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With G7 meetings later today and tomorrow, we are seeing some profit taking in risk sensitive instruments. GBP/JPY bounced off of 100 WMA near 143.30 and rallied 500 pips, retracing three quarters of the decline in May, before turning lower. AUD/USD is also off a cent after testing 0.77 earlier this week.
al_dcdemo's Blog
Yen strength to start the week
Themes from last week continue. Yen is the strongest, followed by the U.S. dollar. AUD/JPY broke to new lows and NZD/JPY is likely to follow soon. CAD/JPY and CHF/JPY already did it last with EUR/JPY not far behind. GBP/JPY is the only one standing with a decent buffer or does it have some catch-up to do?
A volatile turn of the month in FX markets
Quite some action in FX markets at the turn of the month. Several pairs (EUR/JPY, GBP/JPY, USD/CAD, AUD/USD) broke their respective 200 DMA, and few other ones (EUR/USD, GBP/USD, NZD/USD) their 50 DMA, which sparked some momentum. Stock markets turning lower has also contributed to the volatility.
U.S. dollar relief continues
Relief for the dollar continues as it is up for the third consecutive day against most currencies. GBP/USD spiked earlier on some positive Brexit headlines but is already paring those gains. Some more upside is likely in GBP/JPY before stocks go into sell mode again. We'll soon see what U.S. traders will come up with after the holiday.
Cable buoyed by GBP/JPY on Easter Monday
Some pairs traded as if there were no holiday yesterday. GBP/JPY buying was perhaps the most notable. After the break below 136.45 last week, the pair was bought up 137.15 as risk sentiment improved, leaving a reversal candle on the daily chart.
That helped to buoy GBP/USD which rose 75 pips to above last week's high but was unable to breach pre-Article-50 high (1.2615) which is now reinforced by 200 DMA. 1.27 - 1.28 area is the next target if only 1.24 - 1.25 holds as a support.
That helped to buoy GBP/USD which rose 75 pips to above last week's high but was unable to breach pre-Article-50 high (1.2615) which is now reinforced by 200 DMA. 1.27 - 1.28 area is the next target if only 1.24 - 1.25 holds as a support.
Cable looks heavy below 50 DMA
GBP/USD has been grinding ever so slowly higher since the flash crash in early October. The pair has been supported by easing of Brexit rhetoric, better than expected macroeconomic data and, not least, GBP/JPY buying.
Cable is currently stalling just below 50 DMA. A convincing break would target November low (1.23) and the post-flash-crash consolidation (1.22). 1.25 is the current bull/bear line in sand. A break and hold above may lead to a retest of 100 DMA.
Cable is currently stalling just below 50 DMA. A convincing break would target November low (1.23) and the post-flash-crash consolidation (1.22). 1.25 is the current bull/bear line in sand. A break and hold above may lead to a retest of 100 DMA.
Quiet start to the week
Major currencies opened with gaps again but this time around with smallish ones in what appears to be the quietest open so far this year. Improvement in risk sentiment seemed to come after China managed to stabilize its currency and stock market.
Given the magnitude of the bounce in stocks, oil and risk sensitive currency pairs it seems that an interim bottom may be in place. However, all macroeconomic themes are still ongoing, so it may be too early to speak of a reversal.
Given the magnitude of the bounce in stocks, oil and risk sensitive currency pairs it seems that an interim bottom may be in place. However, all macroeconomic themes are still ongoing, so it may be too early to speak of a reversal.
Cable falls to the lowest since 2010
Not long after the London open, Cable broke below 2015 low (~1.4565) by a couple of pips before pulling back. Another attempt at new six-year lows saw the pair being sold to 1.4555. Next major support comes in near 2010 low (~1.4230).
GBP/JPY fell more than 700 pips so far this week and year, almost 200 pips per day, weighing strongly on both core pairs. This pair has been acting as a decent risk barometer having been correlated well with global stock markets.
GBP/JPY fell more than 700 pips so far this week and year, almost 200 pips per day, weighing strongly on both core pairs. This pair has been acting as a decent risk barometer having been correlated well with global stock markets.
Greek deal closer
It seems that a deal was reached between EU and Greece, but it is still subject to approval from the Greek government. The conditions for the third bailout are much harsher than those rejected by the Greek people on the referendum and even if the government approves them, that by any means won't be the end of the story.
Now that some uncertainty is out of the way, currencies appear to be returning back to trading fundamentals. EUR/USD sold off while GBP/USD, USD/JPY and USD/CHF rallied. In line …
Now that some uncertainty is out of the way, currencies appear to be returning back to trading fundamentals. EUR/USD sold off while GBP/USD, USD/JPY and USD/CHF rallied. In line …
GBP/JPY flying
Since ECB lowered refinancing rate to near zero and deposit rate to negative, Euro has been increasingly used as a funding currency. That's a big part of the reason why GBP/JPY has became a better risk barometer than EUR/JPY in the past year or so.
After closing weekend gap, "Geppy" fell some 650 pips on Grexit fears, which at that point seemed almost inevitable, and the sell-off in Chinese stocks. On Thursday, the pair stabilized in line with improved sentiment with regard to Greece and Chinese…
After closing weekend gap, "Geppy" fell some 650 pips on Grexit fears, which at that point seemed almost inevitable, and the sell-off in Chinese stocks. On Thursday, the pair stabilized in line with improved sentiment with regard to Greece and Chinese…