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With New York bracing for a blizzard, markets were thinned but that didn’t make it any less interesting. Sterling, in particular, was buoyant as it raced to 1.51 from 1.5020 in a choppy, but quick move. It appeared to stall out a 1.5100 and peel back a quarter-cent only to race back above the big figure.
EUR/USD made most of its gains in Europe on a reversal after the Greek vote but it continued to be solid in US trading, hitting 1.1298 before offers hit ahead of the big figure and knocked it all the way to 1.1235.
EUR/CHF was where the biggest move was. It started with data on sight deposits in Switzerland and that sparked speculation the SNB was taking some stealth action to boost EUR/CHF. The momentum took hold from there and from 0.9850 it climbed as high as 1.0169 and remains near the highs despite euro weakness elsewhere.
USD/CAD was interesting. An early slump down to 1.2405 was bid up all the way to 1.2487, which is a new cycle high. It’s more evidence that buyers are waiting in the weeds.
At the same time a bounce in oil after El-Badri talked about discussions with non-OPEC producers on co-ordinated hikes. After a squeeze up to $46.41 the market had second thoughts and it skidded back to $45.12.
USD/JPY held a decent bid but it’s been a month now around 1.18 and the market is losing interest.
There isn’t much on the agenda from Japan today, and that’s the case also for China.
Due at 0130GMT – Industrial profits y/y for December, prior was -4.2%.
Last week (and extended into trading today), cable had a “look-see” below what was a consolidation low area defined by the 1.5053 level.
Today, the idea that the break lower last week was a new trend, was thrown out the window as traders pushed above the 1.5053 level and now the 100 hour MA (blue line).
Currently, the price is back down testing the 100 hour MA and this should be a good battle between the buyers looking for more upside (up to the top of the range perhaps?) and the sellers still looking for dollar strength.
Looking at the same hourly chart – but only more recent – the pair is currently testing the 100 hour MA and a number of other lows going back to January 9th (see blue circles) at the 1.5074 area. This level should attract buying if the buyers today, want to exert their bullish influence and send a technical message. Risk may be down to the 1..5053-56 area (bottom of blue box), but this current area is also a key intermediate level to gauge buying interest. Can this area hold? If it does, we should see a move toward the 200 hour MA going forward (green line at the 1.5120).
Goldman Sachs sees lower oil? Well at the start of November they were forecasting WTI at $90 and Brent at $100 for Q1 2015. That was after WTI crude oil already fell to $80.
Chances are, the price of spot is a better indicator than your favorite oil prognosticator, according to the WSJ.
A paper published in 2010, economists Ron Alquist and Lutz Kilian found that simply forecasting no change in oil prices was much more accurate than professional survey forecasts across all time horizons from one month to 12 months out. The no-change forecast also tended to be more accurate than forecasts generated by econometric models and those derived from the prices of oil futures.
Interestingly, the Bank of Canada tried its hand at oil forecasting last week and assumed prices at $60 this year, breaking a long-held tradition of using whatever spot is at to dictate the forecast.
Here was a good oil forecast… FWIW, I think oil is headed lower
Alpari administrators KPMG said there had been “certain inconsistencies” in the pricing of trades after the franc started to move.
“As a result, any account statements or information provided by other means received by clients and creditors after the SNB announcement may not accurately represent a client’s or creditor’s balance,” it said in the statement on its website, dated Friday.
Earlier, EXNESS confirmed it was forgiving negative client balances. “Traders should not incur losses beyond the amount of the deposits in their accounts,” a company executive said.
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