Quant Signals: Short GBP/USD, Long EUR/GBP, Long USD/JPY – Danske

[unable to retrieve full-text content]

Quant Signals: Short GBP/USD, Short EUR/GBP, Long USD/JPY – Danske 

read more

The article is published by one of the foremost sources of Forex trading information. Link to the original article above.

from eFXNews http://feedproxy.google.com/~r/Efxnews/~3/n6lXKNnc2s0/quant-signals-short-gbpusd-long-eurgbp-long-usdjpy-danske

from Online Forex Trading Resource
View thesource article here

Advertisements

Pound one-two punched by Brexit polls

After a few weeks of polls showing a shift towards the “Bremain” camp, the Brexiteers have two reasons to be cheerful: two opinion polls show a shift towards the Brexit campaign, 24 days to go.

GBP/USD managed to recover from one poll but the second one is already a heavier.

First came the ORB poll from the Telegraph. It show a lead for the remain campaign, 51% against 46%. But while an absolute majority for Bremain may look promising, it is a big fall from the 55% to 42% lead the same poll showed a few weeks ago.

GBP/USD reacted with a drop from just over 1.47 to support at 1.4580 but since recovered to resistance at 1.4650.

But then came the second poll, which was actually composed of two polls: ICM, polling for the Guardian, showed in the past a divergence between the online and phone polls. A small lead for Leave was seen online while the phone polls showed a nice lead for the Remain campaign. And in comparison to the previous ones, it was looking like the Bremain camp had momentum on its side.

Now, both polls show a Brexit lead, with similar margins. The bigger difference is that the phone polls show more undecideds than the online poll. Nevertheless, when excluding the undecideds, they both show 52:49 in favor of the UK leaving the EU.

The exact numbers show a tight race and at this point, the momentum matters and it seems the Brexiteers have this much needed momentum.

For the pound, it’s bad news. The status quo certainty is desired over a leap into the unknown which will be damaging in the short term and unclear later on.

GBP/USD dropped to a new low of 1.4540. Further support awaits at 1.4440. More polls will come in the next days and may confirm or disprove the Brexit momentum seen at the moment.

Here is how it looks on the cable chart:

GBPUSD May 31 2016 falling Guardian Telegraph Brexit polls

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/pvN7voH1rAs/

from Online Forex Trading Resource
View thesource article here

EUR/USD: Gradual Or Glacial? A Buy On Dips Or A Sell On Rallies? – Nordea

EUR/USD is at crossroads: despite the slide, it is hesitating and lacking conviction. What’s next? The team at Nordea checks out both options:

A special segment ahead of the big Brexit vote:

The Fed’s fears has gradually receded, prompting a surge in likelihood for a summer hike which has put the USD back on track (+3% in May). A summer rate hike as well as markets glacial pricing of the Fed’s hiking cycle offer support for the USD, while we see no change in stance from ECB. Instead, ECB’s corporate QE and UK’s Purdah rules pose some downside risks to the pair in coming months.

The USD has reasserted itself strongly over the course of May, with the trade-weighted greenback set to see its strongest (3%) gain since the first month of 2015. The Fed’s fears, as we catalogued a month ago, has gradually receded, prompting a surge in likelihood for a summer rate hike.

While a Fed summer hike offers the USD some support from the policy divergence perspective, its December liftoff offered unknowns such as the “undiscountability” of the Death Star which its next hike does not – hence some tempering of optimism should be warranted.

Chart 1: The Fed vs the market

Federal Reserve against the markets

Even so, the market is pricing-in a rate hiking pace of merely one hike per year. This is not gradual, nor glacial (chart 1). It’s a geological rate hiking pace, and a far cry from what was often taken to mean gradual in 2015 (four hikes per year(*)). As long as economic data delivers and financial conditions does not tighten too rapidly (chart 2), this depressed pricing by itself offers support for the USD.

Chart 2: Financial conditions still very easy

financial conditions still very easy

On the other side of the Atlantic, we see no near-term change to the ECB’s policies even though it may be motivated to hike its growth and inflation forecasts somewhat. We continue to view any talk of tapering as highly premature.

There are other factors potentially supportive of the USD (vs EUR) in coming months: i) ECB:s commencement of corporate bond purchases, which could attract EUR issuance, depress basis swaps and weigh on the common currency, ii) the UK’s Brexit vote – remain sentiment could potentially face setbacks. UK’s Purdah rules will prevent civil servants and public officials from making announcements ahead of the referendum on June 23. Communications momentum could start to favour the “leave” camp, which resides outside of the government (while mostly GBP-negative, we also think a Brexit would be negative for EUR/USD).

Chart 3: Will PBoC care about the USD and will market care about CNY?

PBOC CNY USD measures June 2016

Finally, China’s reaction to recent USD gains bears watching as a higher USD/CNY has been at the centre of the last three major risk-off episodes (chart 3). If PBoC lets USD/CNY rise on the back of USD weakness it could pose risks to risk sentiment which could impact upon the Fed and consequently on the USD.

Chart 4: EUR/USD – at its post ECB QE1 average

EURUSD post ECB QE1 average

For lots more FX trades from major banks, sign up to eFXplus[1]

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/GTzNibUjuKE/

from Online Forex Trading Resource
View thesource article here

Fed favorite inflation figure comes out 0.2% as expected

The US reported a bulk of figures with the most important one being the Federal Reserve’s most important inflation figure: the Core PCE Price Index.

The US dollar was stable with only the Australian dollar standing out with gain against the greenback. At the same time, Canada released its monthly and quarterly GDP update.

Data (updated)

  • Core PCE Price Index: previous +0.1%, expected: 0.2%, actual: +0.2%.
  • Personal Income: prev. +0.4%, exp. +0.4%, actual: +0.4%.
  • Personal consumption: prev. +0.1%, exp. +0.7%, actual: +1%. – only significant surprise.
  • Canadian GDP m/m: prev. -0.1%, exp. -0.1%, actual: -0.2%.

We later have consumer sentiment and the Chicago PMI. The last day of the month usually results in erratic market movements. The month of May was quite good for the USD and the GBP.

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/ArvDWOR0X1Y/

from Online Forex Trading Resource
View thesource article here

GBP/USD – the devil’s currency pair? [Video]

In our special feature today we talk about cable. The original transatlantic pair offers more pips than EUR/USD, but these pips can turn into both a loss or a gain. We covered the special features of cable’s reaction to UK data and talked about the recent movers of this pair.

A special segment ahead of the big Brexit vote:

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/CdKyYxGami4/

from Online Forex Trading Resource
View thesource article here

Euro-zone inflation at -0.1% as expected

Euro-zone inflation ticks up from -0.2% to -0.1%, as expected. This is the fourth consecutive month of a negative number, but it can be blamed on oil prices. The unemployment rate remains at 10.2% also as expected. Also core inflation comes out as predicted with a rise from 0.7% to 0.8%. 

This doesn’t cheer EUR/USD too much with continues playing around 1.1130.

The euro-zone was expected to report a drop of 0.1% in the Consumer Price Index (CPI) in May, in its preliminary read. In April, the final read was -0.2%. Core CPI was also expected to rise from 0.7% to 0.8%. The unemployment rate was predicted to remain unchanged at 10.2%.

EUR/USD traded around the former support line of 1.1130 towards the release.

Early indications from Germany and Spain did not change the expectations. Earlier in the day, euro-zone monetary data disappointed with private loans sliding to 1.5% y/y and the M3 Money Supply slipping to 4.6%. Also German retail sales missed expectations with a drop of 0.9% after a rise of 1%.

Join me for a webinar all about EUR/USD at 13:00 GMT at Financial Juice[1].

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/D7Dhs7_ZCwM/

from Online Forex Trading Resource
View thesource article here

Rocky end-of-month ahead [Video]

All traders are back from the long weekend and it’s getting busy: the Fed’s favorite inflation figure is key to the June decision. In the euro-zone, inflation figures feed into Thursday’s ECB meeting and for Australia it may be a “make or break” moment: a double feature of GDP and Chinese data. Also for the pound things are getting interesting with fresh polls showing a tighter race. Also watch out for movements in the Canadian dollar with the GDP figure coming out.

Wrap up of the morning show for May 31st 2016:

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/5IF15sEVn1s/

from Online Forex Trading Resource
View thesource article here

Learn all about EUR/USD – webinar at 13:00 GMT

What are the forces moving the world’s most popular currency pair? What is going on now and where is it headed next? It has been quite turbulent since peaking two years ago and this week is clearly a critical one for the king of currency pairs.

Join me for a deep dive into EUR/USD’s moving parts today at 13:00 GMT / 9:00 EST on Financial Juice[1].The webinar features a live interaction where you can ask questions in the chat box.

Join in right here[2] – you can open the page now and the broadcast will start automatically at 13:00 GMT.

Get the 5 most predictable currency pairs[3]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/Du-z-fPMRpY/

from Online Forex Trading Resource
View thesource article here

EURUSD , GBPUSD , USDJPY and XAUUSD TA – May 31 2016

EURUSD Daily Analysis

1_EURUSDH4_3105 

EURUSD (1.115): EURUSD closed with a modestly bullish note yesterday following the strong bearish candlestick on Friday. The reversal is likely to see a near term retracement in prices, with 1.120 price level coming in as the first level that could be tested for resistance. On the 4-hour chart, price action is currently flat with a moderate rally in prices. The Stochastics has moved out of oversold levels. Only a clean break above 1.120 – 1.12170 and establishing support at this level will see further upside towards 1.1380 resistance zone.

USDJPY Daily Analysis

2_USDJPYH4_3105

USDJPY (111.3): USDJPY continues to edge higher with price action now aiming for the 111.43 – 112.0 level of resistance. Unless prices go for a clean break above this resistance level USDJPY could be looking for a dip towards 107.95 – 108.0 support on a retracement. The 4-hour chart shows prices in the resistance zone currently with the Stochastics pointing to a hidden divergence near this resistance. 109.73 -109.35 will be the first support level of interest to the downside ahead of a correction to 108.

GBPUSD Daily Analysis

3_GBPUSDH4_3105

GBPUSD (1.471): GBPUSD is currently bullish, but prices are in the resistance zone of 1.4743 – 1.4720. Further continuation to the upside is possible only on a close above 1.4743 with a bullish candlestick pattern confirming further upside in prices. Support at 1.4461 – 1.4445 will be likely holding out any short term dips. Above 1.4743, the next resistance is at 1.48.

Gold Daily Analysis

4_XAUUSD_H4_3105

XAUUSD (1213): Gold prices fell through to test the 1200 support yesterday and with prices holding at this support so far, a near term rally cannot be ruled out. 1231.50 is the first level of resistance to the correction followed by 1264. On the 4-hour chart, 1214.80 is likely to act as a minor resistance level, and only a break above this resistance will see a continuation to the upside. To the downside, 1200 support could be tested if the 1214.80 resistance holds, but price action could stay flat. A break below 1200 could see gold prices fall towards 1180 – 1190 region.

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/euTTAgdj_gY/

from Online Forex Trading Resource
View thesource article here

EUR Into This Week’s ECB: What To Expect? – BofA Merrill

EUR/USD is generally under pressure ahead of the ECB decision. Can Draghi push it lower or will he unintentionally lift the common currency?

Here is their view, courtesy of eFXnews:

The June ECB decision should prove to be a non-event for EUR on our economists’ base case scenario of no change in policy particularly ahead of the start of CSPP and another TLTRO. These policies afford the ECB time to assess the impact on the real economy before deciding whether further measures are needed after the summer. Expectations around this meeting are correspondingly low, with the rates market pricing virtually nothing in for the event. The market seems to be reassured that the ECB can bide it’s time given the improvement in macro data and the weakness in the Euro trade weighted index (TWI). Flow data also suggests that there has been little pre-positioning in EUR ahead of the event.

The depreciation of the EUR TWI since the start of the month  (-1.9%) will also alleviate concerns over broader financial conditions in the Euro Area which have steadily improved through May. The EUR has found some support from the improvement in Euro Area macro data surprises which have recently moved back in positive territory. However, against this improving macro backdrop, and supportive of our view for a lower EUR by year-end, 5Y/5Y inflation break-even rates have not responded to the data improvement and have remained relatively stable since March.

With the ECB in stasis for now, the burden of proof for further EUR/USD weakness likely will continue to fall on the Fed and we look for USD gains (albeit modest) through Q3 as the Fed tightens policy once more in September.

For lots more FX trades from major banks, sign up to eFXplus[1]

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/6zJVTnZHdV4/

from Online Forex Trading Resource
View thesource article here