Bank of France expects the country’s economy to expand at 0.4% in the first quarter

The Bank of France released its gross domestic product (GDP) forecasts for France on Monday. French economy is expected to expand at 0.4% in the first quarter, after a 0.2% growth in the fourth quarter.

The manufacturing business confidence index increased to 101 in January from 100 in December. Companies expect a slight growth in activity in February.

The services business sentiment index remained unchanged at 96 in January. But services companies expect a rise in activity in February.

The construction business sentiment index remained unchanged at 96 in January. Companies expect a slight increase in activity in February.

EUR/GBP through 0.7700, session highs

The single currency is advancing further at the beginning of the week bolstered by the increasing risk aversion, sending EUR/GBP through the 0.7700 handle.

EUR/GBP firmer on EUR-buying

The renewed selling pressure around the sterling plus the solid sentiment around the risk-off trade is now lifting the European cross to the proximity of 0.7730, trading at shouting distance from YTD tops near 0.7760 seen in late January.

Nothing of note in Euroland in the data space, where the Sentix index has come in at 6 for the current month, missing estimates at 7.6 and down from January’s 9.6

EUR/GBP key levels

The European cross is now advancing 0.44% at 0.7725 and a break above 0.7756 (high Jan.20) would aim for 0.8007 (high Dec.16 2014) and then 0.8041 (high Nov.27 2014). On the other hand, the immediate support aligns at 0.7481 (61.8% Fibo of 0.7310-0.7758) ahead of 0.7310 (low Jan.5) and finally 0.7249 (200-day sma).

The single currency is advancing further at the beginning of the week bolstered by the increasing risk aversion, sending EUR/GBP through the 0.7700 handle...

(Market News Provided by FXstreet)

Industrial production in Spain declines 0.2% in December

Spanish statistical office INE released its industrial production figures for Spain on Monday. Industrial production in Spain declined 0.2% in December, after a 0.1% gain in November.

On a yearly basis, industrial production in Spain climbed at adjusted 3.7% in December, after a 4.3% increase in November. November's figure was revised up from a 4.2% gain.

Output of capital goods jumped at seasonally adjusted 7.7% year-on-year in December, output of intermediate goods climbed 6.6%, energy production was down 3.5%, while consumer goods output rose 2.4%.

In 2015 as whole, industrial production rose 3.2%.

Technical analysis of EUR/USD for February 08, 2016

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Overview:

  • The EUR/USD pair has faced strong support at the level of 1.1069 because resistance became support. So, the strong resistance has been already faced at the level of 1.1069 and the pair is likely to try to approach it in order to test it again. The level of 1.1069 represents a weekly pivot point for that it is acting as minor support this week. Furthermore, the EUR/USD pair is continuing to trade in a bullish trend from the new support level of 1.1069. Currently, the price is in a bullish channel. According to the previous events, we expect the EUR/USD pair to move between 1.1069 and 1.1238. Also, it should be noticed that the double top is set at 1.1238. Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 1.1069 with the first target at the level of 1.1238. If the trend is be able to break the double top at the level of 1.1238, then the market will continue rising towards the weekly resistance 1 at 1.1325.

The weekly technical analysis of EUR/USD pair:

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The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/CAD for Febuary 8, 2016

General overview for 08/02/2016:

The market has been capped just at the technical resistance level of 1.3908, but it does not look like it is an end of a rally as this move higher is the biggest correction in the overall downtrend from a top of 1.4688. This might mean the ABC cycle is completed and if the level of 1.3908 is violated, then an impulsive wave progression to the level of 1.4102 might start very soon. The intraday support at the level of 1.3780 should provide bulls with support and all traders should keep an eye on it for eventual violation. Please notice the pair is still trading in the bearish zone and only a breakout higher would be the first clue the that a local low at the level of 1.3638 is in place.

Support/Resistance:

1.3638 - Local Low

1.3666 - WS1

1.3780 - Intraday Support

1.3880 - Weekly Pivot

1.3908 - Intraday Resistance

1.4102 - Technical Resistance

1.4126 - WR1

1.4343 - WR2

Trading recommendations:

Buy orders placed last Friday have hit the TP level this morning and should be closed now.

For today, a trading plan remains the same: day traders should consider buying on dips with SL below the level of 1.3780 and TP at the level of 1.4102. Please notice that this entry might be kept longer for a swing trade as well.

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The material has been provided by InstaForex Company - www.instaforex.com

UK business confidence drops to 3-year lows

According to the latest survey conducted in the UK, business optimism among British companies fell to a three-year low, as the recent global market turbulence stemming from China slowdown concerns and the oil rout weighed on the business morale. While looming Brexit concerns also remain a drag on the business prospects.

The BDO Business Optimism Index has touched lows not seen since 2013 this month. BDO, being the consultancy firm which carries out the survey, said that the results indicated that firms expect their output growth to slow beyond the long-term trend.

The BDO's Peter Hemington noted, "Global headwinds are finally hitting business confidence and the added uncertainty of an EU referendum just round the corner is fuelling concerns."

According to the latest survey conducted in the UK, business optimism among British companies fell to a three-year low, as the recent global market turbulence stemming from China slowdown concerns and the oil rout weighed on the business morale. While looming Brexit concerns also remain a drag on the business prospects.

(Market News Provided by FXstreet)

Technical analysis of USD/JPY for February 08, 2016

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USD/JPY is expected to trade with a bearish bias as the key resistance is seen at 117.55. Last Friday, the US stock indices slid as the January jobs report came in weaker than the forecast (+151K vs +185K expected, jobless rate down to an 8-year low of 4.9%, December number revised downward to +262K from +292K). Technology shares experienced a sell-off. The Dow Jones Industrial Average dropped 1.3% to 16204, the S&P 500 fell 1.9% to 1880, while the Nasdaq Composite slumped 3.3% to 4363.

Nymex crude oil declined further by 2.6% to $30.89 a barrel, while gold gained another 1.6% to $1173 an ounce. Amid strong demand for haven assets the benchmark 10-year Treasury yield fell to a 10-month low of 1.846% from 1.864% on Thursday.

Meanwhile, the US dollar rebounded against other most major currencies. EUR/USD dropped 0.5% to 1.1156 and GBP/USD declined 0.6% to 1.4500. At the same time, commodity-linked currencies gave back most of their gains made at the previous two sessions, with USD/CAD rising 1.2% to 1.3913, AUD/USD plunging 1.9% to 0.7062 and NZD/USD being down 1.4% to 0.6627.The pair has maintained a bearish bias after failing to advance further above the level of 117.55. Currently, it is capped by the key resistance at 117.55. The 20-period moving average has crossed below the 50-period one and the relative strength index is below the neutrality level of 50, signaling the persistence of the bearish bias. If the key resistance at 117.50 is not surpassed, the pair should fall toward the first downside target at 116.30.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 116.30. A break of that target will move the pair further downwards to 116. The pivot point stands at 117.55. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 117.80 and the second target at 118.25.

Resistance levels: 117.80, 118.25, 118.60

Support levels: 116.30, 116, 115.75

The material has been provided by InstaForex Company - www.instaforex.com

JPY: What to watch for this week – Deutsche Bank

Taisuke Tanaka, Research Analyst at Deutsche Bank, suggests that the sentiment about whether the USD/JPY rate can stay in the ¥115-120 range has returned to a patient lull.

Key Quotes

“Surprisingly, yen depreciation resulting from the BoJ's surprise adoption of negative interest rates lasted only three business days. The USD/JPY bullish faction has lost momentum amid weak US indicators and falling equity and oil prices. Also, Japanese banks and investors have been struggling to realign their operations for negative interest rates. Yen-bearish flow is not active yet.

Last week's closely-watched US employment statistics were a mixed bag. NFPs showed weak growth, but the unemployment rate and wages suggested the robust labor conditions. In the first 3-6 months of the Fed’s tightening cycle, strong indicators for rate hikes as well as weak indicators pointing to future uncertainties tend to trigger nervousness about the USD/JPY. It would be difficult to find any good factors to make the USD/JPY rebound for a while.

UST yields have fallen more sharply than JGB yields around the BoJ’s negative interest rates surprise and are unlikely to signal any trends for the USD/JPY. FRB Chairman Janet Yellen will likely say well-balanced comments on future rate hikes with consideration of global risk-off in her testimony before Congress on 10 February.

Fortunately, risk-off news this week over the Chinese New Year might be fairly scant (although greater attention will be needed next week when the Chinese market reopens). Negative interest rates will actually take effect on 16 February. We intend to carefully monitor how buy-on-dip support for the USD/JPY from Japanese financial institutions and investors can be reinforced.

For the near term, sentiment about whether the USD/JPY rate will stay around 150-120 has returned to a patient lull. In the medium term, for maintaining an uptrend in the USD/JPY rate, the strong US economy remains the most important factor. Our economists have revised down their forecasts for US GDP and changed their forecast for interest rate hikes from three times for this year to once in December. We think the medium-term USD/JPY bullish trend has been reaching a critical stage.”

Taisuke Tanaka, Research Analyst at Deutsche Bank, suggests that the sentiment about whether the USD/JPY rate can stay in the ¥115-120 range has returned to a patient lull.

(Market News Provided by FXstreet)