GAINSY Hottest Forecasts

Daily Statement: JPY Rebounded as G7 Officials Clarified the Statement
(GAINSY Technical Analysis)

Markets were clearly confused by G7's messages regarding Japanese yen. JPY initially dipped yesterday as the official statement released from G7 seemed to be general without targeting recent depreciation in the Japanese currency. However, some unnamed officials came out and "clarified" that the statements were indeed targeting yen and the comments sent it higher. The statement pledged that G7 policies "will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates." An unnamed US official was quoted later in the day saying the statement was "misinterpreted" and has indeed "signaled concern about excess moves in the yen". The official warned that ":the G7 is concerned about unilateral guidance on the yen" and "Japan will be in the spotlight at the G20 in Moscow this bank weekend." Then it's reported that a Canadian official said then statement was aimed at calming recent rhetoric on yen and criticized that Japan has been too vocal on the need for a weaker currency. USD/JPY is back at around 93 level after jumping to as high as 94.45 yesterday. Meanwhile, EUR/JPY and GBP/JPY are stuck in recent range below 127.70 and 117.97 respectively. The meeting of G20 finance ministers in Moscow this Friday and Saturday will now be important in the near term trend in yen. It's expected that emerging market countries would be critical of Japan's recent rhetorics and policies in the G20 meeting. ...

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AUD/USD: Aussie Gains On Upbeat Consumer Confidence Data
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, AUD strengthened 0.74% against the USD to close at 1.0337, following a rise in the National Australia Bank’s business confidence and conditions index for January.

LME Copper prices declined 0.2% or $16.8/MT to $8199.3/MT. Aluminium prices rose 0.1% or $2.3/MT to $2078.3/MT.

In the Asian session, at GMT0400, the pair is trading at 1.0359, with the AUD trading 0.21% higher from yesterday’s close, after Australia’s Westpac Bank and the Melbourne Institute’s consumer confidence index rose to a reading of 108.3 in February, compared to a reading of 100.6 recorded in the previous month. ...

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GBP/USD: GBP Trading Higher Ahead Of The Bank Of England Quarterly Inflation Statement
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, GBP rose 0.14% against the USD and closed at 1.5677, as the greenback weakened after the G7 industrial nations stated that countries should not use monetary policy to actively weaken their currencies. However, UK growth concerns continued to weigh over the GBP.

On the economic front, UK’s consumer price index remained stable at 2.7% annually in January, in line with market expectations. Meanwhile, annual retail price inflation increased to 3.3% in January, from 3.1% in December. Also, the house price index rose 3.3% on an annual basis in December, faster than the revised 2.2% gain recorded in November. Moreover, on an annual basis, output price inflation eased to 2.0% in January, from 2.2% in December, while the core producer price index climbed 0.2% (MoM) in January, higher than the expected 0.1% rise. Separately, the Conference Board’s leading index edged up 0.1% (MoM) to 103.5 in December, following a 0.2% rise in November. ...

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EUR/USD: Euro Advanced As G7 Pledged Not To Engage In Currency Devaluations, Trading Lower This Morning
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, EUR rose 0.38% against the USD and closed at 1.3453, after the G7 pledged not to engage in currency devaluations, thereby easing investor fears that the European Central Bank would react to recent Euro strength with monetary easing measures that would depreciate the single currency. The Euro held gains, following remarks by European Central Bank President, Mario Draghi that Spain was on the right track of recovery and that the nation’s banks were properly capitalized and in a position to give credit. ...

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G7 Comments Support JPY, G20 To Discuss On Weekend
(GAINSY Fundamental Analysis)

U.S. USDTrading (USD) theJapanese JPY once again dominated the headlines and moved most of the other majors with EUR/JPY dragging the EUR/USD higher. The G7 down played the recent moves in the JPY as just an over valued currency returning to normal values. They did suggest the recent comments about JPY targets like Y95-Y100 was not helpful with such universal guidance from Japan counter to the G7 rules. Looking ahead,January Retail Sales forecast at 0.1% vs. 0.5% previously. Also US Treasury Secretary Speaks.

The Euro (EUR) the EUR/USD soared chasing the EUR/JPY higher and supported by the up trend in the EUR/CHF.The major broke above 1.3410 and quickly moved to 1.3475 before fading back with some easing in the EUR/JPY. The EUR/JPY continued to be the most volatile in the market moving ina 200 pips but in a wild fashion up down up and finally down again reacting to comments out of the G7 and G20. ...

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Markets To Eye BoE Inflation Statement After Sticky CPI
(GAINSY Fundamental Analysis)

Traders are hours away from one of the most awaited and freshest releases of the year, where policymakers from The Old Lady of Threadneedle Street prepare to publish the Bank's first quarterly inflation report in 2013.

The Bank of England's interest-adjusting committee set to announce new projections for inflation and growth on Wednesday. February's outlook report is expected to reflect the rising pressures on the U.K. economy and its poor sterling.

Inflation rate in the U.K. was apparently bottled up throughout the past fourth months, at an annual rate of 2.7 percent, 5 percentage points higher than the Bank's target for inflation, expected to remain higher on the forecast horizon. ...

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EU Industrial Production To Aid Single Currency
(GAINSY Fundamental Analysis)

The euro (EUR) consolidated its strengthening versus the US dollar (USD). Currently at 1.3444, the single currency has seen boosted confidence after the ECOFIN and G7 meetings, as markets see many of the issues in the Eurozone being within reach of being solved. Looking ahead, we expect European industrial production results this morning. They are expected to come out positive and this may help the euro look at further gains

The US dollar (USD) edged lower versus the Japanese yen (JPY) touching 92.94 after the G7 meeting hinted that the low level of the yen had to be discussed in the upcoming G20 meeting this bank weekend. The Bank of Japan meets tomorrow to decide on Monetary Policy and all ears will be on the press conference that follows...

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ECB's Draghi Cheers Spanish Efforts To Tackle Crisis
(GAINSY Fundamental Analysis)

European Central Bank Mario Draghi believes that Spain is on the right path of economic recovery since he vowed to protect the euro with the Bank's latest crisis-fighting strategy.

Draghi said he sees positive signs and cheered the Spanish efforts to tackle the crisis while he was in Madrid to address members of parliament during a closed-door session on Tuesday.

Today Spain has what probably is the most advanced recovery and resolution system for banks in the euro area," Draghi told reporters after talking to lawmakers. ...

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European Stocks Mixed, FTSE Pressured Ahead Inflation Statement
(GAINSY Fundamental Analysis)

European stocks kick-start the session Wednesday mixed with investors cautious ahead of the G-20 summit after the G-7 statement rattled markets. Investors are digesting earnings and Obama’s State of the Union impact on the market with more data set for release late in the session.

- STOXX 50 off by 0.10% at 2646.26 . STOXX 600 nearly flat around 286.97
- DAX 30 slightly positive higher by 0.10% at 7667.70 . CAC 40 off 0.13% at 3681.77

The mixed sentiment governs the market with volatility evident ahead of the Group of 20 meeting as seemingly volatile FX movements remain at the top of the agenda. The confirmation from the G-7 for the needed loose monetary policies is support for equities as the rally will find more support, but excessive FX volatility will surely be unwarranted for investors. ...

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JPY Weakness In Spotlight
(GAINSY Fundamental Analysis)

The overnight session was mostly dominated by the comments from G7 and the BoC Governor Carney on Japanese currency stimulus, ahead of G20 meeting scheduled on February 15-16th. The major statement out of G7 meeting was its commitment to 'market-determined' exchange rates, giving a level of comfort to further JPY sell-off early in the session. USDJPY traded above 94.00, before smashing down to 92.83. USDJPY retraced gains amid an obscure voice, first thought to come out of the French delegation, said that G7 statement was misinterpreted, and commented that G20 is concerned about excess moves in JPY and the unilateral guidance of JPY. The rumors gained more pace when Financial Times reported that the comment was made in 'Washington'. Now, the markets see Japan in spotlight during G20 on February 15-16th summit. ...

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Haunted By Comments Ahead Of The G20
(GAINSY Fundamental Analysis)

Intraday, EUR/USD was under moderate pressure early in the session as European equities initially lagged the rally in Japan. However, the first support area (1.3350 zone) was left intact. With few data to guide the price action, currency traders had to keep an eye on equities and on the comments ahead of the G20 meeting. The G7 published already a statement on currencies, confirming their aim for market determined exchange rates. Monetary policy should be oriented towards meeting domestic objectives and G7 members will not target exchange rates. As such, the statement didn't bring that much news for markets. However, Japanese policymakers interpreted the communiqué as approving their policy approach. So, it supported the yen cross rates, including EUR/JPY. More or less at the same time, SNB's Jordan came out with soft comments. He said that the Swiss franc cap policy will be kept in place and that he expects the franc to keep weakening against the euro. Buying in EUR/CHF and EUR/JPY also pushed EUR/USD higher. If the G7 communiqué intended to bring some calm to the currency market, one can question whether this was the right way, especially from a euro point of view. Later in the session, the story became even more bizarre as there came headlines on the screens from all kinds of stakeholders in the debate, including from a ‘G7 official' who said that the G7 statement was misinterpreted. He said it intended to signal concern about excess moves in the yen and the Japan will be in the spotlights at the G20. EUR/USD reversed part of the earlier gains on the these headlines. Late in the European session, ECB's Draghi did speak in Spain. He repeated that the exchange rate is important for growth, but that the ECB targets price stability in the medium term. The comments from Draghi basically confirmed the stance at last bank week's press conference. Nevertheless, EUR/USD gained some further ground later after the comment hit the screens. The pair closed the session at 1.3454, compared to 1.3406 on Monday evening...

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Forex Signal Update: EUR/USD – Look to sell higher
(GAINSY Ichimoku Analysis)

Although yesterday’s anticipated recoil adds credence to our view that a temporary low has been formed at 1.3326 earlier this bank week and consolidation with mild upside bias remains for retracement of recent decline to 1.3500 and possibly 1.3515-20 (50% Fibonacci retracement of 1.3711-1.3326), reckon upside would be limited to 1.3550-55 and price should falter well below resistance at 1.3577, bring another decline later. ...

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Heavy Swings On JPY Ahead Of G20 Summit
(GAINSY Fundamental Analysis)

The currency markets remain dominated by speculative swings on JPY and EUR. The catalyst was the buzz on wires emulating for the G20 meeting scheduled on February 15-16th. JPY gains against all of its major peers, as EURUSD consolidates recent losses.

The Swiss Franc extends strength, despite SNB President Jordan's CHF-negative speech given yesterday. Surprisingly, USDCHF fell as far as 0.9150, from 92.15-February-highs. ...

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BOE Cuts Growth And Raise Inflation Forecasts, GBP Drops
(GAINSY Fundamental Analysis)

The BOE quarterly inflation report released today showed that the bank cut growth and raised inflation forecasts, pushing the pound beyond 6-month low against the U.S. dollar.

The report revealed that economy is set for a "slow and sustained recovery" over the coming three years and economic output is unlikely to surpass pre-financial crisis peak until 2015.

However, there will be growth in the first quarter, following the 0.3% drop in the last three moths of last year, where the economy will avoid a triple-dip recession, with annual GDP is predicted to hover around 1.9% in two years time. ...

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It's Only Words But FX Is On The Move
(GAINSY Fundamental Analysis)

The "unnamed official" is not getting their due credit for some of the recent market movements in forex-land. These individual have added to the quality of volatility for dealers and investors alike in this 'economic summit season.' Characteristically, they are consistent and have appeared after most high profile policy points have been delivered in recent times. Thankfully, they are the individual's that are translating some of these policy's meanings and insisting on what market movements should be.

Last bank week the single currency fell awkwardly after ECB's Draghi's communiqué was delivered. In some corners it was viewed as a feeble attempt by the Central Banker to talk his currency down from elevated heights. The "unnamed source" was there to interpret his comments more accurately for the layperson. In translation, they highlighted that the value of the currency should be considered when assessing monetary conditions. ...

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The BOE's Inflation Statement and What it Means for Sterling
(GAINSY Fundamental Analysis)

Outgoing BOE Governor Mervyn King delivered his penultimate Inflation Statement this morning before he leaves in July. Overall, it was a sterling negative report that leaves the door open to more stimulus and predicts inflation to remain above the target rate for the foreseeable future. Here are the highlights from the Feb 2013 Inflation Statement

* UK set for "slow but sustained recovery" this year.
* The recovery needs to be aided by a further easing in credit conditions and supported by the Funding for Lending scheme.

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Intraday Statement: Sterling Tumbled on BoE Inflation Statement
(GAINSY Technical Analysis)

Sterling decreased sharply today as the BoE's quarterly inflation reported showed that policymakers are ready to tolerate higher inflation to boost economic recovery. While BoE expected UK to have "slow but sustained recovery" this year, growth projection for the year to 1Q2014 was revised to 1.7%, down from prior projection of 2.0%. The economy is expected to be back at the pre-crisis level in 2015. Meanwhile, inflation is expected to stay above the central bank's target of 2% until at least end of 2015, and would peak at 2.3% in 2H 2013. However, the MPC emphasized that "as long as domestic cost and price pressures remained consistent with inflation returning to the target in the medium term, it was appropriate to look through the temporary, albeit protracted, period of above-target inflation." And, "attempting to bring inflation back to the target sooner by removing the current policy stimulus more quickly than currently anticipated by financial markets would risk derailing the recovery and undershooting the inflation target in the medium term." ...

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Forex Signal Wrap-up: EUR/USD – Sell at 1.3480
(GAINSY Ichimoku Analysis)

EUR/USD – 1.3443

Most recent candlesticks pattern : Shooting star

Trend : Near term down

Tenkan-Sen level :1.3473
Kijun-Sen level :1.3468
Ichimoku cloud top :1.3415
Ichimoku cloud bottom :1.3410

New strategy : ... Are you interested? READ MORE

Elliott Wave Forecast: EUR/GBP – Buy at 0.8575
(GAINSY Elliott Wave Analysis)

EUR/GBP – 0.8657

Recent wave: v of wave 3 has possibly ended at 0.8067 but wave 4 should hold below 0.9050

Trend: Up

Original strategy :
Buy at 0.8545, Target: 0.8645, Stop: 0.8500

Target: -
New strategy : ... Are you interested? READ MORE

U.S. Retail Sales Rise Modestly in January
(GAINSY Fundamental Analysis)

Retail sales in January 2013 rose by an expected 0.1% although this implied building further onto solid gains of 0.5% in both December and November 2013. January saw very muted monthly changes in some of the more volatile components. For example, sales at motor vehicle dealerships fell by a marginal 0.1% while receipts at gasoline service stations rose by only 0.2%. Sales at building material stores rose by 0.3%, which matched the December increase although was down from a 1.2% gain in November. ...

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