Stops tripped as NZD hits session high

Technical Analysis Mon 1 Feb 2016 20:43:37 GMT Author: Adam Button | nzd
Author: Adam Button
January trades continue to unwind
NZD/USD caught a 30 pip bid in the past few minutes to a session high of
0.6557.
There is little news on the wires so it's all about flows and it's one of the
thinnest times of the day in those pairs. The South China Morning Post reports
that house prices in China rose 4.37% in the 100 biggest cities, the fast pace
since August.
The move looks to be technical as it extended after Friday's high of 0.6545
gave way.
Keep an eye on 0.6559. That's the late-January high.

AUD/USD rises above 0.7100 with RBA decision due later

Technical Analysis Mon 1 Feb 2016 20:34:12 GMT Author: Adam Button |
audusd
Author: Adam Button

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AUD/USD technical analysis

The Australian dollar has shaken off a sharp decline in oil prices, a
downgrade of BHP Billiton and weak Chinese data to post a small gain today.

Look for a much larger move in the day ahead with the RBA decision due up
at 0330 GMT. Only one of 29 economists surveyed by Bloomberg expect a
rate hike so the focus will likely be on guidance around future cuts and the
Australian dollar.

Technically, AUD/USD has been in a mild uptrend since forming a doublebottom on Jan 14/19 at 0.6825. It has slowly tacked on gains to rise as high
as 0.7141 on Friday. It fell earlier today but has clawed back and is trading
at a session high.

The recent high corresponds with the 61.8% retracement of the January
decline. A break (and close) above it would target a retracement to 0.7325.
Cable reversal the best sign yet for bulls
Technical Analysis Mon 1 Feb 2016 20:02:58 GMT Author: Adam Button |
gbpusd
Author: Adam Button

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Cable up nearly 300 pips in just over 24 hours of trading
From midday Friday to now, cable has risen to 1.4444 from 1.4148 -- just shy
of 300 pips. It climbed 100 pips late on Friday and another 200 today in
what looks like a great sign for the bulls.

GBP/USD was beaten up in January as the Bank of England took a less

hawkish view. From mid-December to January 20, the pair fell more than
1100 pips. Even a 38.2% retracement would target 1.4521.

The 50% retracement is a good possibility as Fed officials take a less

hawkish view and that would target gains to 1.4658.

The pair has resolved a week of choppy trading with a strong rally today.
The drops on Jan 25, 26 and 28 couldn't attract momentum for a push to the
Jan 20 low. Combined with the rally today, that's a bullish signal that a
temporary bottom is in.

The main risks this week are a heavy slate of US data including non-farm
payrolls on Friday and the Bank of England decision on Thursday.

USD/CAD down on the day despite oil drop

Technical Analysis Mon 1 Feb 2016 19:06:24 GMT Author: Adam Button |
usdcad
Author: Adam Button

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When something can't fall on bad news...

It's a tough day to draw conclusions in the forex market because flows at
the start of the month can skew the market. There was talk about heavy
leveraged fund selling in USD/CAD and that may continued to be the case.

That said, it's impressive that USD/CAD is lower today despite a drop in oil
prices. Crude bounced off the session lows in the past few minutes and
USD/CAD has responded with a quick drop down to 1.3950 from 1.4000.

That's the lowest since Jan 5.

Cable rises above 1.44, nears complete retracement of Friday decline

Technical Analysis Mon 1 Feb 2016 18:53:40 GMT Author: Adam Button |
gbp
Author: Adam Button

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GBP/USD up 156 pips to 1.4400

The pound has had a steady bid since the start of US trading and that has
continued in the past hour as it breaks above 1.4400.

The high late last week was 1.4413 and a break above it could hit some buy
stops and signal a short-term bottom.
EUR/USD is setting up for a great breakout trade
Technical Analysis Tue 2 Feb 2016 16:13:41 GMT Author: Adam Button |
eurusd
Author: Adam Button

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Narrow range since the December ECB

The fundamental push-and-pull of EUR/USD over the past two months has
been the gyrations of ECB policy, risk aversion and diminished expectations
for Fed hikes.

Those factors have largely fought to a standstill since the ECB cut on Dec 2.

Technically, the result has been a sideways trade in a 3.5 cent range from
1.0708 to 1.1060. Lately, the range has been narrowing into what looks like
a wedge.
When it breaks, look for a big and sustained move. The measured target
would be 3.5 cents on either side of that range.

For the moment, the swift rejection of the rally to 1.0940 today argues for
the downside and a test of the support in the trendline since the start of
January.

EUR/USD tests the January highs once again

Technical Analysis Wed 3 Feb 2016 13:34:51 GMT Author: Adam Button |
eurusd
Author: Adam Button

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Rises to highest since Jan 20

The euro is trading at a two week high but it must still crawl over a few
levels to inspire a continued rally. Recent gains up to these levels have been
sold hard. I suspect macro funds are selling the pair ahead of the March ECB
and expected easing.

The gains came after the comments from Dudley but I just don't think
there's enough there to sustain a bid. Even as I'm writing, it's beginning to
fade.

The Jan high was 1.0985 and the late-Dec high was 1.0992. That's followed
by resistance at 1.1000 and the post Draghi high at 1.1060.

USD/CAD bulls squeezed out as oil rebounds

Technical Analysis Wed 3 Feb 2016 14:19:10 GMT Author: Adam Button |
usdcad
Author: Adam Button

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Oil up $0.74 to $30.62

The great market mystery early this week was how the Canadian dollar
remained so strong even as oil prices were falling. WTI crude was $5 from its
recent highs yesterday and yet USD/CAD had risen just 150 pips from its
low.

It should have been a signal.

Oil turned around today and USD/CAD has been battered by more than 200
pips as crowded longs get squeezed out.
Levels to watch now include 1.3800 and the late-December low of 1.3782.

One idea that I've been mulling is that there is more underlying strength in
advanced commodity bloc countries than believed.

The 15-year run in commodities allowed consumers and the government to

sock away savings and it's left Canada, Australia and New Zealand more
able to withstand commodity declines than anticipated.

AUD/USD approaches key technical levels, nears late-Jan high

Technical Analysis Wed 3 Feb 2016 16:42:02 GMT Author: Adam Button |
audusd
Author: Adam Button

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AUD/USD technical analysis

The Australian dollar is approaching some critical levels.

The January 27 high also corresponds with the 61.8% retracement of the Jan
decline. A close just above spot would also sketch a bullish reversal on the
chart. A close above 0.7141 would confirm it.

This has turned into a wild day in the markets.

Gold bottoming out: Where to target? - BAML

Wed 3 Feb 2016 20:27:22 GMT Author: Adam Button | Category: News
Author: Adam Button

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Gold commentary from Bank of America Merrill Lynch

Themes: gold has rallied into the new year. We have been bearish gold since
2013 on a confluence of factors, including a stronger USD, falling oil prices,
subdued market volatility and a bottoming out of real interest rates. Moving
into 2016, we thought many of these trends, including tighter US monetary
policy may continue to provide headwinds to the yellow metal. Yet, concerns
over the health of China's economy and activity in the US have pushed
prices higher. We see a risk that gold may give back some of these gains, if
the immediate volatility subsides. Having said that, we remain steadfast in
our expectation that this will be a transitional year, with gold ultimately
breaking out of the bear market.

Forecasts: Gold to bottom out this year. While China continues to face
severe structural issues, we see scope for a gradual stabilisation in the
nation. This may ultimately remove some of the immediate upside to gold.
Looking into the remainder of 2016, we believe the benign trading
environment of the past few years is truly behind us, the pace of USD
appreciation starts to slow and inflation could finally pick up in developed
nations, all of which reinforce our view that gold will be bottoming out this
year.

Risks: escalation in China. An escalation of issues in China and a

deterioration of activity data in the US may put sustained upward pressure
on gold prices earlier than we anticipate at present.

BofA targets gold at $1250 by the end of the year.

For bank trade ideas, check out eFX Plus.

USD/JPY can't seem to get off the canvas

Technical Analysis Thu 4 Feb 2016 17:11:58 GMT Author: Adam Button |
usdjpy
Author: Adam Button

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Fresh low at 116.67

US dollar trading is much more of a two-way market today but one place
where that isn't true is USD/JPY.

It staged a small bounce from 117.00 but, otherwise, it's been flat or lower.
It's interesting that there hasn't been a bit more excitement after it broke
below yesterday's low.

To me, that argues that the bears are a bit worn out. On the flipside, the
dollar has gained traction elsewhere -- like in EUR/USD which slipped 80 pips
from the highs -- but USD/JPY can't get a bid.

Technical analysis

If you turn to the technicals, the picture is more clear. The fall since the BOJ
pop has been dramatic and the pair is back near the January lows.

It looks like the selling is exhausted for the moment but the huge reversal
argues for more declines. Look to sell a bounce near 118.00 but there is no
value in selling now.

Gold trades at the highest level since October 2015 today

Technical Analysis Fri 5 Feb 2016 19:45:59 GMT Author: Greg Michalowski |
gold
Author: Greg Michalowski

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Test trend line target

Gold continued to move higher today and in the process has tested the
topside trendline connecting the highs from May in October. That trendline
cuts across at 1162. The high price for the day, did extend to 1163.33 but
the price has retraced back below that trend line.

A move above that level will next target the 1177 area which is the 50% of
the move down from the March 2015 high. The price last week based
against the 100 day MA (blue line in the chart below before heading higher)
This week, the 200 week MA was broken (green line in the chart below).
That MA currently comes in at 1130.46. The last time the price was above
the 200 day MA was back in October. That MA represents a risk level for
those who are long now. Stay above and get above the topside trend line
will have more traders looking for the either safety of Gold or since rates are
low and even below 0% in some countries, a store of value.

Gold finishes best week since July 2013 at the highs

Technical Analysis Fri 5 Feb 2016 20:59:26 GMT Author: Adam Button |
gold
Author: Adam Button

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Gold up 5% this week

Gold has been a sensational trade so far in 2016 and it continued to climb
on Friday, gaining $18 to $1173.

The 4.9% rally this week is the largest since July 2013 and gold is now within
striking distance of the October highs.

Fundamentally, the market is unwinding all the Oct Fed hawkishness but if
the Oct high and long-term downtrends give way, the upside for gold bugs
(who are an endangered species these days) could be tremendous.

Gold is starting to look like a great trade

Wed 20 Jan 2016 17:39:53 GMT Author: Adam Button | Category: News
Author: Adam Button

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Thinking out loud

Gold would be higher if it weren't a 'commodity'

Central banks will eventually 'get it' and turn dovish

Gold production investment is far below what it was and is being curtailed
Flight to safety
I got a little bit long yesterday but I'm starting to think there are scenarios
where gold can go much higher.

The top 5 events for next week's trading: Feb 8-12

Fri 5 Feb 2016 22:16:38 GMT Author: Greg Michalowski | Category: News
Author: Greg Michalowski

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What are the key economic events for the week starting February 8, 2016

Fed Chair Yellen Testifies, Wednesday at 10 AM ET/1500 GMT. The Chair of

the Federal Reserve, Janet Yellen will testify on the semiannual monetary
policy report before the House financial services committee in Washington.
The Fed kept rates unchanged at their January meeting. The next meeting
statement and press conference will be on March 16th. The Fed started the
liftoff of rates at the December meeting and projected that there would be 4
tightenings in 2016. They also said that the trajectory of rate increases
would be gradual. If the Fed is to get 4-tightenings in, that would imply one
ever other meeting. March would be the "other" meeting. The market will
be listening closely for clues for the Fed chairs rate view. PS Yellen will also
repeat her comments on Thursday in front of the Senate.

US Retail Sales, Friday at 8:30 AM ET/1330 GMT. The advance retail sales
report for the month of January will be released on Friday with expectations
for a 0.1% increase vs. minuses 0.1% in December. Ex auto and gas the gain
is expected to come in at close 0.3% vs. 0.0% last month. Finally, the control
group is also expected to rise by 0.3% vs. -0.3% in December.

Germany?E preliminary GDP, Friday at 2 AM ET/0700 GMT. German

preliminary GDP for the 4th quarter is expected to show a 0.3% quarter on
quarter gain. Year on year is expected to come in at 1.4% vs. 1.7% in the
3rd quarter.

UK manufacturing production, Wednesday at 4:30 AM ET/0930 GMT. UK

manufacturing production for the month of December will be released with

expectations of 0.1% month on month vs. -0.4%. The year on year is

expected to fall by -1.4% vs. -1.2% last

RBA Governor Stevens Testifies, Thursday at 5:30 PM ET, 2230 GMT.

Reserve bank of Australia's Stevens is to testify before the House
representatives standing committee on economics in Sydney.

Other things:
China will celebrate the New Year starting on February 8th. The festivities
will continue for the entire week in observance of the Spring Festival.
Michigan consumer Confidence will be released in the US on Friday.