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21 Sep 2013
Session Recap: Euro looks bullish, but investors await Germany and fear Octaper
FXstreet.com (San Francisco) - The Greenback performed sideways against its major competitors but higher vs the minor dollars. Why? Because despite the Fed's chairman Ben Bernanke hinted on Wednesday that taper was out of the table in the rest of his term, today Fed's Bullard said October taper is still possible in October.
Let's call it... Octaper.
Another topic the market is focusing is about Germany's elections that will be held this weekend. Polls say Angela Merkel's party would win the elections. However as is the nature of the coalition tendencies of the Bundestag, Merkel is most threatened by the weakness of her coalition partners, the classical liberal Free Democratic Party (FDP).
As published in a recent article in FXstreet.com, the question is: are German voters ready for the uncertainty of change?
Back to the currency market, the EUR/USD performed sideways for second day, but always above the 1.3500 area. As FXstreet.com Chief Analyst Valeria Bednarik said in a recent report, "The EUR/USD ends the week fading towards 1.3500, but well above past Friday’s New York close around 1.3280." Most important is that pair seems to have broken the 1.3420 area with success.
According to the #FXpoll Forecast Poll sentiment index, EUR/USD short term bullish, fading in term: "Despite dollar weakness, investors are still reluctant to buy the EUR as a longer term investment." In this line Dale Pinkert, #FXroom Live Analysis room's Anchor, affirmed in his weekly wrap up that the $EURUSD seems to look for further highs while the GBP/USD and the AUD/USD seem to be failing rallies.
The GBP/USD performed negative for second day but the cable managed to close the week above the 1.6000 level for first time since the January 5th week. The USD/JPY consolidated Thursday's gains and the bounce after the collapse post Fed. The pair closed at 99.35.
The Japanese Yen weakness seems to be the overall note in the market as the USD/JPY respected the 99.75 dynamic support line and bounced back strongly; the GBP/JPY confirmed the broke above the 156.75 area and extended gains to test 160.00 on Thursday; and the EURJPY crushed the May 22nd high at 133.65 on Friday and it closed the week at 134.30 after touching 135.00.
Remember that BoJ member Kiuchi said the central bank could be influenced by external factors such as market expectations and will be forced to respond in such a way. That's mean that the BoJ would answer with more stimulus and weakening the currency to the Fed no taper decision.
The AUD/USD traded negative for second day and extended its decline from 0.9520 to close the week at 0.9395. Pay atention to the 0.9340 support and the 0.9580 resistance.
Main headlines in the American Session:
Canada: CPI rose 1.1% YoY in August
Fed's Bullard: QE taper possible in October
Final polls put Merkel coalition short of majority
EMU: Consumer Confidence up to -14.9 in September
Fed’s Bullard would recommend more QE if inflation fell below 1%
Fitch cuts Croatia to Junk and Malta to A ratings
Wall Street closes the day in negative but third straight week of gains
Irish Ba1 bond rating changed from negative to stable by Moody’s
Let's call it... Octaper.
Another topic the market is focusing is about Germany's elections that will be held this weekend. Polls say Angela Merkel's party would win the elections. However as is the nature of the coalition tendencies of the Bundestag, Merkel is most threatened by the weakness of her coalition partners, the classical liberal Free Democratic Party (FDP).
As published in a recent article in FXstreet.com, the question is: are German voters ready for the uncertainty of change?
Back to the currency market, the EUR/USD performed sideways for second day, but always above the 1.3500 area. As FXstreet.com Chief Analyst Valeria Bednarik said in a recent report, "The EUR/USD ends the week fading towards 1.3500, but well above past Friday’s New York close around 1.3280." Most important is that pair seems to have broken the 1.3420 area with success.
According to the #FXpoll Forecast Poll sentiment index, EUR/USD short term bullish, fading in term: "Despite dollar weakness, investors are still reluctant to buy the EUR as a longer term investment." In this line Dale Pinkert, #FXroom Live Analysis room's Anchor, affirmed in his weekly wrap up that the $EURUSD seems to look for further highs while the GBP/USD and the AUD/USD seem to be failing rallies.
The GBP/USD performed negative for second day but the cable managed to close the week above the 1.6000 level for first time since the January 5th week. The USD/JPY consolidated Thursday's gains and the bounce after the collapse post Fed. The pair closed at 99.35.
The Japanese Yen weakness seems to be the overall note in the market as the USD/JPY respected the 99.75 dynamic support line and bounced back strongly; the GBP/JPY confirmed the broke above the 156.75 area and extended gains to test 160.00 on Thursday; and the EURJPY crushed the May 22nd high at 133.65 on Friday and it closed the week at 134.30 after touching 135.00.
Remember that BoJ member Kiuchi said the central bank could be influenced by external factors such as market expectations and will be forced to respond in such a way. That's mean that the BoJ would answer with more stimulus and weakening the currency to the Fed no taper decision.
The AUD/USD traded negative for second day and extended its decline from 0.9520 to close the week at 0.9395. Pay atention to the 0.9340 support and the 0.9580 resistance.
Main headlines in the American Session:
Canada: CPI rose 1.1% YoY in August
Fed's Bullard: QE taper possible in October
Final polls put Merkel coalition short of majority
EMU: Consumer Confidence up to -14.9 in September
Fed’s Bullard would recommend more QE if inflation fell below 1%
Fitch cuts Croatia to Junk and Malta to A ratings
Wall Street closes the day in negative but third straight week of gains
Irish Ba1 bond rating changed from negative to stable by Moody’s