Forex-aussie Down As Yuan Falls; Norwegian Crown Extends Gains

By Ilya Spivak 9 hours ago 0 shares To receive Ilya’s analysis directly via email, please SIGN UP HERE Talking Points: Support: 0.8240 (23.6% Fib exp.), 0.8212 (38.2% Fib exp.) Resistance: 0.8283-0.8306 (trend line cluster), 0.8349 (Feb 6 high) A decision to pass on an opportunity to buy the Euro against the British Pound yesterday proved wise as prices retreated from trend line resistance in the 0.8283-0.8306 area. A daily close below support at 0.8240, the 23.6% Fibonacci expansion, exposes the 38.2% level at 0.8212. Alternatively, a move through resistance targets the February 6 high at 0.8349. Prices are sitting too close to relevant support to justify a short entry from a risk/reward perspective. We will remain on the sidelines for now, looking for a more attractive selling opportunity. Confirm your chart-based trade setups with the Technical Analyzer .

FOREX-Aussie weakens as yuan slide deepens

INFLATION The euro gained 0.1 percent against the dollar at $1.3750 , after the closely watched German Ifo survey beat expectations on Monday. However, in a week lacking major economic data, all eyes will be on Friday’s first estimate of euro zone February inflation. Recent months’ numbers have seen price growth sliding below 1 percent, strengthening the case for more action by the European Central Bank to provoke growth. Many players who began the year believing more ECB easing and the U.S. Federal Reserve’s reining in of its own stimulus would gave the dollar a lift are reconsidering. But few seem prepared to bet on a stronger euro ahead of the inflation number, forecast to inch down to 0.7 percent.

Forex – GBP/USD trims gains after U.S. consumer confidence report

Cable was likely to find support at 1.6584, Monday’s low and resistance at 1.6823, the high of February 17. The Conference Board reported that its consumer confidence index declined to 78.1 in February, down from 79.4 in January, amid concerns over the short-term outlook for business conditions, jobs, and earnings. Analysts had expected the index to tick up to 80.0. The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.

Forex – Pound extends gains against dollar

The greenback fell in later trading after a U.S. stock-market rally enticed investors out of the greenback, while talk the Ukraine may receive international aid and avoid default also sent the U.S. currency falling as investors took up risk-on trading positions. Meanwhile in Europe, German research institute Ifo said its business climate index came in at 111.3 in February, the highest level since mid-2011, up from 110.6 in January. Analysts had expected an unchanged reading. German firms are benefitting from high export demand the report said, though ongoing emerging-market volatility concerns clouded the outlook.

Market participants were looking ahead to U.S. reports on house prices and consumer confidence due out later in the session, amid concerns over the outlook for the economic recovery. Investors remained cautious after a recent series of disappointing U.S. economic indicators, including reports on jobs growth, retail sales and housing sparked concerns that the economic recovery has lost momentum since the end of last year.

Forex – USD/JPY mixed after falling CSPI index in Japan

“For now it appears to be relatively contained, but the Aussie would be the likely underperformer should it materialise into something of significance, with the dollar and the yen the likely outperformers.” Daragh Maher, a strategist at Asia-focused HSBC, played down the prospect of a deeper sell-off of the Aussie linked to the yuan move, at least for now. But he said western players, for whom the steady rise of the yuan has been one of the few certainties in global foreign exchange markets in recent years, may have to reassess. After falling another half a percent overnight, offshore rates for the yuan found some support around 6.1270 to the dollar. The spot yuan rate earlier fell below the official mid-point rate for the first time since September 2012, amid speculation the central bank may have intervened in preparation for a doubling of its trading band.

FOREX-Dollar falls after weak U.S. consumer confidence data

Tarullo’s comments suggested the Fed could raise interest rates, which would be positive for the dollar. The central bank has kept interest rates at near-zero levels for more than five years to help the economy recover from recession. The dollar’s rebound was short-lived, however, as lower U.S. bond yields kept the dollar weak.


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