Forex News

  • Morgan Stanley remain with a bearish bias on EUR/USD, targeting to 0.93
    by Eamonn Sheridan on September 28, 2022 at 10:04 pm

    <p class="western" align="left"> This via the folks at eFX. </p><p class="western" align="left"> For bank trade ideas, <a href="" target="_blank">check out eFX Plus</a>. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. <a href="" target="_blank">Get it here</a>. </p><p> Morgan Stanley snippet:</p><ul><li>"We remain bearish on EUR/USD targeting 0.93. Stagflationary concerns continue to rise in Europe as geopolitical uncertainties accelerate. ECB hawkishness may be insufficient to support the currency in a stagflationary environment, we think," MS notes.</li><li>"Moreover, market implied terminal rates for the ECB may be elevated (3%) compared to a more plausible outcome like 2%. The upcoming inflation print will be an important market event as investors seek to gauge the path for Eurozone inflation," MS adds.</li></ul> This article was written by Eamonn Sheridan at

  • Druckenmiller " central case a hard landing", "owning assets doesn’t make a lot of sense"
    by Eamonn Sheridan on September 28, 2022 at 9:46 pm

    <p>Greg had the headline earlier on remarks from billionaire investor Stanley Druckenmiller:</p><ul><li><a href="" target="_blank" data-article-link="true">Legendary investor Stanley Druckenmiller: The Fed was wrong. They made a big mistake.</a></li></ul><p>A little more (<a href="" target="_blank" rel="nofollow">link here for even more</a>) </p><ul><li>“I will be stunned if we don’t have recession in ’23. I don’t know the timing but certainly by the end of ’23. I will not be surprised if it’s not larger than the so called average garden variety.”</li><li>“We are in deep trouble.”</li></ul><p>Says the Federal Open Market Committee (FOMC) made a mistaken its 'transitory' view of inflation and its refusal to move quickly once it realised:</p><ul><li>“I think the repercussions of that are going to be with us for a long, long time.”</li></ul> This article was written by Eamonn Sheridan at

  • Two planes have collided on the ground at UK Heathrow airport, no reports of injury so far
    by Eamonn Sheridan on September 28, 2022 at 9:26 pm

    <p>Korean Air 777 and an Icelandair 757 have collided. </p><p>The mishap occurred while taxiing to takeoff at London's Heathrow Airport. </p><p>No injuries reported, which is encouraging news. </p><p>---</p><p>The UK is in all sorts of strife right now. Overnight eh Bank of England stepped in to avert a deeper crisis in financial markets there:</p><ul><li><a href="" class="article-link article-link">BOE announces to carry out temporary purchases of long-dated UK government bonds</a></li><li><a href="" class="article-link article-link">Will the BOE band aid work?</a></li><li><a href="" class="article-link article-link">Kwarteng reportedly to ask financiers not to bet against the pound</a></li></ul><p>GBP staged a rally:</p> This article was written by Eamonn Sheridan at

  • Forexlive Americas FX news: Rebound.Mkts bounce with USD lower, stocks higher,yields lower
    by Greg Michalowski on September 28, 2022 at 8:45 pm

    <ul><li><a href="">USD: Month-end fixing model points to USD buying - Credit Agricole</a></li><li><a href="">US stocks continue the grind higher. Trade to new session highs</a></li><li><a href="">Reminder: The history of interest rate forecasting is awful</a></li><li><a href="">Fed's Evans: I expect to to be at top Fed funds rate by March</a></li><li><a href="">What's priced in for the Bank of England now</a></li><li><a href="">US treasury auctions off $36B of 7 year notes at a high yield of 3.898%</a></li><li><a href="">BOE buys just £1.025 billion in emergency QE operation</a></li><li><a href="">BOE's bond buying was due to liability-driven investment and links to pensions - report</a></li><li><a href="">US weekly oil inventories -215K vs +443K expected</a></li><li><a href="">No comments on the outlook from Powell</a></li><li><a href="">Bank of Canada to start publishing minutes after January 25 decision</a></li><li><a href="">Fed's Bostic: Baseline right now is a 75 bps increase in Nov and 50 bps in Dec</a></li><li><a href="">US pending home sales for August -2.0% vs. -1.4% expected</a></li><li><a href="">Legendary investor Stanley Druckenmiller: The Fed was wrong. They made a big mistake.</a></li><li><a href="">The BOE was worried about margin calls in the gilt market - report</a></li><li><a href="">US August wholesale inventories +1.3% vs +0.6% prior</a></li><li><a href="">US August advanced goods trade balance -87.3B vs -90.19B expected</a></li><li><a href="">The CHF is the strongest and the GBP is the weakest as the NA session begins</a></li><li><a href="">Kwarteng told bankers that on Nov 23 will lay out a fully-costed plan</a></li><li><a href="">BOE will buy bonds with +20-year maturity starting today</a></li><li><a href="">Equities turn back lower as the relief doesn't last</a></li></ul><p>The BOE came in and said they would be buying bonds to stem the selling.They plan a series of bond buying operations through October 14 and announced that the QT program won't begin until October 31 (fingers crossed). The markets are now implying a rate of 3.79% at their November 3 meeting. That represents a 62% chance of a 125 BP hike and a 38.2% of 150 BP hike. </p><p>Needless to say with the government proposing fiscal stimulus and the central bank promoting austerity measures with some bond intervention, things are in disarray and all over the place. Nevertheless, it worked at least today as we saw yields move lower, stocks move higher, the dollar move lower. </p><p>Looking at the US debt market, the .</p><ul><li>2 year yield is at 4.120% that's down 18.8 basis points</li><li>5 year yield is at 3.944%, down 27 basis points</li><li>10 year yield 3.729%, -23.4 basis points</li><li>30 year yield 3.685%, -14.2 basis points</li></ul><p>In the European debt markets:</p><ul><li>German 10 year fell -12 basis points</li><li>UK 10 year fell -46 basis points</li><li>France's 10 year fell -12 basis points</li><li>Italy's tenure fell -17 basis point</li></ul><p>In the US stock market all the major indices were sharply higher:</p><ul><li>Dow industrial average rose 1.88%</li><li>S&P index rose 1.9%</li><li>NASDAQ index rose 2.05% gain</li><li>Russell 2000 of small-cap stocks was the big winner with a 3.17% rise</li></ul><p>There was relief from the "dollar is king" trend as well. In fact looking at the strongest to the weakest of the major currencies, the dollar was not the king but the weakest of the major currencies. The flow of funds were heading into the safety currency - the CHF - and one of the most beaten down, the NZD. </p><ul><li>GBPUSD moved higher and was able to extend back above its falling 100 hour MA at 1.08345 The price also moved above the swing highs from yesterday and earlier today at 1.0837. With the 100 hour MA and the swing highs near the same level entering into the new day, the level will be a short term bias defining level going forward. </li><li>EURUSD moved back above the 100 hour moving average at 0.9667 and also a key swing area going back to June/October of 2002 between 0.9662 to 0.9708. See the video below outlining the level and the technicals in play. The price moved higher from the London exit levels and is closing above the 0.9708 level increasing the bullish bias. </li></ul><ul><li>USDJPY moved back away from the 145.00 level and moved down to test the 100 hour moving average currently at 143.906. In the new day the 100 and 200 hour MA below at 143.694 will be support targets that if broken would increase the bearish bias. </li></ul><ul><li>USDCAD extended below its 100 hour MA for the first time since September 13 after trying to hold support earlier in the day. The 100 hour MA comes in at 1.3645. Stay below in the new day and the sellers are in control (trading at 1.3619 currently).</li><li>USDCHF was the biggest mover today as it tumbled below its 100 hour MA at 0.9859 and then the dipped and traded above and below its 200 hour MA at 0.97619. There is a key swing area near the 200 hour MA between 0.9754 and 0.9764 as well. The current price is trading within that area at 0.9758 into the NY close. How the winds blow in the new day around that area will help to determine the next short term bias. Move below increases the bearish biasl. Stay above and there could be a rebound from the sharp move lower today. </li><li>NZDUSD: The NZDUSD moved back above its 100 hour MA at 0.5707 after trading earlier in the day to the lowest level since March 19, 2020 (which was the day, the NZDUSD bottomed in the pandemic sell off). The low in 2020 reached 0.54668. The low today 0.55638. Close but no new multi decade low for the NZDUSD. The price is trading at 0.5729 going into the NY session close which is above the 100 hour MA at 0.5707. Close support in the new trading day will be the 100 hour MA level. If the buyers are to continue to hold short term control, staying above that level will be needed. </li></ul><p>Be sure to check out our Youtube channel <a href="" target="_blank" rel="nofollow">HERE </a>and be sure to subscribe as well. </p><p>Good fortune with your trading. </p> This article was written by Greg Michalowski at

  • UK crisis - Chief Sec to the Treasury Philp says will not renege on its tax cut plan
    by Eamonn Sheridan on September 28, 2022 at 8:32 pm

    <p>The UK's Chief Secretary to the Treasury Philp:</p><ul><li> Won't change course on tax cut plan</li><li>To stick to its November 23 timeline on medium-term fiscal plan</li></ul><p>---</p><p>There was some recovery in GBP on Wednesday:</p><ul><li><a href="" class="article-link">BOE announces to carry out temporary purchases of long-dated UK government bonds</a></li><li><a href="" class="article-link">Will the BOE band aid work?</a></li><li><a href="" class="article-link">Kwarteng reportedly to ask financiers not to bet against the pound</a></li></ul> This article was written by Eamonn Sheridan at

  • Trade ideas thread - Thursday, 29 September 2022
    by Eamonn Sheridan on September 28, 2022 at 8:32 pm

    <p>Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so: </p> This article was written by Eamonn Sheridan at

  • US citizens are being advised by the US State Department to get out of Russia immediately
    by Eamonn Sheridan on September 28, 2022 at 8:18 pm

    <p>The U.S. Embassy in Moscow has issued the alert.</p><p>It advises that "severe limitations" could prevent it from assisting U.S. citizens still in the country.</p><ul><li>"If you wish to depart Russia, you should make independent arrangements as soon as possible"</li><li>Noting that Russia has begun a military mobilization against Ukraine, U.S. Embassy officials warned Americans with dual Russian citizenship that they could get drafted by Russia.</li></ul> This article was written by Eamonn Sheridan at

  • Here is whats on the economic calendar in Asia - 29 September 2022
    by Eamonn Sheridan on September 28, 2022 at 8:18 pm

    <p>Japan securites flows for the week and New Zealand business survey is about it. Once again it'll be a headline-driven market during Asia today rather than driven by any of this lot. </p><p class="western" align="left"> This snapshot from the ForexLive economic data calendar, <a href="">access it here</a>.</p><p class="western" align="left"> The times in the left-most column are GMT. </p><p class="western" align="left"> The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where is a number, is the consensus median expected.</p> This article was written by Eamonn Sheridan at

  • US equities post a huge gain as bond yields retrace
    by Adam Button on September 28, 2022 at 8:14 pm

    <p>Closing changes:</p><ul><li>S&P 500 +72 points, or 2.0%, to 3719</li><li>Nasdaq Comp +2.1%</li><li>Russell 2000 +3.3%</li><li>DJIA +1.9%</li><li>Toronto TSX Comp +2.1%</li></ul><p>The S&P 500 got into Friday's gap but couldn't close there. Despite the huge gains, we're going to need a few more days like this to get some breathing room above the June lows. All eyes will remain on the bond market.</p> This article was written by Adam Button at

  • Oil: RBC is forecasting the October 5 OPEC+ meeting may slash output by up to 1 mn bbl/day
    by Eamonn Sheridan on September 28, 2022 at 8:14 pm

    <p>Newswires with the headline from an RBC note, the gist is:</p><ul><li>OPEC+ meet October 5, may cut oil output in the range of 500K to 1mn barrels/day</li></ul><p>"We certainly see a significant chance that the producer group will opt for a substantial cut (500 kb/d to 1 mb/d) to try to signal that there is indeed an effective circuit breaker in the market."</p><p>This is certainly the murmuring at present, yeah:</p><ul><li><a href="" target="_blank" data-article-link="true">Russia will likely propose OPEC+ reduce output by 1 million bpd at the next meeting</a></li></ul><p>The oil price seems to concur:</p> This article was written by Eamonn Sheridan at

  • Oil rallies nearly 5% but it's still not enough to erase the declines since Friday
    by Adam Button on September 28, 2022 at 6:54 pm

    <p>There isn't much to break down in terms of market moves today. The Bank of England emergency move was enough to turn the tide after days of ruthless bearishness in every market. Oil has been particularly hard hit lately and there's the prospect of a cut from OPEC next week so the buyers piled back in.</p><p>But it's all one trade right now and it's steered by bonds and the dollar. Oil is just along for the ride unless (until?) something important happens in the energy market.</p><p>Technically, oil will need to get above $85/86 to generate any kind of upwards momentum.</p> This article was written by Adam Button at

  • US says to expect new measures in coming days in response to Ukraine referendums
    by Adam Button on September 28, 2022 at 6:23 pm

    <p>Earlier, the EU also said it is planning for a new package of measures.</p><p>What worries me -- and many others -- is a Russian escalation. The bombing of both Nord Stream pipelines is bizarre but that, Putin's rhetoric and the referendums/annexation point to some kind of new stance in the war. Obviously, we've all heard the warnings about nuclear weapons and that's the nightmare scenario but maybe it means an asymetric energy war? Who really knows but there's a sense out there that there is another shoe to drop.</p> This article was written by Adam Button at

  • The US dollar trade continues to unravel, sparking wide relief
    by Adam Button on September 28, 2022 at 5:33 pm

    <p>Some impressive daily chart reversals are beginning to appear with a few hours until the close.</p><p>EUR/USD is now up 142 pips on the day to 0.9735 after falling as low as 0.9537. That's traced out an outside day from new lows, which is a strong bullish signal.</p><p>The price action started with bonds and the Bank of England restarting its QE program for a month. They also called off planned QT operations that were set to start on Monday.</p><p>Bond buyers had been lurking with rates a +10-year highs but the buyers were overwhelmed by forced selling due to liquidations and quarter end. With the momentum now shifting, there's some FOMO in bonds that's pushed US 10s down 23 bps.</p><p>This could be the start of a long-end led bull flattener that interts the curve even deeper with the front-end pinned higher by Fed policy.</p><p>In any case, all the broader marked needed was a bit of stability in bonds to spark a reversal, something I've been highlighting for a week. The S&P 500 fell for six straight days until today and it's now up 58 points.</p><p>At the moment though, the dollar is what's on the move. It won't take much to keep this going until the weekend but if it's going to have any staying power we'll need to see signs of a Fed pivot or weakening US economic data. Tomorrow's US <a href="" target="_blank">economic calendar </a>features initial jobless claims and on Friday we get an important PCE report.</p> This article was written by Adam Button at

  • US treasury auctions off $36B of 7 year notes at a high yield of 3.898%
    by Greg Michalowski on September 28, 2022 at 5:03 pm

    <p>The US treasury auctioned off $36B of 7 year notes. Below are the details of the auction:</p><ul><li>High <a href="" target="_blank" id="bc27d1fa-0b41-4192-ac3a-48794fd4ff1e_1" class="terms__main-term">yield</a> 3.898</li><li>WI level at the time of the auction 3.903%</li><li>Tail -0.5 bps vs 6 month average of 0.0 basis points</li><li>Bid to cover 2.57X vs 6 month average of 2.55X</li><li>Directs (domestic demand) 24.7% vs 6 month average of 19.8%</li><li>Indirects (international demand) 62.5% vs 6 month average of 68.7%</li><li>Dealers (dealers take the rest) 12.9% vs. 6 month average of 11.5%</li></ul><p>Mixed auction, but better than the 2 and 5 year auctions.</p><p>Positives:</p><ul><li>A negative tail of -0.5 basis points which is better than the 0.0BP average over the last 6 months</li><li>The domestic direct demand was strong at 24.7%. US investors are being attracted by the higher yields</li></ul><p>Negatives:</p><ul><li>international demand was less than the 6 month average</li><li>the dealers took a little more than the six-month average</li></ul><p>Neutral:</p><ul><li>the bid to cover was near the six-month average</li></ul> This article was written by Greg Michalowski at

  • Reuters source: German economic institute expects recession due to lackluster consumer
    by Greg Michalowski on September 28, 2022 at 4:46 pm

    <p>Reuters is reporting that a German economic research Inst. is expected to announce that lackluster consumer sentiment will lead to a recession in Germany.</p><ul><li>Forecast calls for GDP to dip to -0.2% in Q3 and -0.4% in Q4 and -0.4% in Q1 2023</li><li>expects modest growth thereafter in 2023</li><li>consumption will only start to recover next summer</li></ul><p>In other European news Italy cut its 2023 GDP forecast to 0.6% from 2.4% as a result as result of surging energy costs.</p><p>The EURUSD is trading at 0.9693. The high just reached 0.97077. That was just short of the topside target at 0.9708 which was the high of a swing area going back to June/October 2002 between 0.9662 and 0.9708. THe 100 hour moving average is currently at 0.9671</p> This article was written by Greg Michalowski at

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