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Forex: USD/JPY bouncing off lows, around 92.25/30

After dipping to sub 92.00 levels, the cross has now regained the handle and trading back to the 92.25/30 region, following the lack of direction in the global markets.

“So the stage is set for a Kuroda/ Iwata/ Nakaso BoJ leadership from March 19. Key for us will be how much the BoJ increases the Asset Purchase Program for this year AND next year at the April 3/4 meeting. Failure to lift both will continue the current retracement in USD/JPY. We maintain a sell bias on both USD/JPY”, suggests Sean Callow, Strategist at Westpac.

At the moment, the cross is up 0.01% at 92.24 with the next resistance at 92.68 (high Feb.28) ahead of 92.75 (high Feb.26) and then 92.81 (Tenkan Sen line).
On the downside, a penetration of the psychological level at 92.00 would expose 92.59 (Kijun Sen line) and finally 91.14 (low Feb.27).

Forex: AUD/USD remains capped by 1.0290

The Australian dollar rose against the greenback on Thursday, extending its recovery from a 4-month low as a rate cut seems less likely in Australia after Q4 Capital Expenditure fell 1.2% versus a rise of 1.0% expected.
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Forex Flash: Canada/USD rate spread may erode more – TD Securities

TD Securities analysts say that the CAD’s positive correlation with risk assets has strengthened again in the past few days despite the relatively weak (44%) correlation with the S&P500 on the rolling 22-day study. "The strongest driver or the CAD remains the short-term Canada/US rate spread (softer also but standing at 49% today) which suggests that Canadian data today and tomorrow (Friday’s GDP especially) should have a big influence on the market one way or the other", wrote analysts Shaun Osborne and Greg Moore, pointing to weakening spreads in the past two weeks, currently trading at 8 month lows (76bps). "The trend suggests that markets are preparing for more erosion in Canada’s yield advantage over the US.  That should weigh on the CAD more", they added, eyeing a minor reversal and support at 1.0190/1.0210.
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