FXStreet (Guatemala) – Analysts at Westpac Banking Corporation offered USD/JPY has a high conviction trade.

Key Quotes:

“The BoJ’s surprise move on negative deposit rates is probably more potent in signaling what Kuroda might do in the months ahead than its practical impact on affected deposits. There is no guarantee banks will buy significant foreign assets in order to avoid an annual 0.1% cost.”

“But the move is a wake-up call for specs who were actually modestly short USD/JPY ahead of the meeting (CFTC data). USD/JPY ranges should remain well above pre-meeting levels, though 122-123 is likely to require greater confidence in the Fed’s plans to raise interest rates. Obviously Jan payrolls will be important but our US data surprise index suggests it isn’t the only potential upside surprise that could boost USD. Our long-standing bias remains to buy dips.”

Analysts at Westpac Banking Corporation offered USD/JPY has a high conviction trade.


(Market News Provided by FXstreet)

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FXStreet (Córdoba) – Risk aversion dominated the Asian session, with the Nikkei falling 541 points or 3.15% to close at 17,191.25. The benchmark followed Wall Street on its way lower, while a stronger yen and poor local earnings reports, also weighed on the Nikkei.

Among the biggest losers was Nomura Holding Inc., which plunged by the most in over four years after the third-quarter net income fell, ending the day down 10.27%.

The index fell further in after-hours trading, down to 16,622, but recovered towards the 17,000 region as US stocks reversed course in the last trading hour.

Nikkei technical perspective

“Technically, the daily chart shows that the index remains below a bearish 20 SMA, while the technical indicators maintain their bearish slopes within bearish territory, maintaining the risk towards the downside”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators are currently bouncing from oversold levels, but remain far below their mid-lines, while the 20 SMA heads lower far above the current level, around 17,509”.

Support levels: 16,846 16,783 16,691. Resistance levels: 17,072 17,167 17,272.

Risk aversion dominated the Asian session, with the Nikkei falling 541 points or 3.15% to close at 17,191.25. The benchmark followed Wall Street on its way lower, while a stronger yen and poor local earnings reports, also weighed on the Nikkei.

(Market News Provided by FXstreet)

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FXStreet (Córdoba) – The GBP/CAD was unable to rally beyond 2.0300 and resumed its slide, erasing all of its Tuesday’s gains.

GBP/CAD fell to a daily low of 2.0110 and it was last trading around 2.0132, down 0.58% on the day. The Canadian dollar was supported by oil prices, which gained more than 8% in spite of strong rises in US stockpiles, as the EIA reported an increase of 7.8 million barrels last week, against expectations of a 4.8 million gain.

GBP/CAD levels to watch

“The 1 hour chart for the cross shows that the 20 SMA has turned sharply lower above the current level, while the technical indicators head south within bearish territory, indicating some further declines on a break below 2.0105, Tuesday’s low”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price is currently trying to break below a mild bullish 20 SMA, while the technical indicators are crossing their mid-lines towards the downside, also supporting further slides.”

Support levels: 2.0105 2.0050 1.9990 Resistance levels: 2.0180 2.0230 2.0285

The GBP/CAD was unable to rally beyond 2.0300 and resumed its slide, erasing all of its Tuesday’s gains.

(Market News Provided by FXstreet)

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FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained that the American dollar sold-off this Wednesday, as tepid US data joined forces with technical breakouts in major pairs. Key Quotes:”The greenback was already under pressure …

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FXStreet (Guatemala) – Analysts at TD securities noted the recent events in the FX space and puts the case forward for a potential shift in dynamics taking place.Key Quotes:”Even though equities and oil prices remain under pressure, we may be seeing ea…

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FXStreet (Córdoba) – Crude oil prices soared amid dollar’s weakness, and in spite of a large increase in US stockpiles. WTI futures surged up to $32.45 a barrel, while Brent futures advanced above $35.00 on comments from Russia’s Foreign Minister, expressing its willingness to meet with OPEC and non-OPEC members to discuss an output reduction, reigniting hopes of a deal to trim production.

Meanwhile, in the US, the EIA report showed that US crude stockpiles increased by 7.8 million barrels last week, against expectations of a 4.8 million gain.

WTI technical view

“The commodity is at its highest since Feb 1st, having rallied beyond the 38.2% retracement of its latest daily decline between 38.37 and 27.35 at 31.65, the immediate support. In the daily chart, the price recovered above its 20 SMA, while the technical indicators are heading north, albeit the RSI indicator is still below the 50 level”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price has also advanced above a now bearish 20 SMA, while the technical indicators head higher, the Momentum still below 100 and the RSI around 57”.

“Despite dollar’s weakness, investors are still reluctant to go long in the commodity, given that the background reasons of the latest slump remain firm in place”, Bednarik added.

Support levels: 31.65 31.00 30.40. Resistance levels: 32.35 32.95 33.60.

Crude oil prices soared amid dollar’s weakness, and in spite of a large increase in US stockpiles. WTI futures surged up to $32.45 a barrel, while Brent futures advanced above $35.00 on comments from Russia’s Foreign Minister, expressing its willingness to meet with OPEC and non-OPEC members to discuss an output reduction, reigniting hopes of a deal to trim production.

(Market News Provided by FXstreet)

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FXStreet (Córdoba) – The US dollar plummeted across the board on Wednesday, losing ground even against Emerging Market currencies. The Mexican peso, that is used as a proxy for EM, rose from the lowest level in a week, approaching last week highs.

USD/MXN
peaked at 18.61 (1-week highs) and then turned sharply to the downside, reversing the trend that had been in place since the beginning of the week. Recently bottomed at 18.18 as stock in Wall Street turned sharply to the upside on a volatile session.

The pair was trading at 18.23, near last week lows located at 18.10 that could be challenge if stocks and crude oil continue to recover.

BRL, RUB outperforming

Among EM, the Brazilian real and the Russian ruble are the top performers. The rally in stocks and in crude oil (WTI up by more than 8%). USD/BRL dropped to a fresh 2016 lows at 3.89 while USD/RUB was falling more than 3%, trading under 77.00.

The US dollar plummeted across the board on Wednesday, losing ground even against Emerging Market currencies. The Mexican peso, that is used as a proxy for EM, rose from the lowest level in a week, approaching last week highs.

(Market News Provided by FXstreet)

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FXStreet (Guatemala) – Analysts at Brown Brothers Harriman explained, apparently, that when Irish eyes are smiling, it’s time to call an election.

Key Quotes:

“And that is why Prime Minister Kenny has done. The election will be held on February 26. The polls suggest that the governing coalition (Fine Gael and Labour) it may struggle to secure a majority.

In some ways, Kenny is making the same bet as Spain’s Rajoy. The economy’s strength will provide a lift on election day. It has not worked out so well for Rajoy though Kenny may have greater success. However, this is most likely to be in a coalition.

This year is expected to be the third consecutive year that the Celtic Tiger is leading European growth. Last year’s 7% pace is not going to be sustained, but around 4% growth will likely be sufficient to push unemployment lower. Unemployment peaked in 2012 near 15% and finished last year at 8.8%, the lowest since late-2008. Both Spain and Portugal have unemployment rates above the eurozone aggregate. Ireland’s is below it.

Ireland’s 10-year bond yield peaked in 2011 near 14.2%. It is now lower than 1%. At shorter end of the coupon curve, Ireland’s 2-year yield is minus 36 bp. Since it is through the deposit rate, it no longer qualifies for ECB purchases. In comparison, Spain and Italy’s two-year yields less than five basis points through zero.

Kenny’s announcement was not a surprise. There has been talk in recent weeks that picked up over the last few days. Irish bonds have underperformed recently. That is expressed as a widening of the premium it pays over Germany, though over the past week, it has done better than Italy and Spain. There is some concern the any hiccup in the process could delay the privatization of Allied Irish Banks.

Irish equities are off 8.3% this year, which is better than most European markets. At the recent lows, the Irish bourse was off 11% from the multi-year high reached late last year. It is a painful correction but does not meet the bear market threshold.

Kenny’s Fine Gael is drawing 30% while the junior coalition partner Labour is polling around 10%. This illustrates the political risk Kenny is taking though it is ultimately a question of timing. Perhaps to ensure an ability to respond decisively if needed if the UK were to vote to leave the EU. The European debate over immigration and Schengen is likely to intensify. The Fine Gael does appear to be on the uptick in terms of public support.

While Irish economy recovered stronger and faster than others in the euro area, the social scars remain. The two main opposition parties, Fianna Fail (center-left) and Sinn Fein (left) are polling just below 20 percent. The former is anti-austerity, and the latter is anti-EU. Mutual antipathy prevents an alliance with Sinn Fein for either Fianna Fail or Fine Gael. The fact that the opposition is divided will prevent a repeat of Portugal, and possibly Spain’s experience.

Fine Gael is likely to remain the largest party. It will likely lead any new government. This too suggest a continuity of policy. The latest polling figures suggest the governing coalition is about ten seats shy of a majority. If this borne out in the election, there would likely be an attempt to bring into the coalition some independents or a couple of small parties. However, given the divided nature of the opposition, a minority government cannot be ruled out, and it might be more stable than it sounds.

If an asset manager was looking to add to Irish exposure, underperformance ahead of the election may offer an opportunity if one expects the election will not disrupt the underlying fundamental strength of the economy and the general thrust of policy. Ireland’s economy is enjoying good momentum now that looks strong enough to weather some near-term uncertainty, and it is a short campaign season. The composite PMI reported earlier today rose to 61.1 from 59.2. It peaked at 61.8 last July and fell to 57.7 in October.

The status quo has not done particularly well in recent elections. Ireland may buck the trend.”

Analysts at Brown Brothers Harriman explained, apparently, that when Irish eyes are smiling, it’s time to call an election.

(Market News Provided by FXstreet)

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FXStreet (Córdoba) – Gold prices advanced on Wednesday as the US dollar weakened across the board, with spot reaching its highest level since October 30th at $1,145 an ounce, before correcting slightly. The yellow metal ended the day at $1,141 an ounce, its highest close in over three months.

There were no clear catalysts for the slump witnessed in the US dollar, although dovish comments from Fed’s Dudley ignited the downward move at the beginning of the New York session, while disappointing ISM services PMI fueled the decline.

Gold prices advanced on Wednesday as the US dollar weakened across the board, with spot reaching its highest level since October 30th at $1,145 an ounce, before correcting slightly. The yellow metal ended the day at $1,141 an ounce, its highest close in over three months.

(Market News Provided by FXstreet)

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FXStreet (Guatemala) – EUR/GBP is above the 0.76 handle and the 200 sma on the hourly sticks at 0.7594.

The euro has rallied on a soft dollar, as has the pound, but the euro has the upper hand in a short squeeze that triggered multiple stops on the way up. “We think EURUSD is likely to trade on a firmer footing as the 1.13 area beckons,” suggested analysts at TD Securities.

“Super Thursday;’ at the BOE tomorrow and newspapers dominated by the Brexit story will attract more attention however, and the FT’s headline (“Cameron faces tough fight to sell EU plan”) doesn’t suggest we’ll get much of a bid to sterling,” suggested Kit Juckes, economist at Societe Generale.

EUR/GBP levels

EUR/GBP has recovered into key bullish territory through the 0.75 handle and looks for space to consolidate on the 0.76 handle above the 1hr 200 sma at 0.7594. This converges with the 20 dma at 0.7585 today and the uptrend eyes 0.7755 high of 19th Jan. RSI (14) is in neutral on the 4hr sticks at 47.06 and spot trades above the pivot of 0.7577, with R1 at 0.7613 and R2 at 0.7655 .

EUR/GBP is above the 0.76 handle and the 200 sma on the hourly sticks at 0.7594.


(Market News Provided by FXstreet)

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