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Extra Forex Markets Research by rahul.khanna

The US president Trump’s selection of Jay Powell as the new Fed chair has left many underwhelmed. As we head into the end of the year it is high time we look at how the Federal Reserve members stack up on the hawks/doves scale as new order takes charge. However, before we look at the ...

The ECB will meet on Thursday but no change to the policy is expected. We can expect some revision in forecasts with the most important being CPI projections. This is because EURUSD has risen to 1.19 from 1.11 when July projections were made. No change in CPI projections will be seen as bullish as this will be a green signal to the market that October meeting will set the tapering policy over the coming months.

In terms of the press conference, ECB president Draghi would use the occasion to remind the market that EUR strength is an impediment to inflation though he may also ...

Rahul Khanna
Aug 03, 2017 - 10:47
GBP trade weighted index

The BoE interest rate decision is due at 1100 GMT but we will also have the UK inflation report and the MPC meeting minutes followed by the Governor Carney press conference at 1130 GMT. Looking at the GBP price action over the past few weeks it seems that the investors are ...

Rahul Khanna
Aug 02, 2017 - 11:32
USDINR 20 Jul 17

USDINR has completed a triangle pattern after breaking key 64.00-64.20 area. Next key level comes in at 63.60 where a break will open 63.00. In order to see improvement MACD needs move above the zero line and 64.25 needs to be regained.

USDINR Daily Chart (6-month).

The week marked a change of trend for CHF now the weakest currency. However, there was no change in outlook for USD as the greenback fell further following a dovish FOMC statement (with language on inflation changed from running “slightly below” to “running below” 2%). The US Q2 GDP also failed to excite the market as it came as expected. The top currencies for the week were SEK and NOK both boosted by better domestic data and a rise in crude prices, respectively. The EUR also added to its gains versus the low yielding currencies as the German 10-year bunds fell ...

Looking ahead, next week is action packed, on Monday, OPEC and the non-OPEC meeting will get the most attention. For EUR traders Preliminary Manufacturing PMI will be the key with upside risk to EUR from positive numbers. On Wednesday, BoJ Deputy Nakaso and RBA Lowe will grab some attention along with UK Q2 GDP (Preliminary) numbers. However, the main focus will remain on the FOMC rates decision. Friday will also be important as the US Q2 GDP (advance) will become due.

This was a tough week for USD with losses across the board as we said ...

USDINR 20 Jul 17

USDINR has now found support at 64.20 area, just above the support line. An upside to 64.75 is likely but MACD needs to improve further to raise chances of a bigger bounce to 65.00. Below 64.20 opens 63.89-64.00 area.

USDINR Daily Chart (6-month).

FX Strategy 18 Jul 17

Weekly FX Technical Analysis round-up – Tuesday 18th July 2017

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The week is marked by a return of the risk appetite and return of crude strength. In terms of the weekly standings, commodity currencies reign supreme with AUD, CAD and NOK top three. In the equities market, Nikkei 225 has closed +0.95% for the week and even though European equities are mixed today, we have seen decent gains since the start of the week except for FTSE; DAX +1.75%, CAC40 +1.53% and IBEX +1.62%. In the rates market, US and EU 10-year yields have now diverged thanks to the US CPI miss. In the energy space, WTI front month has gained nearly $2.5 to reach ...

Is Abenomics going out of the syllabus in Japan?

The short answer is no. However, let’s dig into the details.

After the Liberal Democratic Party’s (LDP) crushing defeat in the Tokyo assembly election, there is now speculation that Prime Minister (PM) Abe may be faced with trouble and the need for some changes to economic policies may be pertinent. PM Abe can do this in two ways, firstly, he can implement a regime change in economic policies through a cabinet reshuffle or changes at the Bank of Japan (BoJ) or, secondly, he can focus on closely aligning ...

We see risk to the dollar still skewed to the downside from both Yellen’s testimony and US CPI. We heard two Fed speakers yesterday (Harker and Brainard are voters) and both were dovish; Fed Harker comments to the WSJ were more surprising as he had earlier given more hawkish signals while Brainard comments were more or less as expected. USD and the US yields fell on these dovish comments which highlight market concern for dovish Fed talks. This is why we see USD vulnerable to a dovish Yellen. In the case of rhetoric on growth and balance sheet normalisation, it is unlikely that ...

Weekly FX Technical Analysis round-up – Tuesday 11th July 2017

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USD has ended the week on a positive note after a very strong NFP print, however, weak earnings data suggest that we are not going anywhere in a hurry. Next week the focus will turn to the US CPI and Fed Chair Yellen testimony and until then USD may remain range bound.


Rahul Khanna
Jul 07, 2017 - 10:30

The US unemployment rate is expected to remain at 4.3% with some increment in participation rate possible (currently 62.7%). We also expect payrolls to come in slightly under expectations (175K) as the employment component of the ISM non-manufacturing showed a drop from 57.8 to 55.8. That ...

The ECB minutes were released and the EURUSD has moved 15pips to 1.1382 following the release. There are some interesting changes in communication on QE easing bias. Here are some key points;

It was stated that if the economic expansion continues and outlook on inflation is improved further there are chances to review the easing bias. There was caution on giving small incremental signals as being misinterpreted as a signal to more fundamental changes in policy as it puts inflation at risk. The economic conditions have improved enough to warrant some tightening in ...

AUDJPY is in process of completing a head and shoulders base pattern with a neckline at 87.35. MACD is also showing signs of gaining momentum and we now target 92.67 initially, possibly 97.26. Below 83.75 to avert upside

AUDJPY Weekly Chart (3-years)


EUR/USD has so far found resistance at 1.1460 (downtrend) and hence a correction to 1.1294 may ensue. That said, the MACD has now found support around the zero line and we are likely to see a break past the recent highs towards 1.1530-1.1611. Below 1.1294 will delay upside instead will open ...

USD and JPY are the weakest currencies among the G10 this week and understandably so because Fed and BoJ were the only major central banks that were reserved in their comments this week. CAD, EUR and GBP got a boost from Poloz Draghi and Carney, respectively as they all caught the markets ...

Rahul Khanna
Jun 30, 2017 - 12:28

EuroStoxx50 Futures

The Global economic outlook remains positive but the recent change in the policy stance (to hawkish) by the ECB has caught the market on the wrong side. The German government bonds have seen a sell-off along with along with a sell-off in equities. However, we ...

Rahul Khanna
Jun 30, 2017 - 12:22

Brent Crude continues to improve, now trading around $47.00 mark in over two weeks despite the EIA crude inventory showing a build up of 118K while a draw of over 2.0mn was expected. The outlook for crude looks positive given the improvement in growth outlook. Also, the European Energy ...

Rahul Khanna
Jun 28, 2017 - 08:35

We continue to be bullish CAD given the BoC Governor Poloz hawkish comments in an interview with CNBC where he said;

The rate cut of 50bp in 2015 was to deal with the ...

EURUSD Daily Chart (6-month)

EUR/USD is approaching resistance area around 1.1365-1.1462 (August 2016 high / downtrend line) but the MACD is now showing initial signs of reversing from around the zero line and we may see bounce upto the top of the ...

The dollar has not gone far from where it started the week with the USD-index up 0.3% since Monday open. The strongest G10 currency is CHF up 0.25% versus USD and the weakest is AUD down 0.68% versus the USD. In the Equities space, Nikkei closed up 0.95% for the week above ...

USD has started to rise versus JPY while falling versus the commodity bloc currencies such as CAD and AUD. The US data continues to be weak but the Fed was relatively hawkish in their assessment; hence, USD avoided sharp falls. That said, the risk appetite is on the rise ...


The Fed rate hike on Wednesday is fully priced in and the investor will look for clues on balance sheet adjustment and future rate hikes. Currently, there is 50% probability of a Fed rate hike in December and expectations of a balance sheet reduction by next year; in our view this too ...

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