the Atlantic in London. Mark Carney, the Bank of England Governor only last week was very clear in his views that the UK was somewhat far away from moving on interest rates.

Not so long ago, there was much discussion on the Bank of England moving on rates before the US Federal Reserve. However, it is now very obvious that the Bank of England will take a patient line and allow the US to move ahead on rates before any move on tightening is made.

Last week’s events reinforce the view that the US greenback, despite the huge debt burden of the Federal Government will continue to be the world’s reserve currency of choice and that the US Federal Reserve is the leading central bank.

Time will tell if another currency can claim the US Dollar’s Crowne, but it would appear that this possibility is many economic cycles away.





EURUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.0835

Target 2: 1.0620

Projected range in ATR’s: 0.0108

Daily control level: 1.0900


GBPUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1.5160

Target 2: 1.4940

Projected range in ATR’s: 0.0108

Daily control level: 1.5400



USDJPY

The intraday technical outlook

Trend 1 hour: Up

Target 1: 124.10

Target 2: 122.45

Projected range in ATR’s: 0.86

Daily control level: 120.60



USDCHF

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.0130

Target 2: 0.9965

Projected range in ATR’s: 0.0084

Daily control level: 0.9880



USDCAD

The intraday technical outlook

Trend 1 hour: Up

Target 1: 1.3415

Target 2: 1.3190

Projected range in ATR’s: 0.0114

Daily control level: 1.3140




AUDUSD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 0.7200

Target 2: 0.6950

Projected range in ATR’s: 0.0077

Daily control level: 0.7170



GOLD

The intraday technical outlook

Trend 1 hour: Down

Target 1: 1104.00

Target 2: 1074.00

Projected range in ATR’s: 15.05

Daily control level: 1111.00



OIL

The intraday technical outlook

Trend 1 hour: Down

Target 1: 46.60

Target 2: 43.60

Projected range in ATR’s: 1.54

Daily control level: 46.35