Forex – Dollar Slips Lower Against Yen

FOREX: Potential Short Set-up in USD/CAD Support: 1.10, 1.09, 1.07-1.0550 Resistance: 1.1080-1.11, 1.12-1.1250, 1.15 Furthermore, a key downside level to watch in USD/CAD is the 38.2% retracement from the lows in September 2013 to the recent highs above 1.12, which comes in at 1.0825. From there, we have earlier highs around 1.07 and the broad range (horizontal) between 1.08 and 1.0550. In fact, that 1.055 area is also the 61.8% retracement for the whole uptrend since September. A break and hold below this level would be critical for USD/CAD in the longer-term, as the overall uptrend may then be challenged. To the upside, we have established resistance in the 1.1080-1.11 area, and, of course, theres the recent peak just above 1.12.

Forex – GBP/USD remains near 2-week highs on BoE report

Previously the center-left PD was to hold a conference next week to discuss its strategy and relationship with the Letta coalition government. The meeting was moved up to tomorrow, but events may be spinning even faster. Renzi has often indicated he wants the Letta government to pass electoral reforms, though has been impatient. Without electoral reform, there is no point in calling a new election. Therefore, if Renzi and Letta cannot reach an agreement, President Napolitano would likely offer Renzi the opportunity to see if he could command a majority in both chambers. The point is that the markets are taking this on with little fanfare.

In her first Congressional testimony since her appointment as Fed Chair, Ms. Yellen told the House Financial Services Committee that the central bank would continue to gradually reduce the pace of its asset purchase program. She also reiterated that Fed plans to hold interest rates at zero ‘well past’ the time the jobless rate falls below 6.5%. Investors were beginning to turn their attention to Thursday’s U.S. retail sales report, amid concerns that sales volumes would be lower in January after a 0.2% gain the previous month.

Hours after the release, we saw approximately a 100-pip rally in the AUD/USD pair. On February 4th, the Reserve Bank of Australia (RBA) kept its benchmark interest rate, or overnight lending rate, unchanged at 2.5%, in line with expectations. In a monetary policy statement, RBA governor Glenn Stevens expressed concerns on the Uncomfortably High exchange rate. We recently observed some depreciation in the Australian Dollar, which if sustained, would definitely assist economic growth, Stevens said.

unemployment rate has fallen much faster than the bank anticipated, and will hit the initial 7% threshold “in the spring”. In the six months since forward guidance was implemented the U.K. unemployment rate has fallen to 7.1% from 7.8%. The bank outlined new forward guidance, saying that it will not raise rates which etf to buy now until the spare capacity in the U.K. economy has been fully absorbed, which it does not see happening until 2015. The bank said it would consider a broader range of indicators, including the unemployment rate, wages and productivity and business surveys when deciding to raise rates, and added that when rates rise they will do so only gradually.


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