INTERNATIONAL CURRENCY BUZZ :
- Forex -NZD/USD moves lower in late trade
- Forex -Dollar falls to more than 1-year low against yen
- Forex -AUD/USD drops after tepid Australian data
The shared currency has faded the overnight spike to daily highs near 1.1240 vs. the greenback, with EUR/USD now testing the lower end of the range in the 1.1170/60 band. The initial bull run to the 1.1240 area has been supported by a fresh wave of risk aversion following a slump of the Japanese equity markets. However, the risk appetite has managed to return to the global markets after European equities reverted the negative start, adding to the offered tone in EUR.On the data front, German Industrial Production has contracted at a monthly pace of 1.2% during December and the trade surplus shrunk to €18.8 billion during the same period, both prints missing expectations. The pair is now retreating 0.16% at 1.1172 and a breach of 1.1054 (200-day sma) would open the door to 1.0966 (20-day sma) and finally 1.0899 (55-day sma). On the flip side, the next up barrier lines up at 1.1246 (high Feb.5) ahead of 1.1496 (high Oct.15) and finally 1.1713 (post-PBoC high Aug.24).
The pound was little changed against the dollar on Tuesday after data showing that the U.K. trade deficit widened in the final quarter of 2015, despite improving in December, and is likely to have acted as a drag on growth. GBP/USD was at 1.4444, from around 1.4431 ahead of the report. The Office for National Statistics said the total trade deficit widened to £10.3 billion in the fourth quarter from £8.5 billion pounds in the previous quarter, marking the biggest trade gap since the start of 2015. The annual trade deficit widened to £34.7 billion in 2015, up from £0.3 billion in 2014. Trade is likely to appear as a drag on economic growth when revised figures for fourth quarter gross domestic product are released, the ONS said.In December, the total U.K. trade deficit, including services, narrowed to £2.7 billion from £4.031 billion, helped by the value of oil imports falling to their lowest since February 2009 amid a steep drop in oil prices.Sterling was slightly higher against the euro, with EUR/GBP easing 0.14% to 0.7745.
- BUY GBP/USD ABOVE 1.4444 TARGET 1.4464 1.4494 SL 1.4414
- SELL GBP/USD BELOW 1.4420 TARGET 1.4400 1.4470 SL 1.4390