Market Analysis

08/19/2014 - 18:14
Key market drivers for August 20 (Wednesday) AUD: RBA Gov Stevens Speaks (23:30 GMT on Aug 19) GBP: Bank of England's August meeting minutes (08:30 GMT) CAD: Wholesale Sales (12:30 GMT) USD: FOMC Meeting Minutes (18:00 GMT) Trade ideas EUR/USD fell on Tuesday reaching our targets and going even lower touching support at $1.3320. The level of $1.3295 (Nov. low) now seems as close as ever. The pair should find some initial support at this point. The close below $1.3340 will strengthen the case...
08/19/2014 - 12:22
GBP/USD fell to $1.6623, the lowest level since the beginning of April closing this week’s opening gap. Pound weakened as the UK inflation data came lower than expected. Note though that the inflation (1.6%) is still rather close to the Bank of England's 2% target. Further dynamics of GBP will depend on the market's expectations ahead of the BoE's minutes release on Wednesday, 08:30 GMT).
08/18/2014 - 12:05
Authored by Alex Weber Time has come to analyze my favorite FX cross – EUR/JPY. The pair has been cramped in a clear downward channel since May. Bearish widening daily Ichimoku is a good confirmation of the medium term descending tendency. The 100-day moving average crossed the 200-day moving average upside down at the beginning of August – another signal for growling bears to attack. Wait. I know my words sound persuasive enough, but you shouldn’t go short right now. Take a look at the MACD...
08/15/2014 - 14:36
Kira Iukhtenko, FBS financial analyst Japan Q2 GDP release was one of the most discussed events on the past week. Economy contracted by almost 7% from April to June following a 6% growth in Q1. It was the sharpest decline since the year 2011, when a powerful earthquake paralyzed the country. On the one hand, Abe government warned us about a short-lived economic slowdown following the sales tax hike in April: Japanese households strongly reduced consumption in Q2 after mass purchases in Q1....
08/15/2014 - 14:33
Kira Iukhtenko, FBS financial analyst The cable had another bearish week, plummeting below $1.6700 on weak UK wage growth and dovish BOE Quarterly Inflation report. Even as the employment increased and unemployment declined, the average weekly earnings fell by 0.2% y/y – this was the first negative reading in 5 years. The Bank of England slashed its 2014 wage growth forecast from +2.5% to 1.25%, dampening the rate hike expectations in the year 2014. Real wage growth is lagging far behind the...
08/15/2014 - 12:08
Elizaveta Belugina, FBS leading analyst During the past week there were several weak releases in the euro area: the industrial production declined, while GDP growth in the second quarter turned out to be zero. At the same time, deep down everyone was probably expecting something like this, so the market’s reaction was modest. At the same time, with the course of time bad data will do their job: the difference in condition of the US and the euro zone’s economies is now evident, and the pressure...
08/15/2014 - 11:55
Elizaveta Belugina, FBS leading analyst During the second week of August US dollar strengthened versus EUR, GBP and JPY, but weakened versus commodity currencies – AUD, NZD and CAD, as well as against gold. The most important event in the past week in the US was a substantial decline in the retail sales growth. This release encouraged the speculation that the Federal Reserve won’t raise the interest rates earlier than expected and diminished the enthusiasm of the dollar bulls.  Next week we’ll...
08/15/2014 - 11:26
Strategists at JP Morgan recommend buying USD/JPY at 102.50 with a stop at 100.55 and with no preset target. In their view, USD/JPY remains undervalued according to the fair value model and has relatively clean speculative positions.

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