Get started

Helenrush

AUD: Does The History Repeat?A significant part of the traders has gone to celebrate Thanksgiving Day. Yesterday AUD/USD managed to bounce while the markets were sleeping. The Aussie tried to grow on the RBA’s Governor Lowe comments. It goes almost without saying that the next central bank’s step will be a rate hike. It was really helpful for the currency. Well, it was quite obvious, too. But the question is when the regulator meets its targets. Considering the RBA’s position reflected in the Minutes and comments made by some of the policymakers, it does not happen near term, and probably in this life. Anyways, the hawkish comments are always AUD-positive, and the pair may continue its recovery after a long fall. At least, it corresponds to its regular cycle: 3 or 4 months of the fall are followed by 2 months of growth. What may put a crimp in the scheme is the strong US data. AUD/USD tested the intraday maximum at 0.7595. Yesterday it could bounce from the dangerous support level at 0.7500. The bears need a good reason to make their dreams come true here.
by HelenRush
GBP/USD is on thin ice? Janet Yellen will not continue her work in the FOMC once J. Powell takes charge. That means Trump has one more vacant chair. It is quite possible the new FOMC member will be a ‘dovish’ one, which is not too positive for the dollar, but it can’t collapse the currency, especially during the pre-Thanksgiving trading. The traders will now concentrate on the release of the Fed’s Minutes tomorrow. Another important question is whether the Fed is still ready to continue its tightening policy with the ‘reshaped’ team. GBP/USD has been growing for 6 days and is moving straightly towards the next resistance at 1.3280/1.3300. Theresa May, even being at risk of resignation, managed to make an interesting offer to both – the EU and the UK government. This has been a GBP-positive background, which helped the currency to grow against USD and EUR. The degree of uncertainty in both countries is high. There is a relatively high probability of a bullish continuation short term, but it’s better to wait for the break out of the 1.3250 area with the target at 1.3290.
by HelenRush
Will Draghi Rock The Euro? As a rule, political news is just a kind of an irritant for financial markets. The consequences of a political turmoil are unpleasant, but non-fatal usually. When a country with the strongest economy in Eurozone does not succeed in forming the government, the national currency suffers. Today is not a good day for the euro, apparently. Neither is the worst one. Political uncertainty together with the lack of macroeconomic news is a tough part for EUR, but these are just temporary factors. The Eurozone economic background has improved recently, which was enough for the Central Bank to start unwinding its QE program. On Friday, Mario Draghi made overall positive comments on the job market, and there are two more speeches planned for today. The key question is: what will the Central Bank will in case the economy diverges from the base scenario? If Draghi makes EUR to retreat below the 1.1720/00 area, we will see the falling towards 1.1660 first. The bulls anchor their hopes on the 1.1790/1.1800 resistance line.
by HelenRush
Will The Aussie Pull A Trick? AUD is in a fever. The Antipodes are those who lose positions against the US Dollar. But, the Aussie is just pretending to be sick. USD traders shifted too fast their attention from the macro data to politics. That means the dollar is getting more and vulnerable. AUD/USD is a good player. The pair is approaching the lower limit of its 5-months range. Australia’s economy is flexible and it is not too big. When AUD is expensive, it immediately reflects on the economy. The exporters suffer, international tourism declines, all of which hurts the business activity in the country. So, that’s quite obvious that the central banks can’t stand such state of things and interferes. The pair has been falling for 4 months, so, it’s probably the very time for it to turn around. Remember that there will be the RBA’s meeting next Tuesday, and Philip Lowe will deliver his speech. AUD may find the bottom at April 16th lows at 0.7490 and turn to to the upside then.
by HelenRush
USD/JPY: Let's Risk It The risk-on mode is on, and that is what helped the US dollar to ‘save the face’. The US currency managed to recover part of its previous devastating selling. On Wednesday, USD/JPY lost almost 100 points, but the pair could recover the smile. Anyways, we'll keep that in mind. USD/JPY spent some time within a tight range because USD was not able to move to the upside. It means the market was ready to make a U-turn and start selling. We should also keep in mind that yesterday the Fed’s Evans added ‘a fly in the ointment’ by expressing his doubts over the future path of inflation. Against this backdrop, it is interesting that USD/JPY is struggling to settle above the 113.00 area. The Yen is committed to the principle ‘the more haste, the less speed’. In other words, little strokes fell great oaks. And, putting it otherwise, the markets will wait for the vote on the US tax cut reform to determine USD’s fate. This year there have been a lot of ups and downs for the pair. Considering that all year, when the market came up to the range resistance 114.00-113.00, it started falling down, the next bearish target may be the late October lows at 112.95 and 112.50 after that. If the bulls have some counter-argument, they will need to regain the area above 113.90 level.
by HelenRush
AUD: Weaker Than The Weakest The US Dollar is like Alice in Wonderland falling down the rabbit hole. Will someone or something help USD today? We are not so sure. Even if the US data brings a positive surprise, would it be enough to help USD? Let's not forget that one of the main maintaining factors for the buck - the probability of a rate hike in December – is almost fully priced in. Does the dollar possess any other trump card (and by “trump” we don’t mean just one from the pack of cards)? Nevertheless, AUD distinguished itself today. In the morning, the currency lost almost 0.6%. AUD/USD broke the very important support level in the 0.7600 area. The Aussie was really disappointed with the wages data. The RBA repeated in all sharps and flats it was not ready to tighten the monetary policy anytime soon. Its cautious stance is quite understandable, in spite of the overheated job’s market. And, you know, the incoming data confirms the regulator is right. The Aussie is near July’s lows. Here it found a solid support. The break out of the 0.76 round figure will be a bearish signal. Under this scenario, AUD/USD should recover to the previous range, otherwise, the pair may fall towards May’s lows at 0.7400.
by HelenRush
EUR Finally Did ItToday was a big day. Apart from the flow of macroeconomic data, the meeting of the biggest central banks’ chiefs in Frankfurt definitely attracted some of the market’s attention. Frankly speaking, we did not expect any surprise from the central banks' chiefs, yet their comments provoked some volatility in some pairs. The common currency finally did it. Here it is again beyond the 1.17 levels. We are waiting for the US inflation and retail sales data for October now. The fact is the figures may influence the Fed’s decision of a rate hike in December, even though the Fed’s Kaplan told today they were ‘actively considering’ December rate rise.
by HelenRush
GBP: Houston, We've Had A Problem Pardon the phrase, but something is rotten in the United Kingdom. The country is torn in pieces. The prime minister has already lost some of its chess pieces, and this time 'the queen' is 'in check' herself. The news broke that 40 Conservative members of Parliament have agreed to sign a letter of no-confidence in Theresa May. They need only 8 voice votes to initiate the process of changing the leader. Last week the Pound showed resilience in spite of the uncertainty around the disruptive Brexit. This time GBP could not stand the news. The currency slumped 0.7% against the dollar and tested the lows at 1.3061. The political factors are too strong, and it will be difficult for the economic data to draw markets’ attention. The bulls will expect some hawkish or, at least, consolatory comments from the Bank of England's Governor Carney this week. At the same time, ‘the lion's share’ of attention will concentrate on the UK the inflation data. The downside is limited by November, 2-3 support line at 1.3040-50. Anyways, GBP/USD has to surpass the 1.3200-30 area to start the sustainable growth.
by HelenRush
The Dollar’s Decline As The Theme Song The US dollar is under the thumb of the president who got a handful of nothing during his visit to China. It’s interesting that yesterday Trump did not blame China for the trade balance deficit, but today he told the US ‘can no longer tolerate these chronic trade abuses’. Bad night, probably. As it turned out, the Senate version of the bill differs a lot from the House version. It seems that Trump’s team will not be able to implement the reform by the year-end, which means USD will lose the bulls’ support. So, someone has got a good chance to gain some points. The UK published a positive data today. The industrial production smashed the expectations, and the trade deficit narrowed. The positive figures helped the GBP to touch the highs at 1.3167. During the press conference today, EU’s Barnier told that only real progress on 3 key issues would open the second phase of talks. UK’s Davis noticed it’s the time for both sides to seek solutions. Right on time. The GBP-bulls tested 1.3190 resistance and retreated to the 1.3180 area. The 1.32 level is still a tough level to break, and a 'hard Brexit' is still not a myth.
by HelenRush
EUR/USD: Still Water Runs DeepThe majors keep their ranges today. The US dollar is under pressure in light of the uncertainty over the tax-cut details. During the Asian session, USD tried to gain some points, but the attempt was ineffectual. The US currency started the European trades on the back foot. EUR, vice versa, has reaped the harvest today. The EU Commission raised Eurozone economic growth forecast for 2017 to 2.2% from 1.7%, and ECB’s Coeur said the Eurozone economic growth was the fastest in 20 years. This news helped EUR/USD to surpass the 1.16 important barrier and to touch the highs at the 1.1644 area. Most of all, today Germany confirmed the healthy state of the region's economy. Positive German trade data brought joy to the markets, too. As it's said, in an empty field, a beetle is meat. The US dollar needs a positive trigger. Otherwise, the shared currency will confirm the breakout and settle above the important psychological level at 1.16.
by HelenRush
GBP Will Arise From The Ashes? GBP leads the outsiders today, and we think it is time to buy it. The Pound is a tricky currency: it can grow even when the dollar is strong. On Monday, GBP was one of the leaders of the trades. Of course, there are all these good old GBP-negative factors, such as concerns over Brexit negotiations, the political situation in the UK and that ‘dovish’ hike by the Bank of England. All of them undermine the Pound. But, actually, the markets do not believe that the Bank of England ended with the rate hike cycle. After the last week's meeting, Mark Carney noted that the inflation level would surpass the central bank’s target level. Another policymaker told the economy might need some more rate hikes in future. Under this scenario, the markets will cheer any good reason to buy GBP. For example, at the end of the week, the UK will publish the industrial production data. Positive figures will aim the pair towards 1.3280 levels, but keep in mind a strong resistance line at the 1.3196-1.3125 area.
by HelenRush
CAD Fails To Catch Up With Oil Yesterday's star, oil, is consolidating near the higher levels with minor losses. The asset is digesting the wild and surprising events in Saudi Arabia, and the majors don't care about it at all. Let’s face it: even USD/CAD has already recovered yesterday’s losses to the 1.27 round figure. CAD is trying to catch up with crude oil prices, but a lot will depend on the USD dynamics. The buck’s positions are not too stable at the moment. USD lacks some important driver. Yes, the markets were very satisfied with the NFP data and the ISM Index published on Friday, but the happiness vanished into smoke too soon. Trump’s tax cut plan is in danger – the markets are not sure if the Republicans can do it on time by the Thanksgiving Day. All this uncertainty limits the US dollar’s upside potential. More dovish Fed and the delaying of the tax cut reform may help the Loonie. Meanwhile, the markets will be waiting for the Bank of Canada's Governor Poloz speech today. Dovish comments, in spite of some positive incoming data, will force USD/CAD to check the 1.28 area. Otherwise, the pair may retreat towards 1.26 level.
by HelenRush
JPY: Some Risk Averse Investors Wanted The JPY lost 0.6% in the morning on the back of the release of the Bank of Japan Monetary Policy Meeting Minutes. During the first half of the day, USD/JPY touched the highs at 114.73, which is the lowest level for the Japanese currency since last March. There were different reasons behind the slump, and among them, we may emphasize the impact of 10-years Treasury yields, as well as some regional issues. Firstly, Trump expressed sharp criticism of the trade relations between the US and Japan. Frankly speaking, the US president thinks little of any regional trade partnership, including the Transatlantic Trade and Investment Partnership (TTIP). Another bad news for the Yen was Mr. Kuroda’s comments. The BoJ Governor told the current monetary policy was enough to achieve 2% target level. However, the USD-bulls did not manage to keep gains, and the pair came back to its familiar range at the 114.20-25 area. If the pair closes below the 114.00 level, the bears will have a chance to test the 113.60 support level, especially, given the pullback in Treasury yields. In case of any risk aversion, the pair will move below the mentioned area.
by HelenRush
AUD: More Pressure Ahead? After quite a volatile Thursday, the overnight trade was calm and almost uneventful. The Retail Sales data set the Aussie up: the sales did not grow at all in September after having fallen by 0.6% in August. AUD/USD slid below the 0.77 area and touched the lows at 0.7669. This was a bearish sign which may lead to the consolidation in the current range 0.7670/40 at best. The last risk event for this week was the US jobs and wages data release. It is worth mentioning that this release used to be a market mover, but it has not been that important lately because it is obvious now that the problem is not the labour market, but the inflation. In October nonfarm payroll employment rose by 261,000, but the unemployment rate fell to the lowest level since 2001 at 4.1%. Even these dismal figures could not save the Aussie. We think that the NFP data will hardly influence the Fed’s intentions. This will support the US dollar, and the next bearish target for the pair is the area of August lows at 0.7420.
by HelenRush
That Moment When They Raise, But…We waited for it too long (almost 10 years, actually) and it happened. The Bank of England pushed interest rates up to the pre-Brexit levels. Over a year ago, the Bank made an emergency rate-cut from 0.5% to 0.25%. Ramsden and Cunliffe became the dissidents as expected. We agree with those who think that today’s step did not mean the start of a gradual tightening. The regulator just wanted to take back the emergency cut of the last August. Today’s event determined GBP’s destiny for the upcoming months. The Sterling had its toughie area at 1.3280-1.3300 and slumped to the lows at 1.3098 as the inflation outlook is still dovish. The Pound could not settle above the higher levels. Our next target to the downside is the October lows at 1.3020. If this area capitulates, the pair might be right back to the August lows. Let’s keep in mind two more risk factors – the announcement of the new Fed Chief and a tax bill announcement.
by HelenRush
NZD/USD: Will Depend On FOMC... ...Even though the meeting is not going to offer a firework. The Kiwi lost almost 3 figures in the past two weeks and finally found a bottom. At least, it seems the pair has a chance to start the recovery. The Kiwi’s reaction to the employment data for the third quarter was enthusiastic. And it’s not surprising: the employment rate grew by 4.2% y-o-y. The unemployment rate dropped to 4.6% from the previous 4.8% for the first time in the last 9 years. The new government will have to try hard to “fly the flag”. You may remember that the RBNZ may suffer some changes. The ruling party may force the regulator to keep its easing policy. So, the markets cheered the data because this is a good sign for the future of monetary policy. NZD/USD surged to the area of 0.6890 and on the second try regained 0.69 level touching the intraday high at 0.6929. Curious to relate, but a lot will depend on the FOMC meeting today. If the traders send USD to the south under «buy the rumour, sell the fact» rule, the Kiwi may settle above the 0.69 level, which will confirm a bottom in the area of 0.6835.
by HelenRush
USD/JPY: Waiting For Clarification The Bank of Japan did not deliver. We all knew it, and yet we expected a miracle. The regulator did not change its stance and left its massive monetary stimulus program on hold. To the markets’ surprise, it was not an overwhelming consensus. There was one dissident – Goshi Takaoka – who voted against the decision. Anyways, the results were JPY-positive, but the currency’s reaction was sluggish. USD/JPY touched the lows near 112.95 and after that met some buying interest, which helped the pair to climb to the area of session’s high near 113.40. In broad terms, USD/JPY dynamics looks like a Pushmi-pullyu: the Yen was unimpressed with a boring press conference, the USD can’t advance amidst a political turmoil in the US. At least, on Thursday Trump may announce who will replace Yellen, and maybe some action will finally begin. During the last two months, USD/JPY was not able to regain the 115 mark. The bulls are disappointed, indeed, but the pair will probably make another try. On the other side, "buying the dips" may attract some investors, which may swing the pair. Anyhow, we do not expect any significant step from the Fed tomorrow.
by HelenRush
EUR: The Calm Before The Storm The euro had little time to get over the recent slumps provoked by dovish ECB and strong US data. On Friday, EUR/USD slid far below the 1.16 mark, but euro-bulls are trying hard to regain some ground. The Catalan crisis is still a euro-negative factor but, as a rule, the impact of such events is usually short term. Today’s US data was quite solid and reflected that US consumer spending surged to the maximum level in 8 years in September. The pair almost ignored the data, though. But, the weak German CPI weighed on the euro, and EUR/USD once again tested the very important 1.16 mark. Most of all, it seems we will have to live four more days of speculations around the next Fed Chair. US president Trump may wait till Thursday to disclose the name of the new Fed's Governor. The solid break out of the 1.16 mark will clear the path to the next target at 1.1550. In order to come back to the familiar range and offset the consequences of the recent fall, the pair has to try hard and close above the 1.17 level.
by HelenRush
USD Waiting For US GDP Yesterday’s turmoil provoked by ECB seems to fade away. Some of the Council’s members – Knot, Lautenschläger, Weidmann and Coeure - commented they were not happy with the decision. Villeroy added that the central bank made "essential step" to end QE. It will give the euro some time to take a breather. The US dollar is in a good shape today, and it is higher against its major counterparts. Yesterday the U.S. House of Representatives passed Trump’s budget blueprint. This is a big step forward on US tax reform, which may be the first one in almost 30 years. Among all the USD pairs, we should be careful of USD/CAD, since the pair has been growing for 7 days. Especially, after the Bank of Canada kept the rates unchanged on Wednesday. Actually, this was predictable but, anyways, disappointing. After two rate hikes in a row, the markets did expect another hawkish surprise. This week will end with the release of US GDP data. Given that the US data has been positive lately, there is a chance the GDP will surprise on the upside. In this case, USD/CAD may test July highs at the 1.30 area. If failed, the pair should be ready to rebound.
by HelenRush
ECB: A little Bit More Bearish Than ExpectedIt has been all about ECB these days. The markets were ready to catch any signal from the regulator about the tapering. Actually, the really important thing is not today’s meeting results, but the timing of the next ECB’s rate hike. We don’t expect this until the springtime of 2019. The appreciation of the euro is the last thing that ECB wants, so Draghi should be very careful during his speech. In the morning, EUR/USD traded in the range beyond the 1.1800 level. The pair touched intraday highs at 1.1833. This was probably the last time we saw EUR at these higher levels, at least short term. The European regulator did not deliver any surprise and decided to keep the status-quo on rates as expected. But the extension of QE was a little bit more bearish - to September 2018 and "maybe beyond". This was disappointing news for the euro bulls. The euro went into free fall, and EUR/USD approached the strong support line at 0.1750. This is the area of swing lows, and the bears need more arguments to push the pair through it. Draghi will deliver some details and we may soon see the euro at 1.1740.
by HelenRush
AUD: The Bulls Are Really Disappointed The Aussie marked the fourth day of falling. Actually, that is what usually happens when the CPI Index of a country falls instead of growing. Especially if the data comes far below central bank’s expectations of 2-3%. In fact, AUD/USD has been losing its positions since September. But the traders think there is still a good chance of a rate hike from RBA taking into account situation on Australia’s housing market. It is worth mentioning it probably will not happen until the end of 2018. The markets are used to RBA’s cautiousness. Most of all, the central bank told not once but repeatedly it was not going to take any measures but it seems this time the markets finally believed the regulator. So, AUD's growth potential has been depleted. The pair is nearing the 0.7700 round figure. The Aussie will probably try to form the bottom below the area (and also in case of the clear break out of the level). If it happens the things may take a turn for the worse for AUD/USD and the next bearish target will be the 0.7400 area.
by HelenRush
Keep The Faith, Kiwi! While all euro pairs are waiting for the ECB meeting on Thursday, which will unlikely impress the EUR, the Antipodes are losing their positions. The strongest pair for today seems to be EUR/USD, but the bulls are still favouring the USD. Yet there is still some kind of nervousness since the markets are waiting for the announcement of a new Fed Chief this week. The US dollar has some room to take revenge. The New Zelanian prime-minister (still designate though) did exactly what she was supposed to: she called for the reforms on the Central Bank and announced plans to cut immigration. Most of all, the new Kiwi government is set to ban the foreign purchases of New Zealand property. Pity. The drop in capital inflows can’t be any good for a small island country. The Kiwi slumped to almost 6-months lows area at 0.6910 and is nearing the 0.6900 round level. What shall we expect from the RBNZ’s monetary policy after the reforms? Apparently, more easing measures. The bears’ firmness may lead NZD/USD to the May’s support line at 0.6860-85. The next target is the May,11 support area at 0.6817.
by HelenRush
JPY: That Monday Morning Feeling Japanese general elections took place on Sunday. According to exit polls, PM Abe’s party is going to celebrate the victory. These were not good news for the Yen, definitely. This means the Central Bank will continue its ultra-easy monetary policy. And, indeed, the government is going to hasten the process of Abenomics. It is not surprising USD/JPY opened with a gap up of 50-pips and refreshed month’s highs at 114.10. The “action” has already eased by now but the pair still can’t fill the gap. The initial surge seemed to be short-term and USD/JPY is under some minor bearish pressure near the 113.70 area. At the same time, USD is getting a good support because the markets are still welcoming the Republican-controlled Senate's approval of a 2018 budget blueprint. The USD-bulls don’t have any significant resistance ahead of 114.00 level. In case of this level’s capitulation, the next bullish target will be the 114.50 area without any serious counter-arguments from the bearish side.
by HelenRush