Market news and trade recommendations by FBS

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Market News

May 26: American Session

Tatiana Norkina, analyst at FBS

The U.S. dollar is showing signs of weakness due to the absence of major market participants from the U.S. and the UK who are celebrating national holidays. The dollar index has fallen by 0.15%, while stock indexes are showing a positive trend, adding about 0.38%.

Against this background, the EUR/USD pair has compensated for its Friday's fall, returning to the 1.3650 level. The GBP/USD currency pair keeps trading below the 1.6850 resistance. The dollar is weakening against the franc as well: USD/CHF has decresed to the 0.8940 area, correcting after a three-weeks growth. The rate of USD/JPY has also tumbled, to the 101.80 support area. However, the short-term trend gives hope for further growth.

More:
http://fxbazooka.com/en/news/show/1295

 

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Market News

May 27: Asian session

Asian stocks climbed for a fourth day. MSCI Asia Pacific Index added 0.2%. Nikkei 225 is up by 0.65%. USD/JPY stays just below 102.00. Japan’s currency dropped as demand for haven assets declined on speculation that policy makers globally will add to measures supporting growth and before Bank of Japan Governor Haruhiko Kuroda speaks at a conference tomorrow.

Commodity currencies are in demand on Tuesday. AUD/USD strengthened after four days of a sideways trade, hitting a session high of $0.9275. However, the selling pressure remains pretty high above $0.9260. NZD/USD moved up by around 35 pips to $0.8580, but gave some gains back. Gold loses ground, weakening below $1,288.

EUR/USD rose to $1.3668. US dollar is rather weak before data today forecast to show durable goods orders fell. All in all, euro was set for its biggest monthly drop since January after ECB President Mario Draghi signaled yesterday policy makers are ready to expand stimulus should inflation slow. GBP/USD edged up to $1.6869.

More:
http://www.fxbazooka.com/en/news/show/1296

 

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Market News

Key option levels (May 27)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3620 (large), $1.3625, $1.3650, $1.3700/05 (large);

GBP/USD: $1.6900;

USD/JPY: 101.00, 102.00;

AUD/USD: $0.9175, $0.9200, $0.9240 (large), $0.9250/55 (large), 0.9265 (large);

USD/CAD: 1.0905/20 (large);

EUR/GBP: 0.8050, 0.8100 (large).

More:
http://www.fxbazooka.com/en/news/show/1297

 

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Market News
27 May 2014

BoJ pushes Abe to further reforms

Japan risks low economic growth even as policy easing spurs inflation, the Bank of Japan Deputy Governor Kikuo Iwata said in a speech yesterday. He underlines that the GDP growth can't be achieved only through the monetary policy, it is also a task of the government.

“The BOJ is stepping up its rhetoric to push the government to raise Japan’s potential,” RBS economists say. “Iwata is basically saying that the BOJ is achieving results, so now it is time for the government to show its commitment to ending deflation.”

Japanese economic growth hit a 2-year high of 5.9% y/y in Q1. First-quarter growth was mainly driven by spending increase before the April 1 sales-tax hike. However, GDP is forecasted to contract by 3.4% y/y in Q2 as consumers cut back the purchasing.

The BOJ’s stimulus helped lift core inflation to +1.3% in March 2014 from -0.4% in April 2013 when the central bank started easing a campaign of policy easing. However, it’s not all so simple. “The BOJ is aware that if the government doesn’t make efforts on this, the public may start to complain about the inflation policy,” analysts at Bank of America Corp. in Tokyo explain.

Japan’s Prime Minister Shinzo Abe is currently preparing for the next phase of Abenomics. Many market participants fear that the so called Third Arrow of the government’s growth strategy has got “lost in flight”. Investors would like the planned economic restructuring to result in higher wages growth, helping the consumers to withstand the rising prices. The core question these days is whether the Abe's strategy will be really effective.

More:
http://www.fxbazooka.com/en/news/show/1298

 

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Market News

May 27: American Session

Tatiana Norkina, FBS analyst

Strong growth of index "CB Consumer Trust" strengthened market sentiments and contributed to a very positive image of the major U.S. stock exchanges. Thus, DJIA added immediately about 0.50%, while the S&P500 - 0.60%. Also the dollar index increases - more than 0.20% - exceeding the 80.50 mark.

In currency markets, there is also strengthening of American against major world currencies. Thus, EUR/USD pair dropped to minimums of the last two days - 1.3615; currency pair GBP/USD had fallen to the strong support of 1.6800, after a day of testing the level of 1.6880. At the same time, the dollar strengthened against the franc, the pair USD/CHF has established a new maximum for the last two weeks, recovering to 0.8975 area. The currency pair USD/JPY finally broke the resistance figures 102.00 - trades are now held in the area of 102.10.

More:
http://www.fxbazooka.com/en/news/show/1299

 

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Market News

May 28: Asian session

Asian shares rose as US data added to evidence a recovery in the world’s largest economy is intact. The orders for US durable goods unexpectedly increased in April and consumer confidence perked up in May. The MSCI Asia Pacific Index gained 0.5%. Japanese Nikkei 225 rose by 0.5%.

USD/JPY keeps trading just below 102.00 after testing 102.14 yesterday. AUD/USD remains in a tight $0.9250/70 range, slightly below the yesterday’s $0.9280 peak. NZD/USD was a big mover, falling from $0.8570 to $0.8540. Kiwi was pressured by the big decline in business confidence (53.5 in May vs. 64.8 in April). Gold price plummeted by more than 300 pips yesterday, falling to the lowest level since early February. Rise in the US equities curbed demand for the precious metal as an alternative investment. Today XAU/USD opened with a bearish gap and consolidates around $1264.

EUR/USD edged down to $1.3630. GBP/USD is at $1.6800 after declining yesterday.

More:
http://www.fxbazooka.com/en/news/show/1300

 

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Market News

May 28: European session

EUR/USD is trading in the $1.3620. Data released in the euro area today was mostly disappointing. The number of unemployed people in Germany rose, French consumer spending declined. German import prices also fell, while the increase in the euro zone’s Money supply was lower than expected. GBP/USD fell to $1.6745. UK released lower CBI realized sale.

There is little on the data calendar for the rest of the day. Tomorrow the US will release its second estimate of Q1 GDP, widely expected to be revised lower from the initial 0.1% rise.

More:
http://fxbazooka.com/en/news/show/1301

 

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Market News

May 28: American Session

Tatiana Norkina, analyst at FBS

The dollar continues strengthening its position due to the pressure on the euro. In the absence of news factors from the U.S., the index has grown to the 80.60 level, adding about 0.20% at the moment. Stock indexes, however, are showing a decline: DJIA - -0.25%, S&P500 - -0.16%.

The EUR/USD currency pair has updated its yesterday's lows, falling to the 1.3595 support, and GBP/USD has collapsed significantly to yet another figure of 1.6700 again. At the same time, the USD/CHF pair has updated its highs again, recovering to the 0.8990 mark. USD/JPY has corrected to the 101.70 support after failing to consolidate above the 102.00 figure.

More:
http://fxbazooka.com/en/news/show/1302

 

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Market News

May 29: Asian session

USD/JPY declined to 101.64. Yen strengthened as the greenback’s appeal diminished after Treasury 10-year yields fell to a 9-month low relative to similar-maturity Japanese government debt.

AUD/USD strengthened by almost 70 pips to $0.9290. The pair initially dipped on the release of worse-than-expected Australia private capital expenditure report (-4.2% q/q vs. expected -1.6%). However, the Aussie found support at $0.9210 and pushed higher as the estimates for spending in 2014/15 all came above expectations, supporting the view that RBA will keep rates on hold in the nearest future.

NZD/USD consolidates around $0.8485 following the yesterday’s 100-pips drop to $0.8470. Kiwi fell to the lowest level in more than two months as market sentiment worsened following a drop in business confidence and a weaker forecast payout to dairy farmers from Fonterra Cooperative Group.

Gold consolidates around the yesterday’s low of $1256 – this was the lowest level since early February.

EUR/USD is trading just above $1.3600 after dipping to $1.3590. Euro was set for its biggest monthly drop since February 2013 before data tomorrow on German retail sales and Spanish inflation that may back the case for additional stimulus from the ECB. There are bank holidays in Germany, France and Switzerland today. GBP/USD rose by 20 pips from support at $1.6708.

More:
http://fxbazooka.com/en/news/show/1303

 

[riki143]

Market News

Key option levels (May 29)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3525, $1.3600, $1.3625, $1.3650 (large);

GBP/USD: $1.6700/15, $1.6900

USD/JPY: 101.50/65 (large), 101.95/102.00 (large), 101.20/30 (large), 102.50 (large);

USD/CAD: 1.0875, 1.0915/20 (large);

AUD/USD: $0.9200, $0.9220 (large), $0.9250 (large);

NZD/USD: $0.8500, $0.8525;

EUR/CHF: 1.2215, 1.2225.

More:
http://fxbazooka.com/en/news/show/1304

 

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Market News
29 May 2014

US GDP may decline

US GDP is due at 12:30 GMT. Analysts expect that American Q1 economic growth with be revised down from +0.1 to -0.6%.

US dollar is broadly weakening ahead of the release. Still, analysts at Banco Santander SA think that bad figures are caused by bad weather and are unlikely to alter the Fed’s outlook.

More:
http://fxbazooka.com/en/news/show/1305

 

[riki143]

Market News

May 29th: American session

Tatiana Norkina, an analyst at FBS

The appearance of the data on pending home sales in the U.S., worse than expected, weakened the U.S. dollar a little, its index is currently reduced to 80.50, down about 0.13 %. At the same time, the number of applications for unemployment benefits last week fell to 300 thousand, although the expected delivery was up to 318 thousand. Because of the mixed data, U.S. stocks opened uncertainly, the major indexes are around zero as a percentage change.


Consolidating takes place in currency markets today. The EUR/USD is held above support 1.3595, GBP/USD is trading slightly above the figure 1.6700. At the same time, the USD/CHF fell to 0.8960 support, after it could not overcome the two-days resistance of 0.8980, and the pair USD/JPY is testing support 101.50 again.

More:
http://fxbazooka.com/en/news/show/1308

 

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Market News

May 30: Asian session

Nikkei 225 is down by 0.2%. MSCI Asia Pacific stock index lost 0.1%, butheaded for its biggest monthly gain (3.4%) since September.

USD/JPY declined to 101.50 approaching yesterday’s low at 101.42. Yen strengthened as a government report showed inflation accelerated to 3.2%, the fastest in more than 20 years in April from 1.3% in March, reducing the prospect of additional stimulus by the Bank of Japan.

Demand for the commodity currencies in Asia was pretty high. AUD/USD extends the recovery on Friday, touching $0.9330 in the session – this is the highest level since May 20. NZD/USD recovered to $0.8515 following the yesterday’s dip to $0.8450. New Zealand building consents growth slowed from 9.2% to 1.5% in April. Gold price consolidates slightly above the yesterday’s low of $1251.4.

EUR/USD is trading in the $1.3605 area. GBP/USD rose a bit, to $1.6738.

More:
http://fxbazooka.com/en/news/show/1310

 

[riki143]

Market News

May 30: American Session

Tatiana Norkina, analyst at FBS

Negative statistics and guarded comments of FRS member Pianalto on the current U.S. economy state have put the dollar under pressure once again. Today, the U.S. dollar index is losing about 0.10%, sliding to the 80.40 mark. The major U.S. stock markets have opened without much optimism either: DJIA has lost about 0.20% already, S&P500 - 0.05%.

The world's major currencies, except for the yen, are strengthening against the American. Thus, EUR/USD has leaped to the 1.3630 mark, the GBP/USD pair has reached up to the 1.6770 level, after consolidating above 1.6730, and USD/CHF has yet again broken through the 0.8960 support. The USD/JPY currency pair is back to the morning highs of 101.80, after having declined to the 101.50 support.

More:
http://fxbazooka.com/en/news/show/1312

 

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Market News

June 2: Asian session

Asian stocks rose after a gauge of China’s manufacturing expanded at the fastest pace in 5 months (to 50.8 vs. the forecast of 50.7) and policymakers said they will cut the reserve requirement ratio for some lenders. MSCI Asia Pacific Index gained 0.5%. Nikkei 225 rose by 2% rising to the 8-week high.

USD/JPY rose above 102.00. Despite the better Chinese weekend data, AUD/USD fell by about 50 pips to $1.0257 as Australian building approvals contracted by 5.6%, while median dwelling prices for the nation’s capital cities dropped 1.9%. NZD/USD is testing levels below the 100-day MA at $0.8477.

EUR/USD declined to $1.3620. GBP/USD slid to $1.6737.

More:
http://fxbazooka.com/en/news/show/1313

 

[riki143]

Market News

June 2nd: American session

Tatiana Norkina, an analyst at FBS

Negative statistics from the United States restrain the growth of the dollar index (the index of manufacturing activity ISM dropped to the level of 53.2 last month, while analysts forecasted an increase to 55.5). However, the USD quickly returned to today's high of 80.60. U.S. stock markets opened quite positively, but the indices immediately went into the red zone. So DJIA is currently losing about 0.11 % and S & P500 - 0.30%

Some turmoil is observed in the currency markets. European currency is not supported by the PMI data, which came out worse than expected. As a result, the bulls were forced to withdraw from the market, allowing the exchange rate EUR/USD pair fall under the 1.3600 figure. Now trades are carried slightly higher, but the bearish sentiment could inspire market participants. GBP/USD pair is consolidating near the critical level 1.6750 . Positive attitude is observed for the pair USD/CHF, which returns to 0.8980 highs today. A currency pair USD/JPY has broken resistance figures 102.00, recovering to around 102.30 today.

More:
http://fxbazooka.com/en/news/show/1314

 

[riki143]

Market News

June 3: Asian session

Asian stocks rose as concerns about a slowdown in Chinese economy eased. MSCI Asia Pacific Index gained 0.5%. The final reading of a China’s HSBC manufacturing PMI came in at 49.4, missing economist forecasts for 49.7 (reading below 50 indicates contraction). That comes 2 days after a government gauge signaled the fastest growth in 5 months. China’s non-manufacturing purchasing managers’ index rose from 54.8 in April to 55.5 in May.

USD/JPY is trading in the 102.35 area after rising by about 60 pips to 102.47. Commodity currencies have spent the session in the positive territory. AUD/USD recovered by 30 pips into the $0.9270 area. As it was widely expected, the Reserve Bank of Australia left interest rates unchanged at 2.50%. The regulator repeated that it sees a likely period of interest-rate stability and that the AUD remains high by historical standards. Australia’s retail sales rose by 0.2% in April vs. 0.3% forecasted. NZD/USD followed the Aussie, recovering to $0.8665. Gold consolidates around $1245 after having hit a fresh 4-month low of $1240.9 yesterday.

EUR/USD is trading in the $1.3600 area after declining from $1.3635 yesterday. GBP/USD edged down to $1.6740, but is above yesterday’s low at $1.6725.

More:
http://fxbazooka.com/en/news/show/1317

 

[riki143]

Market News

June 3: American session

Tatiana Norkina, analyst at FBS

U.S. dollar index is showing signs of recovery after the publication of positive data on production orders. Over the past month, this number has increased by 0.7%, while analysts have expected only 0.5%. However, according to the revised data, the previous period growth was 1.5%. This is sure to put extra pressure on the U.S. currency.

Thus, the EUR/USD currency pair was returning to yesterday's highs of 1.3650 today, but has pulled back to the 1.3620 support by now. GBP/USD has tested the 1.6780 resistance again, but it is becoming apparent that the bulls are unable to overcome this level yet. Trades are carried out in the 1.6730 area. The USD/CHF pair has once more bounced back from the 0.8980-0.8990 resistance, collapsing to the 0.8850 level. But the bulls did not give up and restored the rate to the 0.8970 figure. The USD/JPY currency pair is consolidating near the 102.50 mark. Breakthrough upward is possible.

More:
http://fxbazooka.com/en/news/show/1320

 

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Market News

June 4: Asian session

Asian shares slid, with regional benchmark index retreating from a 7-month high, as investors await a report on US jobs later today and a decision from the ECB on monetary policy tomorrow. Nikkei slid by 0.3%.

USD/JPY rose to 102.80. US dollar strengthened to a 1-month high against yen before US reports this week that economists said will show the job market improved last month.

AUD/USD spiked to a high just under 0.9300, inspired by a strong Australian Q1 GDP. Economy grew by 1.1% in the first 3 months, up from 0.8% in Q4 and forecasted 0.9%. However, the disappointing details of the report pulled the pair back to $0.9260. NZD/USD tested the $0.8440 mark, but met resistance and retraced to the $0.8415 mark. Gold consolidates around $1246.0.

EUR/USD slid back to the $1.3600 area. GBP/USD declined to $1.6718.

More:
http://fxbazooka.com/en/news/show/1322

 

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Market News
4 June 2014

Danske Bank: Ukraine still in focus

“While focus on Ukraine seems to have faded somewhat, the situation has continued to worsen as fighting with pro-Russian separatists has continued”, Danske Bank analysts say.

“Yesterday, US president Obama started a four-day tour of central and eastern Europe and he repeated that the US will ensure the national security of its allies in central and eastern Europe. Today Obama will be meeting newly elected Ukrainian president Petro Poroshenko”.

More:
http://fxbazooka.com/en/news/show/1324