GBP/USD 7 Oct 2013

United Kingdom’s economy is not growing at “a sustained pace” as BoE Governor Mark Carney commented last week and this was reflected in the market, generating the recent drop.

Technical Outlook

Early during Friday’s trading session we experienced an almost perfect re-test from below of the level located at 1.6170, followed by a bounce lower. The pair dropped almost 170 pips and the bears are in control at the moment, aiming for the first support, located at 1.5960. Today we expect a “clash” with this level which is very important for future direction as we may witness a trend reversal and a shift in the balance of power.

Fundamental Outlook

The United Kingdom doesn’t release today any major economic or financial data so the pair’s movement will mostly be driven by the technical aspect.

EUR/USD 7 Oct 2013

Forex Technical Analysis: The pair moved to the south for almost the entire duration of Friday’s trading session on the back of Euro weakness generated by a worse than expected German Producer Price index and the bears scored the first victory in a long time.

Technical Outlook

The level located at 1.3570 was broken to the down side and the sellers had the strongest day in a long while. If this bearish momentum will turn into a trend reversal, the first target is the support located at 1.3520. For today we anticipate slow price action, with a potential re-test from below of the recently broken level, followed by continuation of Friday’s bearish direction.

Fundamental Outlook

The Euro Zone Sentix Investor Confidence will be released today at 08:30 am GMT with an anticipated increase from the previous 6.5 to 10.9. This is a leading indicator of economic health based on the opinions of investors and analysts who are highly informed due to the nature of their jobs so higher than expected numbers usually strengthen the Euro.

USDCHF Falling Wedge

The USDCHF currency pair has formed a falling wedge formation which is a bullish chart pattern. MACD indicates momentum has stabilized while RSI is trading in oversold territory.

DAILY ANALYSIS FOR 24.09, 2013

Asian and European trading sessions:

Euro: After data on business sentiment in Germany, which were weaker than expected the euro exchange rate fell slightly against the dollar. The Ifo survey showed that business climate index rose to 107.7 in September from a revised 107.6 in August, while many economists' expected it at the level of 108.4. Also, the Ifo business expectations index rose to 104.2 in September from 103.3 in the previous month, where accordingly to forecasts the index had to grow to 104 mark. The current conditions index fell slightly to 111.4 from 112 in August with forecast an increase to 112.6. The EUR / USD pair fell to $ 1.3470 during the European session.


British Pound: The British pound fell against the dollar after the data that showed that the approved applications for mortgage loans increased in August, both in quantity and in value terms in the UK. The data presented by the British Bankers Association (BBA) confirmed that the number of mortgages approved for house purchase rose to 38,228 which is the highest level since 2009. However, the August level was below the consensus of the forecast of 38650. In value terms, mortgage applications to purchase homes rose to 6 billion British pounds from 5.8 billion pounds in July. In addition, the data showed that the level of unsecured borrowing rose by 0.3% compared with a year earlier. As part of the annual growth of credit cards was 6.7 % surpassing the personal loans and overdrafts, which grew by 5.1%. The GBP / USD pair fell to $ 1.5956 during the European session.


New Zealand Dollar and Australian Dollar: The currency of Australia and New Zealand fell against most major currencies amid falling Asian stock indexes, departing from theirs the four-month high.
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American trading session:


U.S. Dollar: The dollar allowed for its competitors to recover some of the lost ground which was helped by the U.S. data, demonstrated that the consumer confidence presented by Conference Board fell in September. The Index is currently 79.7 compared to 81.8 in August. The current conditions index rose to 73.2 from 70.9. And the expectations index fell to 84.1 from 89.0 last month.


Gold: The gold prices declined moderately today, registering with the decline in the fourth session in a row, which was associated with the strengthening of the dollar. The cost of the October gold futures dropped to $ 1315.00 per ounce on COMEX today.


Oil: The cost of WTI oil futures fell slightly, dropping at the same time below $ 102.80 per barrel as geopolitical tensions eased, and there were some new evidence of increases in oil supplies from Libya and Iraq.
 

TECHNICAL ANALYSIS FOR 24.09, 2013

EURUSD
The pair has declined to support level at 1.34882. If the pair breaks this level the pair will decline to 1.34218.
Resistance: 1.35984, 1.37486, 1.38554
Support: 1.34882, 1.33143, 1.31674

GBPUSD
The pair is testing 1.60322 for support. If the pair breaks this level the pair will decline to 1.58543.
Resistance: 1.62050, 1.63316, 1.64636
Support: 1.60322, 1.58543, 1.56722

USDCHF
The pair has declined to the support level at 0.91079.
Resistance: 0.92026, 0.93069, 0.93949
Support: 0.91079, 0.89635, 0.88418

USDJPY
The pair is trading around 98.718.
Resistance: 99.888, 101.207, 102.567
Support: 98.718, 97.491, 96.400

AUDUSD
The pair is trading between 0.94635 and 0.93493.
Resistance: 0.94635, 0.95611, 0.96579
Support: 0.93493, 0.92284, 0.91360

DAILY ANALYSIS FOR 24.09, 2013

Asian and European trading sessions:

Euro:The euro exchange rate fell slightly against the dollar after the data on manufacturing activity in the euro area came out weaker than economists' expectations. However, the Purchasing Managers 'Index rose primarily due to improved activity in the services sector. The production index rose in September more than expected to a 27- month high of 52.1 compared with 51.5 in August, while the economists had expected a rise to 51.7. The index of purchasing managers in the services sector reached 52.1 compared with 50.7 in August. Activity in the services sector rose a second month in a row and expanded at the fastest pace since June 2011. Meanwhile, the index of manufacturing activity fell to 51.1 in September from 51.4 in August, yet industrial production increased for the third consecutive month. The EUR / USD pair fell to $ 1.350 area during the European session.

U.S. Dollar: The dollar was higher today against all currencies excluding the yen ahead of today's speech, the president Federal Reserve Bank of New York and Atlanta Fed Dudley Dennis Lockhart. Recall that last week, the Fed unexpectedly refrained from lowering monthly asset purchases, saying that more signs of sustainable recovery of the labor market.

Australian Dollar: The Australian dollar rose after today's publication of the preliminary data of the manufacturing index from HSBC PMI on China’s economy. This month the index rose to 51.2, from 50.1 in August, while analysts had expected growth of only 50.9.



American trading session:


U.S. Dollar: The little pressure on the U.S. dollar had data on the index of business activity in the industry. The index of manufacturing activity in the U.S. PMI Markit weakened to 52.8 versus 54.2 and 53.1 which was its previous result. The decrease was primarily due to a reduction in new orders, including export, as well as the deterioration of the employment situation.

Japanese Yen: Against the background of the fact that the U.S. Treasuries rose and their yields fell on discussing the Fed's rate of economic growth, the yen rose against most major currencies. The yield on 10-year bonds fell by 1 basis point to 2.726 %. The yield on 30 -year bonds also fell by 1 basis point to 3.755 %, and 5 - year securities - 1.5 basis points to 1.469 %. The speeches by leaders of the Fed after the decision of keeping the asset purchase program again raised the question of when the Fed is ready to stop easy monetary policy.
The USD / JPY pair fell to Y98.80 during the session.

Gold: The cost of October gold futures dropped to $ 1327.60 per ounce on the COMEX today expanding the losses of the previous session. Many investors continued to weigh the Fed's comments with regard to stimulus.

Oil:  The cost of the WTI November futures fell to $ 103.44 a barrel on the NYMEX. The oil prices fell markedly, as the higher the volume of production in Iraq and a possible improvement in US- Iranian relations have improved the outlook for oil supply.