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Helenrush

Why It's Time to Buy YenThe market has focused on the key issue - the tone of central bankers' comments. That's why we have seen euro and pound rising, while yen falling against US dollar. The ECB and the BOE adopted a more hawkish position than the market expected, the Fed didn't surprise by the words "gradual rate increase", and the BOJ keep saying it's too early to remove the stimulus. However, the USD/JPY moves on Thursday make us think the reversal is coming. Weaker than expected GDP Price Index coupled with decreasing Personal Consumption Expenditures point to a subdued inflation pressure. And it means the Fed has no reason to rush with further rate increases. On Friday, we gonna see a series of reports from Japan and the USA. Stronger Japanese inflation coupled with weaker Chicago PMI and Personal Spending from the US may support the USD/JPY selloff with the nearest target at 111.00 once 111.70 support is broken.
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Yellen may make euro cryEUR/USD has gone too far on hawkish comments of the ECB’s Draghi. It touched 1.1335 hitting 11-month high. The thing is that the ECB’s chairman during his speech turned out to be rather optimistic, hinting the monetary policy change was coming sooner than expected. He said the economy was going to grow above the trend, and we could even see the signs of acceleration. However, now we have a question – how much higher may EUR/USD go? We haven’t seen that levels since May, 2016. And is European economy is really strong enough to support further currency appreciation? Besides, we have Janet Yellen speech scheduled for tonight. And judging by the recent FOMC meeting, she is rather hawkish. And this may trigger the demand on USD. It means that EUR/USD has little potential to go above 1.1335, and current levels are very attractive for the selloff with the nearest target at 1.1290 followed by 1,1220. Helen Rush, Senior Analyst at Capital Markets
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Why it's time to sell kiwi?NZD/USD is in a bullish mode more than 1.5 months. And it fits well into the cyclical nature of the local economy, and cyclical nature of the pair moves. It usually takes kiwi three months to get to the bottom of the yearly range 0.6880 – 0.7340, and then two months to rebound to the upper limit. All of it is directly related to the flexibility of New Zealand that is usually oriented on dairy trade, but every time something goes wrong, it pressures the national currency, and lets the service sector blossom. Right now we came too close to the roof of the mentioned range, and there are chances of a deep correction in the nearest future. Actually it may occur tonight. Everything goes fine in the national economy, but there are some wake-up calls that make me think of a selloff. First, the recently published GDP data turned out much weaker than expected, meaning the market was too optimistic. Second, dairy products pricing. Every Tuesday night we get the Global Dairy Option data, and during the last 7 weeks we saw the prices growing except for the last one. Last Tuesday we got to know the price fell 0.8 per cent for the first time during 1.5 months. And tonight we are going to see an update. If the weekly auction data shows the prices falling again, it may trigger a broad-based selloff of the kiwi. NZD/USD may sharply fall down with the nearest target at 0,7200. Helen Rush, Senior Analyst at Capital Markets
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