Analys från DailyFX

US Dollar Outperforms with Volatility Ahead Thanks to BoE, ECB

Published

11 år ago

5 september, 2013

DailyFX

Talking Points

– Bank of Japan on hold; Governor Kuroda strikes dovish tone.

– US yields back near yearly highs supporting US Dollar.

– Turbulent few hours ahead with two central bank announcements due.

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INTRADAY PERFORMANCE UPDATE: 09:25 GMT

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.09% (-0.30%prior 5-days)

ASIA/EUROPE FOREX NEWS WRAP

The Dow Jones FXCM Dollar Index remains off of its highs of the day and is lower over the past week overall, but that’s been a function of the Australian Dollar outperforming the broader market; not a sign of general US Dollar weakness. Today, the buck finds itself barely in the green amid a flurry of central bank activity.

Overnight, the Bank of Japan announced its September policy decision and although no formal changes were made, Governor Haruhiko Kuroda took on a relatively more dovish tone. The big picture – that the Japanese economy is showing signs of improvement on the growth and inflation fronts – was duly noted.

Stemming from this economic optimism have been calls for a higher sales tax to help combat the country’s mounting debt burden (now exceeding ¥1 quadrillion). Knowing this full-well and the implications of a sales tax on inflation, Governor Kuroda noted that the BoJ is prepared to introduce further stimulus should higher taxes encumber the economy – an outcome I began discussing in late-July. (Read more: Japanese Yen Extends Gains as Japan’s ‘Third Arrow’ Becomes Clearer)

With the BoJ remaining in full-on easing mode (which has supported the JPY-crosses thus far today), attention now turns to the Bank of England and the European Central Bank. In a way, both of these central banks face a similar dilemma: attempting to keep interest rates low amid an upswing in economic growth prospects.

Between the two, the British Pound is better poised fundamentally to outperform than the Euro after these central bank meetings. Whereas the BoE desires to keep rates pointed towards zero in the nascent stages of the UK growth jump, incoming economic data has been consistently beating forecasts, accelerating the timeline (from a speculator’s perspective) that the BoE would end QE in.

Conversely, the Euro is at risk as ECB President Mario Draghi may want to avoid overbearing optimism insofar as it could stoke tighter credit conditions. Credit remains tight in the Euro-Zone, as President Draghi harped on last meeting; and he will thus do his best to prevent a further backing up of yields. Read my full take on the ECB and the Euro here: Euro Risks Weighted to Downside Ahead of ECB, NFPs.

USDJPY 1-minute Chart: September 5, 2013 Intraday

US_Dollar_Outperforms_with_Volatility_Ahead_Thanks_to_BoE_ECB_body_Picture_1.png, US Dollar Outperforms with Volatility Ahead Thanks to BoE, ECB

ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION

US_Dollar_Outperforms_with_Volatility_Ahead_Thanks_to_BoE_ECB_body_x0000_i1028.png, US Dollar Outperforms with Volatility Ahead Thanks to BoE, ECB

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— Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

What’s inside:

EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
Resistance in vicinity of 11825/80 likely to keep a lid on further strength
Targeting the low to mid-11600s with more selling

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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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