Technical and Market Analysis by Vistabrokers

[Vistabrokers]

USD remains strong against basket of currencies

The Dollar moved higher today as it recouped gains lost further to the dip incurred following the surprising results from US wages last Friday. Demand has been on a continuous rise for the Dollar – albeit today we saw some thinner volumes of trading due to the holiday in Japan. The Greenback was up 0.2% against the Euro and 0.25% up against a basket of Major currencies. The EURUSD has thus far taken a dip of some 50+ pips from today’s opening session to trade around the 1.1791 mark as of late, as it edges closer to the recently established 9 year low of 1.1752.

Against the Yen the Dollar dipped further in today’s opening session trading around the 118.20’s but has since in European session recovered some losses and has risen some 100 pips to trade at 119.20. Today’s holiday in Japan has seen thinner volumes in early Asian session.

In Europe, Italy’s central bank chief warned on Sunday that risk of spiraling deflation in the Euro zone should not go unaccounted for. The EU economy is currently in a very fragile condition with Greece expected to put in place a member of the Siriza party as the country’s next president, which would most likely oppose the current austerity measures that are put in place in the debt ridden country.

www.vistabrokers.com

 

[Vistabrokers]

Vista Brokers: Oil continues to fall in price

On Monday, oil prices renewed their declines, falling below $ 49 a barrel. Thus, the decline continues for seven straight weeks, and both Brent and WTI are now around their lowest since April 2009: 48.82 and 47.24 dollars per barrel, respectively.

Vista Brokers analysts note that Goldman Sachs experts have lowered their quarterly and annual forecasts on the oil market. The three-month forecast for Brent was reduced from 80 to 42 dollars per barrel, and for WTI - from 70 to 41 dollars per barrel. The forecast for 2015 also decreased to 50.40 and 47.15 dollars per barrel, respectively.

Meanwhile, Saudi Arabia, the largest oil exporter in the world, continues to refuse demands of OPEC to cut production, to keep the price drop.

www.vistabrokers.com

 

[Vistabrokers]

Vista Brokers: on Monday Dollar was Traded under Pressure

The US dollar declined against the euro and the yen amid US stock market falling. Also traders continued to follow the mixed data on the US labor market, published on Friday.

Vista Brokers analysts note that the average hourly wage decreasing by 0.2% in the United States led investors to think about if the Fed would raise rates when the labor market still has some problems.

Another important reference point for the regulator is the inflation, and the situation with this indicator is not too optimistic. According to the forecasts the consumer price index in the US, which will be released this Friday, can show decline by 0.3% in December.

Seizing the moment of weakness of the dollar, the euro rebounded slightly and walked away from the 9-month low of $ 1.1753.

The analysts remind that this week the market will be waiting for the decision of the European Court of OMT program - scheme of bond purchases, and it may have a strong influence on the ECB actions. If the court makes a negative decision, the volume of quantitative easing may be limited in the future. And considering that the stimulation is already put in the price of the euro, the market reaction may be strong.

www.vistabrokers.com

 

[Vistabrokers]

Market Pulse 13.01

Tuesday's economic calendar will not be too crowded. A large portion of statistics will be released in the UK, so volatility of the British pound trading can increase.

9:30 *** Consumer Price Index — December (UK)
9:30 ** Core CPI — December (UK)
9:30 ** Retail Price Index — December (UK)
9:30 ** Producer Price Index Input — December (UK)
9:30 ** Producer Price Index Output — December (UK)
9:30 ** Producer Price Index Output Core — December (UK)

Strong impact on the market (GPB). Inflation is one of the key indicators for financial regulators. In December a slight increase is expected in consumer prices, after the declining in the previous month by 0.3%. In general, the data for all indices are expected to be moderately positive.

15:00 ** JOLTs Job Openings — November (USA)

Moderate impact on the market (USD). Measures the level of vacancies in the private sector at the end of the month (in thousands). The growth reflects the improvement in the labor market of the country, showing a high demand for workers.

18:01 ** 10-y Bond Auction — January (USA)

Moderate impact on the market (USD). US Treasury allocates its debt obligations. 10-year bonds are the reference in terms of reflecting the demand in the markets and in the form of an indicative yield.

www.vistabrokers.com

 

[Vistabrokers]

GBPUSD rebounds on low CPI expectations

The GBPUSD pair has changed trend, from the downward run we saw at the beginning of the new year which saw the pair lose over 500 pips in the space of a week, to a newly upward channel trend as we can see from the 1 hour graph below.

The 50 MA, which was previously seen as acting as a ceiling for the pair, has reversed and acts now as a strong support for the cable. The current price of the cable against the dollar sits at 1.5157, just off from the 50 MA as a recent drop in the cable followed on from an expected slowed UK consumer price inflation down to 0.7% in December. This follows on from a 12 year low of 1% which was measured in November.

Scenarios

The current intraday trend is an upward channel, with price of the GBPUSD expected to find strong support at S1 and climb back up to test this week’s high of R1. A break of which could lead the price to rise and test R2.

Alternately, if the 50 MA proves to be broken by the bears and cannot be sustained as a support, we expect to see the price drop lower and head towards S2 – a break of which will see a reversal of trend.

www.vistabrokers.com

 

[Vistabrokers]

Vista Brokers: Yen is Supported by Uncertainty in the Market

On Tuesday, the Japanese currency hit a one-month high against the dollar, supported with the growth of safe assets amid the falling of the oil prices. Investors go into "safe havens" due to the fear that the decline in oil prices will lead to an even greater slowdown in economic growth and inflation in the world economy.

Vista Brokers analysts point out that for the Japan's economic the oil price declining can be a positive, as well as for the other major importers.

Today, managing director of currency research at Nomura Holdings Inc. Jens Nordvig said that the fall of oil by 45% would reduce Japan's trade deficit by $ 500 million. In November, Japan's trade deficit amounted to $ 7.6 billion.

www.vistabrokers.com

 

[Vistabrokers]

USDCHF in range on intraday

Today’s sessions saw the Dollar dropped against the Swiss Franc as the USDCHF pair dipped under the 1.0200 level to session lows of 1.0180, following resistance met at R1 – 1.0216 – a level which has changed the trend for the Swiss franc into a range, with a support at 1.0116 as shows below.

The short term intraday indicators show the pair to be at a neutral level with the exception of the Stochastic, which currently shows the currency is currently in an oversold position.

Scenarios:

The short term trend is in a range, with currently the lower part of the range being favored as the next test level, with 1.0169 – the 50MA - as the support. A convincing break of which may see the price head to 1.0116 which is the current support line and critical point for the current intraday range.

Alternately, we may see the pair head back-up and retest the R1 level which has already been unsuccessfully tested twice. A convincing break of this may see a continuation of the longer term up trend we have experienced in recent weeks.

www.vistabrokers.com

 

[Vistabrokers]

Market Pulse 14.01

On Wednesday, market participants' views will be glued to the euro zone, where during the day will be a lot of important events. In particular, the European Court of Justice ruling for ESM and fiscal compact will be published. Also on this day the German Chancellor Angela Merkel, ECB President Mario Draghi, BOE Governor Mark Carney and BOE Deputy Governor for financial stability Jon Cunliffe will speak. In addition, the following information will be released.

10:00 ** Industrial Production - November (Euro zone)

Moderate impact on the market (EUR). Often, the production is a small contribution to GDP, but it allows to predict the dynamics of interest rates. In November, zero growth is expected on a monthly basis and a decrease year on year.

13:30 *** Retail Sales - December (UK)
13:30 *** Core Retail Sales - December (UK)
13:30 ** Retail Sales Excluding Auto & Gas - December (UK)

Strong impact on the market (GPB). In December, analysts expect growth in all indicators, but growth is projected to be less than in the previous month.

13:30 ** Import Prices - December (USA)

Moderate impact on the market (USD). Changes in prices of imported goods for the month. May be an early warning sign of inflationary trends change, or their confirmation. In December, the indicator is expected to decline.

19:00 ** Beige Book - January (USA)

Moderate impact on the market (USD). Review of the 12 Federal Reserve Banks of the United States about the local economy. Considering the market's expectations about the future monetary policy of the Fed, the publication may cause an interest among traders.

www.vistabrokers.com

 

[Vistabrokers]

Vista Brokers: Dollar Rose against Currency Basket

On Tuesday, the US dollar rose against its major competitors. Market participants finished to take a lead from the Friday ambiguous data on US labor market and shifted their attention to the fact that the US economy is in clearly better situation than another world major economies. In this regard, investors expect that this year the Fed will raise interest rates.

The dollar has risen against a currency basket in seven of the last eight trading sessions and has a good chance to finish a fourth straight week with the growth. Vista Brokers analysts point out that the positive investor tone against the dollar is limited by the reduction in oil prices, which in June, 2014 hav lost more than 50% of the value. Today, oil futures were traded at six-year lows, and fears of further decline still reserved.

However, it seems that the dollar at the moment remains a better investment than most other major currencies. On Tuesday, the euro was traded at 9-month lows against the dollar. The additional pressure on the single currency had an expectation of further economy stimulation steps by the ECB.

Also Deutsche Bundesbank lowered its forecasts for the euro. Now the regulator expects the single currency to reduce to $ 1.10, $ 1.00 and $ 0.90 by the end of 2015, 2016 and 2017, respectively.

www.vistabrokers.com

 

[Vistabrokers]

Vista Brokers: Investors Prefer Safe Assets

On Wednesday, the dollar came under pressure after the disappointing data on the volume of retail trade in the US. In December, the indicator fell by 0.9% including auto and 1% excluding auto. The index excluding auto and gas decreased by 0.3%.

Vista Brokers analysts point out that for retail trade it is the worst performance in the last 11 months, and it has reminded investors about their fears over global economic growth and inflation. The market expects that in June of this year, the Fed will raise interest rates, but the poor statistics can delay the process.

After the data on retail sales release the dollar fell to 116.07 yen, having lost 1.6%, but then oil suddenly rose in price in anticipation of US Department of Energy data on oil reserves. It stabilized the market and the dollar recovered to 117.35 yen. The euro rose by 0.1% to $ 1.1783 after trading near $ 1.1847 during the session.

On Wednesday, the copper price fell to a more than five-year low, and it sent concerned investors to safer assets such as US Treasuries and Japanese currency.

www.vistabrokers.com