20 / 07 / 2017 | General

What to Look out for Today – AUD Looking at a Potential Interest Hike?

Earlier this week the Reserve Bank of Australia released the minutes of its board discussion, assessed the neutral cash rate at 3.5% a number that is actually 2% under the current cash rate, which is already at a record low.

This all contributed to the currency closing yesterday at 0.79301 with a high of 0.79744 (against the USD). This also gave ground to speculation that a rate hike is on the RBA agenda. On the other side of the argument though, economist and analysts including Commonwealth Bank of Australia’s – G. Aird, said that the discussion amongst RBA board member isn’t as strong of an indicator of an impending rate hike as some people think. Instead they expect the nation’s central bank to hold on a rate hike for the rest of the year.

What will truly separate hear-say and rumor from fact is a 3% acceleration of growth and meeting the inflation target set at 2-3%. Significant events that could potentially affect AUD – Job report today, Deputy Governor of the RBA’s speech and data for the second-quarter inflation next Wednesday.

Other events today that could potentially affect markets are:
BoJ Press Conference - Although markets aren’t expecting anything signifigant enough to affect markets at large, the press conference might hold hints towards a dovish or hawkish stance during the next meeting of Japan’s Central Bank board.

ECB Interest Rate Decision – Investors will be eagerly awaiting this because an interest rate hike is appropriate since growth in the EU has been in the green, but not expected as is the current trend amongst most countries’/unions’ Central banks to hold on to low interest rates

ECB Deposit Rate Decision – a decision made by the ECB regarding how much interest credit institutions make on surplus liquidity.

ECB Monetary Policy Statement and Press Conference – All eyes are on Draghi as a change in interest rate will definitely effect the EUR, but could also cause a chain reaction of interest rate hikes.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
20 / 07 / 2017 | Technical Analysis

Technical Analysis 2017.07.20 - GBP/JPY & AUD/JPY


GBP/JPY: Ichimoku clouds
We see the Kijun-sen under the Tenkan-sen line is above on the daily chart, and blue line has an upwards vector, while the red is horizontal. The Chikou Span confirmative line is over the price chart, indicating towards an ascending cloud. The currency pair’s price is banded on both sides by  the Tenkan-sen and Kijun-sen. Its most proximal support is defined by Kijun-sen line at 143.470. Its most proximate resistance is Tenkan-sen at 146.500.
 

AUD/JPY: Ichimoku clouds 
On the daily chart The Kijun-sen is again under the Tenkan-sen line, both both have a upward vector in the chart. The Chikou Span confirmative line is in the upper region of the chart, indicating towards an ascending cloud. The pair’s price is over both Tenkan-sen and Kijun-sen lines; indicating towards the continuation of the bullish trend. Its most proximate support is the Tenkan-sen line sitting at 87.900 currently. The previous maximus set by the  Chikou Span line are speculated to delineate resistance at 90.300.
 
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
20 / 07 / 2017 | Market News

Fundamental Analysis 2017.07.20 – EUR,USD, JPY and Commodities

For yet another trading day the USD is trading a mixed bag against its competitors.

EUR/USD is currently on a flat trajectory. The pair is banded between the prices 1.1530–1. 1500.Investors are of course waiting for the ECB to come to their interest rate decision and Mario Draghi to present the decision during the press release. Most analysts are hoping the head of the ECB will give them indications towards interest rate bumps and monetary policy tightening, “Super Mario” is likely to disappoint.

GBP/USD is also a pair that seems to be trading on a flat plane; it currently is floating around 1.3020. Here investors are in waiting also, in this case for the UK Retail Sales report. Indices suspected to show an upswing in June after observable May dip, this should have positive effects on GBP.

USD/JPY increased reaching 112.12, as the Bank of Japan held their rate at –0.10%, as although this came as no surprise. AUD/USD corrected to 0.7925 after the release of lackluster employment data. The June index fell short of expectations at 14.0K.

Metals saw a slip leading up to the ECB Meeting, gold is at 1237.20, silver at 16.19.

Oil also experiencing a correction after a swell of its price after the announcement of a drop in US oil stocks, in EIA Crude Oil Stocks change report. At the time of writing this article Brent is 49.70, WTI is 47.15.

FTSE100 saw and increase in price reaching 7440.3; CAC40 is at 5223.0, the DAX around 12477.0.

US incides are growing slightly: DOW went up to 12637.5, S&P500 to 2471.4, NQ to 5917.0.

Asian indices also had a good trading day, the ASX200 reached 5762.5, NI255 to 20143.0.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
...
read more
19 / 07 / 2017 | General

What To Look Out For Today – Potential Crude Oil Fluctuation?

After a week of instability of the big three currencies – USD, GBP, EUR, today should be a relatively quiet with the only significant event of the economic calendar being EIA Crude Oil Stocks Change at 14.30 GMT. Of course, this isn’t an insignificant event, especially for commodity traders – with the recent OPEC+ agreement to stifle oil production with the intention to deplete oil reserves and the fact that the last EIA Crude Oil Stocks change being lower than expected – this event has the potential to send ripples out into the market.

As it stands at the moment analysts are forecasting a drop of reserves in the area of 3.241 million barrels, which is significantly less than the previous 7.564 million barrels. If this number is higher than estimated (as it was the previous week) this could cause another jump in the price of crude.

Yesterday Brent Crude closed at 48.65 and WTI at 46.21.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
19 / 07 / 2017 | Market News

Fundamental Analysis 2017.07.17 - UK CPI, Crude and USD

Market recap
GBP made waves yesterday after the CPI announcement failed to meet forecasts. Now that CPI is out of the traders’ minds, they will be turning their attention towards the BoE’s forecasts.
Inflation data came in under expectations both in the UK and New Zealand, in addition to the BoJ overnight decision to reevaluate its stance on raising its inflation target – lowering it – brings to the forefront an interesting economic disparity – although signs of growth are becoming more evident, inflation is still remaining low. Banks across the world are dovish though, largely due to the fear of inflation outpacing consumer buying power. Certain economists point towards e-commerce competition and their lower retail prices being a disinflationary factor. Ramped up investments in automation could also be a factor negatively impacting wages, which explains how higher employment doesn’t necessarily lead to a higher inflation rate.

Canadian CPI data is due on Friday. The forecast will not deviate from the global trend – and inflation is speculated to be sluggish even though the Canadian economy is robust and growing at the moment.


 
 
AUD, coming in contrast to the world’s other major currencies continued to grow after the release of the Reserve Bank of Australia’s minutes, which showed that the bank’s members decided to increase the neutral interest rate by two points above the current rate. This is where the AUD separated itself from other major currencies – this could spell an imminent rate hike in the currency’s future.
Traders’ go-to safe-haven CHF also felt the benefits of US political turmoil and off-loading of  European stocks..
Oil also saw an increase due largely to Saudi Arabia statement that it  will continue as a swing producer. Reports showed that the Saudi production will not be exported as heavily - lowering it by 1mn barrels a day less than the current exported amount which seeks to offset ramped up Libyian and Nigerian production. .
Today’s market
.
The only news for today comes from the American Continent - Canadian manufacturing sales forecasts speculate a slight dip from last months level’s. Although the figures can’t be characterized as stable, there does seem to be a growth trend. Overall though a increase is expect, just a little bit more conservative than the last 6 mo. average.

 
 
US building permits and housing starts are both speculated to grow. Construction industry payrolls seem to be increase the previous month which, employees, which can be extrapolated, will be used to meet increasing demand.
On a micro timeline housebuilding will most likely boost the dollar, this comes with a caveat of course:  both rental and housing prices are used as a measure inflation. An increase of housing would mean pressure on rents, translating into lower inflation. As most traders know, lower inflation usually means lower currency prices. . 

 
 
The Department of Energy’s Crude Oil inventory is forecasted to  lose 3.5k b/d. The American Petroleum Institute (API) though increase its reserves by 1.6mn barrels. If the data validates that speculation, price of crude could slip signifigantly. 


 
 

 
 

 
 

 This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
19 / 07 / 2017 | Technical Analysis

Technical Analysis 2017.07.19 - USD/JPY & XAU/USD

The daily chart is showing  USD/JPY is in the lower Bollinger band. USD/JPY price is still level with the EMA65, EMA130 and SMA200 which are parallel to the chart axis. RSI is dropping under MA. The Composite is challenging strong support.


 
XAU/USD
Current trend
XAU growth is largely due to global economic risks and volatility. The underwhelming testimonies of Janet Yellen in front of congress and statements made by  other FRS officials, in combination with negative macroeconomic statistics from the US the last two weeks and the most recent legislation/reformation crisis all bolstered XAU/USD price. Yesterday gold broke through  strong resistance at 1240.00 and is trading at1250.00.

Building Permits is slated to be released at 14:30 GMT+2 the the current forecast is 32K and Housing Starts Change forecasted by 63K. The EIA Crude Oil Stocks change is also to be released at 16:30 GMT+2, forecasts are expecting a dip but not one as low as last week.

XAU/USD Support and resistance
Support: 1240.00, 1230.00, 1210.00.
Resistance: 1250.00, 1265.00, 1280.00.


 
 

 
 
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
18 / 07 / 2017 | General

What to Look out for Today: Dollar Takes a Nose-dive?

The USD has had some rough times since the beginning of the year, this instability has been largely fueled by scandal, fear of political impotence and of course the exhaustion of the so-called “Trump Effect” – which roughly elaborates into the confidence created by President’s Trump campaign promises regarding repatriation of heavy industry and pro-growth economic reform.

Yesterday it seems that the dollar took another unfortunate slip, due to the Trump’s administration to pass yet another U.S. health-care reform bill. Not only was it not passed but at this point of the process, it is essentially completely derailed. This makes investors unsure that the Trump administration will be able to reform the economy if they are unable to pass a single health-care bill.

The GBP has also seen volatility this year and continues to experience it largely due to the beginning of a two year long Brexit process.  Today we may see another dip – with the release of the UK government’s inflation data. This is on the tail of Mark Carney’s (BoE Governor) waffling on his stance regarding interest. In that last month, he went from saying rates should be preserved at current levels, to saying that they should be increased.

Currently the second round of  Brexit talks are continuing in Brussels and statements coming from either UK or EU camps might cause some fluctuations in currency pairs and trading instruments tied to the two countries.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
18 / 07 / 2017 | Market News

Fundamental Analysis 2017.07.18 – Dollar Continues to Slip

The US dollar continued losing ground across most other G10 currencies.

EUR/USD price went up to 1.1535 shortly after it was announced that Obamacare reform was not enacted, with two more Republicans voted against it. There is potential for correction if both the Eurozone and the German ZEW Surveys on Economic Sentiment are lackluster, thus bolstering the USD against the EUR. Some analysts are speculating indices to experience a slight drop also, between с 18.6 to 17.8 and from 37.7 and 37.2 points. At the moment price movement of the pair is unlikely, most traders will more than likely take positions on Thursday, after data from the ECB is published regarding the interest rate decision.

GBP/USD climbed to 1.3098, most traders though are waiting for the announcement of June’s UK inflation data. Recently the CPI has on an upswing and observably higher than the level set at 2.0%, this in turn has raised red flags at the BoE, who’s stance has been pro-rate hike recently. Mark Carney should make an address later on today launching the new 10-pound Sterling bill, but he is unlikely to reference the morning’s decision.

USD/JPY slipped slightly coming in at 111.98 this was largely due to the Trump administrations inability to pass healthcare reform.

Conversely AUD/USD went up to 0.7900.

Commodity markets also saw an influx. Metals hit the highest price they’ve seen after weeks of losses; gold in fact is currently trading at 1237.80 and silver is floating around 16.15.

Brent prices are at 48.60–48.40 and WTI is banded between the prices of 46.20–45.95. Investors are likely eagerly awaiting the API Weekly Crude Oil Stock report.

Stocks have corrected after the failed US health care reform attempt:

ASX200 5673.0
NI255 19937.8
FTSE100 7384.0
CAC40 5218.0
DAX 12560.0
DOW 12602.0
 S&P500 2455.0
 NQ 5841.2

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more
18 / 07 / 2017 | Technical Analysis

Technical Analysis 2017.07.18 - AUD/JPY & GBP/JPY


 
The above four-hour chart is showing the Tenkan-sen above Kijun-sen, both have an upwards vector. The Chikou Span confirmative line is over the price chart, indicating a descending cloud. The pair is trading above both Tenkan-sen and Kijun-sen; indicating towards a continued Bullish trend. The most proximate support Tenkan-sen line at 88.05. The pairs cap is defined by the Chikou Span line which is the resistance level at 90.35.

 
Tenkan-sen line is above Kijun-sen, both have an upward vector. The Chikou Span confirmative line is over the price chart, indicating towards ascending cloud. The Tenkan-sen and Kijun-sen lines; are under the instrument’s price, indicating again the continuation of the Bullish trend.The previous Chikou Span line is the estimated support level at 87.84. The last Chikou Span line maximums are set as resistance level at 90.35.
 
GBP/JPY: Ichimoku clouds

 
On the four hour chart both The Kinun-sen line is under the Tenkan-sen line, the red line has an upward vector, the blue line has an unchanged horizontal vector. Chikou Span confirmative line is crossing the chart from top, this reverses the cloud to ascending. The pair currently is banded between both the Tenkan-sen and Kijun-sen lines. The most proximate support is Kijun-sen line at 146.41. The most proximate resistance level is set at Tenkan-sen line at 147.07.

 
 
The Kijun-sen is under the Tenkan-sen line is above, the blue line is has an upward vector, while the red  remains horizontal. The Chikou Span confirmative line is over the price chart, the cloud is currently ascending. The currency pair corrected back to the Tenkan-sen line. The most proximate support is set as the Tenkan-sen line currently 146.48. The previous  Chikou Span line maximum is set as the resistance level at 147.35.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
...
read more
17 / 07 / 2017 | General

What to Look Out For Today: Silver and Gold Off-load?

Even the most novice trader knows that during periods of market volatility metals and certain currencies are considered safe havens. Recently though it seems as though hedge fund and wealth managers have been bearish regarding the safe-haven precious metals including gold, silver and platinum.

According to industry insiders, large speculators and hedge funds have been exiting their precious metals positions, on the speculation of monetary policy tightening both in the industrialized members of the EU and the US (this effect may have been compounded by Fed’s Janet Yellen statements regarding gradual interest rate increase to avoid out pacing inflation and growth).

Historic prices of gold reveal a sentiment trend also:
17th of April - $1284.26
17th of May – $1260.92
16th of June - $1253.59
17th of July (until the time of the writing of this article) - $1230.73

On the other hand healthy economic data and sluggish inflation is attracting an increasing number of investors to Eastern European bonds including local-currency Hungarian and Polish bonds. The rally is causing a 6.7% return in the second quarter, making the best return in emerging markets at the moment.

Comparatively this is four-fold more than that offered by German bonds. In fact Morgan Stanley analysts noted that currencies of these Eastern European countries are amongst their top picks – even considering that German bonds are currently experiencing a 18 mo. high.

This effect might not have the longevity or stability of German bunds, but the current 2.85% growth of these Eastern European countries seems to be piquing investors’ interest.

To stay up to date with the next significant economic event of the week, visit our Economic Calendar.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
...
read more



FX and CFD trading are high risk and may not be suitable for everyone, ensure you fully understand the risks. You may sustain a loss of some or all of your invested capital.You may sustain a loss of some or all of your invested capital

TRADE NOW RISK FREE DEMO