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Week Ahead – US jobs report in focus after cautious Fed minutes

Posted on May 26, 2017 at 3:50 pm GMT

The main focus of the coming week will be the non-farm payrolls numbers out of the US as a positive report could pave the way for a June rate hike by the Fed. Japan will also have a busy data week, while Eurozone flash inflation and UK PMIs will be important too. Eurozone flash CPI to show inflation falling It will be a very quiet start to the week as Chinese, UK and US markets will be shut for a [..]

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Forex Market Review (European Session) – Dollar rebounds after US GDP revised up; sterling falls another leg lower

Posted on May 26, 2017 at 2:39 pm GMT

The dollar rebounded after GDP revisions showed economic growth in the US slowed less sharply in the first quarter than initially thought. Sterling extended losses versus the greenback after the US data. Oil stabilized following the post-OPEC tumble. The dollar had been sliding in European trading to sub-111 yen levels but rebounded after the release of US GDP revisions and durable goods data. The rally stalled at 111.33 yen after the final reading of the University of Michigan consumer sentiment [..]

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Technical Analysis – USDJPY in consolidation phase, capped at 112-yen

Posted on May 26, 2017 at 7:38 am GMT

USDJPY remains stuck within the Ichimoku cloud after falling from a high of 114.36 hit on May 11. From here prices reversed lower due to reaching overbought levels as indicated by the RSI rising above 70. There is strong resistance in the area between the top of the cloud at 111.80 and the key 112-yen level. Support is being provided by the 50% Fibonacci retracement level of the upleg from 108.12 to 114.36. This level lies at 111.23 and is [..]

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Forex Market Review (Asian Session) – Oil slides after OPEC fails to do more; sterling drops on polls

Posted on May 26, 2017 at 7:09 am GMT

Sterling was one of the worst performing major currencies against the US dollar after tumbling on a recent poll showing UK Prime Minister Theresa May’s lead was falling. Oil slid on disappointment following the OPEC deal. Investors were hoping for deeper cuts at the OPEC gathering in Vienna yesterday that also included some non-OPEC producers. A deal was reached to extend a current output cut agreement by another nine months, taking it to March 2018. This was already priced in [..]

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Investment Theme – Fed rate hike path supports broader trend of dollar strength

Posted on May 25, 2017 at 2:48 pm GMT

The minutes of the Federal Reserve’s May policy meeting that were released on Wednesday indicated that the US central bank remained on track for more rate increases this year. Most FOMC members thought it was appropriate to hike soon. This was interpreted as meaning a move by the Fed could come as early as the June policy meeting. While this should be positive for the dollar, the market reaction was to sell off the greenback and US Treasury yields fell [..]

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Forex Market Review (European Session) – Dollar still weighed by Fed minutes; Oil falls after OPEC extends cuts

Posted on May 25, 2017 at 2:17 pm GMT

The US dollar remained weighed by yesterday’s FOMC minutes where Fed policymakers appeared a bit more concerned about the soft patch affecting the US economy. Crude oil was also in focus as OPEC and some non-OPEC countries met in Vienna to discuss whether to extend the output cut deal, which is due to expire at the end of June. The greenback bounced back in Thursday’s European session, rising as high as 111.94 yen from yesterday’s low of 111.47 yen, before [..]

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Forex News – UK GDP unexpectedly revised lower; Sterling drifts lower

Posted on May 25, 2017 at 10:40 am GMT

Economic growth in the UK was unexpectedly revised lower in the first quarter of 2017, as industrial production and services rose by less than initially estimated. Quarter-on-quarter growth was revised down from 0.3% in the preliminary reading to 0.2% in the second estimate, giving a year-on-year rate of 2.0%. Expectations were for both the quarterly and annual figures to remain unrevised at 0.3% and 2.1% respectively. They compare with growth of 0.7% q/q and 1.9% y/y in the final three [..]

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Technical Analysis – USDCAD turns bearish after dip below 50-day moving average

Posted on May 25, 2017 at 7:58 am GMT

USDCAD has turned bearish in the medium-term, retracing more than half of the uptrend from 1.3222 (April 13 low) to 1.3792 (May 5 high). The break below the key 1.3500 level and below the 50-day moving average this week accelerated a decline to the 1.3400 area.  A top is now in place at the May 5 high of 1.3792 as the market reversed lower after reaching overbought levels when RSI rose above 70 in early May. RSI has now dipped [..]

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Forex Market Review (Asian Session) – Dollar lags after Fed minutes; loonie hits new month high; oil gains ahead of OPEC

Posted on May 25, 2017 at 7:26 am GMT

The US dollar was heavy after the FOMC minutes, while the Canadian dollar outperformed across the board on an upbeat Bank of Canada. Oil prices extended gains ahead of the OPEC meeting in Vienna today. The minutes from the Fed’s May policy meeting showed some caution, despite most FOMC members indicating that another interest rate increase would be appropriate soon. The probability of a rate hike at the June FOMC meeting remains quite high – above 80% – but the [..]

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Investment Theme – Euro rally overdone or start of new uptrend?

Posted on May 24, 2017 at 3:19 pm GMT

The euro’s relief rally following the receding threat of right- and left-wing populism in Europe after Macron’s election win in France has turned the euro to one of this year’s best performing currencies against the US dollar. The presidential election in France was seen as a key test for European political stability, as well as the fate of the European Union (EU). A victory for the far-right candidate, Marine Le Pen, could have boosted far right movements in other European [..]

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