Monthly Archives: January 2012
GOLD ANALYSIS
Spot gold is up a tad in Europe Thursday, holding its ground above $1,700 a troy ounce after dovish comments by the U.S. Federal Reserve sparked a sharp rally the previous session.
Behavioral Finance: Daily Forex Outlook : Fed: Novelty trumps content
EUR USD (1.3110) The Fed guidance on ‘exceptionally low’ interest rates until late 2014 sparked a rally in equities and a dollar sell-off. The subsequent hair-splitting in the market on what range of interest rate the words ‘exceptionally low’ actually might imply, or the attributing of dovish and hawkish stance to particular members, does not […]
Technical Analysis
More dollar weakness seen overnight post Fed. We are looking for a marginally new dollar low today however followed by an almost immediate u-turn. EURUSD looks to have potential above 1.3121 but below 1.3199, GOLD passed a bullish milestone yesterday, USDJPY stalling on back of lower US bond yield, EURSEK underpinned by a potential bull […]
BUND ANALYSIS
German government bonds are opening higher Thursday following overnight gains in USTs after the Federal Reserve indicated that rates will remain “lower-for-longer”. The FOMC statement said, “To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly […]
UBS Morning Adviser Europe
Dovish Fed Drives Risk The dovish FOMC decision continued to drive markets in Asia. Investors added more risk, inspired by the Fed’s pledge to keep rates on hold until late 2014. AUDUSD and NZDUSD saw most of the action, and even EURUSD crept higher.
FX Market Technical Research
EUR/USD has cleared this years high at 1.3077 and remains upside corrective. The market is poised to encounter the 1.3141/45 resistance, this is the October low and 55 day ma, between here and the 1.3245/50 zone (38.2% retracement of the move down from October) we expect to see failure.
GBP/USD ANALYSIS
Closed in NY at $1.5660, off FOMC inspired recovery highs of $1.5679. Holiday thinned Asia, Australia and India adding to China, though HK back today, saw cable consolidate the move, with trade contained within a very tight range of $1.5651/65.
EUR/USD ANALYSIS
Closed in NY at $1.3107, having corrected from a low of $1.2931 to $1.3121 as markets reacted to the dovish FOMC comments, the statement pushing out a rate rise into late 2014 (from mid 2013) and leaving the door open to act aggressively (more QE).
GOLD ANALYSIS
Spot gold prices raced higher yesterday after touching lows of $1649.15 in NY, following Fed Chairman Ben Bernanke’s reiteration that US Interest rates would stay close to zero until possibly the end of 2014.
What matters today
Developed macro 1. Risk appetite was boosted by the surprisingly dovish FOMC minutes 2. Media speculation on the ECB’ role in Greek PSI has increased 3. US: Durable goods orders to continue increasing on transportation sector orders, but core good orders holding up as well. 4. New Home Sales to have risen 2.2% in December.
USD/JPY: Position for an extended bounce
Triggered by the global financial crisis, USD/JPY has been in a downtrend since June 2007 resulting in a cumulative 38% loss in competitiveness. Recently, however, this USD/JPY downtrend has slowed and now appears poised to reverse.
Asian Market Summary
The USD fell to multiweek lows against the KRW and SGD; the USD/KRW is trading 1,121.40 at after briefly tapping 1,120.50, the lowest since November 14, 2011. The USD/SGD is trading at a near three-month low at 1.2561.