Instaforex Daily Analysis

03-05-2015, 02:28 PM,
FXStreet (Mumbai) - USD/CHF extends its upward trajectory in the early European morning, mostly driven by the upsurge in the US dollar across the board sitting at fresh multi-year top.

USD/CHF on its way to fresh two-month highs

Currently, the USD/CHF trades 0.25% higher at 0.9658 levels, hovering close to fresh seven-week highs posted at 0.9678 levels in the previous session. The pair prolongs its uptrend as traders continue to cheer robust US services PMI, shrugging off a modest fall in the ADP report. Moreover, the gains accelerated in USD/CHF as the US dollar soars to fresh twelve year highs against its major peers.

The US dollar index which measures the relative strength of the greenback against a basket of six major currencies reached fresh twelve year highs at 96.26 levels, recording a 0.29% gain on the day.

USD/CHF Technical Levels

To the upside, the next resistance is located at 0.9678 (March 4 High) levels and above which it could extend gains to 0.9700 levels. To the downside, immediate support might be located at 0.9604 (5-DMA) levels and below that at 0.9550 (100-DMA) levels.
03-05-2015, 02:29 PM,
FXStreet (Barcelona) - The TradeTheNews Team shares the key developments in the Australian market – Trade balance, Retail sales data and RBA Deputy Governor Lowe’s comments.

Key Quotes

“AUD/USD was not particularly impacted by either China 2015 announcements or the local economic data out of Australia.”

“January trade balance was a deficit for the 10th consecutive month but mainly because imports recovered with a 3% growth vs -1% in the prior month.”

“Exports to China were down 16%, and shipments of oil and iron ore were down 24% and 9% respectively.”

“Australia retail sales were in line with consensus, led by purchases of Clothing, footwear and personal accessory category of 0.7%.”

“RBA Dep Gov Lowe noted AUD is now much closer to fair value but still too high for the state of the economy, elevated by easy policies of other central banks, adding households are reluctant to take on leverage and reiterating the central bank can ease further if needed.”
03-05-2015, 02:30 PM,
FXStreet (Barcelona) - The AceTrader Team comments on the prospects of today’s ECB meeting, expecting the central bank to unveil only some of the details of its EUR 1tln+ purchase program, and lift growth forecasts in lieu of the recent positive data out of Eurozone.

Key Quotes

“Reuters reported keen to keep a low profile over the Greek crisis, the ECB will focus on improved growth prospects when it meets today and unveil some but not all the details of its 1 tln euros-plus bond buying plan.”

“Meeting in Cyprus, the ECB will keep rates on hold, likely lift growth forecasts to reflect a string of positive data surprises but cut inflation projections as it incorporates the full effect of a dramatic oil price fall, backing its case to buy 60 bln euros worth of bonds a month from March to spur inflation.”

“Markets will be looking for how quantitative easing will work, when the buying will start, whether it applies to paper with negative yields and how the purchases will be distributed along the yield curve.”

“Anticipation of the QE programme has driven euro zone borrowing costs down to the point where Spain can borrow for 10 years at just 1.3% and investors actually pay for the privilege of lending to Germany for 5 years.”

“Yields in Italy, Spain and Portugal dropped to record lows this week.”
03-05-2015, 02:31 PM,
FXStreet (Mumbai) - EUR/USD freefall continues in the early European morning and plunges to fresh multi-year lows, as EUR bears continue to dominate the market ahead of German data and key ECB Meeting later today.

EUR/USD slips from 1.1056 levels

The EUR/USD now collapsed -0.41% to the lowest levels since Set 2003 at 1.1030 levels, and is set to test crucial 1.100 psychological levels. EUR/USD remains under pressure as traders remain nervous ahead of ECB meeting as all eyes will be on the release of updated macroeconomic forecasts including GDP growth and CPI. Traders will also scrutinize the bank's details on the framework of the soon-to-be-launched sovereign bond-buying program.

EUR/USD tumbled to fresh twelve lows as weaker euro zone PMIs, while on the flip side, solid US figures, continue to weigh on the main currency pair. Also, a strengthening US dollar, sitting at twelve year highs undermines the pair.

Meanwhile, markets now shift their attention towards German factory orders, key ECB meeting and US employment numbers due later in the day for fresh direction on the currency pair.

EUR/USD Technical Levels

The pair has an immediate resistance at 1.1082 (Today’s High) levels, above which gains could be extended to 1.1100 levels. On the flip side, support is seen at 1.100 (Sept 2003 Lows) levels, below which it could extend losses to sub 1.10 mark.
03-05-2015, 02:32 PM,
FXStreet (Barcelona) - Emmanuel Ng of OCBC Bank, views that GBP/USD is likely to remain heavy ahead of the ECB meet and BOE interest rate decision.

Key Quotes

“With the violation of the 55-day MA (1.5300) on Wednesday, a heavy tone from the EUR (and in spite of a still heavy EUR-GBP) may continue to infect the GBP-USD ahead of the ECB/BOE later today.”

“Next key support is expected towards 1.5200.”
03-05-2015, 02:33 PM,
FXStreet (Barcelona) - With ECB set to announce the details of its purchase program today, Greg Gibbs, FX Trading Strategist at RBS, notes that Draghi might also be quizzed regarding the conditions for providing term liquidity to Greece.

Key Quotes

“Tonight, the ECB is set to announce finer details of its QE plan to purchase EUR60bn per month until Sep-2016, with the intention to continue it until there is a sustainable adjustment in the path of inflation towards the 2% target.”

“It will release updated economic forecasts which will help set expectations on how long the QE program may last. However, it is unlikely that the market will be forward-looking enough to see the end of this QE program for some time.”

“Continuing in the background are the debt financing negotiations with Greece. Draghi will be quizzed in the press conference on how and under what conditions the ECB will continue to provide term liquidity to Greece.”

“Greece faces maturing loans to the IMF and refinancing Treasury bills in coming weeks. There are some questions over whether it has the reserves to get past this month.”
03-05-2015, 03:36 PM,
FXStreet (Mumbai) - The GBP/JPY extended sell-off on Thursday to trade below the 50% Fib retracement (189.68-175.48) located at 182.58.

Pound to track movement in the EUR

The British Pound is likely to take cues from the movements in the shared currency in the absence of fresh economic data out of the UK. A weaker-than-expected UK services PMI data on Wednesday did trigger a sell-off in the GBP pairs, although, the fall was exaggerated due to the fall in the EUR/USD to the levels last seen in 2003. The weakness in the European equities could also weigh on the GBP/JPY pair.

GBP/JPY Technical Levels

The pair currently trades at 182.51. The immediate resistance is seen at 182.58, above which gains could be extended to 183.03 (100-MA). On the flip side, support is seen at 182.00 and 181.62 (Dec. 16 low).
03-05-2015, 03:37 PM,
FXStreet (Mumbai) - The New Zealand dollar dived deeper in to red and reached fresh two day lows against its US counterpart in the European session, Reserve Bank of New Zealand (RBNZ) revealed that it was considering policies to curb investor activity in the housing market.

NZD/USD supported by 50-DMA

Currently, the NZD/USD pair fell by -0.67% at fresh session lows of 0.7534 levels, retreating from day’s high previously posted at 0.7597 levels. NZD/USD extended losses from the previous session after RBNZ release stated that policymakers have begun a consultation period with the public to seek a viable definition of a property investment loan.

Moreover, markets viewed the RBNZ move would likely delay the need for future interest rate hikes, with potential curbs on housing investment loans which dragged the Kiwi lower.

NZD/USD also came under pressure after Chinese officials downgraded the annual economic growth target "about 7%" growth this year, instead of last year's 7.5% target. China is New Zealand’s top trading partner.

In the day ahead, traders will now focus on US unemployment claims and factory orders data for further dollar moves.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7600 levels and above which it could extend gains to 0.7615 levels. To the downside immediate support might be located at 0.7530 (50-DMA) levels below that at 0.7500 levels.
03-05-2015, 03:39 PM,
FXStreet (Edinburgh) - The Swiss franc is edging higher vs. its European peer on Thursday, sending EUR/CHF to test session lows in the mid-1.0600s.

EUR/CHF focus on the ECB

No data releases in Switzerland today will leave all the attention to the European Central Bank monetary policy meeting. Despite market consensus is not expecting surprises, the ECB still need to clarify some aspects of the implementation of the bond-buying programme.

Next of significance in the Alpine economy will be the inflation figures for the month of February, due tomorrow. Prior surveys expect consumer prices to have contracted 0.6% on a yearly basis and 0.0% MoM.

EUR/CHF levels to consider

The cross is now losing 0.08% at 1.0658 and a breach of 1.0610 (low Feb.27) would expose 1.0554 (low Feb.16) and finally 1.0414 (low Feb.9). On the other hand, the initial hurdle lines up at 1.0800 (high Feb.25) ahead of 1.0811 (high Feb.20) and then 1.1000 (psychological level).
03-05-2015, 03:39 PM,
FXStreet (Mumbai) - EUR/GBP steadied in the early European morning, putting a halt to its downslide, after German data which showed that factory orders in Germany slid into negative territory in January

EUR/GBP remains below 0.7300

The EUR/GBP pair trades -0.13% lower at 0.7248, retracing slightly from session lows posted at 0.7240 levels before EZ data. EUR/GBP continues its downward momentum, although remained little affected by downbeat German factory orders numbers which revealed Industrial orders in the euro area's number one economic powerhouse fell 3.9% in January, measured on a monthly basis, while markets had expected the reading to post a 1.0% decline. On the other end, the pound keeps losses near lows on the back of a stronger greenback.

Meanwhile, the data failed to create any stir in the market as traders mainly focus on the BOE and ECB meeting later in the day for fresh incentives.

EUR/GBP Levels to consider

To the upside, the next resistance is located at 0.7262 and above which it could extend gains to at 0.7300 levels. To the downside immediate support might be located at 0.7230 and below that at 0.7200 (2007 lows) levels.
03-05-2015, 03:40 PM,
FXStreet (Barcelona) - The TD Securities Team comments on today’s ECB meeting, expecting the central bank to upgrade GDP and CPI forecasts, and noting that the impact on EUR/USD won’t be significant.

Key Quotes

“For today’s ECB meeting, this should not be a particularly market moving one for once, as the major announcements have been made, and perhaps the biggest risk around EURUSD is the congestion around 1.10 for options and technical levels.”

“There are still a few operational details which needed to be clarified in terms of exactly when asset purchases will begin and under exactly what rules, which may lead to some relative shifts in the EGB market, while having the rubber finally meet the road in March in starting purchases should reinforce the trend for euro lower.”

“GDP forecasts will need to be upgraded simply because now they must include the impact of QE, which will likely add about 0.5pp to the 2015 and 2016 figures.”

“This should also see the CPI forecasts for 2016 upgraded slightly (2015 is a done deal to be cut), but the one key will be 2017 HICP. The ECB must signal that they announced enough policy measures to return that to target, which means we would expect a forecast within 1.7-2.0%.”
03-05-2015, 03:41 PM,
FXStreet (Mumbai) - The success of Greece's reform plan depends on how they will be implemented, the International Monetary Fund (IMF) managing director Christine Lagarde said on Wednesday.

Key Quotes:

"They have four months within which to put together and agree with their partners, particularly the members of the euro zone, what their framework for growth will be, what reforms they're going to undertake, what fiscal policy they will apply, how they will develop in practice their goal of making the rich pay, bringing more equality in their society, go after corruption,"

"We need to see in practice how it's going to be implemented,"

They've made progress over the years,"

"But now clearly number one, they should not lose the benefit of that progress and, two, they really have to reform in-depth the economy so that it works, so that it's attractive again and so that people want to invest in Greece, so that people want to lend to Greece."
03-05-2015, 03:42 PM,
FXStreet (Barcelona) - The AceTrader Team views that EUR/USD should remain a sell on recovery towards 1.1000, with yesterday’s price action suggesting that the downtrend has resumed.

Key Quotes

“Looking at the hourly n daily charts, y'day's breach of Jan's trough at 1.1098 to a fresh 11-year low at 1.1062 suggests LT downtrend fm 2008 record high at 1.6040 has resumed n further weakness twd 'psychological' lvl at 1.1000 is on the cards, a daily close below wud extend marginally, however, as hourly n daily indicators have displayed bullish convergences, steep decline below there is unlikely to be seen n reckon 1.0956, being 50% projection of intermediate fall fm 1.2254-1.1098 measured fm 1.1534, shud remain intact n yield a long-over due correction next week.”

“On the upside, a daily close abv 1.1155 wud be the 1st signal temporary low has been made n yield retrace. twd 1.1241/45.”

“Today, euro is expected to remain under pressure ahead of ECB press conference where President Draghi will announce details of QE launch.”

“Selling on recovery is the way to go n only abv 1.1155 wud signal a temp. low is in place.”
03-05-2015, 04:50 PM,
FXStreet (Barcelona) - The KBC Bank Research Team gives the key technical levels for EUR/USD, maintaining their sell-on-upticks approach for the pair.

Key Quotes

“The Technical picture for the EUR/USD cross rate turns further negative as the pair dropped below the previous cycle low. On the downside, next support is seen at 1.0765 and 1.0504 (2003 lows).”

“The pair is moving into oversold territory, but it is not in an extreme position yet.”

“On the topside the 1.13/1.1390 area is a first reference short-term.”

“A rebound north of 1.1534 would question the established downtrend.”

“We maintain a EUR/USD sell-on-upticks approach but still hope for higher levels to add EUR/USD short exposure.”
03-06-2015, 09:15 PM,
Technical outlook and chart setups: Silver is also testing its recent lows at $16.00 levels before resuming its rally towards $19.00 and $21.00 levels respectively. The metal is also holding the fibonacci 0.618 support of the rally between $14.75 and $18.50 levels for now. Bulls should be poised to remain in control till prices stay above $15.50 levels. Hence, it is recommended to remain long with risk at $15.50 levels. Immediate support is seen at $16.00 levels (interim), followed by $15.50 and lower while resistance is seen at $17.40/50 levels, followed by $18.40/50 and higher respectively.
Trading recommendations: Remain long for now, stop at $15.50, a target is open. Good luck!

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