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The sharp rebound in oil prices from the middle of January proved to be short-lived as we and many other analysts had expected. Oil prices are now down for the fourth day and second consecutive week.
As a trader, it's difficult to predict the impact of a major trading hub being closed. More often than not, it leads to slow, lackluster trading conditions as traders focus on enjoying their time off
With the EUR/USD rallying to above 1.1300 level today, the USD/CHF is unsurprisingly dropping like a stone. The two currency pairs are inversely-correlated of course because the SNB has more or less pegged its policy to that of the ECB.
Earlier today, we talked about the recent strength of the euro in the context of EUR/USD, but the moves in EUR/GBP since the start of December have been even more impressive.
Late January saw a substantial rally for GBP/JPY that lifted off from nearly a two-year, hammer candle low around the 164.00 support target.
EURJPY With price rejection now seen, the pair looks to put in temporary bottom. Unless the pair returns below the 128.26 level, we think a corrective recovery should occur. On the downside, support comes in at the 129.00 level where a break will aim at the 128.50 level.
The EURUSD continued its bullish momentum yesterday topped at 1.1337. The bias remains bullish in nearest term testing 1.1400 before targeting 1.1500 region. Immediate support is seen around 1.1260 followed by 1.1200.
Yesterday produced a clear break of the neckline of a potential head and shoulders pattern which if successful, projects an approximate target around $25.40.
Dollar Yen (114.54) has hit a low of 114.18, not far away from our initial target of 114.00-113.90. The best the Dollar bulls can expect at this point would be a sideways consolidation in the range of 114-116 but the risk of a sudden decline lower may always be there.
For those who have been following our EUR/USD reports lately, you may recall that we had a pending sell order set at 1.1330 (stop just above our daily supply zone at 1.1395) just below a daily supply zone at 1.1385-1.1332.
Global financial turmoil heightened safe-haven flows and continued to dampen the USD 1 1/2-year climb. Dealers continued to look for clues on the FOMC's policy trajectory. Traders unwound bets that the Fed would tighten rates this year.
The Japanese yen advanced to its highest level in more than a year against the U.S. dollar on Tuesday, while the 10-year bond yield slipped below zero for the first time as worries regarding global economy outlook sparked haven demand on refuge assets.
India continues to be a bright spot in the global economy. India's 4Q 2015 headline GDP expanded 7.3% y/y above expectations. Manufacturing surprisingly spiked in 4Q yet overall solid results were driven by improvements in the service sector.
EUR/USD has posted slight gains on Tuesday, as the pair trades at the 1.12 line in the European session. On the release front, German Industrial Production disappointed, posting a decline of 1.2%.
US crude is steady on Tuesday, as March futures trade at the $30 level in the European session. Brent crude futures are currently trading at $33.36. Today's key event is US JOLTS Job Openings, with the markets expecting a reading of 5.43 million,
Global financial turmoil continues to influence safe-haven flows and stall the mighty USD's 18-month climb. Global growth fears have fixed income dealers looking for clues on the FOMC's policy trajectory. Currently, the market is unwinding bets that the Fed would tighten rates further this year.
'It all has a 2008 global crisis feel about it, without the underlying causes. Shares in the big four local banks fell by a surreal 4 per cent to 5.2 per cent on Tuesday.' This extract from the Sydney Morning Herald's Malcolm Maiden this morning resonated with me.
The loonie was not dragged down by a tumble in oil prices and managed to eke out gains after the Canadian and U.S. bond yield spreads narrowed due to the softness of the big dollar.
USD/JPY came under renewed pressure as Asian stock markets opened lower again. The pair fell from a high of 115.25 in the early session to 114.25, only 4 pips away from yesterday's low.
The Canadian economy lost 5,700 jobs in January, pushing the unemployment rate up to 7.2%. While one month doesn't make a trend, total employment is only up 0.7% (or 126K jobs) since last year, while the unemployment rate has risen 0.6 percentage points since its post-recession low of 6.6% in January of last year.
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