Forex: EUR/GBP testing lows around 0.8640/45

The pair is trading in the red territory on Monday, dragged lower by the soft tone in both the sterling and the single currency, hovering over 1.3000 and 1.5040 against the greenback, respectively.

The research team at TD Securities suggested that the upside in the cross from mid 2012 might have peaked, according to price signals. “Daily and weekly bear signals combined at a retracement resistance point warrant attention. We think the cross is heading lower in the short-to-medium term now”, the analysts commented.

At the moment, EUR/GBP is losing 010% at 0.8641 with the next support at 0.8610 (low Mar.1) ahead of 0.8602 (low Feb.28) and finally 0.8596 (MA30d).
On the flip side, a breakout of 0.8685 (high Mar.1) would expose 0.8700 (psychological level) and then 0.8752 (Upper Bollinger).

Mar 4, 2013

European markets down on China's property market measures

The German DAX 30 (-0.64%), the French CAC 40 (-0.33%) and the Italian FTSE MIB (-1.36%) are edging lower on Monday, as the Eurogroup meets. The Spanish IBEX 35 is contrarying the trend and is rising by +0.25% after "not as bad as expected" unemployment data. The Spanish unemployment change came in smaller than the 77.5K expected and less than half of the January figure, as it "only" added 59.4K unemployed.

Forex Flash: Forecasts for this week's central banks policies – TD Securities

Investors will be trading central bank policies this week, including the BOJ, RBA, BoC, ECB, and BoE, among others. "We see all ten central banks unchanged, but our general bias remains for more central bank support of economies", wrote TD Securities analysts, placing a roughly 1/3 chance of any of the following: the ECB cuts the refi rate on softer forecasts; the BoE resumes QE (pending services PMI on Tuesday); the BoC strikes an even more dovish tone in their communiqué than we expect; the RBA preemptively cuts rates this week rather than our call for June; Poland cuts rates 25bps rather an our out of consensus call for them to stay unchanged as their rhetoric suggests they want to at least pause on new forecasts; Banxico cuts rates, as the market is roughly 50% priced for a 25bps cut over the next three months (however we see them unchanged this week after comments from Deputy Gov Sanchez last week suggested no room to cut and we like being short BRL/MXN into the decision).