Market Overview

GBPUSD: Survation Poll In The Limelight Today.

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GROWTHACES.COM Trading Positions:

USD/JPY: long at 104.90, target 107.50, stop-loss 105.90 (stop-loss moved from 105.30 previously)

AUD/USD fell to 5-month lows.

(stop-loss reached at 0.9230, outlook is bearish now)

  • The depreciation of the AUD came earlier than we had expected and the currency pair reached the stop-loss on our long position at 0.9230. The AUD/USD tumbled as a pick-up in market volatility pushed investors into paring back hugely popular carry trades. The AUD has been a key beneficiary of loose monetary policies in Japan and Europe which have encouraged borrowing in EUR and JPY to invest in higher yielding AUD assets.
  • The reading of Australian consumer sentiment did not help the AUD. A measure of Australian consumer sentiment fell sharply in September. The index of consumer sentiment declined a seasonally adjusted 4.6% in September, from August when it jumped 3.8%. The index fell by 15.1% yoy as households became more concerned about the outlook for the economy and employment.
  • The AUD/USD fell also on rising expectations that the Fed will hike sooner than forecast. The AUD as a result in under pressure for level even below 0.9000. Our outlook is bearish and we will be looking to get short above 0.9200. The nearest resistance levels are at 0.9157 (Asia low) and 0.9188 (Tuesday low).
  • Jobs data for August are scheduled for today's evening (EDT, Thursday GMT). At GrotwhAces.com we forecast weaker change in employment than the market consensus of 12k. A slight drop in unemployment rate (to 6.3%) is expected.

Significant technical analysis' levels:

Resistance: 0.9157 (Asia low Sep 10), 0.9188 (low Sep 9), 0.9288 (high Sep 9)

Support: 0.9048 (low Mar 24), 0.9032 (low Mar 21), 0.9000 (psychological level)

 

USD/JPY continues to rise after weak macroeconomic data. BOJ still believes in economic recovery.

(long at 104.90, stop-loss moved to 105.90 from 105.30 previously)

  • Bank of Japan Deputy Governor Kikuo Iwata is the opinion that the economy can recover from a deep slump, saying that households and companies will boost spending as the pain from an April sales tax hike eases. He acknowledged that weak exports and the rising burden on households from the tax hike were among risks to the outlook, but said a pick-up in global demand and wages will keep the economy on track for a moderate recovery. He said also that there was no strong historical correlation between the JPY and price moves. In his view inflation will not slow as the boost from the weak JPY begins to fade. Iwata added a weak JPY was still beneficial for exports, but conceded that the currency effect has probably become less influential now than in the late 2000s as many Japanese firms shifted production overseas.
  • Japan's core machinery orders rose for a second straight month in July. The growth amounted to 3.5% mom vs. median forecast of 4.0% mom and rise of 8.8% in June. However, following large falls in April and May, orders remain much lower than they were earlier this year. The data showed orders from manufacturers for new machinery rose 20.3% mom in July - thanks to the big order from a chemicals producer - while those from non-manufacturers fell 4.3% mom. Compared with a year earlier, core orders, which exclude ships and those from electronic power companies, rose 1.1%.
  • A strong decline was recorded in foreign machinery orders in July that no longer surpass domestic orders (as in April and June).
  • Japanese wholesale prices rose 3.9% in the year to August vs. a 4.3% increase in July.
  • The USD/JPY went higher again. We expect further gains on this pair. We remain long at 104.90 with the target of 107.50. We have move our stop-loss to 105.90 from 105.30 previously. Let us look at the technical situation. The tenkan and kijun lines are positively aligned increasing the upside potential. The nearest resistance level is at 107.03 (daily high, September 25, 2008) and the nearest support is at 106.04 (session low, September 10).

Significant technical analysis' levels:

Resistance: 107.03 (high Sep 25, 2008), 107.25 (high Sep 22, 2008), 108.04 (high Sep 19, 2008)

Support: 106.04 (session low Sep 10), 105.95 (low Sep 9), 105.37 (hourly low Sep 8)

 

GBP/USD: Survation poll in the limelight today.

  • A TNS poll showed on Tuesday that the number of people saying they would vote "No" to independence had dropped to 39%, down from 45% a month ago. "Yes" support was slightly behind at 38% but had gained ground from 32% a month ago.
  • The GBP hit a fresh 10-month low against the USD as traders cited an online poll on the Scottish independence which gave the "Yes" camp a 53.9% lead.
  • Investors are focused on another poll due to be released late on Wednesday by the Survation polling agency for the Daily Record. The agency said on Twitter that those results would be "very interesting". An August 29 Survation poll said 47% want independence.
  • The GBP/USD reached new lows despite hawkish comment of the BOE's governor Mark Carney. He said forecasts made by the Bank last month showed that if rates started to go up in spring 2015, as markets were predicting at the time, inflation would be on course to settle close to the BoE's 2% target in three years' time. He added that the central bank would watch closely how pay settlements turn out at the turn of the year. The BOE put wage growth more explicitly at the centre of its thinking on when to raise interest rates last month. Carney said he did not expect wages to rise faster than inflation until the middle of next year.
  • Mark Carney's comments came after better-than-expected data on industrial output (1.7% yoy vs. the median forecast of 1.3%). The growth of industrial production was the highest in six months.
  • The GBP/USD bears target the area of 1.6000/05 - a psychological level and the 50% of the July 2013/June 2014 rally (1.4814-1.7192).

Significant technical analysis' levels:

Resistance: 1.6157 (high Sep 9), 1.6185 (US session high Sep 8), 1.6270 (high Sep 8)

Support: 1.6003 (50% of 1.4814-1.7192), 1.5988 (low Nov 14, 2013), 1.5879 (low Nov 13, 2013)

 

GrowthAces.com is an independent macroeconomic research consultancy for traders. We offer you daily forex analysis with forex trading signals. The service covers forex forecasts and signals for following currencies: EUR, USD, GBP, JPY, CAD, CHF, AUD, NZD as well as emerging markets. Our subscribers should expect to receive: forex trading strategies, latest price changes, support and resistance levels, buy and sell forex signals and early heads-up about the potential fx trading opportunities. GrowthAces.com offers also daily macroeconomic fundamental analysis that enables you to see fundamental changes on forex market. We provide in-depth analysis of economic indicators resulting from knowledge, experience, advanced statistics and cutting-edge quantitative tools.

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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