Slightly calmer waters in the FX markets yesterday, with the lack of tier one hot economic data.
In his latest testimony, Bank of England (BOE) Governor Mark Carney once again talked about rate hike prospects, citing that the U.K. central bank would be ready to tighten by spring next year. It’s not the first time that BOE Governor Mark Carney shared his optimistic rate hike forecasts, but it looks like forex traders ain’t buying it this time.
Today could well be pivotal for the future of Scotland, as Mark Carney testifies to the Treasury Select Committee. Mr Carney’s stance is that it would not be possible for Scotland to share the Pound and MP’s will be keen to quiz him on this, as it really remains the major unanswered point of the independence debate. Mark Carney, in theory, is politically neutral and to date has done a very good job of appearing to be so.
Today’s data flow will be eclipsed by Mark Carney’s testimony, as all eyes remain on Scotland’s future and, to be honest, the data that is due for release isn’t that relevant anyway. Mr Carney is due on at 8:45 AM EST.
The ceasefire in Ukraine is ‘mostly’ holding, according to the US state department. Meanwhile, Moscow has urged Kiev to begin engaging with rebels across the negotiating table to establish what will become of rebel held areas.
Germany yesterday threw a spanner in the works for what could have been a large infrastructure investment fund, saying that “the use of more and more public money and the acceptance of higher deficits and debts is leading us astray”. The plan was going to be go create a joint public and private initiative to boost infrastructure investment, but apparently that isn’t going to happen on Germany’s watch. They may now struggle to incentivise the private sector to dip into their pockets if the governments won’t join them.
In Spain, bond yields have jumped as we head towards the National Day of Catalonia. The timing is unfortunate for Madrid, as the intense international focus on Scotland’s election is stoking fears that Catalans will reignite their previous calls for a secession referendum, even if Scotland don’t vote for independence next week.
In Asia, markets have followed the US’ lead and traded lower, with the exception of the Nikkei, which continues to benefit from a weakening Japanese Yen, rising USD/JPY to a 6 year high.
Intraday Forex Technical Levels
GBP/USD 4-hour: Key resistance at 1.606
Invest Diva likes: Long positions above 1.6155 with targets at 1.6236 and 1.6327 in extension..
If pair goes nuts: Below 1.6155 look for further downside with 1.606 and 1.5986 in extension
What’s up on the forex dance floor: The pair remains below the Ichimoku cloud but rebounding from a key resistance level, teasing the middle band of Mr. Bollinger and moving towards the 23% Fibonacci level. The RSI is heading up towards the neutrality area.
Supports and resistances:
1.6327
1.6236
1.6155 pivot point
1.606
1.65986
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Short positions below 1.2947 with targets at 1.2974 and 1.2818 in extension.
If Pair Goes Nuts: Above 1.2947 look for further upside towards 1.3020 and 1.3142
What’s up on the Forex Dance Floor: The pair is on an overall downtrend but is now consolidating below 1.2947 after rebounding from the bottom. The RSI is below the neutrality area.
Supports and Resistances
1.3142
1.3020
1.2983
1.2947
1.2874
1.2818
USD/CHF 4-hour: Moving up.
Invest Diva Likes: Long positions above 0.9376 with target at 0.9450.
If Pair Goes Nuts: Below 0.9376 look for further downside towards 0.9330 and 0.9253.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend above the Ichimoku’s cloud and within the Bollinger Band. The RSI is teasing the overbought zone.
Supports and Resistances
0.9450
0.9376 Pivot point
0.9330
0.9253
GBP/JPY 4-hour: Moving up, Testing the 61% Fibonacci Level
Invest Diva Likes: Long positions above 172.20 with targets at 172.80 and 173.78 in extension.
If Pair Goes Nuts: Below 172.20 look for further downside towards 171.50 and 170.65.
What’s up on the Forex Dance Floor: The pair is moving up below the Ichimoku’s cloud and currently teasing the 61% Fibonacci level at 172.20. A break above this level could open doors for more gains. The RSI is above the neutrality area.
Supports and Resistances
173.28
172.80
172.20 Pivot point
171.50
170.65
