Forex News and Events

Australia: recovery not a sure thing yet (by Arnaud Masset)

The Australian jobs market continues to show signs of improvement as the unemployment rate fell to 5.8% in November (versus 5.9% previous reading and 6% median forecast), a level last seen in May last year. Net hiring rose to 71,400 workers, compared with an expected loss of 10,000. On the top of it, the participation rate ticked up to 65.3% verse 65% consensus. However, the recovery in the jobs market is still in early stages and is conditional on a weak Australian dollar. Indeed, exports were one of the strong growth driver in the third quarter, highlighting the dependency of the Aussie economy to a weak currency. Even though Governor Stevens demonstrated a relative satisfaction regarding the RBA’s current monetary policy, the bank closely monitor the FX market and patiently wait the Fed to help them through a rate hike. We therefore believe that the risk remains on the downside in AUD/USD as a strong currency could derail the budding recovery.

BoE meeting to be a non-event (by Peter Rosenstreich)

Today’s Bank of England rate decision and meeting minutes is likely to be a non-event. We anticipate no change in policy or shift in voting pattern (only one member voting for a rate hike).
The tone of the minutes will remain dovish as the strength of the sterling has dampened inflation expectations, while signals from global demand are concerning. As expectation for the BoE to raise interest rates in 2016 drift away, policy divergence should favor the USD. The GBPUSD recovery rally bullish momentum is waning (current intraday range pattern). Failure to clear 1.5200 suggests an extension to 1.5232 (55d MA) looks unlikely. Exhaustion reversal to 1.5160 support would be the first real test of our downside call.

CHF strengthens on disappointment from the SNB (by Yann Quelenn)

Following in the footsteps of last week’s ECB meeting when Mario Draghi disappointed financial markets, the Swiss National Bank has announced this morning that its rates will remain on hold. The SNB’s sight deposit rate holds at -0.75% and the Libor target is still be ranging from -1.25% to -0.25%. Indeed, despite the ECB rate cut on the deposit facility rate to -0.3% from -0.2%, there was no desire for the SNB to react as markets in fact over-priced Draghi’s delivery and finally ended up disappointed. As a result, pressures on the EURCHF were limited and left some room for the SNB to react. However, the inflation forecast has been set higher for 2016 at -0.5% and lower for 2017 at 0.3% instead of 0.4%. The GDP forecast has also been revised down in the short-term at 1% this year and 1.5% next year.

Yet, we believe that the CHF will face increasing pressures as economic and also political uncertainties in Europe grow. Europe should not expect better results from their QE program, knowing that neither Japan nor the U.S experienced positive results quickly. Moreover, Europe is a set of fragmented countries each with its own set of governmental and fiscal rules, meaning that there will be more than one occasion when the ECB monetary policy will be questioned. The main risk for the SNB is a renewed strengthening of the Swiss Franc as Swiss industry is mostly oriented towards Europe. The SNB has two tools to defend the Swiss Franc, the sight deposit rate as well as the intervention on the FX market.

Officially, according to the sight deposits of domestic banks, the SNB is not intervening in the market despite some rumours stating the opposite. Over the past five years the SNB has shown a propensity towards aggressive action. However, even a further rate cut may not be sufficient and so we are expecting some surprises from the SNB within the next few months. In our opinion the EURCHF will not be allowed to set up below 1.0500.

USD/JPY - Bearish Breakout

USDJPY











































































































































Today's Key IssuesCountry/GMT
3Q INE House Price Index QoQ, last 4,20%EUR/08:00
3Q INE House Price Index YoY, last 4,00%EUR/08:00
Oct Current Account Balance, exp -0.20b, last 0.10b, rev 0.12bTRY/08:00
3Q GDP YoY, exp 2,70%, last 3,80%TRY/08:00
3Q GDP SA/WDA QoQ, exp 0,40%, last 1,30%, rev 1,40%TRY/08:00
3Q GDP WDA YoY, exp 3,30%, last 3,80%TRY/08:00
Nov CPI MoM, exp -0,10%, last 0,00%DKK/08:00
Nov CPI YoY, exp 0,60%, last 0,40%DKK/08:00
Nov CPI EU Harmonized MoM, exp -0,10%, last 0,00%DKK/08:00
Nov CPI EU Harmonized YoY, exp 0,40%, last 0,20%DKK/08:00
Dec 10 SNB 3-Month Libor Lower Target Range, exp -1,25%, last -1,25%CHF/08:30
Dec 10 SNB 3-Month Libor Upper Target Range, exp -0,25%, last -0,25%CHF/08:30
Dec 10 SNB Sight Deposit Interest Rate, exp -0,75%, last -0,75%CHF/08:30
Nov CPI MoM, exp 0,00%, last 0,10%SEK/08:30
Nov CPI YoY, exp 0,20%, last 0,10%SEK/08:30
Nov CPI CPIF MoM, exp 0,00%, last 0,10%SEK/08:30
Nov CPI CPIF YoY, exp 1,10%, last 1,10%SEK/08:30
Nov CPI Level, exp 314,2, last 314,29SEK/08:30
ECB's Liikanen Speaks at Bank of Finland Briefing in HelsinkiEUR/09:00
Nov CPI MoM, exp 0,20%, last 0,40%NOK/09:00
Nov CPI YoY, exp 2,60%, last 2,50%NOK/09:00
Nov CPI Underlying MoM, exp 0,00%, last 0,20%NOK/09:00
Nov CPI Underlying YoY, exp 3,00%, last 3,00%NOK/09:00
Nov PPI including Oil MoM, last 0,60%NOK/09:00
Nov PPI including Oil YoY, last -9,40%NOK/09:00
SNB's Jordan, Zurbruegg, Maechler Hold Press ConferenceCHF/09:00
Riksbank Bond Purchase ResultsSEK/09:10
Oct Visible Trade Balance GBP/Mn, exp -£9700, last -£9351GBP/09:30
Oct Trade Balance Non EU GBP/Mn, exp -£2500, last -£2076GBP/09:30
Oct Trade Balance, exp -£1800, last -£1353GBP/09:30
Dec IGP-M Inflation 1st Preview, exp 0,92%, last 1,31%BRL/10:00
Bank of Italy Publishes Monthly Report `Money and Banks'EUR/10:00
ECB' Jazbec Speaks at Press Conference in LjubljanaEUR/10:00
ECB's Coeure speaks in BrusselsEUR/11:30
Dec BOE Asset Purchase Target, exp 375b, last 375bGBP/12:00
Dec 10 Bank of England Bank Rate, exp 0,50%, last 0,50%GBP/12:00
3Q Capacity Utilization Rate, exp 82,00%, last 81,30%CAD/13:30
Oct New Housing Price Index MoM, exp 0,10%, last 0,10%CAD/13:30
Nov Import Price Index MoM, exp -0,80%, last -0,50%USD/13:30
Oct New Housing Price Index YoY, exp 1,30%, last 1,30%CAD/13:30
Nov Import Price Index YoY, exp -9,60%, last -10,50%USD/13:30
Dec 5 Initial Jobless Claims, exp 270k, last 269kUSD/13:30
nov..28 Continuing Claims, exp 2155k, last 2161kUSD/13:30
Bloomberg Dec. United States Economic SurveyUSD/13:45
Dec 6 Bloomberg Consumer Comfort, last 39,6USD/14:45
3Q Household Change in Net Worth, last $695bUSD/17:00
Bundesbank President Weidmann Speaks at Conference in LisbonEUR/18:00
BOE Governor Mark Carney Speaks at Women’s Network EventGBP/18:30
Nov Monthly Budget Statement, exp -$66.0bUSD/19:00
Bundesbank's Weidmann speaks in Lisbon (1900 local)EUR/19:00
Nov Import Price Index MoM, last -3,00%KRW/21:00
Nov Import Price Index YoY, last -14,80%KRW/21:00
Nov Export Price Index MoM, last -3,50%KRW/21:00
Nov Export Price Index YoY, last -6,20%KRW/21:00
Nov BusinessNZ Manufacturing PMI, last 53,3NZD/21:30
Nov Food Prices MoM, last -1,20%NZD/21:45
Nov New Yuan Loans CNY, exp 735.0b, last 513.6bCNY/23:00
Nov Money Supply M2 YoY, exp 13,40%, last 13,50%CNY/23:00
Nov Aggregate Financing CNY, exp 970.0b, last 476.7bCNY/23:00
Nov Money Supply M1 YoY, exp 14,00%, last 14,00%CNY/23:00
Nov Money Supply M0 YoY, exp 4,00%, last 3,80%CNY/23:00
Nov Exports YoY, last -17,50%INR/23:00
Nov Imports YoY, last -21,20%INR/23:00
3Q BoP Current Account Balance, exp -$7.80b, last -$6.20bINR/23:00
Nov Foreign Direct Investment YoY CNY, exp 0,20%, last 4,20%CNY/23:00
Nov Trade Balance, exp -$10100.0m, last -$9767.3mINR/23:00


The Risk Today

Yann Quelenn

EUR/USD has increased and the pair is now is now in a clear bullish momentum. Hourly resistance at 1.0981 (03/12/2015) has been broken. Hourly support lies at 1.0796 (07/12/2015 low). Stronger support lies at 1.0524 (03/12/2015 low). Expected to target resistance at 1.1096. In the longer term, the technical structure favours a bearish bias as long as resistance holds. Key resistance is located region at 1.1453 (range high) and 1.1640 (11/11/2005 low) is likely to cap any price appreciation. The current technical deteriorations favours a gradual decline towards the support at 1.0504 (21/03/2003 low).

GBP/USD's medium-term downside momentum remains lively. The pair is now struggling to increase above 1.5200. Hourly resistance is given at 1.5336 (19/11/2015 high). Stronger resistance can be found at 1.5529 (22/09/2015 high). Hourly support can be found at 1.4985 (02/12/2015 low). Expected to show further weakness. The long-term technical pattern is negative and favours a further decline towards the key support at 1.5089 , as long as prices remain below the resistance at 1.5340/64 (04/11/2015 low see also the 200 day moving average). However, the general oversold conditions and the recent pick-up in buying interest pave the way for a rebound.

USD/JPY has declined and hourly support at 122.23 (16/11/2015 low) has been broken. Hourly resistance still lies at 123.76 (18/11/2015 high). Strong support can be found at 120.07 (28/10/2015 low). Expected to bounce back toward resistance at 123.76. A long-term bullish bias is favored as long as the strong support at 115.57 (16/12/2014 low) holds. A gradual rise towards the major resistance at 135.15 (01/02/2002 high) is favored. A key support can be found at 116.18 (24/08/2015 low).

USD/CHF is heading downwards and the pair is still holding below parity after last week's sharp decline. Hourly support is given at 0.9876 (27/10/2015 low) while hourly resistance is given at 1.0034 (04/12/2015 high). Expected to show further consolidation. In the long-term, the pair has broken resistance at 0.9448 and key resistance at 0.9957 suggesting further uptrend. Key support can be found 0.8986 (30/01/2015 low). As long as these levels hold, a long term bullish bias is favoured.


Resistance and Support:





















EURUSDGBPUSDUSDCHFUSDJPY
1.15611.56591.1138147.66
1.13871.55291.0676135.15
1.10951.53361.0328125.86
1.09521.51790.9893121.73
1.05041.48570.9476120.07
1.04581.45660.9259118.07
1.00001.42310.8501116.18

This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

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