Forex News and Events

Proactive China good for market sentiment (by Peter Rosenstreich)

China's foreign exchange reserves fell by $28.57bn in February to $3.20trn according to official data released on Monday. FX reserves are now at their lowest levels since December 2011 after a four month consecutive decline. After heavy capital outflows and expectations for further yuan deprecation, indications suggest pressure is moderating. The PBoC set the USDCNY fix lower at 6.5113, clearly providing additional propaganda by punctuating RMB strength (also further punishing yuan shorts). In addition, weakness in USD has allowed keep its pledge to guide the exchange rate with reference to a basket of currencies. We continue to anticipate limited CNY depreciation (but two-way price action). While speculation over the stability of China's economic rebalancing management will not end any time soon, it’s unlikely in our view, that spillover will force CNY to levels not wanted by the PBoC. The central bank has made it clear that targeting CNY deprecation (to gain a competitive advantage) would not be their strategy. We understand the need to take official comments with a pinch of salt and to focus on real actions, however we also suspect that steadiness of the CNY is also in China's best economic interests. Elsewhere, market sentiment improved as China’s National People’s Congress (NPC) signaled additional stimulus (although nothing major) and lowered 2016 growth target to 6.5% to 7.0% as was widely expected. The NPC also suggested heavier reliance on fiscal policy which would be “proactive” and “more expansionary” than trusting only monetary policy. We are more bullish on China than the majority of the market as we expect fiscal and monetary stimulus to lift China’s incoming data in Q2, surprising the bearish contingent and providing support for the stabilization of risk appetite.

Germany starts to suffer (by Yann Quelenn)

German factory orders have declined for the second consecutive month printing at -0.1% m/m for January on global turmoil and weak domestic demand. Yet, December data has been revised up to -0.2% m/m. The recovery that is widely expected is not currently happening. Concerns are growing that the ongoing crisis may be deeper than suspected as it impacts Europe’s first economy.

At the same time, the German two-year yield keeps on declining at around -0.55% on the increasing likelihood that the ECB will increase its monetary stimulus on Thursday. Downside inflation pressures are also very significant due to low oil prices, even though the Brent keeps on bouncing further at $40 a barrel. Consensus appraises a 90% chance that the ECB will lower its deposit rate -0.4% and a 10% chance that the cut will be down to -0.5%. The single currency remains under definite pressure, even if we think that it should remain stable against the greenback, as disappointment towards the Fed keeps it at its current level.

Gold - Long-Term Reversal

Gold







































































Today's Key Issues Country/GMT
Jan Industrial Production MoM, exp -0,50%, last 3,60%, rev 3,40% DKK/08:00
Feb Foreign Currency Reserves, last 575.4b, rev 575.0b CHF/08:00
mars.04 Total Sight Deposits, last 477.6b CHF/08:00
mars.04 Domestic Sight Deposits, last 418.1b CHF/08:00
Feb Foreign Reserves, exp $3190.0b, last $3230.9b CNY/08:10
Feb Budget Balance, last 16.6b SEK/08:30
Jan Industrial Production MoM, last -0,90% NOK/09:00
Jan Industrial Production WDA YoY, last -2,00% NOK/09:00
Jan Ind Prod Manufacturing MoM, exp -0,10%, last -0,30% NOK/09:00
Jan Ind Prod Manufacturing WDA YoY, last -7,70% NOK/09:00
Jan PPI MoM, last -0,70% EUR/09:00
Jan PPI YoY, last -4,00% EUR/09:00
BOE's Andy Haldane Speaks at FinTech Conference in London GBP/09:10
Feb SACCI Business Confidence, last 80 ZAR/09:30
Mar Sentix Investor Confidence, exp 8,3, last 6 EUR/09:30
Bank of Italy Report on Balance-Sheet Aggregates EUR/10:00
2Q Manpower Survey, last 11% NZD/11:01
Central Bank Weekly Economists Survey (Table) BRL/11:25
2Q Manpower Survey, last 8% AUD/13:01
ECB Publishes Monthly and Weekly QE Details EUR/14:45
mars.04 Bloomberg Nanos Confidence, last 53,6 CAD/15:00
Feb Labor Market Conditions Index Change, exp 1, last 0,4 USD/15:00
Fed's Brainard Speaks at International Banking Conference USD/17:00
mars.06 Trade Balance Weekly BRL/18:00
Fed's Fischer Speaks at Annual NABE Conference in Washington USD/18:00
Jan Consumer Credit, exp $16.500b, last $21.267b USD/20:00
BOE's Alex Brazier Speaks at a Conference in Washington GBP/20:00
Feb ANZ Truckometer Heavy MoM, last -4,30% NZD/21:00
4Q Mfg Activity SA QoQ, last 4,20% NZD/21:45
4Q Mfg Activity Volume QoQ, last 3,50% NZD/21:45
4Q BoP Current Account Balance, last -$8.21b INR/22:00
mars.06 ANZ Roy Morgan Weekly Consumer Confidence Index, last 111,3 AUD/22:30


The Risk Today

Yann Quelenn

EUR/USD is moving around 1.1000. The short-term technical structure still suggests a further bearish move. Hourly resistance lies at 1.1043 (04/03/2016 high). Hourly support can be located a 1.0904 (04/03/2016 low) then 1.0810 (29/01/2016 low). Expected to show continued weakness. 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 is pushing higher. Major resistance is given at 1.4409 (19/02/2016 high). Hourly support can be found at 1.4108 (04/03/2016 low). The technical structure suggests further increase. The long-term technical pattern is negative and favours a further decline towards key support at 1.3503 (23/01/2009 low), 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's very short-term bullish momentum starts to fade Strong resistance is given at 114.91 (16/02/2016 high). Hourly support lies at 113.13 (04/03/2016 low). Next support lies at 112.16 (01/03/2016 low). Expected to show continued strengthening. We favour a long-term bearish bias. Support at 105.23 (15/10/2014 low) is on target. A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems now less likely. Another key support can be found at 105.23 (15/10/2014 low).

USD/CHF is trading mixed. An hourly support now lies at 0.9879 (04/03/2016 low), while a key support stands at 0.9847 (16/02/2016 low). Hourly resistance is located at 1.0038 (29/02/2016 high) . In the long-term, the pair is setting highs since mid-2015. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours a long term bullish bias.


Resistance and Support:





















EURUSDGBPUSDUSDCHFUSDJPY
1.13761.46681.0328117.53
1.11931.45911.0257115.17
1.10681.44091.0074114.91
1.09551.41540.9997113.46
1.0811.38360.9847110.99
1.07111.36570.966105.23
1.05241.35030.9476100.82

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.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action. 

EUR/USD News

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance. 

GBP/USD News

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited. 

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures