Tag Archive: EUR/USD

The Real End of the Bond Market

These things are actually quite related, though I understand how it might not appear to be that way at first. As noted earlier today, the Fed (yet again) proves it has no idea how global money markets work. They can’t even get federal funds right after two technical adjustments to IOER (the joke).

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Chart(s) of the Week: Reviewing Curve Warnings

Quick review: stocks hit a bit of a rough patch right during the height of inflation hysteria. At the end of January 2018, just as the US unemployment rate had finally achieved the very center of attention, global markets were rocked by instability. Unexpectedly, of course.

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Euro slides against the dollar on ECB dovishness

The euro has declined further against the dollar but should strengthen over next 12 monthsThe euro fell to a 20-month low against the US dollar following the European Central Bank’s (ECB) March policy meeting, given the revised forward guidance that suggests that the interest rate differential is unlikely to provide much upside to the euro in the next few months.

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LIBOR Was Expected To Drop. It Dropped. What Might This Mean?

Everyone hates LIBOR, until it does something interesting. It used to be the most boring interest rate in the world. When it was that, it was also the most important. Though it followed along federal funds this was only because of the arb between onshore (NYC) and offshore (mainly London, sometimes Caymans) conducted by banks between themselves and their subs (whichever was located where).

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US Manufacturing Questions

The US economic data begins to trickle in slowly. Today, the reopened Census Bureau reports on orders and shipments to and from US factories dating back to last November. New orders for durable goods rose just 4.5% year-over-year in that month, while shipments gained 4.7%. The 6-month average for new orders was in November pulled down to just 6.6%, the lowest since September 2017 (hurricanes).

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Fear Or Reflation Gold?

Gold is on fire, but why is it on fire? When the precious metals’ price falls, Stage 2, we have a pretty good idea what that means (collateral). But when it goes the other way, reflation or fear of deflation? Stage 1 or Stage 3? If it is Stage 1 reflation based on something like the Fed’s turnaround, then we would expect to find US$ markets trading in exactly the same way.

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Eurodollar Futures: Powell May Figure It Out Sooner, He Won’t Have Any Other Choice

For Janet Yellen, during her somewhat brief single term she never made the same kind of effort as Ben Bernanke had. Her immediate predecessor, Bernanke, wanted to make the Federal Reserve into what he saw as the 21st century central bank icon. Monetary policy wouldn’t operate on the basis of secrecy and ambiguity. Transparency became far more than a buzzword.

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Further consolidation of EUR/USD rate likely

Short-term noise means we are neutral on the euro over the next three months, but see potential for its gradual appreciation against the dollar thereafterWe have long argued that growth and interest rate differentials are two key components for the direction of the US dollar. Both these drivers should continue to support the dollar over the short term.

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Make Your Case, Jay

June 13 sticks out for both eurodollar futures as well as IOER. On the surface, there should be no bearing on the former from the latter. They are technically unrelated; IOER being a current rate applied as an intended money alternative. Eurodollar futures are, as the term implies, about where all those money rates might fall in the future. Still, the eurodollar curve inverted conspicuously starting June 13. That was the day of the prior “rate...

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Downslope CPI

Cushing, OK, delivered what it could for the CPI. The contribution to the inflation rate from oil prices was again substantial in August 2018. The energy component of the index gained 10.3% year-over-year, compared to 11.9% in July. It was the fourth straight month of double digit gains.

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Europe Starting To Reckon Eurodollar Curve

We’ve been here before. Economists and central bankers become giddy about the prospects for success, meaning actual recovery. For that to happen, reflation must first attain enough momentum. If it does, as is always forecast, reflation becomes recovery. The world then moves off this darkening path toward the unknown crazy.

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A trying time for euro

The euro has hit new lows against the US dollar. We are revising down our EUR/USD projections for the next few months.The euro broke to the downside from its tight trading range relative to the US dollar since the end of May. These new lows go against our expectations of a gradual appreciation of the single currency relative to the greenback in the second half of the year and indicate that we have underestimated the short-term risks related to the...

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Euro, Yen, and Equities: Reviewed

US equities and the dollar appear to be moving higher together.  The greenback is near its best level this year against most of the major and emerging market currencies.  The Chinese yuan is not an exception to this generalization.  At the same time, the S&P 500 is at its best levels since the downdraft February, and the NASDAQ set a new record high earlier in the week. 

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Greenback Corrects Lower

The consensus narrative is that with rising inflation it is understandable that next week's meeting is live and that the confirmation of such has lifted the euro to ten-day highs, dragging the dollar broadly.  However, to accept this is to accept the debasement of language.  Until now, we dubbed central bank meeting that could result in action as "live."  For example, given that the Fed has not changed interest rates since the hiking cycle began in...

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Weekly Technical Analysis: 04/06/2018 – USD/CHF, EUR/JPY, GBP/USD, AUD/USD, WTI

The USDCHF pair managed to break 0.9850 level and closed the daily candlestick below it, which supports the continuation of our bearish overview efficiently in the upcoming period, paving the way to head towards 0.9723 level as a next station, noting that the EMA50 supports the expected decline, which will remain valid for today conditioned by the price stability below 0.9870.

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What Happened Monday?

Italian politics dominated Monday's activity. Initially, the euro reacted positively in Asia to news that the Italian President had blocked the proposed finance minister. A technocrat government would be appointed to prepare for new elections.

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Weekly Technical Analysis: 21/05/2018 – USD/JPY, EUR/USD, GBP/JPY, USD/CAD, USD/CHF

The USDCHF pair reaches the key support 0.9955 now, and as we mentioned in our last report, breaking this level will confirm completing the double top pattern that appears on the chart, to rally towards our negative targets that begin at 0.9900 and extend to 0.9850. Therefore, we will continue to suggest the bearish trend supported by the negative pressure formed by the EMA50, unless the price managed to rally upwards to breach 1.0055 level and...

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Weekly Technical Analysis: 14/05/2018 – USD/JPY, EUR/USD, EUR/JPY, GBP/USD, USD/CHF

The USDCHF pair provided positive trading yesterday to test 1.0000 level and settles around it, and as long as the price is below this level, our bearish overview will remain valid, noting that our next target is located at 0.9900, while breaching 1.0000 followed by 1.0055 levels represent the key to regain the main bullish trend again. Expected trading range for today is between 0.9920 support and 1.0055 resistance.

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Weekly Technical Analysis: 07/05/2018 – USD/JPY, EUR/USD, GBP/USD, Gold

The USDCHF pair’s recent trades are confined within mew minor bearish channel that we believe it forms bullish flag pattern, thus, the price needs to breach 1.0035 to activate the positive effect of this pattern followed by rallying towards our waited target at 1.0100. Therefore, we will continue to suggest the bullish trend supported by the EMA50, unless we witnessed clear break and hold below 1.0000. Expected trading range for today is between...

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Weekly Technical Analysis: 23/04/2018 – USD/JPY, EUR/USD, GBP/USD, AUD/USD, WTI oil futures

The USDCHF pair touched the bullish channel’s resistance that appears on the chart, and the price might be forced to show some temporary decline to test the support base formed above 0.9790 before resuming the rise again. In general, we will continue to suggest the bullish trend supported by the EMA50, depending on the organized trading inside the mentioned bullish channel, noting that our next target is located at 0.9900, while holding above...

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