Tag Archives: Fawad Razaqzada

US Stocks: Is This The Turning Point (Lower)?

Fawad Razaqzada

The movements of stock prices in the days prior to the Fed’s rate decision on Thursday appeared to be the typical “buy the rumour, sell the news” sort of behaviour. But when the news hit the wires, traders initially hesitated to push the ‘sell’ button because there was an element of surprise in the FOMC statement that was probably not priced in. Not only did one FOMC member vote to cut rates into the negative, but the dot plot showed that the median policy maker now expects core inflation to remain below the bank’s 2% target until 2018 and the long-term unemployment rate was revised down to 4.9%, suggesting there is less urgency to hike interest rates. So, to account for this surprise, they waited a bit longer before ‘dumping’ stocks. more…

Crude Holding Up Well Despite More Bearish News

Fawad Razaqzada

Judging by Thursday’s and most recent price action, crude oil is continuing to shrug off bearish news. This suggests that most of the negative news may now be priced in, which in turn implies that prices may have hit a bottom. But it is still early days and there are no concrete signals to confirm this thesis. Therefore, crude oil speculators should proceed with extra caution now and trade what they see rather than what they would like to see on their charts. more…

AUD/NZD: On The Verge Of Breakdown?

Fawad Razaqzada

The AUD/NZD is probably not under many traders’ radars at the moment given for example the sharp moves in stocks and the US dollar recently, but this cross could be one for those who would like to take the greenback totally out of the equation. The AUD/NZD surged higher in early April from a low of just above parity to a high so far this year of about 1.1425/30. The rally thus took out the 2014 high of 1.1300. But as can be seen on the chart, the bulls were unable to hold their ground there for too long and prices have generally held below this handle for this best part of the past two months, without causing too much pain for the bulls. more…

WTI oil drops to 6.5-year low… but where to now?

Fawad Razaqzada

After falling for nine consecutive weeks, the price of WTI crude hit oil its lowest level since March 2009 on Thursday. Though US oil has bounced off the low ($41.35), it remains near this year’s earlier base of about $42 and thus on course to potentially fall to $40 a barrel next. That being said though, the correction potential is now high as ‘bargain hunters’ try to buy “cheap” oil and the sellers take profit ahead of the weekend. If seen, this would probably only lead to a temporary bounce. After all, the end of the summer driving season is approaching and refineries will have to more…

Forget Super Thursday: it could be Black Friday for gold

Fawad Razaqzada

Now that Super Thursday is behind us, it could be a Black Friday for gold. Today’s much-anticipated jobs data could provide us a big clue in terms of when to expect a potential rate rise from the Federal Reserve. If the numbers are as strong as the ISM services PMI indicated on Wednesday then calls will increase for a September rate hike. This should help to give the dollar another shot in the arm, which in turn could weigh heavily on gold. Conversely, if the numbers are weaker than expected then the dollar could fall back, leading to a relief rally for gold. Admittedly, the dollar is just one among several factors that determine the direction of gold. But today, it will most likely be the main driver. more…

EURUSD: all bears need now is a ‘lower low’

Fawad Razaqzada

The EURUSD has been trending lower in recent weeks and the selling pressure has accelerated over the past few days as the investor focus has returned to the interest rate differential between the US and Eurozone economies. Whereas the Fed has signalled that it is ready to hike rates later this year, the ECB has only recently started QE and there were no suggestions from President Mario Draghi today that the bank is ready to trim or end the €60 billion a month stimulus programme early. In fact, Draghi said the ECB has temporarily increased emergency funding to Greek banks by €900m. Thus, the ultra-accommodative monetary policy is here to stay for now and this should in theory put downward pressure on European bond yields, which in turn could depress the euro even further. more…

USD/JPY: where to next?

Fawad Razaqzada

The appetite for risk has improved noticeably this week, as evidenced by a sharp rebound across the global equity markets. FX traders have likewise witnessed the unwinding of some safe haven trades with CHF and JPY both falling sharply following their recent gains. The US dollar has performed well given the fact that the weekly unemployment claims disappointed expectations and after the minutes from the FOMC’s last policy meeting contained very little in the way of new information other than what we already knew. However, as some FOMC members are concerned about the developments in China and Greece, more…

Gold: moment of truth

Fawad Razaqzada

We have repeatedly commented that gold’s near term outlook does not look bright because of the apparent lack of interest from investors worried about the crisis in Greece. Whereas the European stock markets have fallen quite dramatically in response to the deteriorating Greek situation, the precious metal has barely shown much reaction. Admittedly, this has been in part because of the strength of the US dollars, which has been climbing steadily higher this week in anticipation of Thursday’s US jobs report. As it turned out, more…