Forex Analysis
AUD/USD Analysis
Aussie was a victim of the overall risk-off sentiment and particularly hurt by the China HSBC flash PMI reading. Aussie-dollar opened at $0.8848 and after a brief peek at $0.8858, it slowly drifted lower in the early hours.
USD/JPY Analysis
The pair started the session on a slightly weaker note with dollar-yen witnessed a gap higher at the open this morning, from Y104.24 to Y104.58.
Morning Report
Asian markets are mostly lower following weak manufacturing data from China. The flash reading of HSBC China manufacturing PMI unexpectedly dropped to 49.6 in January versus consensus of 50.4.
Curtain raiser: Preview of RBNZ OCR Review
We expect the RBNZ to leave the OCR at 2.5%, and to clearly signal its intention to hike in March.
Performance of Manufacturing Index (PMI) – World Class Average
New Zealand’s manufacturing sector ended the year on a healthy note, and the first time since 2007 that every month recorded expansion in activity,
USDJPY – small bull triangle ahead of rally towards ~105.50 area
Since the rally from 102.86, prices have been forming a bull triangle above our key 103.89 support level. Further back and forth is needed to satisfy the consolidation ahead of an expected rally to near ~105.50.
GBPUSD – A-B-C pullback and false trendline break suggest new highs
There was a false trendline break just above key 1.6260 support; the rally since suggests a new high ahead for Sterling with extension targets as high as 1.6711.
EUR Mid-day Analysis
The Euro continues to see deflationary concerns surface and that sentiment leaves the bear camp incontrol. As suggested in Dollar coverage this morning, the Euro might be temporarily vulnerable,
CHF Mid-day Analysis
The Swiss retains a pattern of lower highs and lower lows. While the Davos conference might cushionthe Swiss temporarily, strong UK data, positive sentiment toward the German economy and residual fears of UStapering,
JPY Mid-day Analysis
With the BOJ sticking with recent economic forecasts and discounting deflation threats, the Yen finds somecapacity to consolidate on its charts.
CAD Mid-day Analysis
Perhaps the Canadian is catching some spillover support from improving attitudes towardthe UK and US. Maybe the Canadian is simply technically oversold and temporarily unable to fall further.
GBP Mid-day Analysis
Not surprisingly, the Pound has streaked higher in the wake of employment numbers that blow the doorsoff the anemic data flowing from around the globe.