USD news

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USDJPY Technical Analysis: Remains vulnerable near 3-month lows

USD/JPY Technical Analysis: Remains vulnerable near 3-month lows, 200-DMA support holds the key

  • The pair's attempted recovery, along side an ascending trend-channel, constituted towards the formation of a bearish continuation - flag chart pattern on intraday charts.
  • Technical indicators on the 1-hourly chart have moved out of oversold territory and a breakthrough the pattern support sets the stage for a resumption of the bearish trend.
  • However, oscillators on 4-hourly/daily charts remain in oversold zone and hence, any subsequent fall might continue to find decent support near the very important 200-day SMA.

USD/JPY 30-mins. chart
USD_JPY (39)-636809786037592613.png

Today Last Price: 111.08
Today Daily change: -14 pips
Today Daily change %: -0.126%
Today Daily Open: 111.22

Previous Daily SMA20: 113.09
Previous Daily SMA50: 112.97
Previous Daily SMA100: 112.4
Previous Daily SMA200: 110.88

Previous Daily High: 112.67
Previous Daily Low: 110.81
Previous Weekly High: 113.71
Previous Weekly Low: 112.24
Previous Monthly High: 114.25
Previous Monthly Low: 112.3
Previous Daily Fibonacci 38.2%: 111.52
Previous Daily Fibonacci 61.8%: 111.96
Previous Daily Pivot Point S1: 110.46
Previous Daily Pivot Point S2: 109.71
Previous Daily Pivot Point S3: 108.6
Previous Daily Pivot Point R1: 112.32
Previous Daily Pivot Point R2: 113.43
Previous Daily Pivot Point R3: 114.18

Source: https://www.fxstreet.com/news/usd-jpy-t ... 1812210846
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USDCAD fluctuates in narrow band below 1.36 mark

USD/CAD fluctuates in narrow band below 1.36 mark

  • USD/CAD continues to trade near its 19-month highs.
  • US Dollar Index moves sideways below 97.
  • WTI treads water above the $45 mark.

Forecast Bias: Bearish

Following last weeks impressive rally, which caused the pair to record its highest weekly close since May of 2017, the USD/CAD pair started the week quietly amid the choppy action in the FX markets ahead of the Christmas holiday. As of writing, the pair was trading at 1.3570, down 30 pips, or 0.23%, on a daily basis.

The government shutdown in the U.S. seems to be weighing on the greenback on Monday. Although it's nothing significant, the US Dollar Index, which tracks the greenback against a basket of six currencies, is recording losses in the day ahead of the day's only macroeconomic data release, Chicago Fed's National Activity Index. As of writing, the DXY is down 0.2% on the day at 96.75.

On the other hand, hopes of OPEC+ deepening oil output cuts following the United Arab Emirates’ energy minister's, Suhail al-Mazrouei, comments on Sunday seems to have a provided a small boost to the commodity-sensitive currencies such as the loonie. Nevertheless, the barrel of West Texas Intermediate hasn't yet staged a rebound but doesn't extend its losses either.

WTI struggles to preserve gains, stays quiet above $45.
Technical levels to consider

The pair could face the initial resistance at 1.3600 (daily high/2018 high) ahead of 1.3670 (May 18, 2017, high) and 1.3720 (May 15, 2017, high). On the downside, supports align at 1.3500/1.3490 (psychological leve), 1.3445 (Dec. 20 low) and 1.3410 (Dec. 19 low).

Source: https://www.fxstreet.com/news/usd-cad-f ... 1812241146
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USDJPY climbs as US stocks surge

US stocks turn around and rip higher, USD/JPY climbs

S&P 500 up 2%
It's another day that's supposed to be quiet but has turned into a wild ride in equity markets. The S&P 500 is currently trading up 2.0% in a 47 point rise to 2398. The Nasdaq is up 2.7%.

It's a relatively small bounce after a massive fall but it could signal that the forced selling on redemptions and year-end could be done. Or simply that all the selling was over-done.


In turn, the US dollar is a half-cent higher against the safe haven Swiss franc and Japanese yen.

Source: https://www.forexlive.com/news/!/us-sto ... r-20181226
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US: Initial weekly jobless claims decreased

US: Initial weekly jobless claims decreased by 1,000 to 216,000

"In the week ending December 22, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 1,000 from the previous week's revised level," the U.S. Department of Labor announced on Thursday.

Key takeaways from the press release

  • The 4-week moving average was 218,000, a decrease of 4,750 from the previous week's revised average.
  • The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending December 15, unchanged from the previous week's unrevised rate.
  • The advance number for seasonally adjusted insured unemployment during the week ending December 15 was 1,701,000, a decrease of 4,000 from the previous week's revised level.

Source: https://www.fxstreet.com/news/us-initia ... 1812271331
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USDJPY fades a spike to 110.80, focus on US data

USD/JPY fades a spike to 110.80, focus on US data

  • Unable to sustain the upside, despite risk-on, as weaker US dollar weighs.
  • Technical set up points to further downside bias, a test of 110.00 likely.

The USD/JPY pair extends its overnight descent in the Asian trading and tested the 110.50 level, with supply capping the recovery attempts near 110.85 region.

Despite moderate risk-on sentiment prevalent across the financial markets in Asia, as reflected by the oil-price rebound, a rally in Treasury yields and mostly higher Asian equities, the spot remains exposed to downside risks amid a broadly weaker US dollar.

The US dollar index drops -0.16% to fresh five-day lows of 96.33, as the sentiment remains weighed down by the US political risks, in light of the partial US government shutdown and President Trump’s criticism of the Fed.

Meanwhile, the year-end flows in the Yen keep the safe-haven buoyed, as markets shrug-off downbeat Japanese CPI and industrial output data released earlier today. Also, the Bank of Japan (BoJ) Summary of Opinions (December) also had little impact on the Yen markets.

The focus now shifts towards the US macro updates due later in the NA session for fresh trading incentives. The US pending homes sales and new home sales data will be published among other minority reports.

USD/JPY Technical Levels

Today Last Price: 110.62
Today Daily change: -37 pips
Today Daily change %: -0.333%
Today Daily Open: 110.99

Previous Daily SMA20: 112.44
Previous Daily SMA50: 112.83
Previous Daily SMA100: 112.38
Previous Daily SMA200: 110.99

Previous Daily High: 111.38
Previous Daily Low: 110.45
Previous Weekly High: 113.52
Previous Weekly Low: 110.81
Previous Monthly High: 114.25
Previous Monthly Low: 112.3
Previous Daily Fibonacci 38.2%: 110.81
Previous Daily Fibonacci 61.8%: 111.03
Previous Daily Pivot Point S1: 110.5
Previous Daily Pivot Point S2: 110.01
Previous Daily Pivot Point S3: 109.57
Previous Daily Pivot Point R1: 111.43
Previous Daily Pivot Point R2: 111.87
Previous Daily Pivot Point R3: 112.36

Source: https://www.fxstreet.com/news/usd-jpy-f ... 1812280337
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Re: USD news

The Fed’s Esther George indicates it’s time for a pause from rate hikes


Kansas City Fed President Esther George said the central bank likely should “pause” from rate hikes until it assesses conditions.

“A pause in the normalization process would give us time to assess if the economy is responding as expected with a slowing of growth to a pace that is sustainable over the longer run,” George said in prepared remarks for a speech in Kansas City.

Full Story:
https://www.cnbc.com/2019/01/15/the-fed ... hikes.html

Fed Signals End of Interest Rate Increases

Fed Signals End of Interest Rate Increases

WASHINGTON — The Federal Reserve kept interest rates steady on Wednesday and signaled that it may not raise them again anytime soon, a surprising reversal from last month, when the central bank indicated it expected to continue raising rates in 2019.

In a statement following a two-day meeting of its policymaking committee, the Fed said that economic growth remained “solid,” and that it expected growth to continue.

But in a sharp deviation from its stance just one month ago, the Fed did not say it expected to keep raising interest rates. Instead, the statement said the Fed would be “patient” in evaluating the health of the economy. And it indicated that the Fed stood ready either to increase or to reduce rates, depending on economic conditions.

“The case for raising rates has decreased somewhat,” Jerome H. Powell, the Fed’s chairman, said at a news conference following the release of the policy statements. He said that while “we continue to expect that the American economy will grow at a solid pace,” some signs of weakness in consumer and business sentiment, as well as a global economic slowing in places like China, is “giving reason for caution.”

“My colleagues and I have one overarching goal: To sustain the economic expansion,” he said.

Reinforcing this more cautious tone, the Fed also announced that it stood ready to slow or even reverse the steady slimming of its bond portfolio. This, too, marked a striking shift. The Fed in December said it was committed to reducing its holdings of Treasurys and mortgage bonds, which it amassed during the financial crisis to help bolster the economy, at a steady pace.

The Fed’s policymaking committee voted unanimously for the changes.

Stock markets, which were up even before the Fed decision hit at 2 p.m., climbed more after the arrival of the statement. At around 2:15 p.m., the S&P 500 was up more than 1.4 percent. Yields on shorter-term Treasury securities declined, as traders bet that future rate hikes would be pushed further out.

The Fed’s newfound caution is likely to delight President Trump, who argued loudly and publicly through much of 2018 that the Fed should stop raising its benchmark rate, which now sits in a range between 2.25 and 2.5 percent. Many liberal economists also argued for the Fed to take a break.

The unemployment rate remains low by historical standards, but inflation has been sluggish for the entirety of the last decade — and the Fed’s statement noted market-based measures of inflation expectations have weakened in recent months.

The statement also referred to the weakness of global growth and volatility in a range of financial markets.

“In light of global economic and financial developments and muted inflation pressures, the committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate,” the statement said.

Mr. Powell did not indicate how long the Fed’s “patient period” might persist and when the Fed might consider another rate adjustment. But he said that there would have to be strong signs of inflation to warrant an increase.....

Full Story:
https://www.nytimes.com/2019/01/30/us/p ... ss&emc=rss

Re: Fed Signals End of Interest Rate Increases

navid110 wrote:
Thu Jan 31, 2019 9:18 am
Mr. Powell did not indicate how long the Fed’s “patient period” might persist and when the Fed might consider another rate adjustment. But he said that there would have to be strong signs of inflation to warrant an increase.....
great reading ur articles navid thx for posting :clap:

Fed's Dudley Explains "How I Learned To Stop Worrying & Love The Fed's Balance Sheet"

Fed's Dudley Explains "How I Learned To Stop Worrying & Love The Fed's Balance Sheet"

(ps: In memory of "Stanley Kubrick" movie "Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb" ;) )

"Stocks have reached a permanently high plateau", "subprime is contained", "there's no icebergs this far south" and now "The Fed's balance sheet is not the threat that people seem to think it is."

Man's ability to willfully ignore 'downside possibilities' and remain cognitively dissonant far longer than logic (or their pocketbook) should allow seems to know no bound and none other than The Federal Reserve's Bill Dudley just unleashed what could be the piece de resistance of "nothing to see here, move along" agitprop.


Financial types have long had a preoccupation: What will the Federal Reserve do with all the fixed income securities it purchased to help the U.S. economy recover from the last recession? The Fed’s efforts to shrink its holdings have been blamed for various ills, including December’s stock-market swoon. And any new nuance of policy — such as last week’s statement on “balance sheet normalization” — is seen as a really big deal.

I’m amazed and baffled by this. It gets much more attention than it deserves.
Let’s start with the stock market. Yes, it’s true that stock prices declined at a time when the Fed was allowing its holdings of Treasury and mortgage-backed securities to run off at a rate of up to $50 billion a month. But the balance sheet contraction had been underway for more than a year, without any modifications or mid-course corrections. Thus, this should have been fully discounted.

Moreover, if anything, the run-off of the Fed’s balance sheet had a smaller-than-expected impact on the yields of those securities. Longer-term Treasury yields remained low, and the spread between them and the yields on agency mortgage-backed securities didn’t change much. It’s hard to see how the normalization of the Fed’s balance sheet tightened financial conditions in a way that would have weighed significantly on stock prices.

Better explanations for this fall’s weakness in the equity market abound. For one, economic growth and corporate profits looked set to falter in 2019, as the effects of corporate tax cuts waned and the labor market tightened. Demand for scarce labor should increase its share of income, crimping profits. And if the economy didn’t slow enough on its own, the Fed was likely to raise interest rates to make sure that happened. These developments weren’t good for an equity market that had been accustomed to strong earnings growth and an accommodative central bank.

Why then, one might ask, did the Fed announce changes to its plans to pare down its holdings of Treasury and mortgage-backed securities? Actually, there wasn’t much of a change at all. Here’s what Chairman Jay Powell said at his news conference last week:

1-The Fed will maintain a balance sheet big enough to satisfy banks’ demand for reserves, with a buffer above that so the Fed will not have to intervene in the money markets on a day-to-day basis;

2-The Fed now expects banks to demand more reserves than previously thought, so its balance sheet will likely be larger — this means more securities in its portfolio;

3-The Fed could use its balance sheet more actively as a monetary policy tool but only if interest-rate adjustments — its primary tool — were to prove inadequate.
None of this should be a surprise. It always was likely that the Fed would maintain the current “floor” system, in which its choice of the interest rate it pays on reserves drives monetary policy. It also has been clear that banks would have a greater demand for reserves than in prior expansions. That’s because the central bank now pays interest on those reserves, and post-crisis regulations require banks to keep a lot more cash and other liquid assets on hand.

The new news here is simply that Fed sees greater demand for reserves than it expected a year ago. But even this should not be a big surprise. After all, the federal funds rate — the interest rate that banks pay to borrow reserves from one another — had crept up to equal the rate that the Fed itself pays on reserves. So the central bank’s conclusion is just consistent with what we have already seen happening in money markets.

The concept of using the balance sheet as a monetary-policy tool isn’t new, either. It has always been part of the Fed’s toolkit. The shift is merely in emphasis. When the Fed was clearly on a tightening path, the attention was on interest rates. The Fed has made it clear that this is the primary tool of monetary policy and that hasn’t changed a whit. However, now that the balance sheet is getting more attention and the direction of short-term interest rates is less certain, the Fed is simply reminding people that the balance sheet is still available in circumstances where its primary tool might be insufficient.

We are nowhere close to that situation today. The balance sheet tool becomes relevant only if the economy falters badly and the Fed needs more ammunition.

It’s worth pointing out that the composition of the balance sheet is also important. Not only does it matter how much the Fed holds in Treasury and mortgage-backed securities, but also — for Treasury securities — whether they are predominately short-term bills, medium-term notes or long-term bonds.

On this score, the Fed faces several important decisions. First, once the balance sheet gets to the desired size, what will it do with its still-large holdings of mortgage-backed securities? Will it just let them run off passively, or more actively sell them off? Under a passive approach, it would take several decades for the holdings to disappear.

Second, on the Treasury side, what should the composition be? Before the crisis, the Fed held Treasury securities across the maturity spectrum. Now, with a much bigger balance sheet, there is more reason to shift to Treasury bills. Holding mostly bills would reduce exposure to interest rate risk and increase the firepower available to fight future economic downturns. Should quantitative easing be needed, the Fed would have greater scope to extend the maturities of its holdings, not just increase the size of its balance sheet.

The bottom line: The Fed’s balance sheet isn’t the threat that market participants sometimes make it out to be, and last week’s announcements do not have significant implications for the interest rate outlook. Market participants would be better off focusing on the economic outlook. This is what will drive monetary policy and the Fed’s decisions about the appropriate trajectory for short-term interest rates over the next year. If the outlook changes, so will the Fed’s thinking.

https://www.zerohedge.com/news/2019-02- ... ance-sheet

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