Forex Technical & Market Analysis: January 28 2013

MARKET OVERVIEW

2013-01-28 06:30 GMT

Euro rallies on LTRO payback

The European Central Bank announced on Friday that 278 Eurozone banks would repay 137.2 billion euro borrowed in December 2011 under the 3-year Long Term Repo Operation (LTRO). The first early paybacks would take place on January 30. This is a larger amount of early repayments than the market consensus of 100 billion euros and approximately 30% of the December 2011 loans, “but it continues to leave open the question of how much will be repaid when the next €529.5bn becomes eligible for repayment on February 27th (to be announced Feb 22),” as Richard Kelly, Head of European Rates and FX Research at TD Securities points out. The expert predicts that it is “likely to be less than today’s figure, perhaps around the €75-100bn range for a total repayment of €200-225bn, slightly about our initial €150bn estimates.”

ECB head Mario Draghi said today at the World Economic Forum in Davos, Switzerland that the sovereign bond purchase program (OMT) would remain active for “as long as necessary.” He also added that the Eurozone will benefit from ECB’s accommodative policy. Draghi affirmed that the LTRO program had helped avoid a credit crunch and contributed to restoring a relative calm in the Eurozone. The ECB chief also emphasized the importance of the implementation of structural reforms and said that he expects the Eurozone to recover by the end of the year. Finally, Draghi went over the measures introduced by the ECB throughout 2012 and signalized that the challenge for this year would be to overcome the fragmentation which still differentiates financial and capital markets and causes inequality in financing.-FXstreet.com

Forex Economic Calendar

2013-01-28 13:30 GMT | United States. Durable Goods Orders (Dec)
2013-01-28 15:00 GMT | United States. Pending Home Sales (YoY) (Dec)
2013-01-28 21:45 GMT | Australia. Trade Balance (MoM) (Dec)
2013-01-28 23:00 GMT | Australia. CB Leading Indicator (Nov)

Forex News

2013-01-28 05:47 GMT | EUR/GBP above 0.8540; biggest monthly gain in 4 years
2013-01-28 05:34 GMT | EUR/USD, 1.35 the catalyst for greater gains?
2013-01-28 04:43 GMT | GBP/USD holds above 1.5750 lows
2013-01-28 04:10 GMT | AUD/JPY limited below fresh 4-years high area around 95.00

TECHNICAL ANALYSIS

EURUSD

HIGH: 1.34711 | LOW: 1.34502 | BID: 1.34522 | ASK: 1.34527 | CHANGE: -0.01% | TIME: 08:41:09

OUTLOOK SUMMARY: Up
TREND CONDITION: Up trend
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Low

MARKET ANALYSIS – Intraday Analysis
Upwards scenario: Further upwards formation is limited to resistive measure at 1.3479 (R1). A break above it would suggest next target at 1.3492 (R2). If the price holds its momentum we can expect price increase towards to 1.3506 (R3). Downwards scenario: Instrument trapped to the consolidation formation after its initial uptrend development. Risk of further depreciation is seen below the next support level at 1.3447 (S1). Clearance here might put selling pressure to the pair and enable next targets at 1.3433 (S2) and 1.3418 (S3).

Resistance Levels: 1.3479, 1.3492, 1.3506
Support Levels: 1.3447, 1.3433, 1.3418

GBPUSD

HIGH: 1.5785 | LOW: 1.57534 | BID: 1.57585 | ASK: 1.57594 | CHANGE: -0.23% | TIME: 08:41:10

OUTLOOK SUMMARY: Down
TREND CONDITION: Downward penetration
TRADERS SENTIMENT: Bullish
IMPLIED VOLATILITY: Low

Upwards scenario: Instrument trades under the descending channel formation, though market recovery is possible above the next resistance at 1.5786 (R1). Break here is required for further appreciation towards to our initial targets at 1.5808 (R2) and 1.5830 (R3). Downwards scenario: If the price manages to overcome our key support at 1.5745 (S1), we expect to see downtrend development towards to our next target at 1.5725 (S2) and any further depreciation would then be limited to 1.5704 (S3).

Resistance Levels: 1.5786, 1.5808, 1.5830
Support Levels: 1.5745, 1.5725, 1.5704

USDJPY

HIGH: 91.255 | LOW: 90.833 | BID: 90.874 | ASK: 90.881 | CHANGE: 0.03% | TIME: 08:41:11

OUTLOOK SUMMARY: Up
TREND CONDITION: Up trend
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Low

Upwards scenario: USDJPY formed clearly positive market sentiments but recently lost some momentum on the upside. Appreciation above the 91.26 (R1) might push the price towards to our next target at 91.48 (R2) and any further rise would then be targeting resistance at 91.70 (R3). Downwards scenario: Although consolidation development looks reasonable on the hourly timeframe. If the market break below the next support at 90.76 (S1), we suggest next targets to be placed at 90.54 (S2) and 90.32 (S3).

Resistance Levels: 91.26, 91.48, 91.70
Support Levels: 90.76, 90.54, 90.32

Prepared/Published By FXCC Forex Trading Blog.