Mr. Aussie continues his bearish moves. In fact he became rebellious enough to break below the 61% Fibonacci level against the US dollar, touching 0.8860 which is the lowest level for the pair since February. The extended bearish move came upon weak sentiment in China and decreased demand for commodities.
“The Aussie dollar is caught between a rock and a hard place,” said Peter Kinsella, a senior foreign-exchange strategist at Commerzbank AG in London as he spoke to Bloomberg. “The normalization of U.S. monetary policy is exerting downward pressure upon commodity prices. And then there is the impact from slowing Chinese growth. All told, it’s going to be a difficult fourth quarter for the currency.”
Over the weekend, finance ministers from around the world gathered at the G20 meeting in Australia, but that probably had nothing to do with Mr. Aussie’s declines because the meeting was focused entirely on Europe. The Eurozone has been called to sort itself out, “The euro area continues to encounter persistent headwinds, with unemployment still near record highs, and inflation at dangerously low levels. Among the G20 members, there is an intensified call for boosting domestic demand.” Structural change, strong action and political leadership is needed to ensure growth according to the group. However it will take more than words and strong actions to resolve the ailing area.
The Bank of Japan made history last week buying one-year government debt at negative yields for the first time last week. determined to achieve its 2 percent inflation target and pump up the monetary base as quickly as possible.
The purchase of these negative yielding assets are guaranteed to lose the BoJ money when the bills are redeemed. However determination is required and an unwavering focus if they are to double their money base by the end of 2014 to $2.5tn, which is the target. However headway is being made as japan is about to emerge from deflation, and there being no floor for yields now the task of de-basing seems a little more achievable.
Today’s data releases are all but non existent. markets should continue to rejoice a little bit following the Scottish vote, we should see a degree of correction as they seek to find their new levels. Kicking off the London session was ECB’s Mr Draghi speaking. US Home sales and Eurozone consumer confidence started the New York session alongside with the FOMC member Dudley’s speach.
Forex Technical Levels
AUD/USD Daily: Downside prevails
Invest Diva Likes: Short positions below 0.8981 with targets set at 0.8830 and 0.8659 in extension.
If Pair Goes Nuts: Above 50% Fibonacci level at 0.91 look for more upside with 0.9385 and 0.9504 as alternative targets.
What’s up on the Forex Dance Floor: The pair continues on a strong new downtrend below the Ichimoku cloud, with the Tenkan line moving below the Kijun line.
Supports and Resistances
0.9504
0.9385
0.8981 Pivot point
0.8981
0.8830
0.8659
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Short positions below 1.2836 with targets at 1.2810 and 1.2771 in extension.
If Pair Goes Nuts: Above 1.2874 look for further upside towards 1.2917 and 1.2974.
What’s up on the Forex Dance Floor: The pair is rebounding from and consolidating around the level at 1.2836 below the Ichimoku cloud with the RSI below the neutrality area. Also one of the largest international brokers says that 59% of traders are long the pair. Using this market sentiment index as a contrarian signal, the combination of the technicals and current sentiment gives a further bearish bias.
Supports and Resistances
1.2974
1.2917
1.2874
1.2836 Pivot Point
1.2810
GBP/USD 4-hour: Rebounding from the Ichimoku’s cloud.
Invest Diva Likes: Long positions above 1.6324 with targets at 1.6485 and 1.6616 in extension.
If Pair Goes Nuts: Below 1.6324 look for further downside towards 1.6236 and 1.6155.
What’s up on the Forex Dance Floor: The pair was in a strong overall downtrend but it has been moved up after hitting the bottom level at 1.6060. The pair rebounded from the upper boundary of Ichimoku’s cloud after reaching the 38% Fibonacci level at 1.6485 with the RSI around the neutrality area.
Supports and Resistances
1.6616
1.6485
1.6324 Pivot point
1.6236
USD/JPY 4-hour: Consolidating.
Invest Diva Likes: Long positions above 109.17 with targets at 110 and 110.52 in extension.
If Pair Goes Nuts: Below 108.71 look for further downside towards 108 and 107.36.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend above the Ichimoku’s cloud but is now consolidating between the level at 109.17 and 108.71. The RSI is heading below the overbought zone.
Supports and Resistances
110.52
110
109.17 Pivot point
108.71
108
107.36
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