Wednesday, October 15, 2014
Currency Trading Signal
http://www.fxpipsignal.com/
Market Brief
The
falling oil prices hits the oil exporter currencies heavily. USD/CAD advances
to fresh 5-year high of 1.1344 as crude declines to $81.32. The upside move
gained good momentum after breaking the former high (1.1279). Bullish trend
gains pace, option bids build strong above 1.1200/50 walking into Friday’s CPI
reading. Markets expect slight cool down in Canadian infaltion dynamics from
2.1% to 2.0% y/y. Soft inflation should reinforce CAD-bears giving more dovish
flexbility to Poloz’s BoC. Especially at times Canada’s larger export business
is threatened by falling prices. The BoC rate decision is due on Octobe 22nd,
we expect dovish stance.
Another
currency heavily hit by oil prices is the Ruble. USD/RUB extends gains to fresh
all-time high of 41.0419, as oil prices continue sliding. The Central Bank of
Russia canceled its bond auction today, the Russian 10-year government yields
hit 9.98% (highest levels since Oct 2009). Trend and momentum indicators are
comfortably positive, option bids are building at 40.00+.
In
China, the CPI grew 1.6% y/y, near 5-year lows (vs. 1.7% exp. & 2.0% last),
the PPI decelerated at the pace of 1.8% (vs. -1.6% exp. & -1.2% last).
USD/CNY rebounded to 6.1300 as the soft inflation revived expectations for more
PBoC stimulus. Large option barriers are placed at 6.13/6.14 and 6.15 for today
expiry. The bias remains negative, with resistance seen at 6.1363/95 (21-dma /
MACD pivot).
GBP/USD
extended losses to 1.5877 overnight as Asia followed the post-CPI sell-off. The
UK labor data is due today (08:30 GMT), expectations are optimistic. We will be
closely monitoring the wage growth in August data. Any negative surprise should
place 1.5855-support at risk. Resistances are placed at 1.6003 (Fib 50% on
Jul’13 – Jul’14 rally), 1.6182 (21-dma), 1.6284 (Fib 61.8%). EUR/GBP tests
100-dma (0.79555) on the upside. Trend and momentum indicators are comfortably
bullish. Option barriers at 0.7960/80 are to be cleared.
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