The Yen continues to retreat. Overview for 29.09.2016

The Yen0006japan

The USD/JPY pair is growing for the third consecutive day despite an insular interest to the US Dollar.

The Japanese Yen is “losing weight” for the third day in a row. At the moment, the pair is moving close to its weekly highs. The current quote for the instrument is 101.48.

Today’s statistics showed that retail sales in August in Japan reduced by 1.1% m/m after adding 1.5% m/m in July. On a year-on-year basis, the August number lost 2.1%. The indicator has been declining for the last six month and it looks like the tendency is becoming stronger.

The retails sales indicator is a rather informative way to assess the health of the country’s economy by analyzing consumer spending. The decline is always negative for the Yen.

At the same time, one can hardly notice an insular interest of the market to the US Dollar – investors are very aggressive and don’t pay much attention to the worldwide emotional intensity.

Demand for the Yen as a “safe haven” currency might return in November, when the USA will have too many event important for the market.

Forex Trading | News Daily Update |  Analysis Department.

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The Dollar is “keeping stiff upper lip”. Overview for 29.09.2016

The Dollar0004usa

On Thursday afternoon, the main currency pair is trading quite calm; changes in sentiments on the oil market had almost no influence on the instrument.

The EUR/USD pair looks stable on Thursday. Yesterday evening, being influenced by a higher volatility on the market, the pair fell to 1.1175, but before the market closing it recovered up to 1.12 and higher. Today the price is trading in the range familiar to investors. The current quote for the instrument is 1.1222.

Today’s statistics proved to be in favor of the Euro. The business sentiment index in September increased up to 0.45 points against the predicted number of 0.1 points. The consumer confidence index this month was -8.2 points, just as expected. The Economic sentiment index improved significantly, up to 104.9 points against the expectations of 103.5 points.

The industrial sector of the Eurozone looks very interesting. The IFO recovered up to -1.7 points against the predicted number of -4.1 pints.

Reports from Germany turned out to be neutral. The unemployment level in September remained the same, 6.1%.

This evening, one should pay attention to the statistics from the USA as the country is going to publish its weekly report on jobless claims and the final report on the GDP growth over the second quarter of 2016.

Forex Trading | News Daily Update |  Analysis Department.

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Forex Technical Analysis 28.09.2016

 (EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD, BRENT)Analysis for September 28th, 2016

EUR USD, “Euro vs US Dollar”

The EUR/USD pair is forming another descending structure. The price rebounded from 1.1224 and may continue falling towards 1.1170. Later, in our opinion, the market may be corrected to return to 1.1224 and then move downwards again to reach 1.1116.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair broke its consolidation range upwards and may be corrected with the target at 1.3100. According to an alternative scenario, the price may return to the upside border of the daily consolidation range. After that, the instrument may continue falling inside the downtrend towards the local target at 1.2800.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair is growing towards 0.9800; this ascending movement may be considered as a part of the wave with the target at 0.9940.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is moving in the center of the consolidation range without any particular direction. Possibly, today the market may return to the upside border of the range and then move downwards to break 100.00. The local target is at 98.00. » Read more

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Market Overview for 28.09.2016

The Big Picture:009market

Deutsche Bank has lost almost 90% of its value, since the highs of 2007. It has been the highest losing stock in the DAX since the beginning of this year, losing 53.2% in value. The list of bad decisions made by the bank is long, counting contravention of sanctions against Iran, aid in tax avoidance in Russia, market manipulation. Most recently, the US Department of Justice imposed a fine of 14 billion USD on the bank for risky mortgage deals. The gravity of this fine is made clear ba the fact that Deutsche Bank is only capitalized to the amount of 14.5 billion Euro. The International Monetary Fund (IMF) sees Deutsche Bank as the greatest risk to the finale sector, in case of a new financial crisis, branding it the most dangerous bank. Should a new banking crisis emerge, Germany will be hardest hit.

DAX

The DAX is in a sideways trend.  Resistance is at 10820, support at 10250

Euro / USD

The Euro is in a large sideways trend against the Dollar. Support is at 1.0822, resistance at 1.1429.

USD / JPY

The USD is in a downward trend against the Yen. Strong support is seen at a closing level of 100. » Read more

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How Actual Nuts and Bolts Are Bringing Down Oil Prices

The Oil Prices

Last spring, Statoil ASA announced it had used the same oil well design and components to drill three reservoirs for the price of one.oil

While the specs for Norwegian Sea drilling might provoke reactions akin to the oil field’s name—the Snorre—such standardized pipes and casings could hold the key to a pervasive mystery about today’s energy market: Why is everyone still drilling when prices are in the basement?

Even as oil producers have planned $1 trillion worth of spending reductions between 2015-to-2020—cutting staff, delaying projects, and squeezing contractors—they’ve continued to green-light new wells from the Norwegian Sea to Brazil, and from Uganda to the Gulf of Mexico. Those initiatives mean oil production will continue to grow, adding to the supply glut and putting downward pressure on prices.

 It’s a development that has both baffled and frustrated the world’s biggest producers of crude, who have been waiting for lower prices to force a rollback of global production. They have largely blamed the resilience of the world’s oil drilling on U.S. shale producers, as well as efforts to maintain market share, but the Snorre and other projects like it suggest there may be another–much more boring–culprit at fault.

That’s because oil majors’ urgent mission to slash costs includes standardizing the components used in drilling for oil–a development that has helped turn unprofitable wells into moneymakers, protected bottom lines, and allowed companies to keep pumping even in the face of crude prices that have more than halved over the past three years.

“One might wonder how it is possible that with expenditures being cut dramatically in the upstream industry, output is still growing in many parts of the non-OPEC world while the costs of future projects are declining,” analysts at JBC Energy GmbH wrote earlier this year. “One of the key topics in this respect is industry standardization.”

2222

While oil traders have been pondering the prospect of a production freeze from OPEC, which has so far ramped up production to seize market share and force upstart shale players out of business, they’ve paid scant attention to cooperation already taking place across the industry. » Read more

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Forex Technical Analysis 28.09.2016

(EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD, BRENT)Analysis for September 28th, 2016

EUR USD, “Euro vs US Dollar”

The EUR/USD pair is forming another descending structure. The price rebounded from 1.1224 and may continue falling towards 1.1170. Later, in our opinion, the market may be corrected to return to 1.1224 and then move downwards again to reach 1.1116.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair broke its consolidation range upwards and may be corrected with the target at 1.3100. According to an alternative scenario, the price may return to the upside border of the daily consolidation range. After that, the instrument may continue falling inside the downtrend towards the local target at 1.2800.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair is growing towards 0.9800; this ascending movement may be considered as a part of the wave with the target at 0.9940.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is moving in the center of the consolidation range without any particular direction. Possibly, today the market may return to the upside border of the range and then move downwards to break 100.00. The local target is at 98.00. » Read more

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Market Overview for 28.09.2016

The Big Picture:009market

Deutsche Bank has lost almost 90% of its value, since the highs of 2007. It has been the highest losing stock in the DAX since the beginning of this year, losing 53.2% in value. The list of bad decisions made by the bank is long, counting contravention of sanctions against Iran, aid in tax avoidance in Russia, market manipulation. Most recently, the US Department of Justice imposed a fine of 14 billion USD on the bank for risky mortgage deals. The gravity of this fine is made clear ba the fact that Deutsche Bank is only capitalized to the amount of 14.5 billion Euro. The International Monetary Fund (IMF) sees Deutsche Bank as the greatest risk to the finale sector, in case of a new financial crisis, branding it the most dangerous bank. Should a new banking crisis emerge, Germany will be hardest hit.

DAX

The DAX is in a sideways trend.  Resistance is at 10820, support at 10250

Euro / USD

The Euro is in a large sideways trend against the Dollar. Support is at 1.0822, resistance at 1.1429.

USD / JPY

The USD is in a downward trend against the Yen. Strong support is seen at a closing level of 100. » Read more

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Forex Technical Analysis 27.09.2016

(EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD, BRENT)Analysis for September 27th, 2016

EUR USD, “Euro vs US Dollar”

The EUR/USD pair has almost completed its five-wave ascending structure and right now is forming a new descending impulse. We think, today the price may start forming another descending wave with the main target at 1.1100. The first target of this wave is at 1.1187. To reach this target, the market may form one more five-wave stricture.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is consolidating around 1.2936. According to the main scenario, the downtrend may continue towards the local target at 1.2800. After that, the instrument may be corrected towards 1.2940 to test it from below and then move downwards to reach 1.2650.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair is rebounding from 0.9660 to the upside. The market has almost formed the inverted double top pattern. The price is expected to grow towards 0.9800. The first target is at 0.9744.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is rebounding from 100.00. Possibly, the market may be corrected towards 101.40. However, the main scenario suggests that the instrument may fall to reach 99.40. » Read more

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Why China’s Yuan Is Set to Join IMF’s Elite Club: QuickTake Q&A

From Oct. 1, China’s yuan gains a new status as a member of the International Monetary Fund’s Special Drawing Rights (SDR) basket. That makes it part of one of the global economy’s most exclusive, if esoteric, clubs.

What is an SDR?

SDRs were created by the IMF in 1969, when the world’s governments needed assets for their international reserves and there wasn’t enough gold or dollars to go round. While the SDR isn’t a currency itself, its holders have a claim on the currencies in the basket. The yuan’s addition is the first change to the SDR basket since 1999, when the euroreplaced the deutsche mark and the French franc. The weightings will be:

Currency Weighting
Dollar 41.73%
Euro 30.93%
Yuan 10.92%
Yen 8.33%
British pound 8.09%

How important are SDRs?

By value outstanding, not very. There were 204.1 billion SDRs allocated to IMF members as of March, equivalent to around $285 billion, compared with about $11 trillion of global reserves.
world-currencies The yuan’s inclusion is a recognition of China’s importance in the global economy and the steps it’s taken to make the currency more freely traded. Plus, the SDR basket, small though its use may be, offers competition of sorts to the greenback. In a landmark2009 essay, People’s Bank of China Governor Zhou Xiaochuan argued that a global system so reliant on a single currency — the U.S. dollar — was inherently prone to shocks. That conviction set off a global push by China’s leaders, including now-President Xi Jinping, to have the yuan included.

What did China do to get in?

After a 2010 review, when the IMF said the yuan didn’t meet its criteria for inclusion, China worked hard to make the grade. Policy makers made the yuan fixing more market-based, expanded overseas access to the bond market, sold debt in London and staged drastic interventions to close the offshore exchange rate’s gap with the onshore level.

What’s still on the to-do list?

Analysts argue that for the yuan to become a major global reserve currency, China needs to further open up to foreign investment and pledge to maintain that access even when markets move in a way that officials don’t like. Heavy-handed state intervention in the wake of last year’s surprise devaluation led some to doubt China’s commitment to giving market forces more sway.

14290375-main-world-currencies-isolated-3d-render-stock-photo-globeThe Reference Shelf

  • Bloomberg primer on what it means for the yuan to be included in the IMF’s reserve basket.
  • The IMF’s tally of official foreign exchange reserves.
  • QuickTakes on the internationalization of the yuan, and on China’s economic reforms and managed markets.

Forex Trading | News Daily Update |  Analysis Department.

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Market Overview for 27.09.2016

The Big Picture:009market

Around 100 million Americans watched the Clinton vs. Trump duel at the Hofstra University in New York. That is roughly is roughly a third of the population and 70% of voters. Neither Clinton nor Trump made larger mistakes and gave very little new information. Instead rewarming old topics. On economic subjects, Trump again accused China of taking American jobs away. In addition, he pledged to lower taxes and to renegotiate international trade agreements. Clinton on the other hand, wants to subsidize businesses and support start ups. As a rule, presidential candidates reveal their income tax returns, Trump refuses to do this. At the moment, both are on roughly the same ground.

DAX

The DAX is in an sideways trend.  Resistance is at 10820, support at 10250

Euro / USD

The Euro is in a large sideways trend against the Dollar. Support is at 1.0822, resistance at 1.1429.

USD / JPY

The USD is in a downward trend against the Yen. Strong support is seen at a closing level of 100. » Read more

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