The FOMC meeting: a small step towards the rate hike, but it all depends on inflation.
EUR/USD approaches the 2014 lows on the increased Fed hike expectations. Friday’s focus will be on the GfK German Consumer Climate (7:00 GMT).
USD/CHF, EUR/CHF: Swiss franc fell as the SNB introduced negative interest rates.
USD/JPY: recovered from support, next stop – the Bank of Japan’s meeting.
GBP/USD: tested 1.5540, but remains range bound.
Commodity currencies recover versus the USD amid improved risk...
EUR/USD pushed higher on the back of the better-than-expected euro zone’s PMI and ZEW economic activity indices. The pair met resistance at 1.2560 as we speak. Push higher would open the way to 1.2600 and then, potentially, to 1.2900. On Wednesday euro zone is scheduled to release final November CPI (forecast: unchanged at +0.3%). However, the pair will mostly be driven by the Fed’s meeting expectations.
GBP/USD rose as the USD was broadly weaker on Tuesday plus the British banks stress tests...
Last week the markets were focused on the ECB’s TLTRO auction that took place on Thursday. In December European banks took 129 billion of cheap loans. The figure is above the September reading of 83 billion, so the market reaction was mildly positive. However, this is far below the minimum level of 200 billion needed to help the ECB to expand its balance sheet by 1 trillion euros.
As a result, the long-term sentence to the euro has finally been pronounced: euro zone clearly needs...
USD/JPY dipped to 117.40 on the past week on the wave the overall US dollar selloff. As can be seen from the weekly chart, the market formed a bearish engulfing candle. The pair still remains badly overbought and we concede more bearish correction to follow. Break below 117.00 yen would open the way to 115.00 and then, potentially, to 112.00 yen by the year-end. We will review this pullback as a good opportunity to buy US dollar on dips.
Next week the both the US Fed and the Bank...
by Leonid Varfolomeev
D1. The pair bounced from the 7/8 (121.88) level, then broke through 6/8 (118.75), as well as CTD1. Judging by this, a more global pullback to the 5/8 (115.63) level looks like the most likely scenario. Return from the current positions to 7/8 will take place, in case of a break through 6/8 upwards by one third of the levels width.
H4. After breaking of 8/8 (118.75), the price is trying to consolidate below the level. CTH4 has already changed its color, and thus, combined...
Analysts at BNP Paribas recommend selling EUR/USD in the year 2015, targeting 1.1500 in the medium-term.
In their view, monetary policy divergence that drove EUR/USD lower in 2014 should persist in the year 2015. Expectations for the Fed's policy tightening in June conflict with a potential balance sheet expansion by the ECB.
Asian markets came under pressure as data releases highlighted the weakness of the region’s key economies. China's imports fell surprisingly in November, showing weak domestic demand. AUD/USD gapped lower and fell to 0.8270 on the release.
Japan’s Q3 GDP was revised down to -0.5% from -0.1%. USD/JPY touched a fresh multi-year high of 121.80 yen.
EUR/USD consolidates around 1.2280. Economic calendar for today is rather light with the Eurogroup meeting as a key event. GBP/USD slipped to a new low...
On Friday market attention will be glued to the US Non-Farm Payrolls release at 13:30 GMT. According to the forecast, the US economy created 231K new jobs in November (slightly more than in October). The figure will be crucial for all the currency pairs as it will impact Fed’s rate hike expectations.
On Thursday EUR/USD has recovered a figure from the multi-month low of 1.2300 as the ECB announced no QE. According to Mario Draghi, ECB could alter stimulus measures in early 2015 if needed (not...