Daily Forex market overviews by MasterForex

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Trend analysis of the USDCAD for 12/11/30

USDCAD

On the 4-hour chart:

The pair continued the consolidation between the resistance line 1 and support area 0.9920/16. Now the resistance is under testing. The nearest level from the top is 0.9956. The moving averages are showing the weakening of middle-term downward tendency.

On the 1-hour chart:

The pair recoiled from the support area 0.9920/16 and started the testing of the resistance line 1 within the bearish trend correction. The price formed the resistance level 0.9929. The moving averages are showing the consolidation.

On the 15-minute chart:

The pair is fluctuating in flat between the support level 0.9923 and resistance line 0.9929. Herewith, the resistance line has not affected the price dynamics yet. The piercing of the corridor will be a stimulus to trade in the respective direction.

 

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Trend analysis of the USDJPY for 12/11/30

USDJPY

On the 4-hour chart:

The pair continues the growth after the recoil from the support level 81.81. The price touched the resistance area 82.53/66 and turned to the correction phase of ascending tendency. The moving averages are showing the consolidation.

On the 1-hour chart:

The pair formed the ascending trend channel between the support line 1 and resistance line 2. The level 82.35 was pierced and now is waiting for the confirmation as a support. The moving averages are showing the activation of ascension trend.

On the 15-minute chart:

The pair recoiled from the resistance line 2 and started the correction. The piercing of the support level 82.95 will be a bearish signal. The recoil from the support will be a stimulus to buy.

 

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Trend analysis of the USDCHF for 12/11/30

USDCHF

On the 4-hour chart:

After the recoil from the resistance line 1, the pair started to decline by piercing the support lines 0.9315, 0.9290 and 0.9275. The price continues the decrease. The moving averages are showing the bearish trend.

On the 1-hour chart:

The pair pierced the support level 0.9265 after the long testing. The nearest support lies at 0.9422. The pair is lowering within the channel between the lines 1 and 2. The moving averages are showing the descending tendency resumption.

On the 15-minute chart:

The pair recorded the monthly low at 0.9245 and started the correction of bearish trend. Traders will continue to sell after the receiving the signals about the correction end on the elder timeframes.

 

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Trend analysis of the AUDUSD for 12/11/30

AUDUSD

On the 4-hour chart:

The pair continues to move between the resistance line 1 and support line 2. The price started to test the support lines 2 and 3. The nearest support lies at the level 1.0401. The moving averages are showing the consolidation.

On the 1-hour chart:

The pair is moving straight within the descending trend channel between the lines 1 and 2. Now the price mentioned the beginning of the bearish trend correction form the line 1 and level 1.00418. The moving averages are showing the recoil.

On the 15-minute chart:

The pair is fluctuating between the support level 1.0418 and resistance level 1.0438. The price formed the intraday upward trend channel between the lines 1 and 2. In case of piercing of the corridor, spectaculars will start the active trading.

 

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Trend analysis of the GBPUSD for 12/11/30

GBPUSD

On the 4-hour chart:

The pair continued to move within the ascending trend channel between the lines 1 and 2. The price herewith is testing the key resistance level 1.6050. The moving averages are showing the upward trend.

On the 1-hour chart:

The pair grows within the short-term within the ascending trend channel between the support line 1 and resistance line 2. Herewith, the price has not already gained a foothold above the level 1.6050. The moving averages are showing the moderate upward trend.

On the 15-minute chart:

The pair confirmed the support line of the short-term of bullish trend 1 and continued the testing of the level 1.6050. In case of holding the price above the level, traders will continue to bull the market. Otherwise, the large flat will resume.

 

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Trend analysis of the EURUSD for 12/11/30

EURUSD

On the 4-hour chart:

After the recoil from the level 1.2890, the pair started the intensive growth. The levels 1.2955 and 1.2985 have been pierced. The price reached the level 1.3020. The moving averages are showing the ascending trend resumption.

On the 1-hour chart:

The pair formed the ascending trend channel between the support line 1 and resistance line 2. After the recoil from the support, the price reached the level 1.3020 and started the testing. The moving averages are showing the confident trend.

On the 15-minute chart:

At the end of the Asian session, the pair started the testing of the resistance 1.3020. In case of success, traders will continue to bull the market. Otherwise, the pair will turn to the phase of upwards trend correction.

 

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Hello everyone,

MasterForex Company switches to a new Analytics format. We'll introduce you the overview of the main economical events of the current day.

From now, every day at 1:00 p.m. (GMT+2) we'll publish the general review of financial news, which influnce the Forex market. Every Friday you take a tour of the past week with a forecast for the next one.

 

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Overview of the main economical events of the current day - 12/12/2012

USD remains under pressure as investors are waiting for the results of FOMC meeting

Yesterday was quite a positive day for EUR thanks to a couple of surprises allowing the currency to demonstrate some growth, while USD remained somewhat under pressure as investors wait for the 2-day FOMC meeting to end today.

First piece of positive news came from Germany yesterday, showing that ZEW index (an indicator of the economic sentiment) suddenly reached 6.9 points coming up from negative 15.7 while analysts forecasted the number to be around negative 12. Another surprise came from Greece which announced that the government bought back Greeek bonds worth EUR 31.8bn – a number that some people doubted it could be reached. Combination of this news gave investors hope that the debt crisis in Eurozone might be just a little bit less severe than expected, sending EUR up.

While there are some statistics we are expecting today from Eurozone (such as UK's unemployment data and industrial production in EU), we think that investors' attention is likely to remain on USA, where the second day of FOMC meeting is to take place today. While we doubt that there will be any surprises when in comes down to decisions regarding interest rate and another round of quantitative easing in some form, we believe the investors should pay attention to the tone of comments of the head of FRS which are usually quite market moving.

With the lack of the news coming from FOMC meeting yesterday, USD remained under pressure, while EUR demonstrated some growth on a few surprises. However we believe, that investors are in a waiting stance and we should definitely see some heavy market action once the Federal Reserve System makes its announcement.

 

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Overview of the main economical events of the current day - 13/12/2012

FOMC meeting ended as expected sending USD down; now is the time turn your attention back to Europe

Yesterday the Fed announced that it will continue to purchase long-term Treasuries after the expiration of Operation Twist at a pace of USD 45bn per month which was quite expected. The main surprise in the Fed announcement was the shift to numerical targets for unemployment and inflation in its forward guidance. Specifically, the Fed said that rates will remain low "at least as long as the unemployment rate remains above 6.5%" and inflation does not move more than 0.5% above the Fed's 2% long-term target. Fed forecasts for unemployment and the fed funds rate were consistent with the previous guidance that most policymakers do not see tightening until 2015. The initial FX market reaction has been USD-negative. Given that the Fed is on course to expand its balance sheet substantially, this supports a weak USD regime.

Now with the FOMC meeting finished, investors should turn their attention back to Eurozone, where a couple of important political news are happening. First of all, EU has agreed in a common banking supervision framework that give the ECB regulatory responsibility for banks within the euro area with more than EUR 30bn in assets or that have assets of 20% of their national economy's GDP. This is quite positive news which should result in a more sustainable European banking system and a sign that different members of the EU can find some common ground.

Another important piece of news from Europe to watch for today is ECB meeting during which a release of the next tranche of international aid for Greece is expected. In case everything goes as planned, the International Monetary Fund would release EUR 48bn in rescue loans in 4 installments enabling Greece to avoid bankruptcy. With almost no statistics coming out from Eurozone today and quite negative news for USD, we believe EUR has a good chance to demonstrate some growth today on the positive news coming from ECB.

 

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Overview of the main economical events of the current day - 14/12/2012

Expect some profit taking as the week ends but watch out for Japan

Yesterday dollar showed mixed dynamics hanging softer than euro feeling the consequences of the Fed decision but fractionally firmer against JPY, which is under pressure due to elections in Japan this weekend. While there are some numbers coming out from both Europe and USA, they are unlikely to move the markets which are currently ruled by political news rather than fundamentals.

As expected, euro continued to rise on the positive news regarding the common banking framework and another tranche of international aid being given to Greece. GBP was hit yesterday after Standard and Poor's changed its rating outlook for UK from "stable" to "negative" quoting rising governmental debt to GDP ratio, which will start to come down only in 2015, according to agency.

We expect some investors to take profits in EUR/USD today as it looks like the whole Eurozone story is over for now – the minister have done everything that's possible and we are unlikely to see any market surprises coming from them today. Some movement is possible in GBP pairs as the news about the downgrade hit the wires late in the evening, meaning that some investors might have not played the news yet.

Finally, all eyes on JPY and Japanese elections. With opinion polls in Japan suggesting that the Liberal Democratic party, led by Shinzo Abe, likely will score a strong victory, the yen was left defensive on the notion that the LDP leader has promised to pressure the central bank to take more aggressive steps to boost the economy, steps that likely would weigh on the yen, traders surmise. While many agree with that notion, some traders caution that the bet against the yen is now quite hefty after real-money players and model-driven funds increased short yen positions this week, and some worry that the yen could rebound sharply if something triggers a round of profit-taking on those positions. In any case, looks like the elections in Japan are bound to affect other currencies – one way or another.

 

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Overview of the main economical events of the current day - 17/12/2012

JPY and USD were outsiders last week, focus is likely to remain on Eurozone today

Last Friday close marked JPYUSD downfall continuing for 5th week in a row, while becoming cheaper against other currencies as well due to election in Japan – won as expected by Liberal Democratic Party lead by Shinzo Abe. The win of LDP likely means more active state interference in Japanese economy and a possibility of quantitative easing in some form, which creates pressure on JPY.

USD was one of the downsiders as well after FOMC making a decision to extend its quantitative easing program to USD 45bn per month. While there is some macro data coming from USA today, such as Economic Activity Index for New York (being a financial center of the country, its quite an important and illustrative regions) and Net Inflow of Foreign Capital, we believe that USD is likely to be still depressed due to FOMC decision.

EUR, on the other hand, demonstrated quite positive dynamics this Friday, rising against main currencies. The explanation likely lies in a fact, that investors being tired of bad news from JPY and USD took optimistically the decision to provide Greece with another tranche of international help as well as the creation of common banking framework, allowing for EUR to demonstrate some growth in the end of the week.

We believe that positive statistics coming from Eurozone can support this trend even further providing EUR with more fuel to grow. We willl see whether this assumption is correct or not with Trade Balance and Labor Cost numbers coming out today.

 

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Overview of the main economical events of the current day - 18/12/2012

Markets starting to slow as holidays approach; USA fiscal cliff negotiations are to become the main driver.

With year-end holidays coming, FX markets are predictably slowing, however we suspect that the outcome of the fiscal cliff negotiations in USA is likely to be the dominant driver for price action over the next couple of weeks. The latest negotiations suggest that a constructive scenario is playing out, however there are two important things to consider. First of all, a positive outcome is widely expected, meaning a strong market reaction in case of any stumbles. Secondly, we believe that this Friday is an important threshold. In case no consensus is reached by end of the week, we can expect a new wave of risk aversion as traders are likely to fix their positions just right before the weekend leaving for Christmas holidays. If that is the case, USDEUR and USDJPY are likely to be hurt.

However there is still time till Friday and some statistics are coming out today with the most important being CPI from UK. While the markets are currently ruled by political sentiment rather than by fundamentals, some limited reaction in GBP is still possible.

With no other market moving data expected for today, we recommend investors to prepare for year-end and Christmas holidays. While some surprises are possible (such as FOMC member saying something unexpected during the evening speech), we believe the markets are to slow even further as holidays are coming.

 

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Overview of the main economical events of the current day - 20/12/2012

Euro retreats on US "fiscal cliff" talks standoff.

Yesterday EUR was showing quite positive dynamics as German December IFO business climate index came better than expected, pushing the pair higher. However, the pair retreated sharply after the comments of U.S. White House spokesman, who said that "Republicans "plan B" tax proposal does not meet President Obama test of balance for fiscal cliff, and he would veto the legislation, if passed.

At the same time, Barack Obama tried to bring some clarity to the market, saying he would like to find a solution before Christmas and that the package he proposed is balanced by any definition. Nonetheless, we believe that it is all a part of the process and we have seen American politicians playing blame game before – so we think that the problem is likely to be solved this year.

The Bank of England released its minutes revealing that only 1 member voted for extra 25 billion GBP and most MPC members agreed that past month's developments did little to alter QE argument.

In other news, Fitch added some drama to the mix having said that there is an "increased likelihood U.S. would lose AAA status if failed to avoid fiscal cliff, went into recession; U.K. rating downgrade likely if extended economic weakness causes slippage in fiscal targets.''

As a result, negative sentiment is dominating the market and whether we will see another round of sales before holidays or not is highly dependent on the news on "fiscal cliff" in USA.

 

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Overview of the main economical events of the current day - 21/12/2012

All eyes still at "Fiscal cliff" with Boehner dropping his plan

The newsflow continues to be quite weak as investors prepare for holidays. Nonetheless, the problem of "fiscal cliff" was on all headlines when John Boehner suddenly dropped the idea of asking the House to vote on a Republican plan to avert the fiscal cliff. It seems the plan would have failed to pass by a margin of a few votes, and so a decision was made not to proceed with it. And while the plan was doomed to begin with given Democrats had already decided not to put it to a vote in the Senate, and US President Obama had already threatened to veto it if necessary, the nervous market reaction was justified to some degree however, given it illustrates just how difficult it will be to reach a compromise solution before year-end. The overnight frantic trading is probably a taste of things to come over the next week or two – brace for higher volatility until a benign outcome emerges.

Euro on the other hand was trading quite well yesterday thanks to rising regional consumption data. EURUSD was even close to reaching its 8 month maximum, however some positive numbers from USA somewhat supported the dollar in the second half of the day.

Finally, JPY is reaching its 20 month minimum against USD thanks to Bank of Japan announcing an increase in its stimulation plan by USD 119bn while leaving guided inflation at 1%. Market reaction comes as quite expected and we will likely see the pressure on JPY rising from this decision in next year as well.

 

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Overview of the main economical events of the current day - 24/12/2012

Results of 2012. Forecast for the 2013

With the year-end coming at us many investors look back at 2012 in hopes to draw some useful conclusions and prepare for 2013. In 2012 central banks tightened control over their balance sheets leading to limited volatility and decreased opportunities. And while the global economy is expected to strengthen somewhat next year (thanks to all the financial injections made during the year finally moving into real sector), 2012 was marked with political influences being stronger than fundamentals – and that is what was moving the markets this year. Parliament elections in Greece and Russia; presidential races in France, Russia and USA combined with plenty of meetings, summits and whatnot made 2012 an incredibly politically driven year.

The peak of Eurozone debt crisis was hit during the elections in Greece parliament after which investors turned their eyes to other problem countries. Italy was under scrutiny having a huge debt and a bunch of economy measure, slowing the growth. Spain was hitting terrible unemployment numbers on top of a failing banking system. Germany was seemingly getting tired of constantly being a savior for falling states. Was the problem solved? While the sides clearly demonstrated ability to communicate, we would not say so – but rather state that they bought some time to reach a decision. With every nation looking for interests of its own people, this lack of a single approach is likely to continue into 2013. While political battles were won in 2012, only time will tell if they would transfer into real economic results.

On another side of the planet, the problem of "fiscal cliff" is tearing US politics apart – Republicans and Democrats cannot reach a decision that will satisfy both sides. USA is facing an economic slowdown and decrease in consumption due to tightening budget along with the end of Bush tax cuts. Add QE programs on top of that which will lead to inflation and you will get the picture why USD was under pressure in 2012.

Meanwhile QE is coming to Japan with Liberal Democratic Party winning the elections. That means planned inflation rising to 2% and GDP growth to 3%, which can be achieved only through increased money printing – again, a negative sentiment for the currency.

The year 2012 was quite turbulent sometimes, yet it brought a number of positive surprises, allowing for some optimism for 2013. The Fiscal Cliff, if not resolved soon, will be a major theme of discussion in early 2013. There is also a couple of important elections – namely in Italy (April) and Germany (September) – as well as some political leaders taking office: expect China to officially appoint its next President (Xi Jinping) and Prime Minister (Li Keqiang) in March and Bank of England will be headed by Mark Carey starting July 1. All these events while might bring no surprises will definitely shape the trading next year and we recommend investors to keep an eye for them.

 

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Overview of the main economical events of the current day - 08/01/2013

Year starts slow with a lack of growth drivers

While there was some appetite for risk seen on Monday, ultimately it all came down to investors acknowledging the fact that positive drivers were somewhat lacking. Press reports on regulatory developments were initially positive for financial stocks, but this failed to translate into broader gains.

EUR was probably the best bet on Monday - it demonstrated some growth against both USD and JPY yesterday on the news that Silvio Berlusconi decided not to run for Prime Minister office and rather will try to become Italy’s new Minister of Finance.

Nonetheless, the data calendar is expected to pick up a bit over the coming days and allow markets to seek fresh catalysts for upside. German factory orders and US consumer credit are due. Sweden will release minutes from the last policy meeting. Finally, ECB is having a meeting this Thursday during which there is a chance that one of the Eurozone countries will ask the regulator to buy its sovereign debt – which will be a negative trigger for EUR in the short run.

 

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Overview of the main economical events of the current day - 09/01/2013

Investors remain cautious; Japan is likely to be a news flow generator in the coming weeks.

EUR was demonstrating quite a performance yesterday, however it ended up decreasing vs. USD for the first time in 3 days on the rumors that France received a downgrade warning. While the rumors turned out to be false, this illustrates the underlying lack of confidence from the investors. The currency was also somewhat affected by rather weak German trade balance figures.

Nonetheless, EUR was rising for the most part of the day fueled by Japan's comment as Finance Minister Aso said the country would buy a portion of Europe's ESM bonds continuously using foreign reserves as Europe's financial situation would help stabilize currencies including the Japanese yen. Also, Aso noted that ESM bond is considered by Japan to be a "major investment tool" just like euro-denominated sovereign bonds".

Meanwhile, it's seen that purchase of ESM bonds would help Japan avoid criticism from Eurozone on currency manipulation and would also help weaken the yen. So far, Japan bought around EUR 7b of ESFS bonds, around 6.7% on issue. Regarding monetary policy, Aso said the government is keen to issue a joint statement with BoJ and the 2% inflation target would be the main focus in the statement.

We recommend investors to keep an eye on Japan in the coming days as Bank of Japan's next policy decision is just a couple weeks away. While it is safe to expect a weaker JPY to some extent, the news flow around the fact is crucial for investors and is bound to affect other currencies as well.

 

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Overview of the main economical events of the current day - 10/01/2013

ECB meeting to drive trading in the coming days

While yen and euro weakened against the dollar, strong data from China supported rallies in equities and some currencies as well. However, industrial production from Germany was weaker than expected, making the market more concerned about the possibility that ECB might cut its rate.

The ECB meeting thus is likely to be a key focus this week. There is a real chance that the central bank elects to cut its repo rate following weak growth expectations delivered last months. While we think that the rate cut is not a very likely turn of events given the macro situation, however EUR is vulnerable to loss of interest rate support if the ECB eases or simply continues to send a dovish message.

Bank of England is having a meeting today too, however we do not expect it to deliver any policy changes. The ongoing improvement of statistical data coupled with rising inflationary risks makes further easing unlikely in our view.

Finally, USA is expected to post weekly jobless claims. However we do not expect any strong market reaction to these news unless there is a huge surprise in numbers.

 

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Overview of the main economical events of the current day - 11/01/2013

ECB looks optimistic; YEN is remains vulnerable

EURUSD rallied on the back of a change in rhetoric at ECB monetary policy announcement. The main shift was ECB President Mario Draghi saying that the decision to leave rates unchanged was unanimous and listing a number of significant improvements in the economy. This differs drastically to what we heard in December when ECB was having wide discussions on the subject. Seems like further ECB easing is off the agenda now provided we do not see any serious economy deterioration any time soon.

While Japan's trade balance numbers came lower than expected yesterday which resulted in a brief round of selling, the new policy of the recently elected government remains the key driver. According to Japanese press, Bank of Japan's adoption of a 2% inflation target on January 22nd is basically a done deal – and investors seemed to appreciate some clarity.

Today's calendar is really light with attention likely to be focused on UK industrial production. With ECB meeting behind us, we recommend investors to keep an eye on the situation in Japan as it looks like a one of the most important factors right now.

 

[MasterForex Broker]

Overview of the main economical events of the current day - 14/01/2013

JPY continues to decline, while all main currencies demonstrated growth against USD last week.

Last week resulted in most of the major currencies demonstrating growth against USD. JPY is a notable exception from this observation – a 1.16% decline vs. USD resulted in Japanese currency reaching a new a low. This is explained by the fact that the currency was caught in a perfect storm last week: not only trade balance numbers were disappointing, but newly elected government has accepted a USD 116bn stimulus package – not an unexpected decision however it definitely puts JPY in quite a weak position.

EUR, on the other hand, demonstrated quite a performance fueled by Draghi's comments after ECB meeting, who pointed out that this time the decision was unanimous, showing investors that Eurozone is still capable of finding a consensus.

Seems like this week will be a rather quite one in terms of meetings and press-conferences. In the last couple of weeks US government agreed on the "fiscal cliff problem", Japan started economy stimulation and Eurozone finally made a unanimous decision (albeit not a big one, but it's the effort that counts). If you think about it, it looks like quite a lot of important decisions and the market likely has not yet fully priced all the information in. For investors it means that some trading correction is possible as market participants will adjust to a new reality. As usual there is some data to come out over the week, however it is more on the statistics side rather than some market changing political or macro news. Despite it, keep a close eye on the newsflow – surprises may happen.