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General Category => General Discussion => Topic started by: Andrea ForexMart on March 23, 2016, 03:45:39 PM
Fundamental Analysis: March 23
Being halted from increasing in opposition to the major currencies on Tuesday, the dollar still gained support caused by the investors who stick on being heedful as a round of terrorist attacks in Brussels killed 26 people and left more than 100 injured. This devastating events in Brussels affected the euro and the British pound negatively.
The market slightly strengthened in the absence of important macroeconomic reports. Likewise, US releases did not help to enliven the market. The existing Home Sales for February embark at a low level wherein it was lessened by 7.1% whereas analysts had hoped for a more moderate fall of 2.8%. The Chicago Fed National Activity Index for February embarked at -0.29 contrary to the reported +.025 and the previous value of +0.41.
Our focus will be on the IFO Institute release. The dynamics of Gross Domestic Product of Germany is closely corresponded with this indicator and investors always keep an eye on it. This indicator has been consistently giving a negative trend for the last three months. In the midst of euro's growth, the market did not anticipated the data to be better than the consensus report. However, the data embarked at the level of 106,7 contrary to the reported 106,0. The euro/dollar pair decreased.
An Inflation Report was released by the UK. As expected, the sturdy labor market data pointed to the forecast that was a little better than the consensus report. The average monthly income was 0.2% in the last three months which would heighten inflationary pressures whilst the unemployment in UK is at the bottom-most level now since 2005. The Consumer Price Index embarked at the level of 0,3% y/y and 0,2% m/m contrary to the reported 0,4% y/y and 0,4% m/m. The pound/dollar pair aggressively declined by the end of the trades.
As of now, we are not expecting a sturdy increase of quotations. The investors were not pleased with the United States' poor macroeconomic data wherein the Existing Home Sales for February lessened by 7.1%. The home sales reduced by 6.7% from January to March which only certified again the assumptions that the Americans started to save more than spending. The dollar/yen pair became stronger.
Sterling continued its low trajectory on Wednesday amidst negative economic data, terrorism attacks in Europe, and rising worry surrounding the Brexit.
The Bank of England announced a stagnant 0.3 percent inflation rate, missing the projected 0.4 percent rise. The news was paired with a looming interest rate cut, which has been standing at 0.5 percent since 2009. The nearest rate increase is in another three years, while the US is expecting at least two rate hikes this year, pushing the dollar upward.
UK’s controversial 2016 budget was also bad news for the ailing pound. Many were disappointed with budget cuts, with Secretary of State for Work and Pensions Duncan Smith resigning on Friday over lower disability benefits.
The pound fell further from its 1.4251 after the inflation announcement.
The first support occurred at 1.4094 and 1.4024 subsequently. The first resistance was at 1.4304 and 1.4375 subsequently.
The MACD indicator is at positive location. The price is falling.
The dollar managed to recover most of its losses which is an aftermath of the Federal Reserve meeting, and is being in demand continuously. In the midst of the Catholic Easter celebration, the traders' activity was inferior. We are hoping that today the volatility shall resume as the traders' return from their holidays' activities.
The Gross Domestic Product forecast of the US is somewhat strong and is quite surprising which of course sustained the dollar as well. The GDP was altered upwards. In the fourth quarter, the US economy increased by 1.4% contrary to the previous estimate of +1.0% and an increase of 2% in the third quarter. In favor of an early rate hike, these figures became another cause of disagreement which was consistently uttered by the Fed's representative in the past week wherein it also turned out to be supporting the demand for the dollar. The US has issued the Pending Home Sales for February wherein the data occurs at the level of 3,5% and the report was 1.0%. The EUR/USD pair slightly increase by the end of the trades on Monday.
The GBP/USD was still weak and continuously move down in the midst of concerns regarding the effect of Brexit. High risks in Brexit effect enkindled growth in volatility for the pound and the pair. The GBP/USD grew by the end of the trades.
In favor of the United States, the inflation forecast for February between Japan and US modified their differential of CPI indicators. In January, the spread was 0.1% and grew by 0.43% in the last month of winter. The USD/JPY pair reduced by the end of the trades.
The dollar experienced remarkable losses. The tremendous tender eloquence of the Fed oppressed the US currency. The external and internal risks has given emphasis by the regulator and stated that there would be a probable policy easing if needed. The statement of the regulator implies an essential enfeeblement of the dollar in coordination with its viable return to the economy stimulation. The ADP for March was issued on Wednesday wherein the report was 194,000 while the previous value was 214,000. The data occurred at the level of 200,000.
Disregarding the growth of risk appetite is not possible which is an aftermath of the growing long positions and high-yield cross-rates of the traders which gave pressure to the euro as a funding currency. The EUR/USD pair stabilized by the end of the trades.
The debt market dynamics correspond to the British currency rectification. In relative with their counterparts, United States and Germany, the 10 years UK government bonds yields decreased which also caused to diminished the appeal of the British assets. On Thursday, the performance of the Bank of England will be the center of attraction. The GBP/USD pair reduced by the end of the trades.
The United States and Japan's yields differential on government bonds reduced from November to February. In Japan, the Retail Trade revenue diminished by 5.4%. The 0% retail sales differential indicator of the Japan and US at the end of January managed to extend as far as level of 2.2% in favor of the latter in February. The USD/JPY pair slightly grew by the end of the trades.
The Australian dollar is riding the bulls while the greenback is too weak to follow owing to the sell-off after Fed chairwoman Janet Yellen’s speech on Tuesday. In fact, the Aussie dollar is gaining too much for the Reserve Bank of Australia’s (RBA) liking.
AUD has now reached the level of 0.77, its highest in two weeks. Investors are selling their dollars and opting for Aussie ones as the latter has a better yield. However, questions are aloft on the RBA’s next move over the currency’s overvaluation.
RBA officials had previously said that the Aussie dollar is “getting ahead of itself” without significant signs of slowing down. Banks are also aiming for a lower domestic currency to successfully transition to a services-oriented economy from a mining-oriented one.
Yellen disappointed many central banks including the RBA after saying on Tuesday that tightening monetary policy should be approached with caution, slashing the hopes of many that they will see a rate hike in its policy meeting in late April.
Earlier this month, the RBA was forced to revise Aussie dollar expectations by the end of the year from US70¢ to US75¢. Furthermore, the current inflation is at 1.7 percent, missing the bank’s target of 2 to 3 percent.
If the RBA is to take a hawkish stance during its policy meeting on Tuesday, only two course of actions are in the horizon: to jawbone the Australian dollar or to cut bank rates, which now stand at a record low of 2 percent.
Technical Analysis for USD/CHF: April 1, 2016
After Janet Yellen's speech which supported a discreet strategy towards the interest rates raising, the dollar fell in opposition to almost all currencies. Her comments were presumed by the investors as rhetoric which cause the stock market to grow.
The price's first support occurs at 0.9580 and at 0.9500 subsequently. While it's first resistance resides at 0.9660 and at 0.9750 subsequently.
A confirmed and a sturdy sell signal has been found. The price is below the Ichimoku Cloud and it is below the Chikou Span. The Tenkan-sen displays a downward movement and the Kijun-sen forms a horizontal movement. The descending motion will remain until the price is below the Cloud.
The MACD indicator is in a negative location. The price is declining.
The EUR/USD posted its highest rates in five months, a strong end to cap the first quarter of the year. Gaining more than 4.75 percent during the first three months, this is also Euro’s best quarter against the dollar in almost five years.
The pair is now trading at 1.1381 in a range between 1.1310 and 1.1412. The Euro is trying to break into the 1.14 level as traders wait for the upcoming economic data from the US side.
The US will release data on nonfarm payrolls later today. About 210,000 are expected to be added to the already strong labor market, but should it reveal more than the expected amount, the dollar may recover its losses since Tuesday.
It is also possible for the nonfarm payrolls to not pull the dollars up as
(The unemployment rate should hold steady at 4.9% following a series of increases in labor force participation.)
Fears on Britain’s exit in the EU and a high inflation rate buoyed the Euro against bearish greenbacks.
The Eurostat revealed yesterday that March’s inflation rate dropped by 0.1 percent from a -0.2 percent in February, far from the European Central Bank’s 2 percent target inflation.
Meanwhile, core inflation (which strips off the most volatile industry such as food, and energy) increased to 1.0 percent from last month’s 0.8 percent, the highest in six months. However, the core inflation’s rise is only attributed to businesses’ seasonal price hike for the Easter holiday and not necessarily to the whole month.
Earlier in March, the ECB cut interest rates to the red, and if needed, they will do more in the future, ECB governing council member Francois Villeroy de Galhau said on Thursday.
The New Zealand dollar is maintaining a bullish trend against the US dollar despite lack of economic data released in recent days. It appears that the kiwi is only propped up by the dollar’s sell-off and not because of strong economic performance.
The Reserve Bank of New Zealand (RBNZ) slashed interest rates in early March. Talks of another rate cut is rife as the RBNZ’s policy meeting in April comes nearer.
The bird landed at a daily low of 0.6890 in earlier session but has since bounced back to its days-long attempt of beating the 0.69 level and possibly hover pips below 0.70.
Employment data from the US is scheduled to be released later this session.
The first support is at 0.6853 and 0.6818 subsequently, while the first resistance is at 0.6939 and 0.6973 subsequently.
The MACD indicator is at a positive level. The price is declining.
After months of rally, the Australian dollar finally experienced a setback as the week started with disappointing data and a slowly recovering US dollar.
Retail sales for the month of February was unchanged from the previous month’s 0.3 percent, a big letdown from the forecasted 0.1 percent increase.
According to the Australian Bureau of Statistics, retail sales of household goods and department stores posted the highest increases with 0.4 percent, while the food sector decreased by 0.2 percent.
During Tuesday’s monetary policy meeting, the Reserve Bank of Australia (RBA) decided to hold onto its 2.00 percent interest rate, sending the AUD to the bears. RBA governor said in a statement that the “economy is continuing to rebalance following the mining investment boom.”
Contrary to an expected verbal intervention to weaken the AUD, Stevens did not jawbone the currency which has risen steadily since the start of the year, even sounding dovish toward its appreciating value.
Inflation hit a seven month low of 1.7 percent while the RBA’s target range is from 2 to 3 percent. Trade deficit rose to A$3.410 billion in February from January’s A$3.156 billion. It was projected to shrink to A$2.600 billion.
After days of losses, the USD picked up over the weekend due to a positive nonfarm payroll that further strengthened the labor market.
The pair touched 0.7536 today, recording a five-day low. Heads are now turned to Fed’s meeting later today.
The New Zealand dollar is gaining against the greenbacks after the Federal Reserve indicated that an interest rate increase is highly unlikely this month. The kiwi dollar posted gains hours before the release of Fed’s minutes of its last meeting.
The minutes was released today and showed that the majority of the board members agree that rate hikes should be approached with caution, sending the US dollar to bearish territory after a slight recovery in earlier sessions.
The Global Dairy Trade (GDT) price index released on Wednesday was also a good news for the bird especially for New Zealand’s main export, whole milk powder, whose prices rose by 1.5 percent. Cheddar prices also moved up by 10.5 percent. The entire GDT index climbed by 2.1 percent after last reading’s 2.9 percent fall.
China, New Zealand’s largest trading partner, will release trade data and its Q1 GDP next week. This will inject further volatility into the kiwi dollar.
The pair is now trading at a range of 58 pips. The first support is at 0.6799 and 0.6765 subsequently. The first resistance is at 0.6868 and 0.6902, subsequently.
The MACD indicator is in a neutral position. The price is rising.
A poor Industrial Production forecast was presented to the market wherein the index missed 0.5% while the report was 1.8%. Yellen's statement about the external risks and the decelerating rate hike were implied in the issued Fed minutes. The market was hoping for the Fed to lower their rate hike in September wherein they expected for 46.5%. There is also presumptions and the market gives 50% that the rate hike will take place in November and 52.5% that it will happen in December.
The main occurrence of Thursday were the declaration of the ECB minutes and Mario Draghi's statement. The Initial Jobless Claims was 267,000 while the report was 270,000. However, the Consumer Credit Change was $17,22B while the report was 14.74B.
The House Prices forecast for March was issued by the UK wherein the housing prices grew by 10.1%. However, the economists expected that the inflation rate would slow down a bit to 9.5%. In monthly terms, the housing prices increased by 2.6%. Nevertheless, analysts expected the prices to increase only by 0.7%.
The NZD/USD extended gains to an intraday high of 0.6885 assisted by a soft USD and a pickup in global commodity prices.
The Real Estate Institute of New Zealand (REINZ) showed that the number of houses sold in March saw an 8.2 percent year-on-year increase, breaking the record set in March 2007. Property prices also grew by 4.2 percent year-on-year.
The Reserve Bank of New Zealand has been keeping a watchful eye on the real estate market amidst worries that lenders will be in trouble once the gains subside.
Apart from this, the bird is on a quiet flight until the release of the Food Price Index later today which will give a hint on the inflation rate.
The MACD indicator is in a neutral position. The price is increasing.
The risk assets may be affected by the outcome of the summit in Doha, and beforehand, the volatility of the market already reduced. Moreover, the US currency had gone under pressure which is the aftermath of the Fed statements and the poor inflation data from the US. Dennis Lockhart, Chief Executive Officer of the Fed of Atlanta, stated that he would not go for a rate hike in April as he supports a careful approach to the monetary policy tightening because of low consumer spending. The market volatility heightened by the end of the trades.
The US issued the Industrial Production volume for March. The index occur at the level of -0,6% m/m wherein the recent value was -0.50% m/m while the report was -0.60% m/m and the Consumer Sentiment index from the University of Michigan for April. The index have shown 89.7 wherein the previous value was 91.0 while the report was 92.3.
There was no important impact on EUR/USD the inflation data of the Euro area wherein the index came in the zero value after decreasing by 0.1% y/y. The Euro zone issued the Trade Balance for February wherein the index displayed 19.0 billion euro and the recent value was 20.0 billions. The pair euro/dollar increased.
The Bank of England let the rate remained at the level of 0,5% and the Bank pointed to the risks relative to the Brexit. The pound stayed appeased to the regulator's speech. The GBP/USD pair aggressively grew by the end of the trades.
The investors were upset by the poor US retail sales, PPI and CPI reports. The US and Japanese government bond yields reduced which caused the US assets to lessen its charm. The USD/JPY pair diminished by the end of the trades.
In the middle of risk aversion in the stock markets, the dollar came low. While the attention in the safe assets heightened amidst the cheap oil prices. The fall of the oil prices was due to the negative outcome of the oil exporter's meeting in Doha. The dollar have gone under pressure caused by the poor US data which is low than expected. The UDS Industrial Production decreased by 0.6% contrary to the expected 0.1% whilst the Capacity Utilization lessened to 74.8% from 75.4% and lastly, the preliminary Consumer Confidence index for April reduced to 89.7 contrary to the reported 92.
Serving as a funding currency, the euro were sustained by the decline of the risk appetite. Also, the attention in the risky assets slacken caused by the slowdown of the Gross Domestic Product increase of China and the poor economic statistics from the US. The primary reasons that cause the dollar to fall were the decrease of economic inflation of China to its bottom-most level and the average negative statistics on the US inflation. The euro/usd pair stabilized by the end of the trades.
A technical rectification to the psychological level of $40 per barrel was caused by the traders that acquired profit and closed their orders in oil contracts. Traditionally, inferior energy prices had a negative effect on the British currency. The oil price heightened and the pound/dollar pair increased by the end of the trades.
The President of the Federal Reserve Bank of New York, William Dudley stated on Monday that the US labor market has recuperated firmly and the Central Bank would slowly pursue to make the interest rates remained normal. An Inflation, Retail Sales and Industrial Production were negatively reported in the past week. These also played into the bear's hands in the dollar/yen pair. The dollar/yen pair increased by the end of the trades.
The pair is experiencing a retracement as the USD outperforms the NZD, halting the bird’s third consecutive day of uptrends. The kiwi dollar is trading just eight pips above the 0.70 handle as of time of writing.
Data pointing to the opposite situation was released today. The GlobalDairyTrade(GDT) index rose by 3.8 percent from 2.1 percent. Whole milk powder, New Zealand’s biggest export goods, grew by 7.5 percent, while skim milk powder added 0.3 percent.
Meanwhile, the US’ housing data tumbled with only 1.086 building permits issued from 1.777 million in the previous month. Housing starts skidded to 1.089 million from last year’s 1.194 million.
The first support is at 0.6840 and 0.6656 subsequently. The first resistance is at 0.6926 and 0.7068 subsequently.
The MACD indicator is in a positive location. The price is dropping.
On Thursday, the central events were the ECB meeting and Mario Draghi's speech. The rate remained unchanged by the regulator at 0%. Draghi stated that he does not also deny a transition to the negative rates. The soft policy will remain until the inflation hits 2%.
The dissatisfying retail sales publication cause the pound to decrease in opposition to the US dollar which weaken the optimism regarding the strength of the British economy. The total number of retail sales for March was anticipated to lessen by 0.1%, but it was diminished even lower to 1.3%.
For April, the Philadelphia Fed Manufacturing index reduced and displayed -1.6. Initial Jobless Claims occured at 247,000 contrary to the reported 263,000.
In spite of lower than expected Trade Balance publication, the yen increased slightly wherein the Balance reached 755 billion contrary to the expected 834,6 billion. While the exports increased from -4.0% y/y to -6.8% y/y, imports heightened from -14.2% y/y to 14.9% y/y. Kuroda's speech about further policy easing if necessary supported the yen as well.
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The New Zealand dollar recovered when markets opened on Tuesday while the USD index is still weak.
Ahead of the RBNZ’s announcement on monetary policies, the central bank’s shadow board put together by the New Zealand Institute of Economic Research urged that interest rate should remain at 2.25 percent, causing the bird to fly a little higher.
The pair broke through yesterday’s resistance of 0.6895, peaking at 0.6897 earlier today. The kiwi dollar is currently testing 0.69 levels and is trading at a 42-pip range.
The initial support is at 0.6848 and 0.6814 subsequently. The immediate resistance is now at 0.6921. The MACD indicator is in negative location. The spot exchange is at 0.6893 and rising.
The America filled the economic calendar with its important releases yesterday. For March, the Durable Goods Orders record was issued first wherein it came out at 0.8% in opposition to the report of 1.8%. Meanwhile, the Consumer Confidence for April hitted 94.2 wherein the recent value was 94.2 and the report was 96.0. Traders were hoping to have a glimpse of sign about the state of the economy before the Fed release their decision on Wednesday. And this could also have an effect on any further activity of the dollar. Now, investors abstain from opening new positions before the meeting.
The Eurozone did not have any significant news yesterday. After a solid increase, the EUR/USD pair reduced a bit by the end of the trades.
Meanwhile, the UK has issued Mortgage Approvals index for March wherein the data came in at 45.1K in opposition to the report of 46.0K. The GBP/USD pair displayed an increase but diminished a bit by the end of the trades.
The attraction set for the safe assets provoked the buying of yen. The gossips regarding the BoJ who won't implement fresh soft measures also sustained the yen. We are thinking that the regulator will cautiously assess the impact of the running measures furthermore and will implement the new ones only in June. The USD/JPY pair consolidated.
On Wednesday, the dollar were constantly steadfast to other major currencies as a preparation for the last Federal Reserve System political speech. Investors put their attention to the result of the political meeting expecting for any signs about the interest rates modification in June. The Fed left the rates remained at 0.5%.
In Germany, the Consumer Confidence outstandingly improved as it came at 9.7 in opposition to the recent value of 9.4. The consumers think that the economy of Germany will get better for the next months and look forward to its modest improvement. The EUR/USD stabilized a little.
Since the market realized that the UK economy gained by 0.4%, the pound ceased in growing together with the expectations of economists, but it slowed down to 0.6% in the recent quarter. In the first quarter, the UK economy grew by 2.1% on annual basis, which is the same with the recent quarter and rather high than the anticipated 2.0%. The GBP/USD pair reduced by the end of the trades.
Meanwhile, the USD/JPY pair heightened by the end of the trades.
The kiwi is hovering 20 pips below 0.70 handle after recording losses from an intraday high of 0.6990. With rate decisions coming from a number of currencies this week, NZD is showing the second strongest performance after the Yen.
The ANZ Business Confidence released today showed that companies are expecting positive economic activity as it jumped from 3.2 in March to 6.2 in April. Thirty-five percent of the surveyed firms predict an interest rate cut in the next policy meeting.
On the US side, personal spending will be released today while a deluge of data including manufacturing PMI and nonfarm payroll will come next week.
The first support is at 0.6918 and 0.6883 subsequently. The first resistance is at 0.7037 and 0.7072 subsequently. The MACD indicator is in neutral location. The price is rising.
Insignificant forecasts has been issued by the USA which is the ISM New York and IBD/TIPP Economic Optimism indices wherein the data came in at 48,7 in opposition to the reported 46,6. The stabilization of the price can be viewed already, yet it is too soon to determine whether this is enough for a rate hike. At the next meeting that will take place in June, the decision for the rate hike will come up.
Meanwhile, the Producer Price Index in Eurozone for March displayed -4.2% wherein the report was -4.3% and the recent value was -4.2%. And for the first time this year, the index heightened. It could be a sign that the growth is impossible to decline for the next months.
The pound reduced on Tuesday from being on peak for four months when the manufacturing activity of the UK dropped in April for the first time over the past three years wherein the data came in at 49.2 from 51.0 in March contrary to the reported 51.2. The index that has been issued heightened the concerns regarding the probable growth in the second quarter.
Meanwhile, in the midst of the Constitution Day, the Bank of Japan did not have any activity on Tuesday.
Tuesday, the dynamics of the market was enliven with the help of the calendar of economic events. Job Openings was issued by the US wherein the data came in at 5.757 million contrary to the report of 5.431 million.
The euro currency heightened a little in opposition with the dollar. The euro zone has made a report about Industrial Production in Germany for March which the data dropped low more than what was expected wherein it came at -1,3% contrary with the expectations of -0,2%. Meanwhile, exports displayed a fast growth showing 1,9% against expectations -0,1%.
The Trade Balance which has sustained the pound was showed by the United Kingdom. The Bank of England Governor Mark Carney apprised the commercial banks and other financial institutions regarding a probable rate cut if ever the UK departs from the European Union.
The fall of the yen currency is an aftermath of the statement of the Minister of Finance on Monday. If it happens that the yen continues to grow, the regulator is ready to intercede, as stated by the ASO. The Japan Minister of Economy Nobuteru Ishihara stated that after the rally of the yen in the past week, he is nearly observing the financial markets.
Yesterday, in opposition with the US dollar, the major pairs has been rectified. We haven't heard EU stating significant data and the market's volatility was weak. The market was not affected by the British data through the main cross-pair EUR/GBP and most of the trades were unperturbed and smooth.
The scarcity of drivers helped the UK market to stay still. But the forthcoming referendum can probably become one of the drivers in the future. As stated by Michael Sanders, Bank of England Monetary Committee representative, if Britain favors the exit from EU, the Central Bank will be obliged to heighten the rates to 3.5% by the end of 2017, because the exit out of the EU union will facilitate the slump of the pound and will probably strengthen the inflation.
Due to the profits taken by the investors, the dollar slumped in opposition with the yen on Wednesday. It was an aftermath of the recent rally gaining a two-week highs and the Japanese speech regarding its preparation for an intercession. Yet, Japan were expected by many investors to refrain from doing any activity to enfeeble the yen before the G7 meeting.
The sturdiness of the world economy was left vague even though the dollar was sustained by the restored risk appetite. The Initial Jobless Claims volume was issued by the US wherein the data came in at 294,000 contrary with the expected 270,000. The political event of the day were the statements which came from Rosengren E. and Mester L, the Fed representatives. Mester stated that the risks which relative with the Fed reports should not affect the monetary policy management. While Rosengren proposed that the risks of leaving the rates unmodified seem too inferior for a long term of time.
The Germany issued the Wholesale Price Index wherein the data came in at 0,3% m/m in opposition with the expected 0,2% m/m while the Eurozone issued Industrial Production wherein the data came in at -0.8% m/m contrary with the expected 0.1% m/m.
The significant event of the day was the Bank of England meeting. The rate was remained unmodified by the regulator at 0.5%. At the same time, the inflation report of the Central Bank became the center of attraction. We hope that the growth in assessment of the inflation in the present year could help the pound to rise and counterbalance concerns about the cost of lending decrease. The Central Banks anticipates the inflation to restore at 0.2%.
In the midst of short positions closing, the dollar still managed to increased in opposition to yen. However, the US currency was still under pressure caused by the vagueness of probable increase in the global market.
Earlier on Monday, the dollar has stabilized as the sturdy US reports, Retail Sales and Consumer Sentiment, reduced the investor's concerns regarding the development in the economy. The positive data also enliven the expectations that the Fed may brought up the interest rates as soon as possible contrary with what is expected. But later on, the dollar dropped to its low.
The Monday trading was frail with inferior volatility amidst the empty economic calendar. The financial markets in Germany and France refrain from working as they celebrate the Holy Spirit on Monday. We have not heard any significant report from the UK.
Meanwhile, the previous gains of yen in opposition with the dollar was lost. The reason of its fall was because of the unsatisfying Chinese economic forecasts.
The center of our attraction this week would be the Machine Tool Orders in Japan, the forecast of the Fed, Consumer Prices and the Industrial Production in the Us.
We heard a lot of economic news on Tuesday, US data being the main driver of the day. The States has given the report of Core Consumer Price Index to the public wherein the data came in at 0,2% which occur simultaneously with the report and also the Industrial Production which reached 0,7% against the reported 0,3%. The Federal Reserve representatives, Williams and Lockhart gave their statements. The idea of raising the rates twice or thrice this year was supported by Williams. Meanwhile, Lockhart stated that the negative rates scenario was not intended.
As for the Eurozone, it only published their positive Trade Balance for March wherein the data came in at 28.6 billion against the report of 22.5 billion.
Since September last year, the inflation in the UK decelerated in April for the first time which also caused the pound to lessen its gains contrary with the dollar. After increasing by 0,5% in March, the Retail Price Index grew by 0,3% y/y. The inflation was expected to stay at 0,5% by the traders, but the British inflation has been low from the target level of 2% for more than 2 years.
In March, the Japanese Industrial Production aggressively increased wherein the data came in at 3,8% against the previous 3,6%. While the Capacity Utilization grew from -5,4% to 3,2% in March. But still these statistics could not support the yen.
Fed’s hawkish sentiment evident in its FOMC meeting minutes released last week fairly strengthened the dollar against other currencies even the reasonably strong NZD. We can see that the buying interest in the NZD/USD will stay in the near term.
The pair is trading at 0.6797 in Wellington. Volatility is expected on Thursday as the New Zealand government announces the annual budget which include a possible revised inflation forecast. Data released last week showed that inflation was at 1.6 percent.
The first support is at 0.6716 and 0.6594 while the first resistance is at 0.6823 and 0.7054 subsequently. The MACD indicator is in negative location. The price is rising.
NZD/USD is receiving downward pressure from rosy US data, shrouding a similarly upbeat trade data from the kiwi dollar.
New Zealand’s trade balance in April amounted to $292 million from the previous month’s $117 million, beating the forecast $60 million by leaps. This is due to exports of $4.30 billion, a 10 million increase from March’s $4.20 billion, while imports were down to $4.01 billion from $4.09 billion.
Home sales in the US is the highest in eight years, with 619,000 more houses sold from the previous month’s 531,000. Only 523,000 were expected in April. This is a 16.6 percent growth from a decline of -1.3 percent in March.
Increasing talks about a Fed rate hike in June is also boosting the buying interest around the USD, sending the bears toward the bird. As the market digests Fed officials’ hawkish statements on Monday, a bearish outlook on the NZD will remain.
The first support is at 0.6716 and 0.6576 while the first resistance is at 0.6823 and 0.7054. The spot exchange is currently 0.6754.
The MACD indicator is in negative location. The price is rising.
In the midst of positive economic forecasts, the dollar reinforced its positions. As stated by the Fed, the US regulator may heightened the rates at its conference this coming June. Meanwhile, in the economic news, the United States presented the Initial Jobless Claims wherein the volume appeared at 268,000 against the report of 275,000.
The euro was bolstered by the agreement happened between the Eurozone and the Greece. The latter attained an agreement with its creditors and shall take a new tranche of loans in the amount of 10 billion euro.
It has been inveterated that the recoupment of the British economy became sluggish by the second Gross Domestic Product estimate for the first quarter in the UK. The economy showed a growth by 0,4% in the first quarter from 0,6% in Q4 2015. The economy of Britain encountered a difficulty with a devitalized growth in emerging markets particularly in China. The approaching referendum also decelerated the growth.
The dollar stick around in a range waiting for the statement of Janet Yellen. The market is anticipating hints from the regulator about the probable rate hike in June. The yen raised and bereaved the dollar from its recent gains. The investors involuntarily close positions before there are any probable risk that may occur.
A latest survey showing that Vote Leave is points ahead dragged the British pound to 1.41 cents against a stronger US dollar. As the EU referendum approaches, the sterling is swaying nonstop due to voters’ sentiment and the release of poll results after another.
TNS revealed yesterday that 47 percent of respondents wanted the UK to leave the EU, while only 40 percent wanted to remain a member of the bloc. GBP/USD fell to two-month lows.
UK inflation in May was also on the red, printing only a 0.3 percent rise, similar to the same period last year. Analysts were expecting a 0.4 percent growth. In m/m terms, CPI also disappointed as it climbed by 0.2 percent, missing the forecasted 0.3 percent. Transport costs rose by 0.9 percent in Mayi from the previous month but was offset by declines in food and clothing.
As we predicted, CPI didn’t have significant effect on the sterling especially because a Brexit poll was released in the same day. The Bank of England’s decision on its interest rate is next on the GBP’s economic headline.
The USD performed slightly stronger than its counterparts with the release of positive retail sales which hit 0.5 percent m/m against a 0.3 percent forecast. Core retail sales was in line with expectations at 0.4 percent. Both exports and imports at 1.1 percent and 1.4 percent respectively eclipsed their forecasted rates.
Atlanta Fed upgraded its GDP forecast for Q2 to 2.8 percent from an initial estimate of 2.5 percent. Strong retail sales was also viewed as a signal that consumer expenditure will most likely print robust numbers.
We are looking at an immediate support of 1.4089 and 1.4040 subsequently, while resistance is at 1.4265 and 1.4350. The MACD indicator is in negative location. The spot exchange is at 1.4142 and rising.
The exchange rate of British pound to Euro (EUR/GBP) plunged a significant dip of 9 points just as euro has a little price action and the value of British pound emerges from default rate. At the moment, the pair seems to be holding the same level at 0.8514. Due to the extreme support of the European Central Bank monetary policy, it helped maintain the stability of prices and maintained the inflation rate close to medium term position. When inflation rate rises dramatically, there is a need to promote monetary easing in order to minimize financial costs and increase the amount of money flow in the market.
The investment sector is beset with difficulty, making it complicated to invest a new capital. To this extent the bank management should stabilize the global economy in order to aid bankruptcy. Every financial institution should write off undesirable credits or loans so as to recover losses and produce new income. Since the outset of the stock market storm in U.K. , the British pound ride out a way through it and made a 31-year low against dollar.
British sterling underscores a big fall of 13% versus dollar and 10% against euro. According to analysts, this will build up U.K exports because anything that is price-marked in sterling would be much cheaper for the foreign buyers. But the effect of these major lost in sterling offered mixed trade signals whether or not it would influence the external trade transactions.
The EUR/USD pair experienced a small upsurge after a possible stability of UK politics, lifting pressure from traders. The USD traded at 96.38 or 20 points lower, giving up some of its “safe haven” profit. On the other hand, the EUR traded today at 1.1088.
Consumer prices in Germany rose by 0.1%, while the yearly inflation rate for the past three months has increased from April’s -0.1%. Concerns within the Bundesbank may soon arise if the inflation rate continues its increase.
Fuel prices also went up as oil prices increased, causing transport costs to go up by 0.8%. On the other hand, food prices for this month went down at 0.4% while recreation prices increased after an upsurge in package holiday prices. On Monday afternoon, the EUR single currency experienced a marginal elevation against the USD after slightly up and down swings in a data-light session.
In general, the EUR was able to limit its incurred losses, thanks to the psychological barrier at the level of $1.10 for two consecutive sessions in spite of the turmoil caused by nonfarm payrolls.
The EUR/USD pair was subject to pressure following the release of China’s latest trade balance data. The Euro went up by 0.0012 or roughly +0.11%, hitting 1.1084 from its low of 1.1042.
EUR traders can now breathe a sigh of relief after the trade balance data from China came out in their favor after the news release signalled a possible volatility. Exports came out at -4.8% after an estimate of -4.1%. On the other hand, imports came out at -8.4%, a long shot from its forecast of -5.0%. Meanwhile the dollar’s headline figure for June came out at $48.1 billion, about $2 billion lower than May’s headline figure, with economists gunning for a reading of $46.64 billion.
After US stock indices had an upward surge, Investors and traders are now back to monitoring global equity assets with the promise of higher risk assets, putting more confidence in the EUR/USD and aiding in its overall recovery.
The Bank of Canada opted to maintain interest rates during their most recent closed-door meeting with the currency board and bank directors and eventually the rate of the Canadian Dollar moved higher yesterday. The USD/CAD keeps on pushing higher prices most of the trading session but the invested capital gains immediately fluctuate down to 1.2934 close to 1.2976, falling to 0.0064 or -0.49%. Since midsummer the BoC continued to retain its appropriate benchmark with a rate of 0.50%.
According to the central bank, the financial valuation of the BoC would likely have an economic growth, considering that it has increased by 2.4% during the first quarter of the year and is expected to decline by 1% by the second quarter. The assessment is inferred through the volatility of the capital flows, household consumption and the massive wildfire that ravage the Canada's region.
The central bank also anticipates the expansion of the Canada's economy by 1.3% up to 3.5% during the months of July to September. The BoC mentioned also their expectation of the price stability of oil prices for the rest of this year.
One of the problems emerged in Canada is the overall financial vulnerabilities as it resulted to a lower rates and experienced an adverse shock. Other news releases said that a 4% price fall in crude oil will restrain the weakening of the USD/CAD pair.
The USD/CAD pair traded at 1.2971 and closed at 0.56% after the USD was restored and pressure was put on the market as international events shook traders during last Friday’s session. On Thursday, US numbers looked promising, as inflation rates went up after the PPI went over its estimated percentage of 0.3%, climbing up to 0.5%, the highest monthly gain since May 2015.
The Core PPI also exceeded expectations, gaining 0.4% after an initial estimate of 0.1%. However, Unemployment Claims remained stagnant at 254 thousand, way below the expected rate of 263 thousand. The consumer price index report of the US Department of Labor showed an increase in the CPI by 0.2% for June, while currency speculators renewed their net long position on the USD following a significant upsurge since June, after positive US economic data caused the currency to experience an increase.
The USD’s net long position increased after the week’s end on July 12, hitting $8.01 billion after last week’s $4.18 billion. US retail sales also picked up and went higher than expected, which shows how the economy went up during the second quarter of the year.
Currency Pair GBP/USD (British Pound/U.S. Dollar) has earned 55 points just as the U.S paper dollars go through a few price differences. Short-term buyers are expecting to have a significant data set this impending week since the recent British Prime Minister is now working for a new trade agreement with Europe. The moving average of the sterling pound is 1.3237 and gained up to 0.5% that yielded $1.3256. The pound increased right after the time of announcing the deal for adjustable-rate mortgage (ARM) and when the policymaker of the Bank of England, Martin Weale released a statement about the need of a firmer financial evidences in order to change bank policy and bring an impact to U.K after they leave EU behind.
The BOE provided an additional market liquidity and cutback the mandatory capital requirements for the credit unions. Most of the Monetary Policy Committee members is anticipating for a stable movement on the 4th of August immediately prior to the publication of economic conditions and forecast.
Eventually, Weale will hand his resignation in the rear of the meeting next month. He confirmed that there is no instances of panic selling or panic buying among traders and investors after the strong vote for Brexit last month. Weale also said that central banks are far beyond the horizon of the falling market.
The EUR/USD gradually declined at 1.1009, dropping at 0.0011 or -0.10% because there is a build up of selling pressure that moves technically into a weaker global market since July 2014 which has 1.1164 as their highest points.
Investors are now fully prepared since the European Central Bank (ECB) have announced their monetary policy today thus resulted to a physically lower level of volume and volatility. According to the ECB, they planned not to enact new policy to their current protocol but it is still possible for the bank to issue a statement about the negative effects of inflation with response to the Brexit decision. After the dovish tone statement made by the ECB they intended to have a break for eight weeks.
The Brexit decision also affected the main driver of the price growth which is the relative value of U.S. Dollar. The report about the U.S Non-Farm Payrolls for the month of June made the dollar to settle against the Euro and the dollar continuously to heighten just as the U.S. Retail Sales excelled more over their anticipated outcome.
Yesterday, the report about the bullish housing were released and it supported the Fed rate to have a chance in increasing its rate hike up to 50% in response to the upcoming meeting on the month of December. Due to the absence of any major economic releases the market presented a two-way market on Wednesday.
In addition to the ECB announcement, traders can decide whether to cutback their positions over the long run since the EUR/USD may continue to finished a lower interest rate because of the rate differential against the U.S dollar. To wrap it up, the ECB could plan for an additional quantitative easing program while the U.S Fed is settling an increase for the recovery of the U.S dollar rate hike.
The USD gained an increase versus the CAD after investors paid more attention to a possible hike in US interest rates rather than a recovery in oil prices. The USD/CAD pair went up by 0.0036 or +0.28% at 1.3060.
On Tuesday, the USD/CAD sustained its support from traders after the release of a positive US housing starts data, causing a drastic change in the possibility of a Fed rate hike by at least 50%, after previous indicators showed only a 20% hike.
The USD was previously backed up by healthy June data of US Non-Farm Payrolls and an unexpected upsurge in retail sales data. On the other hand, the CAD was previously supported by the Bank of Canada’s decision to maintain its interest rates while rallying for a stronger and more stable economic status.
The AUD/USD pair shifted from greater rates down to a lesser flat rates earlier today. The Australian dollar is experiencing an adverse situation since its net position turned down against the USD. The AUD trading rate is 0.7476. In spite of the relentless decline of the Aussie dollar, the Reserve Bank of Australia will uphold the reduction of the percentage rates within two weeks, although the rate of the US dollar is surging.
After an hour session last Wednesday, AUD/USD can be purchased at 0.7477 while the pair flattened again in the Asian trade. The New Zealand dollar also regressed with the AUD. The Reserve Bank of New Zealand released a statement about their reduction on the interest rates, with regards to the restoration of the economic performance that were issued after the session.
The investors are expectant about the diversion of the United States' monetary policy after the US Federal Reserve increased in percentage rate and the RBA made an interest rate recession. While the Aussie dollar could possibly heightened their rate since it happened last May 2015.
The EUR/GBP pair finished off last session with a gain of 27 points after the British Pound fell and the Euro sustained its value after the ECB held fast to its policy and rates. Traders are now monitoring Draghi’s address regarding the Brexit vote and the bond buying program. The ECB has left stagnant interest rates in the European Union.
However, the governing council has not taken any steps in spite of the uncertainties brought about by the Brexit referendum. The headline rates are still at zero and banks are still charged at 0.4% as penalty for leaving money inside the vaults of ECB. Retail sales on the other hand fell rapidly since December, with bad weather in the UK put to blame. Meanwhile the present currency volatility caused by the Brexit referendum and the recent attacks in Nice, France and Turkey continue to affect consumer confidence rates.
The EUR/GBP pair went up by 47 points as the British pound reversed its gains after comments from the Bank of England made traders upset, as well as forecasts that the UK will most probably go into recession after the Brexit vote. According to the Chartered Institute of Procurement and Supply (CIPS), which issues monthly Purchasing Manager Index (PMI) surveys of the UK economy, a “Flash UK PMI” survey will soon be published which will reportedly follow the principles of Markit’s Flash PMIs for the Eurozone.
Last week’s market activity already exhibited the effects of the Brexit vote on Britain’s declining economic status. An additional report from CIPS/Markit indicated that business activity in the region has been declining at a fast rate, its fastest since 2009. The Composite version of the survey which was released last Friday printed at 47.7, its lowest dip since April 2009.
Regardless of the news about the subsidence in the Trade Balance during the month of June, the NZ Dollar continued to increase at constant rate.
The currency rate of the NZD/USD sharply moved upward and dropped toward the resistance level of 0.7050. A break beyond the level of resistance or support made the bullish sign to fade considerably. The pair steep down the lower level at 0.7050 while bearish investors take control of the gaining market. As shown in the 4-hour chart of the NZD/USD currency pair, the resistance level is seen at 0.7050, the support lies at 0.6950.
The MACD is plotted along the centerline by which the histogram signals moves in the negative territory showing the strength of the seller but if the index swings to the positive territory, it only means that the buyers will keep control over the market. The momentum oscillator RSI is retraced to the area of the overbought condition in the market which may be observed as a sell signal.
As shown in the 4-hour chart, the New Zealand dollar was able to break the 50,100 and 200 day EMA . Though the bid or ask quotes did not pursue any further as well as the 100-EMA declined the currency pair, the moving average price of the NZD/USD is sloping downward with a bearish MACD which crosses over from the 50, 100, and 200 EMAs.
Trading analysts believes that the bearish market will continue to prevail in the market. Technically, the following stop price will be placed at 0.6980
Prime Minister Shinzo Abe is preparing to issue an economic stimulus package about the competitive sale of Japan's Fuji TV last Tuesday that reached around 27 trillion yen but Japanese Yen still declined against the U.S Dollar. The exchange rate of USD/JPY is 105.568, up 0.953 or +0.91%.
The report from Kyodo News about the upcoming announcement of Abe made the US Dollar to gain more over Yen instead, and it approximately achieve $354 billion or 28 trillion yen.
The stimulus plan of Abe is already prepared before the policy meeting of the Bank of Japan finishes on Friday. The BoJ will lend their support for the monetary policy stimulus.
USD/JPY is expected to receive a support from the U.S Federal Reserve policy statement if they would release it at 1800 GMT because the Fed would not modify their interest rate in any moment. However, many investors are anticipating for a rate hike in Fed since there is a fifty percent possibility that the BoJ will have an increased on interest rate just before the December meeting take place.
A Fed rate hike will probably occur this month when the U.S economic reports will suppose to have a stronger result than expected. The U.S Federal Reserve considers some improvement in the labor market, wage growth and inflation before establishing a rate hike before the year ends.
An inflation hawk will allow the pair USD/JPY to make a progress but may recede if the Fed finishes a dove stances. In the rear of such issues and feedback, the main subject will be the resolution of BoJ on Friday.
The EUR/GBP pair increased by 62 points after the euro went up and the sterling pound declined during Thursday’s session. The currency pair is presently trading at 0.8425 points. The British pound still continued its decline even after a reported second-quarter increase in UK’s economic growth, whose increase was initially seen to be a positive sign for the currency pair.
The UK economy went up by 0.6% during the second-quarter which was sealed by the controversial Brexit vote, a significant increase compared to the 0.4% during the first quarter of 2016. The British pound plummeted its lowest in two weeks after Bank of England policymaker Martin Weale said that PMI surveys would be of importance during BoE’s next policy meeting. He also added that in order for an interest rate cut to happen, there must be a concrete evidence of the UK economy losing its strength.
In July, the Bank of England shocked the financial market when it refused to snip the benchmark for the borrowing cost from its all-time low of 0.5%. However, decision details from last week’s BoE meeting showed that most policymakers will be expected to endorse a yet unknown set of measures in order to help strengthen Britain’s economy.
The EUR/GBP pair traded at 0.8462 points prior to the Bank of England meeting this coming Thursday. Certain factors may weigh in on the value of the said currency pair, such as the Bank of England’s prospective move to cut its base rates below the US rates, which can add to its passive quantitative easing. However, some major banks are speculating that the dollar might be prone to a squeeze following the release of data on Friday.
The EUR has surprisingly done well in spite of the controversy brought about by the Brexit vote three weeks ago. It traded slightly lower than the dollar but is still higher compared to its value last February and has traded higher against the pound, its highest since three years ago. But the IMF has already stressed that Brexit is somewhat more damaging to the EU economy than it is for Great Britain, and the latest ZEW survey has shown reports of confidence going down, with economic sentiment indicators decreasing to its lowest levels since Germany’s financial crisis last 2012.
Some economists believe that this data means that investors are more concerned with Brexit’s effects on the German economy than the financial market’s response to Brexit.
As stated in economic news reports, work compensation in New Zealand speculated for 1.8% but labor price index releases 1.6% compared to their assumption.
The trades for kiwi remained under a negative situation and settled in bearish position yesterday. NZD/USD pair dropped to its lowest price at 0.7140. The resistance is deployed at 0.7250 with the support that appeared in the 0.7150 level.
The MACD is plotted in the positive signal. The histogram narrowed down and reduced the strength of the buyer. RSI has been in the neutral territory. The oscillator gradually declined.
Moving average cross-over is presented in the 4-hour chart which indicated the EMAs 50,100 and 200 in an upward direction.
Analysts estimates that the market would shift to a bearish tone thus the seller's target comes in at 0.7050.
The cable pair GBP/USD went down by 150 points after the good news brought about by the Bank of England. The BoE added stimulus by cutting its rates, which increased the sterling pound’s trading value at 1.3165. The Bank of England increased its asset purchases by 425 billion pounds and cut 0.25% from its lending rates. It has also announced its plans to follow in ECB’s footsteps by buying corporate bonds. Money markets were also completely priced in a quarter-point decrease to the main rates of the central bank, and investors and economists believe that there will soon be new measures which can cause the economy to surge after the UK’s decision to cut itself off from the European Union.
On the other hand, the USD remained firm in spite of Thursday’s most recent low in six weeks, while the GBP remained in a tight range on top of renewed anticipation that the BoE will be cutting its interest rates for the first time since 2009 in an attempt to stave off a possible recession.
The dollar index fell flat at 95.56 on top of a six-week low of 95.003 early this week. The most recent focus for the USD is the expected release of US jobs data on Friday. It is expected that this will cause the Federal Reserve to increase its interest rates on the latter part of the year. US futures interest rates are suggesting a 40% chance of the Fed increasing its interest rates this coming December.
The USD/CAD pair experienced an upsurge at 1.3175 after employment data in Canada disheartened investors, while US jobs data went up at an impressive rate. The week’s forecast for the greenback showed a continued surge for the currency pair. According to Statistic Canada’s labour force survey, the market lost a total of 31,200 in jobs last July, the biggest one-month drop in the last five years. Another report also showed Canada’s international trade deficit, which reached up to $3.6 billion last June.
The said data caused the CAD to go even lower against the greenback, which caused a reversal of a short-term moderate strength. The Canadian economy was deprived of one of the most crucial support in the past years because of the stagnant consumer demand during the last two months. This is while the other sources of growth, like energy patch, business investment, and manufacturing continue its struggle.
Analysts are suggesting that a dip in the Q2 GDP is likely to happen, mainly because of the losses incurred after the Alberta wildfires. Short-term interest differentials in the USD/CAD pair will remain in the USD’s favor due to a divergence in the general growth trends. The CAD also weakens during the latter part of the year, and seasonal considerations are being foreseen for the said pair.
The AUD/USD pair traded lower after disappointments brought about by Chinese trade numbers. The AUD is currently trading at 0.7609, which is higher than its anticipated trading range. The currency did not seem to be affected by plummeting Chinese exports which created hopes for stimuli from the PBOC. The USD eased by a small amount this week after the release of jobs data. Traders are anticipating the rate decision of the Reserve Bank of New Zealand this week and a statement from the RBA head following this week’s rate decision release.
The USD closed Friday’s session with nearly 0.5% in terms of gains while the US 10-year treasury yields went up by 10 basis points to hit 1.59%. The USD traded at 96.11 by Monday morning, putting pressure on the Australian dollar after coming close enough to a multi-month high just before the release of payroll reports.
China’s total export value dipped by 6.25%, decreasing from $192.01 billion to $180.3 billion in a span of just one month. Exports during the first half of the year also went down by 2.1% every year. This significant decrease in Chinese export numbers show that a weak yuan won’t necessarily become an advantage on the part of exporters, particularly in the textile industry, whose export reports showed a decline at 3.7% during the first half of every year.
The PBOC surprised financial markets after devaluing the yuan by decreasing its daily reference rate at 1.87% against the USD. It also bolstered its slow economy by front-lining its stimulus program, with banks allowing lending of up to billions of dollars to various business in order to maintain cash flow in the economy.
The USD/JPY pair plummeted by 11 points, trading at 102.34 after the release of China’s inflation data proved to be better than its forecast. This helped the yen to rally since the Chinese economic situation might see some improvement. Investors are now awaiting more data from Japan, Bank of Japan comments and government statement about stimulus programs. The JPY was initially sent higher by investors, however its fiscal stimulus failed to meet the high expectations set by the market. The USD, on the other hand, went up by a significant amount following a positive US labor market report, erasing most of JPY’s early-week gains.
The Japanese economic stimulus remains as the main focus since BoJ will be releasing its Summary of Opinions from the monetary policy announcement last July 29. This particular BoJ statement has previously caused the JPY to surge since the new policy fell short of its previous expectations. The Bank of Japan is currently in a tight position as it has little room for more stimulus after its easing regulatory policies. However, BoJ predicts that it will be able to reach its headline inflation rate by 2017. However, only its officials believe in BoJ’s ability to reach its targets, since both businesses and consumers are in disagreement with BoJ’s prediction.
The EUR/JPY pair went down further after Wednesday’s session, trading at 113.006, going down by 0.264 or -0.23%. The tight trading range remained as a result of the absence of major economic and political news from Japan and the eurozone. However, Japan’s Tertiary Industry Activity Index was released before the opening of Wednesday’s session and showed an increase by 0.8%, exceeding the initial report expectations which only predicted a 0.3% increase.
Volatility and volume levels were particularly light during Wednesday, since the Japanese public holiday on Thursday will mean closed markets, with volumes expected to be below average. Some major market players will also be having an extended weekend, as most of them will be absent on Friday as well. The EUR/JPY is expected to weaken further due to disappointments caused by stimulus programs from BoJ and the Japanese government, and the ECB is not expected to release another statement until September 8.
The overall trend prediction for EUR/JPY is a decrease in its rates, and is expected to continue, with a possible post-Brexit low of 109.519. An increase in selling pressure is also expected to manifest during the latter part of this year, especially once UK files Article 50 and formerly relieves its membership in the European Union.
Subsequent to the decision of the RBNZ to implement an interest cut rate of 0.25%, the New Zealand's currency increased on its one-month high. Upon arriving at its highest level, the NZD/USD have regressed towards a downward state. The mark price directed from 0.7335 to 0.7225. The resistance stands at 0.7250, the support can be seen at the level of 0.7150.
As shown in the histogram, MACD sloped move towards a lower point and the pair signalled a seller's strength. Furthermore, the fluctuated in the overbought position.
The price of the pair is heading to 50-EMA as indicated in the 1 hour chart . The 50, 100 and 200 EMAs ascended to the top.
Analysts viewed the pair to be bearish and remained to be under-pressure. Trader's stop is situated at the 0.7150 region.
The AUD/USD pair ended last week’s session below its recent high of 0.77, trading at 0.7646. However, the pair remains strong as it enters into a new trading week after traders adjust to Friday’s sudden decrease, although China will be weighing in on the markets following a possible stimulus from PBOC. On the other hand, the RBA reduced its rates by 25 bps and the RBNZ followed suit, applying a 25 bps reduction rate as well.
Prior to this particular move of New Zealand and Australian central banks, RBA’s Glenn Stevens previously denied that cutbacks on interest rates can help in improving the Australian economy. Stevens also added that Australia’s economic slowdown is only natural, given its constant growth during the past few years. He also noted that Australian households will take a while before they can start spending again since a significant amount of domestic debt has put households in tighter positions.
The RBA representative also added that Australia’s lack of a demographic dividend has contributed to the slowing down of the GDP growth. The demographic dividend is the slow growth of the overall working population as compared to the general population growth, a problem which is also being dealt with by Japan. However, Steven’s speech did not have any impact on the AUD, which is up by 0.4% against the US dollar after the USD decreased its value following the release of the US productivity data since traders have already speculated that the Federal Reserve would not have an increase in its rates.
The NZD/USD pair weakened its stance and traded down at 0.7177, although this is still a relatively strong value compared to its counterparts. Investors are taking into consideration China’s mixed signals and the lack of stimulus from the People’s Bank of China. The RBA and RBNZ statements on its rate decisions are making investors and traders uneasy. The retail sales volume rose by 2.3% last June, which is the biggest increase in the last nine years. This is in comparison with a 1% increase last year.
According to Statistics New Zealand, the increase was mainly caused by surges in vehicle sales, personal and pharmaceutical products, and more people spending on eating and drinking out. The retail sales’ total value rose from 2.2% last quarter to almost $20 billion. According to Westpac economist Satish Ranchhod, consumers are benefiting from low inflation and interest rates, which are putting money back in domestic pockets. A strengthened tourist season and strong migration rates are also helping in the surge in spending figures.
Zespri has also stated that it has already improved its pre-export checking procedures, which has already been approved by the MPI, who is currently advising China with regards to kiwifruit exports. Kiwifruit sales has also exceeded last year’s total volume sales, with another 7 million kiwifruit trays in line for export this coming season.
The EUR/JPY pair continued its tight range-trading during Wednesday’s session after trading at 113.195, since traders are now focusing on the minutes from the US Federal Reserve Bank’s July meeting.
The lack of significant economic news from both Japan and the eurozone has led to decreased volatility and volume levels, with the currency pair now range-bound after reaching its lowest level in a month last August 5 at 112.308. However, this unnatural chart pattern might lead to excessive volatility levels, and investors should brace themselves for possibly unexpected economic news.
The ECB is not expected to release a statement until September 8 and the BoJ has apparently run out of economic stimuli, so traders must expect a dull period for the EUR/JPY pair until economic stimuli drives the pair back in activity.
On Thursday, investors are expected to react to several Japanese reports, including the Adjust Trade Balance, where it is expected to be released at 0.14 trillion yen. Japanese exports are expected to decrease by up to 14.0%. Meanwhile, July’s trade balance is expected to fall from 693 billion yen to 284 billion yen.
During the Asian trades session, the pair had restored its position to JPY 100.77 and stops at the 101.14 area which sets off the USD/JPY pair to lead with a rate of 100.74. Furthermore, the rate of the USD increased with the aid of the NY Fed President Dudley whilst the yen became weak due to its prime minister who allowed the intervention of the financial regulators whenever the levels of the rate remained indecorous.
The pair is anticipated to trade over the level of 100.77 and the range of the limit is JPY 99.90-JPY 101.67 and descends perfectly.
The USD/CAD pair went down by 26 points as the USD further decreased its value, with both gold and oil experiencing an upsurge. The said pair is currently trading at 1.2819, with the CAD continuing its present positive value. The CAD temporarily went over the 78-cent level of the USD as the greenback fell in relation to a lot of currencies as oil prices continued to rise.
One of the reasons for the CAD’s recent gains is the sudden upsurge in oil futures, with per barrel amounting to more than $47. Another reason for the currency’s gain is the weakening of the US dollar after calls for the Federal Reserve to take extra caution when it comes to increasing its interest rates. The CAD has been steadily increasing its value during the last 7 trading sessions before the meeting of the Federal Open Market Committee yesterday, which led to a decrease after the release of the meeting’s statement.
Investors are now expecting the release of the Canadian Consumer Price Index monthly report for its yearly and monthly data. Yearly data is expected to fall at 1.3% from last month’s 1.5%, while the monthly data is also expected to go down by -0.1% from last month’s 0.2%. Should the actual data fail to match the expected data release, then traders can expect volatility in prices as the market will try to adapt to the released financial information.
The NZD/USD pair is currently trading at 0.7264 points after gaining a 1% increase during the week due to an upsurge in dairy prices and a generally positive data flow. The positive data for dairy prices was due to an increase in the global dairy auction, with the average pricing going up from 12.7% to $2731 per tonne, with a 6.6% increase during the auction.
Speculators in the market had predicted a 25-point basis cut as central banks are pushing for inflation rates to go back at the 1-3% rate in order to counter high currencies. The governor of the Reserve Bank has also stated that they are willing to further cut down on interest rates since there is a renewed pressure on the NZD as international conditions are continuing to weaken and interest rates remain low. He also stated that the Reserve Bank is currently having difficulties to meet its target inflation rate since the exchange rate must decline first in order to make way for added inflation.
The financial market could also become undermined if the surges in the housing market continue, while the domestic economy remains on the positive side due to an added strength in its tourism and migration data, as well as low interest rates. Commodity prices also increased by at least 2%, its highest index since October 2015.
The EUR/USD pair had little response to the positive composite PMI data, with the EUR trading up to 25 points before the data release and remained at 1.1345 near its highest range point as the USD continued to weaken. Manufacturing PMI data went below its expected range but went above the 50-divider line.
The economic status of the eurozone maintained its status in August, with its growth showing that it is unlikely to be cut back as a result of a possible fallout following the Brexit referendum. The composite PMI for the eurozone rose in July, from 53.2 to 53.3 points, going above the 50 level which separates expansion from contraction and is the best reading for the region in seven months. IHS Markit has stated that the eurozone’s economy remains on the steady side, with an estimated 0.3% GDP for this quarter, similar to the first half average of 2015.
Speculators are now awaiting the Federal Reserve’s chairwoman Janet Yellen’s statement at the Jackson Hole Symposium this coming Friday. Investors will be monitoring this symposium as this has been the platform used by the Fed to warn of either a tightening or a loosening of monetary policy.
The USD/CAD pair went higher during Wednesday’s session, trading at 1.2942 after increasing by 0.0031 or +0.24%. This increase in the pair was due to speculations that Fed Chairwoman Janet Yellen will be delivering a possibly hawkish statement on Friday’s Jackson Hole Wyoming central bankers’ symposium. The CAD also weakened after a sudden build caused crude oil prices to go lower than 1.50%. This sharp sell-off occurred after an unexpected stockpile increase as stated by the US Energy Information Administration, causing renewed concerns about the surplus in international supply.
The government of Alberta, Canada raised its 2016-17 budget deficit forecast to C$10.9 billion last Tuesday, after the disastrous wildfire that ripped through the region caused damages in Fort McMurray’s oil sands hub.
If the USD continues to strengthen against the CAD and crude oil prices further decrease, then the daily pattern chart shows an upside shift in momentum. However, crude oil prices can also experience a sudden surge especially if Janet Yellen’s statement on Friday turns out to be dovish, or both OPEC and non-OPEC countries opt for a production freeze. Large payoffs are expected, however, if crude levels go lower than this month’s levels and if the Fed’s statement signals at least one rate hike before the year comes to a close.
The USD/JPY pair remained within its range while the markets are awaiting Janet Yellen’s speech within today. Aside from the Fed’s statement release, investors are also anticipating the release of Japan’s inflation data, which is expected to cause volatility in the yen’s current value. The BoJ might not be able to extend additional support to either the Japanese economy or to assist inflation rates while employers refuse to have a wage increase, causing stagnation in the country’s economic cycle. The IMF has also recently noticed that Abenomics was not able to use its three-arrow plan in order to boost the economic status in Asia.
The index of Nikkei 225 increased by 10% since June and the JPY has also increased in relation to the USD. This might become a problem for stocks since a strengthening yen would not attract exporters as it can decrease their foreign profits especially when converted to their local currencies. Investors are also worried that the Bank of Japan might dominate financial markets after the BoJ doubled its purchases of Tokyo-based shares, which can cause distortions in prices. This will also make it harder for investors to separate functional companies from non-functional ones, and can also cause misallocation of capital and can reduce incentives which are needed by companies to attain shareholder needs.
The Bank of Japan has previously attempted to revitalize the Japanese economy and put a stop to years of deflation by way of purchasing large amounts of assets, thereby flooding the economy with cash. This has mostly included corporate bonds, JGBs, and ETFs.
The Aussie and the US dollar hover to the range bound periods raised with 11 points at 0.7624. The quantitative measures indicated a low level but will experience a slight effect because of the grand news of Yellen on her Jackson Hole speech. The Australia and New Zealand Banking Group reported that AUD strengthened which influence the economic growth while exports from the region like coal and iron ore are consistent to have the largest volume of supply among countries all over the world.
Subsequent to the unsatisfactory rate of the AUD yesterday due to a lower-than-expected results of the infrastructures, Australian dollar still gained positively.
Australian reports have noted the statement from one of the largest government owned company of the continent, QIC Global Liquid Strategies with the head of the pension managers, Ms. Katrina King said that at US 77 cents, AUD is seen to be overvalued by 10% evaluated by the RBA's newly-developed in-house economic modeling.
While Mr. Roy Teo, an analyst from said that the ABN Amro Bank NV ended their recommendations during the closing of the third quarter since they perceived that the AUD will be bearish with a target price of 72 cents. Reports from Bloomberg issued a forecast from the RBA about the ease of movement on November and expecting the AUD to finished with 74 cents on year end.
The GBP/USD pair decreased by 38 points as the dollar continued to surge after the statement release by the Federal Reserve last Friday. The GBP rallied by 0.5%, hitting its highest in three weeks at 1.3264 following Fed Chairwoman Janet Yellen’s speech at Wyoming. The GBP decreased but is still above $1.31. Prior to the Fed statement, the GBP has been experiencing an increase after data from the Office for National Statistics showed that the UK had a 0.6% economic growth for the second quarter.
Investors are expecting low volatility for the UK market, as the market is closed on Monday due to the Summer Bank holiday. The August survey for UK’s construction and manufacturing data are expected to recover slightly after a massive downgrade in July, which can reduce the possibility of the country going into a recession next year. Investors and speculators are also confident that the UK economy will be revitalized after the Brexit referendum.
The UK will also be releasing its plans this week regarding its objective to retain its single market access on a per sector basis.
The USD accrued by making a 2-week high in spite of the reports concerning the increment in price introduced by the Fed to be imposed for the next month. Furthermore, the yen resumed to subsidize the dollar.
When the pair heightened its rate on Monday, it secured a concrete resistance level at 102.50 but did not permitted any price gains. The current resistance of the doolar and yen is 102.50, the level of support identified at 101.40.
MACD presented a positive movement, the histogram denoted the buyer's’ strength and the RSI is seen in overbought area.
USD/JPY moves through the 4-hour chart and broke 200-EMA and ascended the moving averages of 50, 100 and 200. The trading pair seems bullish after the growth of its resistance level of 102.50.
The AUD/USD pair went up by a few trading points but had limited gains as the US Dollar continued to increase its value. The release of the housing data yesterday caused building permits to go above as expected. In July 2016, the volume of approved houses went up by 0.2%, necclinching an eight-month steady increase, according to the Australian Bureau of Statistics.
In the area of New South Wales and Victoria, the total number of approved houses surged in July by up to 2.4% but has seen a drop in the area of Queensland, Tasmania, and Australian Capital Territory. The AUD is presently trading at 0.7571, a drop from its previous weekly high. Meanwhile the USD is steadily increasing after the Fed statement in Wyoming.
After the non-farm payrolls data were released last Friday, the USD index rallied as the market adjusts into a steady holding pattern.
The USD went up slightly higher than the JPY during Wednesday’s session as investors are waiting for the latest updates on the economic status of the United States. The USD/JPY pair is currently trading at 103.259 points, going up by +0.30% or 0.304. Volatility and volume levels were on a below average level since majority of the currency players in the market are staying on the sidelines prior to the release of the US Non-Farm Payrolls report on Friday, which will be determining the frequency and timing of the oncoming Fed rate increases.
Tuesday’s trading session saw an increase in the USD/JPY pair, after the consumer confidence report in August showed an increase at 101.1, its highest in a year. However, newfound concerns regarding the overall state of the Japanese economy arose as the release of industrial production figures for Japan surprised economists who were expecting two consecutive monthly gains, insinuating the possibility that the Japanese economy might be failing to sustain its progress for the third quarter.
Traders and investors are now waiting for the US ADP Non-Farm Employment Change Report, which is expected to show an increase in jobs offered by the private sector. A below average data could further weaken the USD/JPY, but the onset of the release of the Non-Farm Payrolls Report on Friday might help in alleviating possible losses.
The EUR/USD pair went down by 6 points today as the unemployment rates in the European Union went up and the USD continued to strengthen. The PMI data for the eurozone also came out lower than expected at 51.7 points. The EUR is currently trading at 1.1151, indicating that the pair is currently at the bottom rung of its trading range.
The US jobs data showed an additional 177,000 jobs in the private sector last month, with a significant number of firms and industries adding up their payrolls. On the other hand, last week’s Fed statement are hinting at a possible interest rate hike in September, and if the payroll data comes out stronger than expected, investors should expect an increased volatility in the market.
During the past five years, the August data for US Non-Farm Payrolls has always been erratic, and it is expected to miss again for this period. Traders are then warned of sudden price moves among all asset classes due to the said positions, regardless of whether the data comes out as positive or negative.
The EUR/GBP traded higher by 3 points, going up at 0.8403. However, the pair still remains at the bottom rung of its trading average since the GBP has been bouncing back during the past sessions, especially since UK economic data reports has shown that the Brexit vote did not have that much of an adverse effect to the economy in contradiction to the initial speculations. Financial institutions such as the IMF has also stated that they are now reevaluating the situation since the Bank of England’s foresight has prevented further damage to the UK economy.
Meanwhile, the EUR went slightly higher at 84 pence. However, this is not far from Friday’s all-week low of 83.76 points. The construction and manufacturing surveys for the eurozone showed a major comeback, while the manufacturing PMI data recovered from July’s three-year low and traded at 53.3 points in August, its highest trading point reached in 10 months. On the other hand, the construction PMI data went up to 49.2 points from July’s 45.9 points, going over the speculations indicated in economic polls.
The NZD/USD pair weakened in relation to the USD, trading at 0.7231 points after the Reserve Bank of Australia held fast to its interest rates and monetary policies. The NZD might increase after the release of data from the GlobalDairyTrade auction tonight, where there is an expected surge in the prices of milk powder. Traders and speculators are now monitoring the data for wholesale trade for the second quarter, as well as an update on the RBA’s interest rates.
On the other hand, borrowers are expecting even lower interest rates following low inflation rates. Statistics New Zealand released a report last Monday showing that the Consumer Price Index went up by 0.4% as of June 30. The RBA is predicting that inflation rates would go up by 0.6%, and economists are now expecting the bank to cut down its cash rates by up to 2%.
Westpac has also stated that based on the market prices of financial products, there is now an 80% chance of the RBA cutting down the OCR by up to 70% prior to the release of rates.
The report of the Non-Manufacturing PMI established a slowdown result which also weakened the US dollar and lowered its monthly performance.
During the Asian and Europe session held yesterday the pair existed in the pressured area near the level of 1.1130.
EURUSD interrupted the 1.1200 level then headed in the level of 1.1270. The pair also receded the moving averages 50,100 and 200 furthermore shifted toward the north direction. The resistance approached the 1.270 level whereas the level of support is set at 1.1200.
MACD indicated a softened position of the sellers. RSI moves closer to the overbought condition.
The USD continued to plummet against the JPY during Wednesday’s trading session, dropping by -0.55% or 0.564 points to trade at 101.445 points. This drop in rates was mostly caused by a negative-leaning US economic data, which reduced the probability of a Fed rate hike within the month, and protective sell stops are also being triggered by every new low encountered.
The Institute for Supply Management’s data release for the non-manufacturing purchasing managers’ index also fell at 51.4 points last August, the largest drop seen for the data since November 2008, especially since traders and speculators were expecting 55.4 points. Traders are speculating that the fragile economic data can be used by Fed to refrain from increasing its interest rates.
The labor market conditions data from the Fed also plummeted in August at -0.7 points following a positive data surge in July. On the other hand, the JPY continues to rise following reports that BoJ policymakers had varying opinions prior to the bank’s meeting on September 20-21. The said meeting is expected to tackle the bank’s stimulus program and conduct a thorough assessment of the said program. Analysts are speculating that the BoJ’s move to review its stimulus program may be a sign that its policymakers are beginning to doubt the effectiveness of the nation’s economic stimulus program.
The US is also expected to release its most recent job openings report, with investors expecting data to come out at 5.58M, which is a bit lower from the previous data release of 5.62M. Meanwhile, the Fed is also expected to release its most recent Beige Book data. In addition, Esther George from FOMC will also be releasing a statement on Wednesday, which might have an impact on the market especially if there is a discontinuation of the expected interest rate hike in September.
The dollar made some withdrawal since the Fed had an increase despite that the market is experiencing a very high risk. The growth in the price of oil affected the CAD positively. Investors on the other hand are looking forward for the result of BOC meeting.
The period of indecision of the pair intervenes between 1.2824 - 1.2864. The sentiment of USD CAD is identified to be neutral. The moving averages of the pair maintained a bearish position.
The 50-EMA crosses the 100 and 200 EMAS as seen in the hourly chart. The level of resistance marked the 1.2900 and the current support approached the 1.2800 level.
MACD demonstrated the same position that strengthened the sellers otherwise the RSI is moving towards the negative zone.
The pair is recommended to surge with a resistance level of 1.2900 though there is a tendency to make a reversal and restore a lower position, seller should work for a price increase heading to 1.2800.
The GBP/USD pair increased by 30 points to trade at 1.3370, hitting its highest trading point since the Brexit vote. The GBP was able to gain strength due to the weakening of the USD and strong economic data. The Bank of England previously underwent criticism from Brexit supporters after the central bank stated that the UK economy would soon face a massive slowdown and a recession after the Brexit vote. Post-Brexit data has shown that the UK economy did not wholly suffer the drastic post-Brexit changes that was initially forecasted by analysts and spectators. However, economists are still speculating that it will not be long before Britain goes into an economic slowdown.
The Bank of England Governor Mark Carney defended the bank’s moves against critics who were saying that the BoE has moved too rashly with regards to its handling of the Brexit shock, particularly in August where the bank cut down on its interest rates, eased lending policies, and expanded its bond-buying mechanisms. Carney has since then stated that the BoE has always expected that the main economic sectors would be able to recover from the referendum’s sudden impact in July, and this was shown in the recently published PMI data during the past few days.
The USD/CAD increased by 28 points after a decrease in oil prices caused by a positive US production data and an easing in gold prices. The Canadian dollar is currently trading at 1.3077 points after an increase in international commodity prices, with the USD rallying on Friday after speculations that the Fed might consider an increase in its interest rates within the month.
The USD is increasing in relation to the CAD after a relatively positive US jobless claims data and negative Canadian building permits report data. According to the US Department of Labor, the jobless claims data up until September 3 decreased by 4,000, going down from 263,000 to 259,000. However, market analysts are still expecting the jobless claims data to go up by 2,000 within the week.
Canadian building permits data meanwhile went up by 0.8% in July, exceeding initial expectations for an increase of only 0.3%. The housing price index data also saw an improvement, rising to 0.4% from last month’s 0.1%, while the annual score also increased 2.5% to 2.8%. Investors are refraining from buying into the CAD due to the appeal of other riskier currencies.
The NZD/USD pair went lower during the last trading session, going down 12 points to trade at 0.7341 in the light of an impending interest rate increase by the Fed and confusions brought about by a decision from the Bank of Japan. On the other hand, China’s industrial production data went well above the expected range but did not seem to bring much support to the commodity currency. The Chinese industrial data increased by 6.3% in August as compared to last year, while retail sales data also exceeded expectations from market speculators.
Traders are now monitoring data from New Zealand, with the account balance due on Wednesday, economic data results scheduled to come out on Thursday, and the results of the consumer confidence survey set to be released on Friday. The NZD was also supported by an increase in food prices, which can cause inflation rates to ease a little bit. Bond prices from New Zealand also decreased, with yield points at 1.5 basis points, going higher towards the end of the yield curve.
The EUR weakened while the GBP further increased, causing the EUR/GBP pair to trade at 8.499 points, going down at .0003 or -0.035%. The pair movement has caused a technical reversal top, which signals that investor sentiments are about to drop. Eurostat has also reported on Wednesday’s economic news that the industrial production data decreased by 1.1% in June, with a 0.8% increase in May.
On the other hand, the UK employment data is showing a resiliency in the UK jobs market, even after the Brexit vote. The Office of National Statistics has reported an increase in employment rates, going up by 174,000 to 31.77 million in just three months since July. These employment rates are the highest in 40 years, with the increase in the number going above the expected range by economists. The unemployment rates also remained at a stagnant range of 4.9% in July. Meanwhile, the number of people claiming unemployment benefits went up by 2,400 to 771,000 last August.
However, wage growth data also experienced a gradual slowdown, causing economists and speculators to have unsteady opinions with the set of data released. However, this strengthening of British employment and jobs data may cause the Bank of England to pay less attention to interest rates and maintain its current stimulus once the bank announces it decisions regarding monetary policies on Thursday.
There is an ease of movement of the New Zealand currency although the country indicated a weaker-than-expected result of its economy's health.
The price of the pair is 0.7250 and able to trade with a higher price on Wednesday. The trendline continued to move in an upward direction even before a decline already occurred. The kiwi arrived at a lower position as indicated in the 4 hour chart because it is also currently dealing with a bullish tone 200-EMA.
The price is moving between the 100 and 200 EMAs according to the timeframe analysis. While the 50 and 100 EMAs recorded a lower ratio. The resistance is established at 0.7320, support stands in the level of 0.7250. MACD experienced a downturn which means that sellers have strengthened. RSI merges on the oversold condition. The kiwi and dollar is anticipated to present a negative tone in the market.
The USD/JPY pair dropped 14 points to trade at 102.29 points, well within its recent trading range of between 101.90 and 102.50. The strength of the USD was offset by an impending meeting of the Bank of Japan next week, as well as a renewed demand for the safe haven currency. According to the Wall Street Journal, the Japanese subzero-rates policy had a significant impact in putting downward pressure on interest rates.
There are also signs that the BoJ will be attempting to sharpen its yield curve by increasing long-term rates and suppressing short-term rates. The Bank of Japan has already purchased more short-term government bonds, shifted its bonds and is currently buying lesser bonds. The percentage of long-term bonds went up by half of a percentage since July. However, in spite of the steepening of the Japanese yield curve, the difference between 10-year bonds and 2-year bonds is still half of its value before the effect of negative rates.
Japanese government bonds had their worst selloff in 20 years, especially since the BoJ will be planning to implement adjustments on the maturity range, causing yields to rise on longer-duration bonds.
Due to recent decrease in the oil prices the currency of Canada exhibited a weaker performance in comparison to the US dollar, risk aversion also eventuate though endowed on a limited level only. The pair signaled an upward trend near its upper field.
USDCAD undergone a short assessment and made a weekly high close to 1.3200 then bend over below the testing process. It can be observe that sellers are aiming for the 1.3200 level.
Moving averages are lowered down the price of the pair. As indicated in the hourly chart, the 50-EMA ascends and crosses the 100 and 200 EMAs. Resistance of the pair is at 1.3200, support entered the point of 1.3100.
The histogram established buyer's strength and stay on the positive area. RSI is place on the overbought region.
The USD/JPY traded at 101.866, dropping by 0.390 points or -0.38% as traders and investors are preparing for the announcements of the Federal Reserve and Bank of Japan regarding their respective monetary policies on Wednesday.
Although the Federal Reserve’s announcement on its interest rate policies will be announced in the same period as that of BoJ’s announcement, analysts are speculating that the BoJ’s announcement on its monetary policies will have a greater impact on the market’s volatility and movement than that of the Fed’s announcement. However, this announcement might give cues regarding an imminent interest rate hike in December, which can strengthen the USD and cause the JPY to lose some of its value.
The Bank of Japan is also expected to discuss an extensive review of its monetary policy framework, which includes a combination of its asset-buying program with its negative interest rates.
Speculators are having difficulties with regards to predicting the BoJ’s movement. Some speculators are saying that the Japanese central bank will be changing its mechanism in exchange of a policy which will be combining an increased stimulus while giving protection to banks which are struggling with dealing with the negative effects of interest rates on their respective deposits.
The USD/JPY pair went down by 0.169 0r -0.17% to trade at 101.744 points. The US dollar is currently in a tight trading range against the JPY during the last trading session as various market players are waiting for the Bank of Japan’s announcement regarding its monetary policies, as well as the Federal Reserve’s announcement on Tuesday.
The USD/JPY slightly weakened after the release of the US housing data, which turned out to be a disappointment for traders and investors. The housing data came out at a yearly rate of 1.14 million units last August, going way below the expected range of 1.19 million units. Construction permits also dropped by 0.4% to go down at 1.14 million units in August.
Speculators are saying that the Bank of Japan would have to implement programs with significant monetary policy easing and interest rate cuts in order to further weaken the JPY in the long-term frame. The Federal Reserve must also release a hawkish statement which can indicate a possible rate hike in December. The USD/JPY is also expected to appreciate especially if the BoJ releases a more aggressive monetary strategy combined with an expected 12% interest rate raise by the Fed prior to the central bank’s announcement. However, if the Fed remains cautious on its policies and refuses to raise its rates, then the USD might weaken and the BoJ would be unable to decrease the value of the Japanese currency.
Yesterday, Governor Poloz of the Bank of Canada discussed about the need of the monetary stimulus for the country in order to bolster its economy, however the US and Canadian dollar seems impassive as it performed a steady-going movement.
As it was stated in the yesterday's forecast, the USDCAD traded within a high range near the 200 SMA and possibly to become a firm resistance for the pair and the forecast were already proven right. Buyers attempted to drove the price beyond the resistance level which resulted a fall back to its previous range.
The 200 SMA breaks through the 1.3253, the high is positioned around the 1.3242. Due to a sharp decline of the high, the price settled down at 1.3176 and further changes down to 1.3100 is still anticipated. Moreover, the FOMC announcement will determine if the pair could make an increase within the level of 1.2850.
The USD and CAD appeared to be bearish within a short and medium term. There is also a prediction regarding the oil prices consolidation subsequent to the recession happened few months ago. Part of the forecast is the continuous ranging of the pair between 400-500 daily pip range.
The activity of GBPUSD yesterday resulted the pair to be considered as volatile currency pair in the market.The pound and dollar trades in a tight range with a firm support set in the level of 1.2950. The resistance level maintained 1.3000 even after the Fed announcement regarding the retain the price of current rates, however, they did not issued a specific date for the rate hike.
The vague announcement from Fed rendered an uncertain state of volatility and subsequent to this statement, other pair related to USD have been affected also. The concerned pairs concluded a moderate upward trend followed by the GBPUSD as well.
The USD established a weak position because the market were a little disappointed since Fed did not presented anything hawkish. The pair fluctuated with a resistance level of 1.300 but the movement continued on an advanced level of 1.3035.
In view of the instability of the USD that is expected to prevail until the succeeding session but with a conforming and secure target ranges from 1.3140 to 1.3170.
Investors in the Japanese yen were disappointed with the Bank of Japan’s plans to reexamine its monetary policies. The reaction to the central bank’s announcement caused an initial double-sided volatility. Investors have since decided that this particular decision will have no bearing on the economy and on the Japanese currency.
The BoJ’s announcement caused the JPY to increase significantly on September 21, but the USD had already started bouncing back by September 23. The USD/JPY closed Friday’s trading session at 100.971 points, going up by 0.211 points or +0.21%. The pair however still closed the week lower by 1.26%.
The USD/JPY pair was also further weakened by the Fed’s interest rate and monetary policy statement, which turned out to be less hawkish than expected. The Federal Reserve did not increase its interest rates this month, but there is still a possibility of an interest rate hike in December.
The USD experienced a downward pressure.due to the Fed’s lowered expectations and the decreased possibility of future rate hikes, which can lead to a lowered appreciation of the USD since the central bank’s decision indicates a slow-moving US economy.
The USD/CAD pair went down slightly last week, plummeting at 1.30 points. The currency pair then bounced back from the support barrier, and if the pair goes above the hammer formed then this would mean a very bullish sign for the USD/CAD, and the market would be able to go over the 1.35 trading range.
The oil market is wielding its influence over the financial market, especially since the CAD has become a proxy currency for commodity traders. However, the oil market in general does not look very promising, and speculators are stating that it is only a matter of time before oil prices would take a turn for the worst. This might cause the USD to increase in relation to the CAD in the long-run.
The market is generally expected to go above the 1.35-point level. However, investors are not expected this to occur anytime soon. Pullback levels might be able to offer some measure of projected value and support, given that the market stays above the 1.30 trading range. Buyers are expected to always return to the commodities market, and an upward pressure for the currency market is now felt especially for the possible breakout which could happen at any point now that the volume has returned to the foreign exchange market.
The GBP/USD pair continues to trade at the bottom of its range, closing Monday’s trading session at 1.2950 points. The pair has not yet been able to make a proper recovery from its past price lows. The value of the currency pair will be most likely be decided by the impending adjustments between other currency pairs, particularly the expected EUR/GBP flows towards the end of September.
The GBP/USD pair had strong resistance levels at 1.3140 last week and has plummeted back to the support levels at 1.2950 after failing to go above the resistance level. The pair also momentarily decreased to 1.2910 before going back above 1.2950 points. Analysts are expecting the pair to be bullish for the rest of the daily trading session, possibly going up to the resistance level of 1.3000 points. If the pair manages to go over this resistance level then this would enable the pair to go in the range of 1.3080-3100, where a lot of sells happened during the last time the pair has reached this level.
However, it is still yet to be seen whether the pair would be able to maintain its current value at 1.2950, and could possible lead to a low on Friday at 1.2910 and then 1.2870. The EUR has a somewhat stable bullish stance, and the GBP is also expected to follow this bullish bearing of the EUR, since there are no major UK news that is expected to come out within this period.
The USD/JPY stopped at 0.665 or -0.66% at 100.306. Financiers of the Japanese yen attacked the US investors on Monday as they kept arguing about the BoJ's plan to change the monetary policy.
Despite of the preparation by many investors for the upcoming OPEC meeting and the first presidential debate of the United States, the Yen merchants awaits for the statement of the central bank Japanese Governor Kuroda. As he affirmed last Monday about the readiness of Nichigin regarding the usage of policy tool for the accomplishing the 2% target of inflation.
Furthermore, news released some information during the meeting by which the bank is confident that they will reach their goal, but there are some uncertainties which might leave an impact for accommodating the renewed policy.
The movement of price can be identified upon the debate outcome, considering that this is the major news at this moment.
In case that Mr.Trump got the victory then stocks presumably would be sold-off whereby investors of yen would be safe because it will settle on a higher position.
The sterling pound is currently experiencing a downward pressure following a decrease in oil prices. The buying interest for the GBP/USD went down a few pips to have a current value slightly above the 1.3200 range. The currency’s value dropped significantly from the last trade high and went down between the 1.3200 and and 1.2940 trading range during the last session. The GBP/USD has now dropped beneath the moving averages while the 50, 100, and 200 EMAs is still experiencing a steady decline. Resistance levels are now at 1.3000 points, while support levels are at 1.2900.
MACD levels are currently in the negative but remained in its previous level which indicates that sellers are now increasing their strength. The RSI is sustained at the neutral territory while oscillator levels are expected to decrease.
Sellers would be able to break below the 1.2900 range if the GBP/USD pair would be able to stay within the negative trading range. Analysts are also expecting more sideway trades in the next few hours.
The NZD/USD pair decreased in value after a three-day high, dropping back to the 0.73 trading range in relation to its USD counterpart. The currency pair dropped by -0.26% or 0.7284 points, hovering dangerously close to the 0.7279 trading lows during the last session. The NZD was unable to sustain its bullish bearing, mostly due to sustained weakness in oil prices and a strengthening of the USD.
The commodity currency suffered from significant decreases in oil prices caused by uncertainties in the oil output agreement between non-OPEC and OPEC oil producers. Meanwhile, the greenback was boosted by positive consumer confidence data and PMI data.
The NZD remains to be the worst currency performer during the trading session, especially now that traders are waiting for the release of China’s consumer sentiment numbers. The US durable goods data will also be released later today, as well as the weekly crude stockpiles report from the EIA.
The next resistance point for the NZD/USD pair is projected to be at 0.7297, with a possibility of extending gains up to 0.7332. Meanwhile, the downside support is expected to be at 0.7267 points to 0.7220 points.
The Japanese Yen decreased its value during Wednesday’s trading session, causing the USD/JPY pair to increase its value by up to 0.257 points or +0.26% to close at 100.67 points. The increased demand for commodity currencies and stocks was caused by a report that OPEC had already consented to decreasing its overall output, which last occurred in 2008. Reliable sources from OPEC are saying that the organization would be reducing its oil outputs to 32.5 million barrels daily from its current output of 33.24 million barrels a day.
The USD started strengthening earlier during the session after a recovery of European equity markets increased the risk appetites of investors which then removed their focus from the safe haven currency. The USD/JPY benefitted from the wide-range risk-on sentiment after the statement from OPEC increased activity in the US stock market.
The US market surged primarily due to statements from Fed and a highly durable US goods report. Core Durable Goods Orders data decreased by 0.4% in August, going way below the expected reading of 0.5% and even lower than the expected July reading of 1.3%. However, DGO data was slightly better than the estimate of -1 and went significantly lower than July’s prediction of 3.6%.
The GBP/USD pair continued to sway between 1.2950 and 1.3050 with no definite direction. This indefinite stance of the GBP/USD was mainly caused by an expected break on both sides by traders but has not since occurred. However, the value of the currency seemed to be controlled by EUR/GBP cash flows than any other fundamental factors.
The issues surrounding Deutsche Bank also added uncertainties to the GBP/USD pair’s stance. Deutsche Bank’s recent issues caused stock markets to have a risk-off sentiment and caused the S&P and other technical indexes to drop in value. Moreover, this has caused the pound to decrease its support levels at 1.2950 during the last trading session. Traders should take extra precautions as this might cause major shifts in the financial market and may also cause the USD to increase its value in general.
Speculators are expecting added volatility to the market due to the London fix, as well as a major news announcement from the UK government which is scheduled to be released today.
The USD/CAD pair finished last trading session with its resistance levels resting at 1.3120 points and support levels at 1.3060 points, with the currency pair merely consolidating during the rest of the trading session since there was no major event that came from Canada yesterday. However, the GDP output for Canada will be released today, and this is expected to create a significant insight with regards to the performance of the Canadian economy. Canada’s economy has been steadily weakening during the past few months, although recent data from the nation has not yet been reflecting these changes.
However, the Bank of Canada has been hinting at this particular weakening in their economy, as well as the effect of lowering oil prices on the nation’s economic output and speculators are saying that this might ultimately lead to the BOC cutting back on its interest rates.
The USD/CAD continues to be bullish, mainly because of the current state of the Canadian economy. The USD strengthened as Deutsche Bank’s issues were brought up during the US session which caused the USD to rally at 1.3180 points and is now currently at 1.3153. Support levels are at 1.3060 while resistances are within the range of 1.3200 and 1.3255 points.
The USD/JPY pair had a double-sided trading session on Friday after investors had split reactions to reports of an alleged settlement between the US Department of Justice and banking firm Deutsche Bank. The currency pair finished the last trading session at 101.318 points, going up by +0.29% or 0.288 points, with the USD finishing higher against the Japanese yen.
The BoJ’s decision on its monetary policy is now settled, and investors are now shifting their focus on investor sentiment when it comes to the general direction of the market. Analysts are expecting this particular trend to continue up until Monday’s session especially due to lack of important economic data to be released this week and because of limited speculations prior to the release of the US Non-Farm Payrolls Report this coming Friday.
Traders are now becoming particularly conscious with various economic events and news as they await the next announcement from Bank of Japan. The direction of the USD/JPY was influenced by the US Presidential Debate last week, the Deutsche Bank issue, and the statement released by the OPEC. For this week, speculators are expecting that the USD/JPY would most likely be influenced by the release of the US stock indices and the US jobs report which is set for the end of the week.
The USD/CAD pair continued to trade within the broad range but market players are expecting the currency pair to be on the bullish side. The USD/CAD has proved to be one of the most volatile currency pairs with its 2-way movement but still in the wider trading range between 1.3050 and 1.3280. The release of the retail sales data last Friday turned out to be bad for the market, causing the CAD to decrease earlier this week. However, the bullish stance of the pair was still not able to break through the 1.3280 trading range.
The CAD then bounced back after the release of the OPEC statement, where oil producers have agreed to cut down oil production in order to increase oil prices. The currency pair then decreased in value. But Canada’s GDP data came out way above the expectations of investors, increasing the USD/CAD’s value but not enough to break through the bottom range, therefore settling within the neutral territory.
For this week, investors are awaiting the release of the Canadian employment report as well as the NFP report which is both slated to come out this Friday. Market players are expecting increased volatility once the mentioned economic data are released, together with the strengthening of the US economy due to an impending rate hike and the weakening of the Canadian economy due to the OPEC report.
The USD increased in relation to the Japanese yen during the last trading session, with the USD/JPY pair closing the session at 102.90 points after increasing by +1.24% or 1.265 points. The pair’s current value is its highest trading level since September 15, putting pressure on the currency pair to exceed its highest level last September 14 at 103.351 points.
The increase in the USD was mostly due to a significant increase in US Treasury yields. The positive ISM Manufacturing PMI data released on Monday triggered an upsurge in Treasury yields, increasing the possibility of an interest rate hike this coming December. Comments from Fed officials also strengthened the US dollar, after Federal Reserve President Jeffrey Lacker stated that there is a high probability that interest rates would be increased and that inflation rates would be put under control by increasing borrowing costs.
The CME Group’s FedWatch indicator also showed that traders are seeing a 63% chance that the Federal Reserve would increase its interest rates during its meeting on December 13-14, an 11% increase from the previous reading after the last Fed meeting on September. This was also cemented by comments from the Federal Reserve Bank of Cleveland’s President Loretta Mester, who called for higher interest rates from the Fed. Fed officials, however, are keeping their respective profiles low as of the moment.
The recent increase in value of the USD has caused certain currency pairs like the USD/CAD to move forward with their bullish runs, a move that has long since been anticipated for the currency pair during the past week. The USD/CAD pair was able to push through its resistance levels at 1.3140 points, even going beyond 1.3170 where it was met with marginal resistance and went with support levels after a gain of 1.3140 points.
The Canadian and US trading sessions saw the USD increase its value by a significant margin and has caused the USD/CAD to go through the 1.3200 trading range, and market players are expecting that the pair will be able to reach its short-term targets at 1.3240 and 1.3280 with relative ease in just a few days. The currency pair is now at the support level of 1.3173 but is still expected to go above its present trading range.
Market players are now awaiting the release of the Canadian trade balance data and the ADP Non-Farm Employment data from the US. These economic data should give traders an idea of the relative strength of the two economies, as well as the possible impact of lowered oil prices on both countries. This could then lead to an increased volatility towards the end of the next trading session.
The EUR/USD pair had increased volatility levels and was able to break through the small-scale trading range and went through the larger-scale trading range of 1.1145 and 1.1245 points. The early part of the trading session saw the USD gaining strength after it lost a significant amount of its value last week. The euro was also able to break through its previous support levels of 1.1200 to gain new support levels of 1.1145 before going as low as 1.1137 points. The EUR/USD pair was also affected by the news that the ECB is currently studying the tapering of the QE.
The EUR/USD went back at 1.1200 after the ECB rumors and went as far as 1.1238 before another headline was released, saying that this particular rumor with regards to the QE was not discussed in any of the ECB’s meetings, prompting the currency pair to go back down at 1.1200 points.
This highly volatile movement of the currency pair is a positive sign for traders who are currently looking for market volatility. The market is currently not expecting any major news announcements from the EU, with the US ADP Non-Farm Employment data the only announcement expected from the US market. The ADP data will act as a precursor for the NFP announcement on Friday which is expected to provide a useful insight on the current state of the US economy.
The CAD increased its trading value following the release of the US crude oil inventories data this week, which portrayed a drop of 3 million barrels. The drop in the weekly data for stocks was unexpected since forecasts showed a significant increase after consecutive drops in the data. The CAD has been previously on the lower rung during the first few hours of the trading session after the data released showed a decrease in trade deficits from August’s $1.47 billion.
Meanwhile, the Bank of Canada is not yet expected to cut back on its interest rates in spite of the ambiguities portrayed in the recent trade data. This is because the BoC is still awaiting the fiscal stimulus data from the Canadian government and will keep the CAD from further appreciation by using dovish stances. Non-resource exports were not able to increase and the direction of oil prices are still uncertain after the OPEC’s cuts in its production will still be subjected to another review in another meeting in Vienna.
The USD/CAD pair decreased by up to 0.267 points during the last trading session. The currency pair is presently trading at 1.3166 points following an increase in oil prices. The CAD initially traded over the 1.32 price levels prior to the release of the crude stocks data but eventually plummeted to 1.3166.
The sterling pound continued to plummet during Thursday’s trading session, after the GBP/USD pair dropped to 1.2601, its lowest ever in 31 years. The currency pair also decreased by 400 pips or roughly 5% during the Asian trading session in just a matter of minutes. Prior to the Tokyo session, the GBP/USD pair traded with a 10-pip spread and the currency’s charts portraying lows at 1.2000 and below. However, there is no clear reason yet as to what caused the currency pair to suddenly backslide. Analysts are expecting that the currency pair would further drop in the coming sessions due to massive political and economic uncertainties, as well as deterioration of the UK economy.
The GBP/USD was able to immediately revert back to the 1.2400 trading range. However, the technical indicators for the pair is presently erratic due to its recent activity. However, if the GBP/USD manages to maintain its risk levels below 1.2500 points then the currency pair would be able to recover even up to 1.2600. Market analysts are however warning traders that more sharp declines and sudden surges are to be expected in the upcoming trading sessions, particularly during this period that traders and investors are awaiting the release of the US Non-Farm Payrolls data in order to gauge the level by which they would resume their selling based on the stance of the pair.
The USD/CAD pair continued to consolidate for the duration of today’s trading session although it initially attempted to break through resistance levels at 1.3250 points following a late onset of the US dollar’s strength but was immediately countered by a sudden wave of sellers, causing the pair to drop below 1.3200.
Support levels for the pair came in at the 1.3180 trading range with resistance levels at 1.3250. These indicators are expected to maintain the USD/CAD’s price action for today’s session. The price action for the pair is largely dependent on economic data to be released today, such as the US non-farm payrolls data which is scheduled to be released today together with employment reports from Canada. The USD/CAD pair is then expected to have increased volatility compared with other currency pairs due to the release of these highly relevant data.
Traders are advised to keep out of today’s session since the economic data from Canada and US are expected to come out at opposite terms, which can make it hard for traders to predict the pair’s future price actions. Traders are also reminded to avoid the high volatility levels of the currency pair and wait for the increased activity to die down before going to trading on the USD/CAD.
The JPY went higher in relation to the USD after a long losing streak in nine trading sessions after the release of a somewhat negative US Non-Farm Payrolls report disappointed investors and traders. The USD/JPY pair traded at 102.906, decreasing by -1.00% or 1.042 points.
The US Non-Farm Payrolls report came out at 156,000, way below the expected 177,000 prediction for the NFP in September. Unemployment rates also increased by 5.0% from the previous data release of 4.9%. However, the data for the Average Hourly Earnings increased from 0.1% to 0.2%, with limited trader reactions since the data met its previous expectations.
Investors are now speculating that the disappointment in the US payrolls report makes it impossible for a Fed rate hike in November, but is still strong enough for an interest rate hike in December. Market buyers were also compelled to book their profits due to a slight drop in US Treasury Futures data.
The decrease in the USD/JPY came as a surprise to some investors since the economic data release, although on the negative side, is still strong enough to maintain speculations for an interest rate hike before 2016 ends. The pair is seen to further weaken since Monday is a bank holiday, and the absence of major market players could cause the pair to lose some of its current trading value.
The USD/JPY pair closed the last trading session at 103.516 points during the last trading session, dropping by -0.08% or 0.085 after investors flocked to the safe haven currency due to a break in crude oil and stock prices, wiping out the currency pair’s gains during the earlier part of the trading session.
The USD was backed by support from statements that the 10-year yields for the US were at its highest levels in over four months. Due to positive interest rate differentials, the dollar consistently appreciated against the JPY during the past eleven trading sessions, however, the carry trade exhibit last Tuesday proved to be crucial for the US dollar.
Analysts are saying that this particular scenario might be could possibly occur again on Wednesday’s trading session due to the impending release of the Federal Reserve’s meeting minutes. These minutes will be of use to market players in order for them to gauge the overall sentiment of Fed officials with regards to the expected interest rate hike in December. Although the meeting minutes from the Fed usually only cause little volatility in the market, analysts are saying that this particular report might become an exception, especially since the USD/JPY is expected to have a reaction to Treasury yields movement and might reflect its price action in the previous trading session.
The EUR/JPY pair was able to retain its support on the 50-DMA and expected to incur additional losses in the light of an expected increase in the USD/JPY pair. The cross-currency pair is now at 114.40 points, going above the 38.2% Fibonacci retracement of 114.09 points. The EUR/JPY dropped yesterday to 114.01 points after constant rejection in the 100-DMA in the past week.
All eyes are on Bank of Japan as BoJ Governor Kuroda is slated to make a speech today. Meanwhile, European industrial production data is also expected to be released today. But the major announcement for today will be likely coming from the Federal Reserve’s Esther George and William Dudley, who is expected to announce that there is a huge possibility for an interest rate hike in December.
For the cross-currency pair’s technical indicators, the pair’s break through at 114.09 could possibly lead to a low of 112.79, which could then lead to a leveling of 112.00. On the other hand, an increase over the 10-DMA of 144.76 could cause another break at the 5-DMA of 115.05, which could ultimately lead to a confluence of 115.60.
In the outset of the US session, the greenbacks heightened and together with the loonies attained the resistance region at 1.3280 despite of the news regarding the undermined the spot price of the oil. The USD CAD remained unaffected even though the FOMC minutes were not released yet. The pair attempted to make a breakthrough over the upper extreme of 1.3290 though it fall short once again and finally settled around 1.3282
Consolidation is still anticipated for a few more days since there is no driving force present that lead the currencies to the level of resistance.
When the fundamentals realized that the issue regarding petroleum prices negatively influence the economy of Canada then it would finally be visible. As a result, there is a possible price modification that would elevate to the 1.3280 resistance, at the same time obtaining the next spot at 1.35 and 1.4000.
The pound and greens remain in an uncertain period, the price became affected due to the current events plus some fundamental determinants including the general strength performed by the USD and the risks associated with Brexit, these made the pair to cut loose its gains from the 1.2325 high to 1.2300 region. The subject matter have its way until the EU session which also added to the afflicted factors is the UK Parliament discussion regarding the Brexit activities. This occurrence decreased the pair into 1.2200. Following the statement from FOMC during the US conference because there are three protesters who insisted for a quick hyperinflation. This event is defined to be hawkish as per the market and this made the USD to gain more strength but the GBPUSD approached a lower position at 1.2100.
This morning a major news aided the pound and greens to immediately recuperate due to a weak trades from the Chinese investors, seeing the two to achieve 1.2188 region.
Mainly, GBP/USD is surrounded by news risks considering the fact that its has failing background which cause it to a complicated method in acquiring confident trades. As a result, it is recommended to steer clear of sterling and dollar until it obtain a well-established regions.
The GBP/USD pair had a stagnant run during the last trading session after the sudden drop in its value last week. The pair had an average day-to-day range of a minimum of 200 pips. The currency pair is now consolidating between 1.2130 and 1.2550 points, with a possible break in the resistance level of 1.2550 opening the way for the pair to reach 1.2360, allowing the pair to have selling opportunities. The currency pair is now trading within the 1.2557 range and analysts are awaiting whether the pair would break through resistance or come down at the support level.
The GBP/USD continues to be affected by the Brexit, and analysts are speculating the pair will continue resonating its effects for another two years, or until such time that the UK finally completes the referendum.
Market players are now waiting for an announcement from the Bank of England’s Governor Carney, as well as a statement from the Federal Reserve’s Janet Yellen and the release of the retail sales data later today. Expect an increased volatility for the pair at the close of today’s trading session. Analysts are generally throwing caution to the wind with regards to transacting with this particular currency pair, especially due to the Brexit and the recent drop in the Chinese economy.
The last trading session went bad for the EUR/USD pair due to the release of China’s trade data, which turned out to be extremely lower than expected, with the data showing that the nation’s exports were the most affected sector. The trade data has now led to investors becoming uncertain with regards to the state of the Chinese economy, especially since the Chinese market is one of the largest markets in the world and any movement would certainly affect all major economies. As a result, the Asian stock markets experienced a significant decrease, as well as the S&P500 for the region. Meanwhile, the USD increased its trading value, causing the EUR/USD to reach support levels at 1.1000 points.
The selling for the pair increased in activity which caused the pair to hit support at 1.1000, even going as far as 1.0985. However, the currency pair eventually recovered from the support level and went up to 1.1050 points, with the pair now at the 1.1054 trading range.
Market players are now expecting increased volatility with regards to this currency pair due to the Fed’s statement which is scheduled to be released within the day, as well as the retail sales data to be released from the US. The pair could possibly go into reversal but is expected to immediately get back to its previous trading range during the session.
The Canadian dollar inched higher than the USD during the last trading session in the light of the impending US retail sales data to be released on Friday. The risk appetite for the currency pair dropped due to a slowdown of the Chinese economy, with the nation’s exports contracting 10% annually and imports sinking by 2% in spite of a drop in commodity prices.
Oil prices rose due to the weakening of the USD and an offset in crude stocks due to drawbacks from inventories in refined products. Meanwhile, Canadian house prices increased by 0.2% last August, while prices of real estates are now under close monitoring due to an increase in household debt fuelled by lower interest rates, which might become unsustainable for the Canadian economy.
Meanwhile, the Canada-EU Trade deal has already passed another test after the German court denied a petition to block the said agreement. EU Ministers will be having a meeting next week with an aim to discuss this particular deal following concerns that the Belgian opposition might attempt to block the said deal due to the possibility of farm imports overshadowing local farm production.
The GBP/USD pair continued to trade ambiguously after traders and investors expressed their uncertainties over the current state of the sterling pound, especially now that the UK’s strategies for Brexit have also become uncertain. The market has become dependent on the decision between the European Union and UK with regards on how to go about the Brexit, but so far this has not created enough stability for the market players.
The pricing of the GBP/USD pair remained highly volatile for the rest of last week’s session, with the pair having reactions to movements from both the European Union and Britain, creating difficulties for those wanting to choose a trade direction for the pair. In the coming weeks, a significant number of economic data is expected to be released which will greatly affect the movement of this particular currency pair. For this week, investors and traders are expecting the release of the US CPI data, as well as the US Presidential Debate. The UK retail sales data as well as the UK CPI data will also be released within the week. The recent data releases for the UK turned out well for the most part, but the uncertainties surrounding the Brexit will most likely affect the market.
The USD decreased its value against the JPY during Monday’s trading session after the release of US economic data which turned out to be lower than expected, on top of investor reaction to comments from Fed Chairwoman Yellen last Friday. The Empire State manufacturing index was released last Monday, with the index dropping by -6.80 in October, faring worse than the previous data of -2.0 and falling below the expected +1.1 estimate.
Meanwhile, the data for Industrial Production also fell below its expected reading of 0.3% since the data came out at 0.1%, but was better than the September release of -0.5%. The Capacity Utilization Rate data came out at 75.4%, going a bit higher than the previous data release of 75.3% but still lower than the expected reading of 75.6%.The Federal Reserve’s Vice Chairman recently warned that low interest rates might increase the vulnerability of the economy due to impending recessions.
For the last trading session, the USD/JPY pair traded at 103.779 points, going down by -0.37% or 0.387 points. Market players initially reacted to Yellen’s statement the Fed might wait for inflation rates to go beyond its expected range before inducing an increase in interest rates.
The CAD traded within its previous range after the USD and commodity prices had a slow start for the week. Fed representatives have kept traders and market players on their toes in light of the expected interest rate hike in December, but the US fundamental factors are shifting the focus on the release of the inflation data in the coming days.
The Canadian Foreign Security purchases data increased by 12.74 billion, with the input of foreign funds in the country marking the eighth consecutive month of positive net investments.
For the USD/CAD pair, the pair decreased by 0.08% during the last trading session, with the currency pair now trading at 1.3129 prior to the expected rate statement release from the Bank of Canada on Wednesday. The CAD decreased in value due to the decrease in crude oil prices last Monday, and the CAD will be dependent on the BoC’s rate statement on Wednesday, with the BoC expected to become more dovish in spite of little chances of an interest rate cut within the week, mostly due to the expected interest rate hike of the Federal Reserve later this year.
The EUR/JPY pair has recently experienced a trading high of 116.30, a long shot from September’s monthly low of 112.00 points. The currency pair backtracked from the Fibonacci levels of 23.6 and 38.2 last week after support levels went up to 1114.00-114.12 due to the 20-50 DMA, as well as the Fibonacci levels of 50.0. A breach beyond this level might cause a drop at 113.00 and 112.00, which is in line with the weekly and monthly time frames for the currency pair.
The EUR will be reliant on this coming Thursday’s events, with the European Central Bank seemingly uncertain on whether to increase stimulus to an already expanded policy due to increasing inflation rates and an increase in momentum levels as suggested by growth indicators. However, the ECB still has to remedy the decrease in supply as a means to keep its current program in line and make way for another program, albeit at a reduced level.
Market players are expecting a particularly uneventful ECB statement due to speculations of an unchanged policy and ECB merely repeating its calls for politicians to improve structural reforms in order to boost economic growth in the European Union and to increase inflation in the region.
The EUR/USD pair cannot seem to break through the 1.1030 range and move upwards above this particular range. This is because when the pair tries to move towards 1.1030, the pair has always experienced a lot of selling, causing the pair to be pushed back into the 1.0950-70 trading range.
This activity was also seen during the last trading session, after the EUR/USD pair again tried to go beyond the 1.1030 range but was immediately met with resistance due to the release of the US CPI data, which caused the euro to further drop in value and causing it to revert back to the 1.0960 region. The relatively solid support level of the pair has only caused a minor reversion for the pair after the EUR/USD bounced back to 1.1000 in spite of the significant weakening of the US dollar while traders are waiting for the release of China’s GDP data.
For today’s trading session, there is no major economic news to be expected from the eurozone today, although the US building permits data is set to be released within the day. Market players are not expecting any major movements following this release and bulls will be continuously concerned with the drop in the trading value of the EUR/USD. This is because the EUR will be suffering once the USD manages to bounce back from its weak state if the pair still does not manage to break through the 1.1030 while the USD has not yet regained its strength.
The AUD/NZD pair is currently trading at 1.0624 after dropping by -0.50% during the last session with a session high of 1.0696 points and a session low of 1.0613. The currency pair has decreased significantly following a negative Australian market report release, and the Reserve Bank of Australia is now considering ways on how to further stimulate economic factors for the nation.
The currency pair plummeted from 1.0696 to 1.0612 on the hourly chart, with the AUD exhibiting remarkable resiliency in the recent bulls in the market. The NZD and AUD are both exceeding expectations and gaining significant profits especially now that the market is primarily driven by oil prices.
Since the currency pair is at the 1.0624 region, resistance levels is expected to be at the last session low of 1.0626, 1.0633, and 1.0667 for the hourly EMA. Meanwhile, support levels are expected to be at the daily S1 of 1.0621, its daily low of 1.0613, and the daily 20-SMA of 1.0594.
The USD/CAD pair exhibited extreme volatility during the last trading session which was mainly caused by a slew of Canadian news and events which were consecutively released during the session. First was the release of the CAD’s overnight rate which came out at the expected range of 0.5%. The Canadian monetary policy report also came out and came in short of the previous predictions by 1.1%. This caused the USD/CAD pair to break through the 1.3100 range and also attempted to move towards the 1.3000 region.
The data for the oil inventory reports was also released, as well as the Bank of Canada’s press conference details which showed a massive decrease in the overall inventory, triggering an increase in oil prices and increasing the value of the CAD.
Support levels for the USD/CAD pair is currently at 1.3060, 1.3000 and could possibly dip into 1.2930. Resistance levels for the currency pair is expected to be at 1.3120, which was already broken by the currency pair and could possibly go over the 1.3250 region since the pair is currently at the 1.3141 region. The market is not expecting any major economic news releases from US or Canada any time soon, and traders are still speculating that the effects from yesterday’s subsequent releases would still have an influence on the currency pair’s value.
The USD/JPY pair reached a daily session high of 104.20 points before closing down the trading session at the 103.82 trading range, with daily lows for the pair recorded at 103.52 points. The USD/JPY received rejection at the 104.00 region during the Tokyo session and is currently at the 103.86 region.
The Japanese economic data for this year took on a generally disappointing note, with export data for the nation plummeting by 6.9%. Import data also dropped by 16.3% at the same period, with trade surpluses worth 498.3 billion yen. Chinese exports also decreased by up to 10.6%, causing the Bank of Japan to face renewed pressure with regards to lowering the value of the yen. However, analysts are saying that a Fed-induced drop in the yen might not resolve the issue of dropping Chinese exports since the yuan could decrease further as compared to the yen once the Fed decides to implement its long-awaited rate hike.
The economic calendar for today is primarily dominated by the Fed, with the possibility of an interest rate hike clocking in only at 70%. This possibility is not expected to increase any time soon due to the impending US national elections which overshadows hawkish sentiment from various policymakers. On the other hand, the yen might become more stable due to dovish statements and bearings.
The EUR/USD pair closed down last week’s trading session at its lowest levels since March after the pair dipped significantly last Thursday due to a statement from the European Central Bank that it will be maintaining its current economic policies. However. ECB’s Mario Draghi will be maintaining its substantial accommodation until such time that inflation rates revert back to the 2% range which will stave off any major policy changes until December. Meanwhile, consumer confidence for the European Union increased by up to -8.2 from October’s -8.
In the coming sessions, market players are shifting their focus to the reading of the US preliminary Q3 GDP reading, with market players expecting a significant growth in the US economy. For the European Union, the market is currently awaiting the PMI data for the month of October, with data for manufacturing expected to increase significantly and services data regaining some of its stability after declining in September.
The EUR/USD pair has already reached a critical trading range, especially since the pair has been unable to get out of the 1.0840 -1.1460 region. However, the impending imbalance brought about by the ECB and the Federal Reserve could possibly cause the pair to break through this particular range. But for now, the currency pair is expected to drop further into the 1.0505 range, and further drops in value are expected for the coming trading sessions.
The EUR/JPY pair dropped in value for the second straight week, recording session lows of 112.60 last Friday and closing down the last trading session at 112.96 points. The Japanese yen was boosted by statements from the Bank of Japan’s governor Kuroda, who has said that there is little possibility that the financial activity in the region would be facing actual risk-taking anytime soon. Furthermore, Kuroda also added that the BoJ might delay hitting its inflation target of 2%, with the imminent weakness in the euro adding up to the bearish stance of the currency pair.
The EUR/JPY has been trading with the 112.05-116.30 since July, and charts for the currency pair are showing that it could possibly go even lower especially since technical indicators for the currency pair are exhibiting bearish stances. The pricing for the EUR/JPY has also received repeated rejections while attempting to break through its 100 DMA.
However, if the pair manages to go beyond its recorded lows, then this could cause the pair to reach 112.05 points, while a further drop could lead to a speeding up of the pair’s momentum with regards to its bearish stance.
The Canadian dollar is moving uptrend because of the oil market price activity. Hence, the pair USD/CAD broker higher last Friday because of signs of market exhaustion keeping a bullish pressure with the US dollar. Traders should also monitor the market activity of oil market as it is substantial in the pair’s proceedings.
The charts formed a shooting pattern last week relative to the crude oil market activity. With this market behavior, it could incite a spur in long positions and could further increase higher than 1.35 level. For the past days last week, a candle pattern was predominant which is advantageous for buyers and send them active. A hammer pattern was also sighted as it leaped to the 1.30 physiological level.
A bullish pressure is about to set in after forming new highs and strong support. This could persist and which is mainly due to the strong position of the US dollars hence, indicative of more bullish pressure. Traders have to find means in case of drawback when go for a long position. It is expected for the physiological level to stand at 1.32 level being the initial support level and could rally going upward.
The USD decreased its value in relation to the JPY during Wednesday’s session after yen traders resorted to safety buying as a reaction to the drop in US equity markets. The trading session closed down with the USD reverting back to its previous value against the JPY. The USD/JPY is currently at 104.468, increasing by up to +0.25% or 0.260 points.
Analysts are stating that the USD dropped further due to concerns regarding the Federal Reserve’s monetary policy and uncertainties regarding the impending US presidential elections. However, the rallying of the USD is an indicator that there is an increased possibility for a Fed rate hike in December, and risks are possibly leaning on the downside territory. This will then add more focus to the release of the Durable Goods report on Thursday and Advance GDP data which will be released this coming Friday.
Thursday’s trading session is expected to have more double-sided trades since traders are monitoring the general direction of the US Treasury yields, as well as high-risk assets demand. Traders should also consider monitoring the stock market, since the JPY is expected to increase if support levels for the US equity markets starts decreasing.
The CAD experienced substantial deprecation during Wednesday’s session in spite of a disappointing US crude inventories data. US oil stocks decreased by up to 600,000 bpm last week, going even lower than the expected increase of up to 700,000 bpm. This decrease in oil prices caused a decreasing trend in the Tokyo session after the data for the API inventory exhibited an increase by up to 4.8 million barrels, but crude prices were able to revert immediately after the US Energy Information Administration released its reports. However, these gains were again revoked after traders expressed concerns regarding the OPEC deal.
The USD/CAD pair experienced a significant increase by up to 0.213% during the past session, with the pair now trading at 1.3664 points after the CAD decreased in relation to the USD due to a drop in energy prices. For the rest of this week, CAD traders are expecting the release of the US durable goods data this Thursday. However, the main focus for this week is the flash GDP for the US. The overall growth for the US is showing an increased momentum, and this is expected to cause the USD to significantly increase since this will further cement the possibility of a Fed rate hike in December. However, a further lack of activity from the Federal Reserve might prompt the Bank of Canada to intervene on behalf of the central bank’s monetary policy.
The CAD experienced a drop in relation to the USD after dovish statements from the Bank of Canada last week plus corrections in crude oil prices put downward pressure on the CAD. The USD/CAD pair was able to maintain its bullish stance during Thursday’s trading session, with the pair remaining at the 1.3400 region, which is the pair’s current critical range. However, the pricing for the currency pair was able to drop slightly prior to the opening of the New York session.
The USD/CAD was able to go over its current moving averages after its 50-EMA provided ample support for the currency’s price in the daily chart. However, the pair is seen to have probable difficulties with regards to moving lower from the 50-EMA. The moving averages for the currency pair are generally higher, and analysts are expecting resistance levels to be at 1.3400 points while support levels are expected to be at 1.3300.
The MACD indicators for the USD/CAD pair is still consolidating within its levels, while the RSI remains at the overvalued trading range. Analysts are expecting that if the pair manages to go break through the 1.3400 region, then the USD will be able to have more profits upon reaching the 1.3470 range. On the other hand, if the pair drops and hits the 1.3300, then the market is advised to look at the trading range of 1.3250.
The AUD/JPY was able to remain in the positive side of the chart as the USD incurred more losses against the JPY and increased pressure on the cross currency pair. The AUD/JPY pair hit session highs at 79.42 points but eventually reverted back to its previous range of 79.10 points.
While the AUD/JPY lost some of its previous gains, the AUD/USD pair increased further and was able to reach its highest range in November after the Australian retail sales data showed a 0.6% increase as compared to September’s data of 0.4%. However, the increase in this currency pair was not enough to outweigh the decrease in the value of USD/JPY.
If the AUD/JPY manages to go over 79.42 could possible lead to a strong resistance level at the 80.00 trading range. If the pair closes the trading session over the zero figure then this could induce more bulls and could possibly cause the pair to go further at 81.52 points. The pair’s support levels is expected to be at 79.00 and could cause a sell-off at the 78.48 and 78.00
The EUR/USD is expected to incur significant gains due to risks that Donald Trump could possibly win the upcoming presidential elections, something that the international market did not anticipate. However, some market players are also saying that the USD would be able to regain some of its strength over a few days and a relief rally would occur should Clinton come out as the winning candidate in the elections. Prior to the opening of the Monday session, Clinton was already cleared by the FBI with regards to her e-mails and this is expected to be good for her campaign and has already caused some currency pairs to open up certain gaps.
The EUR/USD pair has already dropped by up to 70 pips and this is just a sneak peek of what could possibly happen if ever Clinton wins the presidential elections, especially since the market is now anticipating a Clinton victory with Trump’s chances becoming invariably slim.
Market players are expecting that this particular gap in the currency pair will be temporarily covered, while the USD is set to regain some of its lost value during the next trading sessions, especially with the impending presidential elections.
The USD is expected to increase significantly against the yen during Monday’s trading session as a result of investor reaction to reports that the FBI will be dropping its investigation of US Presidential candidate Hillary Clinton’s e-mails and will not be filing any charges against the Democratic candidate.
This then means that the Monday session is most likely to be a risky day as investors are expected to go on an aggressive USD and stock-buying spree especially after last week’s sell-offs. Investors are also expected to sell their safe haven assets which were bought as hedge against the probability of a Trump victory, which includes the JPY, EUR, and gold stocks. The USD/JPY dropped to its support region located at the 102.799-102.155 range, going down at 102.533. The pair is expected to rally back to at least 104.03 to 104. 383 if the short-term rally for today’s session proves to be strong enough for the currency pair.
Market players are expected to mainly focus on the upcoming elections even with new economic events taking place, after which, the market is expected to shift its focus on the expected Fed rate hike this coming December. These events are expected to induce an upward shift in the value of the US dollar. The Bank of Japan is expected to release the minutes of its latest Monetary Policy Meeting, while the Average Cash Earnings is expected to be released at 0.2%. Minor reports from the US to be released this Monday are the Loan Officer Survey, Labor Market Conditions, 10-Year Bond Auctions and Consumer Credit data.
The stronger U.S. dollar overpowers Australian dollar. Last week, the greenback declined as the polls showed a lead of the Republican candidate Donald Trump against the Democratic candidate Hilary Clinton. Now, it has been reversed. Greenback is anticipated to rise up again as the news regarding Hilary Clinton’s issue with the private email server, while she was still in the position as the secretary of the state, has been cleared. This sudden boost in prices is a great opportunity especially for audacious investors and gain profit to low prices and buy stocks to avail funds. Investors are expected to hedge funds to narrow risks in this situation.
Aussie is considerably a risky asset hence, a bullish trend may not create a big change in the Australian dollar. Yet, the next move of this pair cannot be clearly known compared to other major currency such as Yen and dollar. Traders have to be careful on their next move and there are other pairs that are more stable.
The main concern in U.S. is the presidential election while the price activity of Aussie depends on the AIG Construction Index and the ANZ Job Advertisements report. There are other minor news in Australia namely: the Labor Market Conditions Index, Loan Officer Survey and Consumer Credit. However, these are expected not to have a major influence in trading.
Aussie is in a neutral state today and investors should be mindful that the price activity may change drastically as it might go a sudden dive in response with the news. As the U.S. presidential election gets near, the financial market is still shaky with investors being unsure to take a position prior to the election.
It is expected for the pair USD/CAD to have less volatility for this week compared to other currencies with global financial market shaken because of the much awaited U.S. Presidential election. The results will be accounted shortly after the election. Volatility is highly affected by this election depending on who will the elected winner although loonies remains steady. It sways around 1.3400 and its pricing ranges from 1.3500 to 1.3300 physiological level.
If the Democratic candidate Hilary Clinton wins the election, greenback will most likely as most of the financial market is on her side and responses are positive including the stock market. This could also boost the oil prices which will be advantageous since loonies is cinched with the oil market. This means that this would even out the appreciation of U.S. dollars. Thereby, the pair would remain in a consolidated state and keep within the range.
There is no any major news to be publicized from Canada while the U.S. presidential election remains in the spotlight. For traders who positioned long for this pair could continue to do so while those who opted for the sidelines could still wait until all the risks associated with the election diminishes which is even safer.
The GBP/USD is currently one of the most active currency pairs as of yesterday’s trading session after it plummeted from 1.2500 and settled below 1.2400 points after the most recent news regarding the FBI probe of presidential candidate Hillary Clinton’s e-mails. The GBP/USD is expected to further increase its volatility during today’s session up until the following days especially in the light of the upcoming US presidential elections.
If Clinton manages to win the elections, then could push the USD farther up the positive range and cause the pair to go lower, possibly even crossing below the 1.2300 range. This is highly possible since the sterling pound is not only the most volatile currency as of this writing, but it is currently among the weakest due to complications in the Brexit strategies of the UK government. The ongoing discussions regarding Article 50 might induce more risks and could make the sterling weaker as the discussions progress.
The UK Manufacturing Data is expected to be released during the European trading session, and this is expected to give traders a clearer notion of how the UK manages its Brexit complications. However, the entirety of the market is now monitoring the results of the US elections, and the USD is expected to become more volatile in the coming hours.
The market is keen and waiting for the U.S. presidential election on November 8 afternoon time in USA. The polls shown a tight competition between the candidates. Traders learned from Brexit that it is much safer to be on standby and wait for the results that is why there is less volatility yesterday until this day. This day determines the short term trend for various instruments which is being anticipated by market players.
Yesterday was bearish for the pair as the U.S. Dollars strengthened with traders aspiring Clinton to win. It posited at 1.1050 and 1.1031 physiological levels. Volatility is expected for the day with the bearish trend to continue as the election closes by. The financial market is positioning with Clinton winning as this is what they want which is expected to further strengthen the U.S. Dollars once the results are out. However if the Republican candidate Donald Trump wins the election, this is not what is expected that may cause a short-term turmoil in the market.
There are no other major economic news to be released neither from the Euro region nor on the U.S.A today. Everyone is looking forward for the election which is the focus for the past weeks bringing volatility today and tomorrow. It is presumed for other data to come out after the election results are out. It is advisable for traders to be keen in their positions with tight stop losses.
The USD increased tremendously against the JPY during Thursday’s trading session after investors posted a somewhat hopeful sentiment towards President-elect Trump’s term, as well as his ability to add stimulus to the US economy as well as increase the nation’s interest rates. The USD bounced back to 106.94, its highest level reached since July. The USD/JPY pair closed down the previous trading session at 106.793 points after increasing by +1.08% or 1.139 and is expected to make further gains at 3.5%.
Since today is a US bank holiday, the USD is expected to get high levels of support from the US Treasury market, which could possibly lead to limited upside activity or profit taking, especially since US Treasury yields reached its highest levels this week, its highest after 10 months. The USD/JPY could either increase further if the US reflation trade gains momentum and long-term US Treasury yields go higher, or the currency pair could be augmented by a steady flow of interest rate hikes from the Federal Reserve. However, there is also a possibility that the USD could lose its footing against the JPY, especially since one of the major highlights of the Trump presidency is protectionism, which could adversely affect the US foreign trade.
The recent activity of the USD as well as the US equity markets suggest that investors are expecting that Trump would be able to become successful with regards to expanding the US economy by way of tax cuts and fiscal spending. These could induce inflation levels and add up to the US debt, prompting the Fed to increase interest rates next year in a more frequent succession than previously expected.
The GBP/USD also experienced the effect of the increased market volatility during the US elections, however its reaction was largely different compared to that of the other currency pairs. The GBP/USD pair was steadily increasing amid initial market expectations of a Clinton victory but as it became clear that Trump was winning the presidency, the currency pair suddenly increased in value as opposed to other currency pairs, which either went up and down or experienced a large decline.
The GBP/USD reached the 1.2550 range but slowly decreased as the market reconciled with a Trump victory and as the USD slowly regained some of its lost value. However, as the other currency pairs steadily dropped in value as the USD rose, the sterling pound instead rose higher and came to rest at a much higher trading range than the USD. This led to speculations that since the US was able to survive the sudden onslaught brought about by a Trump victory, the UK would also be able to hold off on its own as the Brexit progresses. The increase in the GBP was largely due to a minimizing of the initial market overreaction to Brexit, and causing the pair to go up to 1.2670 and ended the previous week with just a little below 1.2600.
The market is expecting the release of the CPI data and inflation reports from the UK this week, which could give hints regarding the overall status of the UK economy and help in evaluating the further effects of Brexit on the nation’s economy.
The USD/CAD pair was able to reach its short-term target of 1.3500 since the pair was one of the least volatile currency pairs after the market’s reaction to the US presidential elections last week. The USD in particular exhibited wild up-and-down motions while the US elections was in process as investors did not know how to react to the sudden victory of Donald Trump. Trump is not yet known how to act as a political figure, however he is expected to implement protectionist policies and it is expected that Canada would also be affected by Trump’s “neighbor” policy, causing the CAD’s reaction to the elections to become somewhat muted as compared to other currencies.
Oil prices have also experienced added activity last week, as this commodity has a significant effect on the Canadian economy. For this week, major economic releases from the US include the retail sales data as well as a testimonial from Fed’s Janet Yellen who is expected to outline the Federal Reserve’s future policies. The market is still expecting a rate hike in December, and the Fed is also expected to increase the frequency of its rate hikes for 2017, and this speculation has been one of the reasons behind the large upticks occurring in the USD/CAD pair. However, these policies might be subject to changes as the weeks progress and as Trump assumes office next year.
The USD experienced a sharp increase against the JPY following a series of investor reactions regarding Donald Trump’s sudden victory in the US elections. The USD/JPY pair closed down last week’s session at 106.615 points after increasing by +3.45% or 3.552 points.
A large number of investors had a flight to safety on November 8 due to uncertainties brought about by the elections, a move highly similar to the Brexit referendum last June. This resulted to increases in the prices of gold and CHF, but as the market came to terms with a Trump victory this has resulted to a steady increase in the US dollar. The market is now expecting added inflation due to Trump’s policies, which include added fiscal spending and production of trade. This has caused the US Treasury yields to increase, therefore putting upward pressure on the USD and making the USD a more sensible investment as compared to Japan’s government bonds. Analysts are now saying that this could compel the Federal Reserve to increase the frequency of its rate hikes.
The USD/JPY pair is expected to continue increasing if the US Treasury yields continue to strengthen as well. Major economic releases from Japan include the nation’s Preliminary GDP, which is expected to clock in at 0.2%, which is the same as the previous GDP report. For the US, expected economic releases are the Retail Sales data, Philadelphia Fed reports, Building Permits data and the Producer Price Index data. Federal Reserve Chairwoman Janet Yellen is also expected to make a statement on Thursday.
The EUR/GBP pair lost its sellers below the 0.86 region for the third consecutive session, maintaining the currency pair’s stance over the key levels in the light of a highly active economic calendar. The market is expecting the release of Germany’s GDP report for the third quarter of 2016. The CPI data for the UK is also expected to exhibit an increased cost of living for the nation at 1.1% for October. The GDP report for the European Union is also expected to get significant attention from market players as it gets released later in the session.
The increased activity in the economic calendar could lead to an increase in stock market activity, which will then have a significant impact on the demand for EUR. The EUR/GBP is currently trading at the 0.8610 range, and incessant bounces from the 0.86 handle could possibly cause the pair to break through the handle and could lead the pair to trade at 0.8652 points and 0.85. On the positive territory, if the pair manages to go above its 100-DMA of 0.8628 then this could cause the pair to go over 0.8664 and possibly even reach its zero figure of 0.8700.
The USD has been recently exhibiting a steady increase, causing the EUR/USD pair to open this week’s session with a weaker value and went even lower as the previous session progressed. The currency pair closed last week’s session at its support levels of 1.0850 and the market was expecting further support levels at 1.0800. However, the EUR/USD started out the previous trading session at below 1.0800 in the light of a broadly increasing USD value.
The EUR/USD further decreased in value, going through 1.0750 at the London session and tested support levels at 1.0700 at the start of the New York trading session. The movements of the EUR/USD were somewhat muted during the course of the trading session, mainly due to the significant strength of the USD plus Draghi opting to stay mum with regards to the ECB’s future plans on its monetary policies. The currency pair spent the rest of the New York session consolidating after the market chose to keep a positive outlook for the Trump presidency, and the USD is expected to have a continuously positive reaction in the market.
The market is now expecting the release of Germany’s preliminary GDP during the European session, as well as the retail sales data from the US to be released during the New York session. These are expected to confirm market speculations with regards to the Fed rate hike in December.
The AUD/USD pair exhibited increased volatility during Tuesday’s session but ended the session on a higher range at 0.7559 points after increasing by +0.05% or 0.0004 points. Meanwhile, the NZD/USD closed down the previous trading session at 0.7099 after decreasing by -0.24% or 0.0017 points.
The Australian dollar received substantial support after the Reserve Bank of Australia released the minutes of its recently concluded policy meeting. The minutes of the RBA showed a balanced inflation risk, indicating a more stable monetary policy which is expected to go forward. The RBA has also showed a positive stance with regards to global growth. However, the market has to consider that the RBA meeting took place prior to the election of Donald Trump.
The Australian dollar broke sharply as the session closed due to the release of the US retail sales data which came out on a much positive note as compared to October’s data. According to report, majority of households in the US purchased a wide range of goods, including motor vehicles. The retail sales report indicates that the US economy is sustaining enough growth which could increase the possibility of a Fed rate hike in December. However, the Federal Reserve has stated that it will be closely watching the regulation of the financial market as well as interest rates due to Trump’s fiscal spending proposals. The Fed Vice Chairman has also stated that however risky the market liquidity is at present, the liquidity is just enough to sustain the movement of the global market.
The USD continued to rise against the JPY as investor reaction caused the USD/JPY to reach its highest levels since June 2016. This has caused the market to reach its striking distance range since May at 111.44 points. The USD/JPY pair finished off the previous session at 109.181 points after increasing by 0.760 or +0.70%.
This recent rally was mainly caused by a sharp increase in US Treasury yields following the bullish report for the US retail sales data. The US Commerce Department has reported that retail sales data went up by 0.8% for the previous month, with September retail sales data revised to have increased by 1.0%. The retail sales data for both months were the highest data release since 2014, with retail sales data increasing by 4.3% as compared to last year.
Traders also reacted to an increase in import prices from 0.2% to 0.5%, a signal that inflation rates are now steadily increasing. The USD/JPY is expected to continue increasing towards 111.444 as US Treasury yields are still expected to increase further. Meanwhile, Japanese Government Bonds are still at the bottom range while US Treasury 30-year Bonds are steadily rising. Investors are waiting for the release of the Produce Price Index which is expected to maintain its previous reading of 0.3%. The data for the Capacity Utilization Rate is also expected to remain at 75.5%, while Industrial Production data could possibly show a slight increase from 0.1% to 0.2%.
The GBP/USD pair remains in the lower trading range even though it has managed to stay above 1.2400. Market players have long been speculating that the after-effects of the Brexit referendum will continue to have an influence on the sterling pound no matter how many times it would increase and its bulls will not be able to stay put. The GBP will have difficulty with regards to getting and maintaining a substantial bull stance since the Brexit process will be too risky for investors and traders for them to make long-term bets. The currency pair has recently been trying to break through its rut, but any uptick by the sterling pound is always met with suspicion from investors and is always seen as a sell opportunity. The pair was somewhat able to increase by 200-300 pips during the past trading sessions but was incessantly pushed down by bears and has returned below 1.2500.
For today’s trading session, investors are expecting the release of the UK retail sales data during the European session, with investors waiting whether this particular data release would be able to exceed initial expectations. The CPI data from US and comments from Fed’s Janet Yellen is also expected to make its rounds today, and the GBP/USD could possibly benefit if Yellen confirms the occurrence of the Fed rate hike in December by going down to the 1.2300 region.
The EUR/USD has been consistently in a tight trading range for the past session as market players are waiting for the next stimulus in order to mark the start of the short-term trend. Although the EUR/USD has hit some significant price lows for this year, its follow throughs have been very few and far in between. The pair is currency seeing more consolidation, which indicates that the bulls are still waiting for possible economic events which could cause the price of the pair to crack both ways.
The number of economic data which will be released today could possibly cause the pair to crack either way. The CPI data and Core CPI is scheduled to be released before the start of the New York session, and market players are expecting a positive data release since this could compel the Federal Reserve to continue with the rate hike in December. Fed Chair Janet Yellen is also scheduled to make a speech later today and is expected to confirm whether the Fed will be pushing through with the rate hike, and she is also expected to confirm that the Federal Reserve will be sustaining its operations and functions without any political influence, especially after Donald Trump’s victory. However, if Yellen fails to confirm the occurrence of the Fed rate hike, then this could cause the USD to weaken and the bulls will be active in the EUR/USD pair.
The pricing of the EUR/USD should be able to go beyond 1.0725 in order for it to benefit the bulls, something that has not done by the currency pair for the past 24 hours. Today’s session could be a crucial period with regards to determining the projected direction of the pair.
The USD CAD bolstered yesterday despite the recent decline in petroleum prices. The pair touched the ascending channel and trades to a lower boundary. The barrier found at 1.3400 region and provide the means for breaking the two-day decline. The price rebounded from the oversold level and continued to make an upward trend. The greens were able to surpass the 1.3470 level after the EU trades. The pair favorably widens its gains and headed to the 1.3540 mark consequent to the break-even of the aforesaid level. The bullish spike softened after testing the 1.3500 region.
Moreover, the pair pass through selling pressure and promptly turn back to the opening price. The price reverse to the 50-EMA as indicated in the 4-hour chart. Moving averages expanded its gains in the same timeframe. Resistance stayed at 1.3470, support hold the 1.3400 region. MACD settled at the centerline of both indicators. An entry on the positive territory will indicate strength for the buyers and the negative zone would imply that sellers will manipulate the market. RSI is in the oversold zone and approached northwards. The USDCAD pair appeared to bullish. The consolidation occurred on top of the 1.3470 level strengthened the position of the buyers.
Cable was swayed by the continues appreciation of U.S. dollars just like other money. In comparison other currencies, pound was not as affected compared to euro while Aussie has weakened. The strengthening of U.S. dollars seems to persist for some time that is favorable for bulls in the market.
The pound was on lows few weeks ago but was able to recover after U.S. elections relative to Brexit decisions where dealers grasp the concept that there are still chances for to make times come around and this could occur again in the future. Consequently, this has driven investors to go for pound but is still inadequate to keep pound afloat in the midst of U.S. dollars strengthening. Nevertheless, the current market activity kept the trend from going down.
The current surge of U.S. dollars has prompted Fed Governor Yellen to determine the next rate hike this December. However, this caused the pair to decline. If greenback sustained its uptrend, the pair is expected to move towards the 1.2300 level in today’s trading session. The is no major news to be released neither from U.K. nor from U.S. countries.
The USD exhibited a steady increase last week along with the US Treasury yields, and this has affected all major currencies across the board specifically the euro and the yen. This has created adverse effects for the EUR especially since the QE has already negatively affected the said currency. The ECB has not yet issued a statement on whether it would be tapering the QE and this has caused the EUR/USD to drop through 1.0800 last week and even dipping through 1.0600 towards the closing of the week. The EUR/USD is currently at its support levels of 1.0580.
The 1.0500-1.0600 is a relatively critical support region, however, whether the pair will be able to maintain its hold on this particular range will be dependent on the yields in the coming weeks. As of now, the USD continues to increase in value while the EUR continues its losing streak and is not showing any signs of apparent strength. The bulls attempted to take hold once the pair hit the 1.0700 range but failed and now the EUR/USD is under total control of the bears.
For this week, ECB’s Draghi is expected to make a speech on Monday but market players are not expecting any vital information from Draghi since the ECB chair is known to only address monetary policy issues when deemed extremely necessary, and the ECB has not yet expressed concerns with regards to the downfall of the euro. The FOMC minutes will be released on Wednesday and this is expected to give hints regarding the December Fed rate hike. If the minutes comes out as positive, then this will further contribute to the strength of the USD.
The USD/CAD pair ranged for the entirety of last week since the sudden surge in the value of the USD seemed to have little if no effect on the currency pair. However, the USD/CAD had one of the tightest ranges as compared to other pairs since the USD/CAD was unable to go beyond 1.3400 and 1.3600 on both the resistance and support side, which was mostly due to the fact that the increase in the value of the USD was mainly offset by the strength of the CAD.
The CAD has been experiencing significant increases since next week due to an increase in oil prices as the OPEC meeting draws nearer. The market is currently putting in optimistic expectations with regards to the meeting, with deals hopefully being made and statements from various stakeholders are showing that this might be the case once the meeting commences. The Canadian economy is expected to get a boost if ever deals regarding oil production cuts are struck especially since the economy is largely dependent on the production of oil.
For this week, the market is expecting the release of Canadian core retail sales data on Tuesday since this is an efficient indicator of Canadian purchasing power and this could give clues with regards to the general direction of the Canadian economy. The minutes of the FOMC meeting is scheduled to be released on Wednesday, and this is expected to give hints regarding the Fed rate hike on December. The USD/CAD continues to be bullish, and the target for the currency pair is expected to be 1.40 in the next few months. The pair is most likely to be drawn to the said target by the impending Fed rate hike as well as an expected rate cut from Canada.
The sterling pound was subject to significant losses since the unexpected strength of the USD has already took hold of the market’s general direction. However, as compared to other major currencies such as the AUD and EUR, the GBP was able to withstand the sudden strength of the USD and its effect on the market. This is because the market is slowly coming to terms with unconventional political moves, which is evident in the Brexit referendum and US elections. The sterling pound was able to become more stable since market players are now seeing Brexit as much less of a risk as compared to before.
For the past week, the GBP has consolidated and stabilized in spite of its bearish bias. This particular bias was somewhat augmented by weak economic data from the UK which was caused by the slowly sinking negative effects of the Brexit referendum as well as the pronounced weakness in the euro. The CPI data for UK came in lower than expected, but the retail sales data for the region came out on a more positive note.
For this week, the GDP report for the UK is expected to be released but since the USD has been constantly increasing as well as US Treasury yields, it is expected that this will have more impact on the currency pair. The US will also be releasing the minutes of the FOMC meeting this coming Wednesday, which is expected to give clues about the upcoming Fed rate hike in December.
The expected deal to be made at the OPEC meeting this week helped sustain oil prices and caused the USD/CAD pair to become muted for the majority of the trading session yesterday. The USD/CAD pair experienced a slight drop to 1.3400 points, triggering a decreasing in buying for the said pair. Since the OPEC meeting had a fairly good turnout, with the possibility of a deal being struck close, oil prices rose and this is expected to help in augmenting the strength of the Canadian economy. The effect of this increase in oil prices was reflected in the increase in the value of the CAD and the drop in the value of the USD/CAD pair. The currency pair traded tightly during the Tokyo and London trading sessions but was able to break through once the New York session began, with the pair dropping to 1.3380 where buying opportunities appeared and is now trading just over the 1.3400 range.
For today's trading session, the Canadian core retail sales data is expected to be released later within the day, with the data expected to come in at 0.6%. If the data fails to make it to this particular speculation then this could cause the currency pair increase to 1.3500. However, if the data manages to come in at the expected data then this could trigger a further decrease up to 1.3200. However, the uptrend is expected to continuously dominate the USD/CAD pair so any decrease in its value can be used by traders to buy the USD/CAD pair in the short-term.
Both the bulls and the bears have been struggling to take control of the EUR/USD pair even though this particular currency pair exhibited little activity during the past trading sessions. However, the USD has once again extended its recent strength, indicating that other USD-related pairs could experience a temporary recovery before again going downwards, and the EUR might find it hard to extend its profits through the 1.0675 trading range.
However, there is a substantial option interest within the 1.0600-1.0659 region and this could lead to the currency pair consolidating between this particular range. The minutes of the FOMC meeting is set to be released on Wednesday, and this particular data is expected to confirm market speculations of a Fed rate hike this coming December. The market expectations for the rate hike is currently at 90%, and speeches and comments from a number of Fed officials including Janet Yellen seem to point towards a confirmation of this rate hike.
However, there is also a possibility that the Fed rate hike might not immediately translate to an added strength in the USD and could possibly weaken the currency if the Federal Reserve refuses to give hints regarding rate hikes for 2017. For today’s trading session, there are no major economic releases expected today from the eurozone and the US, so the EUR/USD pair is expected to consolidate between 1.0600 and 1.0700.
The GBP/USD pair spent the majority of the previous trading session consolidating within the 1.2400 range as the USD kept on alternately losing and gaining its value for the past session. The value of the USD has been significantly uncertain for the past two sessions and this is an expected effect of a bullish market last Monday.
There are no major economic news releases expected for the latter part of November, and this is why a lot of currency pairs have been directed by option expiries and flows instead of fundamentals. The strength of the USD has been mostly attributed to the recent surge in US Treasury yields which was the result of Donald Trump’s victory in the US Presidential elections, but US Treasury yields have started tapering off its strength at the start of this week, causing the USD to lose some of its gains as well.
The minutes of the FOMC meeting are scheduled to be released later today, and this is expected to lend some measure of volatility to the GBP/USD pair even though the minutes are expected to confirm market speculations of an impending Fed rate hike this coming December, as well as give a general overview of the Fed’s future interest rate hikes. However, this could also induce a drop in the value of the USD once the minutes give the opposite of the market expectations.
The EUR/USD pair was expected to remain within the 1.0600-1.0650 trading range due to reports of large-scale options placed within this particular region and will remain until the options expire. The options within this range are scheduled to expire within the day and the minutes of the FOMC meeting are set to be released today, and the market is expecting an increase in the volatility of the EUR/USD pair which could possibly extend for the next few days.
There has been no major economic releases from the eurozone or the US from these past few days, and options players wielded their power during this period of low activity by attempting to control the financial market in order to safeguard their option entries. Unless other market players would have a good grasp on these very recent developments in the market, they might not be able to have a full understanding of the market movements during these past trading sessions.
For today’s session, the market is expecting quite a number of economic data to be released, such as the oil inventory data and unemployment claims data from the US. However, majority of market players are now waiting for the FOMC minutes which is scheduled to come out any time during the New York session. The market has a 95% expectation percentage for the December Fed rate hike, and the minutes from the FOMC is expected to confirm this particular speculation. Aside from confirmation of the rate hike, market players are also expecting to get hints regarding future rate hikes from the Federal Reserve. If the data fails to meet market expectations, then the USD could lose its strength and drop significantly.
In the H4 chart, the price was seen to break at 1.01 handle that pushed the support levels higher within the 1.0155 - 1.0129 levels. The Resistance level showed a weaker stance from 1.02939 to 1.0131 levels. There are some facets to consider to sell this pair. One is the H4 handle steadied at 1.01 handle even though there are offered seen within the supply zone. Another is the uncertainty in the current daily support at 1.0086 mark.
The trend could shift downward when the price closed lower than 1.01 level while there is less volatility. However, when there is a break at 1.0037 daily Quasimodo line, the price could reach the 1.0029 level to 0.9994 and 1.0019 levels. The best stance would be the price lower by 14 pips towards the 1.01 handle then a retest within the resistance zone.
The downward trend will be validated when the price in the H4 chart reached the 1.0086 support level with a probability towards the Quasimodo line.
Major news to be declared today are the U.S. Core durable goods data and U.S. Jobless claims this afternoon while the Federal Open Market Committee minutes of the meeting will be disclosed in the evening.
The euro together with the greens had bounced again on Wednesday following the strengthening of the USD as it was boosted by the positive data regarding the much reinforced economy of the United States. The pair is sailing smooth during the morning session of the Asia and Europe, however, the inevitable volatility started amid the NY trading session.
The pair tested the level of 1.0600 ahead of the announcement of the Durable Goods data which has a better-than-expected result of 1%. The positive release signaled the market to begin the USD purchase again which enabled the pair to break the 1.0600 and touched 1.0525 prior to the stabilization of the pair that settled below the 1.0550 during closing day.
According to previous readings, the regions 1.0500 and 1.0600 is considered as a stable support for the pair which is also mentioned by profuse large banks, the aforesaid level will be the expected mark for the euro as the year ends.
At present, the price movement emphasized a continuous softening and the Thanksgiving celebration in the United States will not become a driving force for the euro to edged high against the dollar. Technically, the signs bring no good for the EUR, in this way the single currency is kept intact and wait for a strong support which include the 1.0500, 1.0440 and 1.0440 marks until we found a much stable support.
The latest German Ifo Business Climate caused a short period of volatility but things as of this moment remains unaffected. The price action is still on guarded and anticipates for a test within the 1.0500 level in order to recognize the final result whether this movement will progress or not.
The sterling pound continues to be the sole currency that has survived the far-reaching effects of the USD’s recent surges since the GBP has continuously inched higher against the US dollar even during the US elections. The GBP/USD pair consolidated and range for the majority of yesterday’s sessions but the USD further increased during the opening of the New York session as economic releases from the US such as the Durable Goods data came out exceeding initial market expectations.
The GBP/USD pair initially plummeted towards 1.2350 points but recovered immediately and broke through 1.2400 and is currently resting just below the 1.2450 region. The GBP is currently on the strong side and should the USD exhibit weakness in the coming days, then the GBP/USD is expected to rise to 1.2600 and could possibly go higher.
The FOMC meeting minutes were released yesterday and has confirmed the possibility of a Fed rate hike this coming December especially since its members talked about the urgent need to increase interest rates as soon as possible. The minutes did not add much volatility to the market since it met initial market speculations. For today’s trading session, there are no important economic releases expected from both the US and the UK, and the currency pair is expected to further consolidate with bullish biases enabling it to sustain its position over 1.2400. Market players are slowly regaining their confidence in the sterling pound, and is expected to further increase in the coming sessions.
Yen has depreciated resulting to breaks on the top psychological levels as seen on different pairing with yen. However the most sensitive among all those pairs is euro against Japanese yen. There is a tendency for the European Quantitative Easing could further decline the Euro in the coming weeks. If this persists with the Resistance levels sitting atop the price movement, it is best for traders to be careful with their next move.
The psychological level at 120 handle is significant for this pair which is 10 pips further than the 61.8% Fibonacci retracement considered as a 16-year move for the pair. Those who are waiting to trade in higher levels, they could suspend their trading until there is a clean break seen until the bulls could push the price higher. This could become an opening to look for new psychological levels in the next move.
The Canadian dollar against greenbacks moves in a consolidated state close to low psychological levels. The next move could be a rebound to 1.3500 level as what happened yesterday. There is less volatility in the market during the Asian and Euro trading session but it there has been a high activity during the U.S. session in preparation for Thanksgiving holiday which was further supported by the strong U.S. economic data.
The pair bounced higher than 1.34 level next to 1.35 level towards 1.3525 zone. This was induced by the reports from Iraq requesting to cut output of oil producers while balancing the market supply and demand. The current demand is stable while the oil price is predicted to climbed in the next days to come. This cause the loonie to rally and strengthen yesterday and retreated at the same time. The pair moves in an uptrend reaching 1.35 handle although it moves in a slow pace.
There is no major economic news for today from U.S. or Canada area. Hence, the current trend will remain bullish and consolidated.
The GBP/USD exhibited a generally bullish stance last week as the sterling pound continued to counter the recent strengthening of the USD, with the GBP the lone currency that has held its ground against the ever-increasing value of the USD. The strong stance of the GBP is reflective of the currency settling as the invocation of Article 50 draws nearer and after a positive reaction from the markets after the high court has ruled that the Parliament will have to go through a debate and discussion before pushing through with the said article. This has resulted into the market receiving assurance that the UK economy will be well taken care of as the region goes through the Brexit process.
This has caused the GBP/USD pair to continuously consolidate on both sides of the 1.2500 region in spite of the added strength of the USD. The GBP did not experience much volatility for the past week as the Hammond Autumn statement predicted a somewhat negative forecast for the UK economy for the next two years, thereby meeting general market expectations.
However, for this week, the currency pair is expected to experience added volatility as currency flows are more likely to have an effect on the value of the sterling pound. The NFP employment report from the US is also expected to determine whether the Fed will be increasing the frequency of its rate hikes this coming 2017.
The USD/CAD pair was consolidating and trading in a tight range last week, with the strength of the USD being countered by equally-strong loonie. However, the currency pair briefly dropped at the 1.3380 trading range but closed down the week on a much higher note at 1.3600 points. The USD/CAD exhibited active fluctuations throughout the week but were quickly reversed after sellers and buyers both struggled to take control of the currency pair.
The USD had remarkable strength for the past three weeks ever since the results of the US elections, while the increasing value of the CAD was largely attributed to highly positive economic data from the Canadian economy, as well as the continued buoyancy of oil prices. The OPEC is set to have a meeting this coming November 30 and the organization is expected to produce a deal between oil producers with regards to production cuts, with producers expected to be in support of a production cut, which has boosted the CAD and has kept the USD/CAD pair in line.
For this week, the market is expecting the OPEC meeting and if the results of the said meeting turn out to be positive, then the USD/CAD pair could possibly go upwards to 1.3400 and could even go further at 1.3300 points. For the US, the NFP employment report is also slated to be released within the week, and if this particular data turns out to be positive, then this could be an indicator for the market as to whether the Fed would be increasing the frequency of its rate hikes for next year which could further strengthen the greenback.
The GBP/USD pair was subject to downward pressure during the previous trading session as monthly cash flows combined with a slight increase in the USD triggered the pair to drop from its highs of 1.2500 to just below 1.2400 points. Every month, the market always expects added selling pressure for the GBP since the UK pays its EU membership fees every month. As a result, the value of the EUR/GBP increases, and the GBP becomes subject to significant losses.
There are also some speculations that the Brexit process will be subject to a number of legal challenges which could cause the process to be delayed altogether, and the schedule of events for the Brexit process could possibly go haywire. The UK government is also questioning the decision of the High Court for a Parliament debate first before pushing through with the Brexit process, while the Parliament is already preparing for the said debate just in case that the High Court refuses to overrule its previous decision on the Brexit process. The strength of the GBP would definitely be affected by these expected delays in the Brexit process and could have an adverse effect on the UK economy in general.
For today’s trading session, there is no major economic news expected from the UK. However, the US will be releasing its Advanced GDP data and this could increase the market volatility, with a consolidation possibly happening together with a bearish stance.
The pair USD/CAD has been on a spree but with no direction since OPEC hasn’t reached an agreement yet. Oil prices came at a low price yesterday morning the reports came in at the afternoon with Iraq would participate alongside with other OPEC members in reducing production output but there are also reports saying the opposite where countries like Iran and Iraq have no plan of any production cuts.
Loonies are dependent to the oil market pricing as it strengthens relative the oil prices. The pair was seen to begin trading at 1.3500 level then later set in close to the support at 1.3400 after the news has been released. It ranges from 1.34 handle to 1.3450 as the market is not definite on what will happen next that makes the market undecided. What happened on September may occur again where OPEC decided on the last minute.
The Bank of Canada’s Governor Poloz had a speech this morning in a positive tone inciting the economy is improving and getting stronger. As the loonies continue to appreciate this keeps the tension up trading in this pair with high volatility while the market still awaits on the outcome of tomorrow’s OPEC meeting.
We had the BOC Governor Poloz speaking early today and he did sound generally very positive about the economy and expressed that the data is slowly getting better which means that the economy is getting stronger as time rolls on. This also added to the CAD strength and helped to keep the pair under pressure. It is expected to have ample liquidity today and tomorrow however if the reverse happens, then the pair will price higher and the Canadian dollar will depreciate.
According to the previous forecasts, the EURUSD persist in having a slow growth and it used the 1.0580 as its base. The pair were able to break the 1.0600 region overnight and settled down from the 1.0650 as of the moment. Later this day, the solid resistance seen at 1.0685 will be challenged and the price trend will be the basis for the possible uptrend of the pair.
The pair is able to rose because of the mild weakening of the USD felt all over, the instability is considered as mild since violent movements are nowhere to be seen among any currency pair. As the end of the month approach, we expect month-end flows to prevail the money flow for today. Despite the positive results of US economic data, GDP and CCI, the dollar continues to soften for the past 24 hours. The fluctuation is caused by the fear of the market regarding President-elect Donald Trump’s unsure policies. Trump is seen posting his opinions using his Twitter account which represents a not so good habit for someone who is the leader of a state.
We are expecting for Draghi's remarks for today and we suppose that his speech won’t complicate the market or either trigger volatility. We also look forward to the EUR/USD to execute trades at higher ranges characterized with a bullish sentiment.
The U.S dollar has softened since Monday while the pound also endures weakness since the week starts as it edged lower because of the end-of-month flows and due to the EU membership payments plus other driving factors.
Yesterday, the sterling established further strengthening and rebounded towards 1.2400 region and reached beyond 1.2540 level before the cable pair settled down from the 1.2500 area and this increase would be better as the weakening of the dollar continues.
The instability of the greenbacks is felt globally though other currencies remains exempted dollar’s softening. The sluggish stance is not a result of weak services data or any fundamentals but more about the market’s weariness regarding the new president of the United States who has the habit of expressing his thoughts whenever he wants to. This way the markets are uncertain about what he’s going to declare any moment.
Furthermore, we are looking forward bank stress test results from the UK. In case that the bank has favorable result we expect for additional strength for the pound which would put the GBP/USD as far as the 1.2500 region. We also await for the ADP Employment data and if the result is less than the expected, the greens will suffer another round of reduction because this report is the main indicator for the NFP on Friday.
The pound remains strong brought by the recent surge that conversely weakened the U.S. dollar. Traders attempting to reach between the 1.27 and 1.2750 range in today’s session. This gives a positive outlook for the pair with U.S. yields declining and greenback remaining weak.
The published results of the Services PMI gave high numbers at 54.2, even more than the expected value of 55.2. This indicates the continuous growth of Britain’s economy despite leaving the European Union. Concerns regarding Brexit especially the negotiations about Article 50 is still pending on what will E.U. gain from U.K. and what will those Euro leaders offer in return. Britain sees the free market access will continue while Euro leaders are careful with the negotiations as it might be taken advantage by other countries. Once the data will be released since negotiations then the U.K. economy can be finalized.
There is no major news to be published from U.K. then, the current price trend will continue. Traders could move the rate towards the 1.2800 level if the greenback continues to depreciate. It is quite difficult to reach the 1.30 mark with the downtrend being strong. If the rebound ends, the price could further go down.
The USD/CAD consolidated and tailed the direction of oil prices during the previous trading session, with the Canadian dollar slightly easing in value after oil prices displayed corrections during the trading session. The Canadian Trade Balance data also came out yesterday and exceeded initial market expectations which helped augment the value of the CAD. The currency pair mainly consolidated on both sides of the 1.3300 trading range.
The market is expecting the Federal Reserve meeting this coming mid-December, and although the Fed rate hike this December is basically minted within the market, market players are now more interested with regards to hints and guidances on the Federal Reserve’s rate hikes next year. The USD/CAD pair is expected to undergo an increase in pressure a few days prior to the Fed meeting since crude oil prices are a major factor in this issue, and another bullish stance is expected for oil prices in the coming days.
For today’s trading session, Canada is set to release a rate statement from the Bank of Canada, where the BOC is expected to maintain its rates and could give traders more insight with regards to the central bank’s stance with regards to the overall feel of the Canadian economy. Traders are expecting some hints with regards to the BOC’s views on future rate cut backs in the coming months, particularly next year.
The GBP/USD pair mostly consolidated and ranged on both sides of 1.2700 points since there was no major economic news release from the UK which could compel the pair to move, and this is why the currency pair had a muted session yesterday. However, since the Federal Reserve’s meeting is expected to induce volatility in the financial market, especially since the Fed is expected to announce its much-anticipated rate hike in this particular meeting. Market players are also expecting to receive hints with regards to the central bank’s future rate hikes in order to determine the USD’s direction in the short run. However, if the meeting fails to give out hints with regards to the bank’s future moves, then this could induce a weakness in the US dollar.
Meanwhile, the UK is currently bearing the brunt of the Brexit process, which is expected to last for a couple of years since this will most likely involve heated discussions with leaders from all over the eurozone in order to send out a warning to other EU countries wanting to go in the same direction as the UK.
For today’s trading session, the UK Manufacturing Production data is set to be released during the European session, and market players are expecting the data to come out as positive. If the data does come out as highly positive, then traders can expect the pair to hit 1.2800 points. Otherwise, the pair could continue consolidating on both sides of the 1.2700 region.
The USD/CAD is currently still subject to increased pressure after crude oil prices surged during yesterday’s trading session. The currency pair is expected to experience this particular pressure as long as oil prices continue to fluctuate and would only cease once crude oil prices reach equilibrium. If this phenomenon happens, then the strength of the USD would most likely dominate the currency pair, and the weak value of the CAD would cause the currency pair to increase in value.
Although the Canadian dollar is currently strengthening, its price is expected to drop once crude oil prices stop its fluctuations and cease from moving upwards, especially since certain issues with the NAFTA agreement will be reopened due to Trump’s re-negotiation, and any changes with this particular agreement would have a significant effect on the trade relationships between Canada and US. The CAD could also weaken due to minor market speculations that the Bank of Canada would be implementing rate cuts next year, and unless the currency pair manages to break through 1.3000, then the USD/CAD will continue to be on the upward trend with a target of 1.4000 points.
There are no major economic news releases expected from the Canadian economy for today’s trading session, and while the US will be releasing its UoM Consumer Sentiment data, this particular piece of news from the region is not expected to have a major impact on the market in general. Market players will now be shifting their focus to US yields, as well as on the scheduled Fed meeting next week, where the Fed is expected to finally implement its much-awaited interest rate hike. However, this event does not automatically translate to an increase in the value of the USD, but the market is expected to receive hints with regards to the Fed’s rate hikes this coming 2017.
The GBP/USD pair consolidated poorly during yesterday’s trading session after the sterling pound was adversely affected by the recent sharp drop in the value of the euro. The previous trading session initially started on a positive note for the GBP after it managed to regain some of its previous losses, causing the currency pair to hit 1.2700 points during the Tokyo and European trading session. However, the release of the ECB announcement caused the euro to incur massive losses, with the EUR/GBP pair experiencing devaluation. This then triggered the GBP/USD to retreat from 1.2700 and is currently hovering at the 1.2600 region.
The GBP/USD is expected to consolidate further with a somewhat bearish note as the euro tries to recover from this very significant loss of value. The Federal Reserve will be meeting at the start of next week, and the market currently has rate hike expectations of up to 0.25%. The dollar is then expected to exhibit weakness once the announcement from the Fed is released, and market liquidity is also expected to be relatively low during this particular period.
For today’s trading session, there are no major economic news releases from the UK, and the GBP/USD would most likely consolidate further along with a bearish stance and will be subject to added downward pressure due to the recent weakness in the value of the EUR.
The GBP/USD pair had a lackluster performance during the entirety of last week’s trading sessions since the sterling pound experienced constant pressure from the much stronger euro. The EUR plummeted last week after the ECB announced its plans to extend its quantitative easing program, and the EUR/GBP lost a significant amount of its value, causing the sterling pound to be affected as well. Prior to this sudden drop in value, the GBP has previously exhibited remarkable resiliency in spite of the confusion caused by the Brexit process. The GBP rose during the first part of last week and was even able to go through 1.2700 points before eventually reaching 1.2800 points before the announcement from the ECB dragged the GBP down.
The GBP was also subject to added pressure due to delays in the implementation of the Brexit strategies as the Parliament is in the middle of heated debates regarding the implementation of Article 50 on the region. Since the timeline for the Brexit remains uncertain in spite of numerous meetings and debates within the Parliament, the sterling pound is expected to remain under pressure and any form of reversion should be immediately seen as a sell-off opportunity for the currency pair.
For this week, the market is expecting the release of the CPI data as well as the Claimant count change data from the from the UK. The Bank of England is also expected to make a statement on whether the central bank would be maintaining its current interest rate of 0.25%, and the Fed is also scheduled to make an announcement regarding its interest rate hike, as well as a statement on whether the central bank will be adding up the frequency of its rate hikes next year. Due to the large number of economic data scheduled to be released this week, the market is expected to undergo an especially high level of volatility within the week.
The USD/CAD was subject to pressure for the majority of last week’s trading sessions due to the continued buoyancy of oil prices despite a short drop in the commodity’s price. Since the Canadian dollar is hugely reliant on crude oil prices and with the fluctuations in oil prices, the CAD has been subject to wildly erratic activity during the past week as well. Presently, market players are expecting that oil prices would experience further surges during this week and the USD/CAD is expected to be subject to more pressure for this week as well.
The economic releases from Canada last week turned out to be pretty positive, with the Canadian trade balance data clinching the string of positive economic data from the region. The Bank of Canada has also decided last week that it will be sustaining its rates at 0.5%, signalling remarkable improvements in the Canadian economy and is expected to further improve due to future increases in oil prices. The currency pair is now forming strong support bases at the 1.3180 trading region.
For this week, the Federal Reserve is set to release its statement with regards to its long-anticipated interest rate hike, and the market currently has expectations of a 0.25% interest rate hike, plus hints on whether the central bank would be increasing the frequency of its hikes this coming 2017. The US is also set to release its retail sales data, while Canada will be releasing its Manufacturing Sales data, and these are expected to induce volatility for the USD/CAD this week. Analysts are speculating that if the pair manages to sustain its place at the 1.3000 region, then the currency pair would be able to continue its upward direction especially since crude oil prices could become tapered in the near future.
The USD/CAD pair remained under 1.3120 points and has now clinched its tenth day in the lower rung of the trading range. The CAD dropped during the previous trading session due to a 5% increase in crude oil prices after the OPEC meeting last week, which included non-OPEC oil-producing countries, with the participants altogether agreeing to implement production cuts on oil. Participants who were not OPEC members all agreed to productions cuts amounting to a total of 600,000 bpd, with Russia contributing a total cut of 300,000 bpd. Saudi Arabia has also expressed its possible plans to further cut back on its production of oil. However, in spite of the uncertainty on whether oil producers would be able to push through with their planned production cuts, an increase in oil prices would most definitely help in augmenting US shale production and could offset the production cuts announced last week.
The Canadian trade market would be able to benefit from steady increases in crude oil prices, as the USD/CAD’s 200 EMA is presently at 1.3075 points and is in line with 1.3040 on the lower region of the trading chart. Resistance levels for the USD/CAD pair is at the 1.3175-1.3185 trading region, and the pair shows signs of becoming oversold. Market players are now expecting a retrace if the 200 EMA maintains its current levels within the week.
The GBP traded on a more positive note during Tuesday’s trading session due to the release of the UK inflation data, which came out better than the initial market expectations. The GBP/USD rose in value and was able to reach 1.2723 points before settling at 1.2710 points after increasing by +0.31% or 0.0040 points.
The inflation data from the UK exhibited a 1.2% increase last November, going well above the market expectation of 1.1%. The report also showed that the main catalysts for inflation in the region were culture, recreation, and clothing. The Core CPI data came in at 1.4%, again exceeding expectations of a 1.3% data release. Due to the positive economic data from the region, analysts are now saying that UK inflation could possibly reach the initial 2% goal during the first few months of 2017. However, this improvement might not be able to have much of an impact to the Bank of England’s impending decision-making this coming Thursday with regards to its adjustments in interest rates. BoE governor Mark Carney has also previously stated that the central bank would be willing to endure inflation overshoots if this would mean an increased economic support.
Wednesday’s trading session is expected to be somewhat light and muted as the Fed meeting looms close. However, since the GBP/USD had mostly positive reactions with regards to the shadow of the expected Fed rate hike, the present inflation data from the UK should be able to underpin the currency pair.
The pair EUR/USD traded lower this day with a tight range and low volume of trading. The major players are on the sidelines waiting for Fed’s final announcement.
The final CPI resulted lower than the expected 0.3% from the actual 0.1% reading. This shows the inflations date for wholesalers. The most recent German ZEW survey indicates augmentation with an expectation at 14.2 higher than the prior 13.8. It is predicted to come in at 16.5.
The market is now focus on Fed’s data with the NFIB Small Business Index forecasted at 96.7 higher than the former 94.9. The prices are anticipated to reach 0.3% compared to last month’s 0.5%. The U.S. Treasury 30-year bond should also be looked out for by traders with interest rates anticipated to be higher than the 2.90% on November 10 as it closed at 3.1748% yesterday.
The New Zealand dollar depreciated as more investors go for safe haven assets since commodity prices dropped in spite of the tension brought by the Federal Reserve's interest rate decision this week. The pair NZD/USD weakened by 17 points to 0.6698 after the greenback rebounded since the decline on Friday influencing the cross trades while the commodity prices remain low.
Currencies that are heavily influenced by commodities dropped to its lowest recorded rate for more than six years because of a drop in oil prices. Concerns in U.S. Junk bonds reemerged while majority are feeling pressured by the Fed's policy meeting this week. It is anticipated that the Federal Reserve Open Committee (FROMC) will proceed with the rate hike since the close to zero policy in December 2008 as the traders rely on hints for future changes.
The New Zealand's BNZ-BusinessNZ performance of services index for November will be announce today. While, Industrial production will also be released today from both Europe and Japan, as well as Tankan manufacturing index will be publicized by Japan.
The GBP/USD pair exhibited consolidation and range trading during the past trading session, with the currency pair now trading over 1.2400 points with more consolidation plus a bearish bias for today’s sessions. The currency pair initially exhibited positive movement during the earlier sessions but dropped in value as yesterday’s trading sessions progressed. There were economic releases from the UK during yesterday’s session, but the Scottish Prime Minister has released a statement which inadvertently threatens the UK’s Brexit process after Scotland decided to remain in the European Union, whereas the whole of UK has already decided to relieve themselves from the eurozone. This has already increased the risk of the already very muddled Brexit process since Parliament members are now in the middle of debating the validity of Article 50 which is a vital part of the said process.
For today’s trading session, there are no major economic releases expected from the UK but the recent strength of the USD could dominate the whole market, and the continuing confusion with regards to the Brexit process could increase the downward pressure on the GBP/USD pair for the coming weeks. Any bounce found in the currency pair should be immediately seen as a short opportunity for this particular currency pair.
The GBP/USD pair is now struggling to cope with the effects of the markedly low liquidity during this holiday season, much like other currency pairs. However, the GBP/USD managed to fare relatively better in terms of market volatility as compared to other currencies since it had a 100-pip range for the previous trading sessions. In spite of the USD’s current strength becoming the dominant feature of the financial market, the lack of market volatility has managed to offset the USD’s strength and has become advantageous to other currencies such as the sterling pound. The USD is expected to regain market control eventually, but until that happens, then the GBP could still range and consolidate at the lower region of 1.2500 points.
As the Brexit process resumes, the GBP/USD is expected to trade with a bearish bias for the short term and medium term, especially since Scotland is apparently disagreeing with UK’s plans to leave the European Union and the UK will have to exert more effort in order to negotiate with all involved parties and make way for an easier Brexit process. Theresa May will also be needing additional support as the Brexit process begins, which is expected to become a long and arduous process.
For today’s session, there are no major news releases from Britain, and with the holiday season fast approaching, liquidity is expected to drop further which could lead to more ranging and consolidation on most currency pairs.
The EUR/USD pair experienced consolidation and ranging during Tuesday’s trading session, with the currency pair becoming limited to a 60-pip range in spite of the dollar’s increasing strength. This particular range for the EUR/USD is expected to become more limited and tighter as the holiday season approaches, mostly due to lowered liquidity during this period, with market players most likely taking advantage of this period to drive certain currency pairs in directions more favorable for their trades. Traders are advised against trading during this time, but if they do so, stop losses should be tight enough to avoid possible mishaps in the short term.
For today’s trading session, there are no major economic events scheduled to be released from either the US or the European Union, and the EUR/USD is expected to exhibit more ranging, albeit with a more pronounced bearish bias. If the pair would be able to reach the 1.0460 region, then this could be seen as an opportunity to trade in the short-term with a more secure stop loss. The recent strength of the value of the US dollar is expected to dominate the overall direction of the market both in the short run and the long run.
The remarks of Yellen about the strengthening of the U.S job market plus the 2017 plan for Fed tightening subsidize the greenbacks, however, weighed heavily on higher-yielding New Zealand dollar. The NZD continued to be bearish and slid down through 0.6900 during the mid-Europe session held yesterday.
Upon successfully breaking the level, sellers had expanded its gain through the 0.6850 region. As indicated in the 4-hour chart, the price traded under the moving averages as the 50-EMA pass over the 100 and 200-EMAs in a lower point. Moreover, the entire moving averages sustained its bearish pattern. Current resistance touched the 0.6900 area, support settled around the 0.6850 level.
MACD grew less which confirmed stronger stance for the sellers. The RSI approached the oversold zone in which supports a renewed downward movement. The NZD/USD will reach the 0.6850 after it broke the 0.6900 region. Should the price advance towards the 0.6800 upon beating its initial target.
The stock market of Canada is close due to U.K’s official holiday, Boxing Day. While the release of GDP and CPI last week has changed the supposition of the Canadian regulator for the easing of its monetary policy in the near future. The pair remains in the hands of the buyers within its 6-week high. The greenbacks regain some of its losses because traders pushed the price towards the 1.3540 from the previous 1.3500 level.
The short-lived upward momentum further weakened in the predetermined level where the buyers came across the resistance of the sellers.
According to the 4-hour chart, the USDCAD hovered on top of the moving averages. The 50-EMA cross over the 200 and 100 EMA in an upward direction. While the 100 and 200-day moving averages are neutral and the 50-EMA headed up. Resistance highlighted the 1.3540 region, support sits in the 1.3470.
The MACD histogram grew less which confirmed weak position for the buyers. RSI remained overvalued.
If the 1.3540 region were unable to break, it would cause for a downward correction when the pair plunge below the 1.3470 support level. The next potential target of the sellers is 1.3400. The pair is able to expand its gains towards 1.3589 if the buyers break higher.
The EUR/USD is still experiencing a tight-lipped trading range after trading within 30 pips. The market liquidity is not expected to increase until next year since there are no signs of currency flows as of late. However, the new year is expected to bring back market liquidity since this signals the end of the holiday season. The EUR/USD had high trading ranges during the North American session yesterday, where it attempted to go beyond 1.0470 points in order to reach 1.0530 points. Meanwhile, the USD exhibited a marked weakness during these past few sessions, particularly against the EUR. This trend is expected to remain for the rest of the week as the market attempts to remove some of the bearishness of other currencies against the USD. The USD’s strength is expected to bounce back next week, and it is therefore vital that the euro bulls would be able to take hold of this opportunity and accomplish all moves in order to avoid the adverse effects of the USD regaining its strength.
There are no major economic data releases expected from the international community for today’s sessions, and this means that added consolidation and ranging could possibly be felt as there are no currency flows which could be a catalyst for added market volatility. As such, traders are advised to tread lightly and remain within the sidelines for this particular period.
The USD/CAD pair is still trading with a bullish stance after spending almost the whole of the previous session trading above 1.3500 points, and this trend is expected to continue for today’s session. The USD traded on a somewhat much weaker tone in relation to other currencies, but in the loonie’s case the weakness of the US dollar seemed to have little if not completely no effect on this particular currency, with the CAD easily trading over 1.3500 points and could possibly become more positive when the USD regains some of its recent losses next week. Market speculators have long since been saying that the CAD might soon be subject to a very strong uptrend, and traders should be loading up on longs in order to make way for bigger future gains.
The USD/CAD pair seems to be already unaffected by the movement of oil prices unlike a few weeks back, wherein the CAD had significant reactions to the wild careening of oil prices. Now, in spite of the recent increase in oil prices, the CAD continues to trade strongly. However, the next few weeks are expected to hit an adverse effect on the Canadian economy since the recent economic data from the region has done little to appease investor sentiment, and oil prices are expected to continue increasing, and Trump will be assuming office in January. The somewhat weakening of the CAD is evidence of this foreboding string of events next year.
Today’s trading session will most likely be characterized by more consolidation and ranging with a bullish undertone since there are no major news releases from the Canadian economy.
The EUR/USD pair became somewhat active during the previous trading session after a lackluster performance during the past few days, and this is especially good news for traders who are waiting for any sign of market activity since the holiday season has caused the market liquidity to diminish. The currency pair was able to go beyond its daily price range of 30-40 pips, and the USD’s recent price surge has caused the EUR/USD pair to plummet below 1.0400 points and even reached 1.0360 points. However, the negative pending home sales data from the US has caused the currency pair to go back above 1.0400 points.
As the new year starts and the holiday season comes to an end, the market’s volatility and liquidity is expected to return, and liquidity levels could possibly go higher. However, the strength of the US dollar is not expected to be stalled anytime soon, and government leaders from both the UK and the European Union are now preparing for the onslaught of the Brexit process next year, which is expected to be very tedious for both regions. On the other hand, Germany will also be holding its elections next year, and the market will be closely monitoring Merkel’s performance before and during the elections. However, until such time that these things happen, market players should first monitor just how long will the USD be able to maintain its recent strong stance. For the EUR/USD pair, the currency pair is expected to consolidate with a bullish undertone as the market adjusts to the very disappointing pending home sales data from the US.
The USD was able to regain some of its lost strength during the earlier parts of yesterday’s trading session, which was felt all throughout the market, and has also affected the sentiment of the sterling pound. The GBP then plummeted and the GBP/USD pair went way below 1.2200 points after almost two months as a result of a very disappointing home sales data. However, as the North American session commenced, the GBP/USD pair was able to surface over 1.2200 points and has hovered over this level for the rest of the trading session. But it still remains to be seen whether the currency pair would be able to deflect the effects of the USD’s ever-growing strength.
The effects of the long and winding Brexit process is expected to be seen during the next several months since various government leaders from the UK and the EU is set to debate on how to go through with the process in general. These are expected to create a constant pressure for the sterling pound, and all reversions on the part of the GBP/USD could immediately be sold by bears, therefore making it hard for this currency pair to make any significant advancements in the coming months.
For today’s trading session, since there are no major economic data which is set to be released from the UK region, the GBP/USD pair is more likely to encounter more consolidation with a bullish undertone, especially since the market is currently experiencing low volatility and liquidity due to the holiday season.
The USD/CAD pair continued to trade in an upward direction due to substantial support coming from the USD, which was basically the market’s theme during yesterday’s trading session. The currency pair was able to maintain its buoyancy in spite of the recent surge in oil prices. Market speculators are now stating that oil prices could be well on its way towards reaching its optimum price and once oil prices stop going in an upward direction, then this could put more pressure on the Canadian dollar, thereby inducing a strong uptrend on the USD/CAD pair.
The USD experienced a short correction during yesterday’s session after the US home sales data came in at a disappointing reading of -2.5% which fell short of initial market expectations of 0.5%. Luckily, the market is now shifting its focus on the Fed’s rate hikes this 2017, particularly the pricing of these rate hikes. The strength of the USD is very evident as of late, since the lack of trading and relatively low market liquidity was unable to mask the dollar’s strong stance, as well as the CAD’s pointed weakness.
For today’s trading session, there are no major economic data scheduled to be released from Canada, while the US is expected to release its weekly oil inventory data. Since the market is relatively thin due to the holiday season, expect an added consolidation for the USD/CAD with a bullish undertone.
The trading session of the pair NZD/USD has high volatility on Friday as traders settle their positions in closing for the year end. A slightly supportive candle is seen to form with a strong resistance at 0.70 level while it is supportive on prior trading session. The exhaustive candle pattern encouraged sellers to be active, trying to move the price towards the 0.68 level. The U.S. dollar remains strong while the New Zealand dollar is expected to be lower as greenback dominates the trend.
The pair EUR/GBP declined last Friday and has been carried on for quite some time. There’s quite a resistance above the psychological level on the direction towards the 0.87 level that signals an opportunity for selling. The market is trying to move the levels further downward on the way to the next target at 0.83 handle, With the strong resistance for this pair, one way to trade this pair is to sell it moving along the surge on its short-term charts that continues to go downward.
EUR/JPY Technical Analysis: January 3, 2017
The EUR/JPY had an initial rally on Friday, however, shifted to another direction and formed an exhaustive candle logically. The pair was unable to break out through the upside and continued to consolidate on its current place. Meanwhile support level hovered in a lower position in order to maintain the market out of debt and any other difficulty. The price floor of the market settled near the 120 region. The next potential target is 125 mark, favoring a higher level against longer-term trends. Selling interest seems little no importance as of this writing.
The British pound paired with the Japanese Yen rallied last Friday as it moved ahead of the hammer pattern on Thursday. This event caused many buyers to return to the market as it moved near the 145 level. A break above the aforesaid level will drove towards the 150 region.
The GBP/JPY continued to have a significant dip by which the market in return would increase buying opportunities. On the other hand, the price floor of the pair is below the 140 handle.
The pair GBP/USD has been moving softly and remains resilient despite the appreciation of U.S. dollar since yesterday. This was brought by closing of London market same with the New York market that causing the low liquidity and weak volatility of the pair. Since today is the opening again, it is expected for the pair to gain volatility and waiting for hints on what will happen to the short term trend.
The U.S. dollar surged in the early weeks of December since the announcement of the Fed rate hike but a few correction were seen as the days advanced near the holidays. This pushed the pair to go lower towards the 1.2400 level predominant in thin market but it is expected that this will only occur for a short period of time. Since it is after holidays, then there will be high liquidity that guarantees the next moves compared to how it was 2 weeks ago.
The Manufacturing PMI data from U.K. will be announced today that starts this week rich in data while the market awaits if the trend will continued to be supported by U.K. keep posting positive results in the midst of Brexit preparation. However, the surge of dollar may continue for some time while pound weakens. Hence, any form of rebound for the pair signals an opportunity for short-term position.
The USD/CAD was one of the few currency pairs which benefited from the dollar index surge, as well as the recent drop in crude oil prices during yesterday’s trading session, which was the result of the carrying out of the recent agreements between oil production firms. The USD/CAD pair continued to exhibit a somewhat circumspect trading in spite of the dollar strength and has also limited itself to a tight trading range yesterday. The USD/CAD pair made a short-term drop at just below 1.3400 points but eventually reverted back to due an onslaught in demand and is now currently hovering at just below the 1.3450 trading range. The currency pair is expected to increase its strength as the day progresses, especially since majority of traders are now finishing off the holiday season and are now coming back to their trading desks. Even if the increase in the dollar index is not expected to drop anytime soon, its effect on the currency pair is expected to be somewhat subdued since the effect of the dollar surge could be offset by the recent increase in oil prices.
For today’s trading session, there are no major economic news releases from both Canada and US, and if the USD’s strength continues to go across the board, then the USD/CAD could possibly re-test the 1.3500 levels soon.
As the market’s overall volatility and liquidity returned yesterday following the holiday season, the USD once again exhibited its strength across the board. The strength of the currency was further augmented by the strong economic data which was released from the US. The US Manufacturing PMI data came in yesterday and showed a positive reading of 54.7, which just evident of the US economy’s recently positive economic data. If the nation continues to clock in positive economic sentiments, then this could further cement the chances of more frequent rate hikes from the Federal Reserve this year, and could also lead to faster hike pricing as well.
As a result, the EUR/USD pair plummeted through 1.0400 points and even surpassed its monthly lows last December for a short duration but eventually recovered during the opening of the European trading session and is currently hovering within the 1.0400 trading range. Market players are expecting the USD’s strength to be felt across the market for today, and if the EUR/USD could manage to break through 1.0400 points, then this could lead to the pair going lower further and possibly reaching 1.0300 points.
For today’s session, there are no major economic data coming from both the European Union and US and the market is most likely to be dominated by the onslaught of the returning of traders into the market, and any reversion in the EUR/USD should be seen by trades as a short-term opportunity.
The New Zealand currency had recovered compared to its American counterpart after the data release from China's manufacturing Purchasing Managers Index. Meanwhile, the pair established its recovery during the early trades yesterday in spite of the dollar’s strengthening across the board.
The NZD plunged through an upward trend and beat the 0.6950 level in the middle session of Asian trading. Nevertheless, the upswing that last overnight tried to hold back below the 0.6950 hurdle where the NZD/USD found a renewed selling interest. Moreover, the pair rebounded from the level amid the post-EU open and continued towards the 0.6900 support.
The 4-hour chart showed the price pushed the 50-EMA upwards in the morning trades. The pair was unable to expand its growth and further entered the 50-day moving averages before the outset of the North American session. The 200-EMA together with the 100-EMA sustained its bearish signal and the 50-EMA established a neutral stance. Resistance took the 0.6950 level, support approached the 0.6900 area. The MACD histogram traded on the downside. While the RSI oscillator lies in the neutral zone after it departed in the overvalued readings.
A bearish sentiment ruled on Tuesday. It is highly anticipated that the currency pair’s next target is 0.6900. In case the NZDUSD surpasses the initial target, the price is possible to move ahead to the 0.6850 region.
The positive sentiment of the oil market yesterday brought favorable impact on commodity currencies including the Canadian dollar.
The U.S dollar recovered in the Asian hours and slowed down within the 1.3470 range when the commodity-linked pair move towards fresh offers as it continued to fell under the 1.3400 support during the onset of EU trades.
Sellers were able to resume their gains amid the European session and pointed to the 1.3260 region. The downward pressure weakened near the 1.3300 while the price made a reversal around the aforesaid level. The price further broke the 200 and 100-EMAs in a descending manner as shown in the 4-hour chart. The 100 and 50-EMAs maneuvered towards a higher position while the 200-EMA is trending neutral. Resistance took the 1.3400 level, support highlighted the 1.3330 mark.
MACD indicator declined which confirmed strength for the sellers. RSI kept intact around the oversold zone.
In case the price had directed below the 1.3330 region, it will open an opportunity for the sellers to continue a short-term downward trend. The next probable target of the sellers are the 1.3190 and 1.3260 marks. The USD/CAD is able to bounce off few of its losses if it moves back on top of the 1.3330.
The GBP/USD significantly increased in value during the previous trading session after the USD dropped following the release of the latest FOMC meeting minutes. The market was somewhat docile during the rest of yesterday’s session but immediately picked up after the release of the minutes during the North American session yesterday, and has caused the USD to undergo corrections across the board.
However, the reaction of the GBP/USD pair to this phenomenon is somewhat docile compared to other USD-related currency pairs, and this is expected to keep the bulls on their toes. Initially, the GBP/USD pair was expected to rise exponentially since the UK construction PMI data clocked in a highly positive reading and exceeded its market expectations of 54.2, and the FOMC minutes lacked the expected hawkishness from the market. But the reason why this currency pair’s growth was significantly limited is that the various risks and uncertainties surrounding the Brexit process continues to dog a lot of traders due to the general confusion within this issue. This is why a number of speculators are saying that the GBP/USD would be receiving the shorter end of the stick once the USD regains its strength.
Although the UK is not expected to release any economic data for today, the US will be releasing a number of important economic data along with the highly essential NFP report, which is expected to determine the overall market sentiment for the rest of the month. If these set of data comes out as positive, then the USD could possibly rebound and could be sustained until the end of January.
The USD/CAD pair exhibited a significantly large correction during yesterday’s trading session after the USD lost some of its value due to the absence of a hawkish undertone on the minutes of the FOMC meeting which was released yesterday. The USD/CAD only weakened further since it had already failed to reach the higher trading regions. The USD/CAD pair is now sitting just over the 1.3300 trading region.
Since oil prices have been generally positive during the past few days, the market expects that its effect would be felt in the current value of the CAD as well, and true enough, the currency pair dropped yesterday while the market went into a lull. The Canadian dollar then extended its losses after the release of the FOMC minutes, which triggered the weakening of the USD and therefore increased the downward pressure on the USD/CAD pair.
There are no major economic news releases from the Canadian economy for today’s session. However, the US is expecting to release a number of major data, including the Unemployment Claims data, and the ADP employment report. These data are determinant of whether the market would experience added volatility or otherwise, depending on the readings. The US will also be releasing the NFP report tomorrow, which is considered as a critical determinant of market volatility. Traders are encouraged to evaluate the effects of these news releases on the currency pair before trading in on the USD/CAD.
The USD/CAD has recently been in a reticent mood during the past few trading sessions, and analysts are speculating that the USD/CAD pair could possibly be in for a good trading session since oil prices have now become buoyant and is expected to remain buoyant since the cutbacks in the production of oil are expected to be implemented anytime soon, thereby spelling good news for the Canadian dollar. The Canadian trade balance data as well as the employment change data also came out exceeding initial investor expectations, and this means that the CAD would be receiving substantial support both in the long term and short term, and the Canadian dollar’s value could be well on its way to increasing.
In a much more normal market setting, a scenario such as this would automatically lead to a correction in the USD/CAD. However, the USD is also gaining strength alongside the CAD, and this is expected to offset if not completely counter the effects of the recent rise in the value of the Canadian dollar. This situation is then expected to keep the pair within a tight trading range in the short term period. Friday’s session was a testament to this scenario, as the currency pair made a short drop at 1.3200 points but immediately went up above 1.3200 after the release of the economic data from the regions before finally settling just below 1.3250 points. There are no expected economic data to be released from both the Canadian and US economy for today, and this could help the USD/CAD to extend its gains towards 1.3300 points.
A lot of analysts have been initially saying that the GBP/USD pair will be the currency most likely to experience the majority of the adverse effects of the recent surge in the USD’s value, especially since there is a lot of confusion and discussion going on with regards to the provisions of the Brexit process, particularly with its stakeholders, who all have to step up their game in the next two years. This is why the GBP/USD pair has recently become more susceptible than ever, and traders are advised against selling any bounces in the GBP/USD pair. The downward trend in this particular currency pair is very evident, since its bounces have been very few and far in between, with deep corrections dogging the pair’s direction.
Friday’s session proved this particular downtrend in the pair, since the market has seen the currency pair stop its consolidation and plummeted through 1.2400 points and eventually through 1.2300 points. The NFP report as well as the average wages data from the US also came in last Friday, with the data showing an increase in average wages, thereby increasing chances that the Federal Reserve would be soon stating its next interest rate hike. The Scottish Prime Minister has also released some comments over the weekend, saying that Scotland would most likely undergo yet another vote with regards to “Scexit”, or Scottish independence from the UK. During the controversial Brexit vote, it can be recalled that Scotland initially voted to remain in the European Union but eventually had to concede after majority of the UK states voted to “exit” from the EU. This is only one the many issues surrounding the Brexit process, and will be incessantly putting the sterling pound in great risk.
There are no major economic data expected today from both the UK and the US, and the market is expected to be continuously dominated by the existing market trends for today’s trading session,and the USD strength is expected to be the driving force behind the market for today.
EUR/USD Fundamental Analysis: January 9, 2017
The EUR/USD pair traded in a muted fashion and exhibited ranging and consolidation after falling slightly from its original value following the release of the NFP report as well as US earnings report last Friday. The NFP report fell somewhat short of its initial market expectations. However, the US wage earnings increased significantly, thereby compelling the market to shift its focus instead on the wage earnings data.
The January report for the average wages data has spelled good news for the market, since it generally shows that more and more people are now able to sustain themselves, and would still be able to do so even if the Federal Reserve chooses to again increase its interest rates as needed. This has caused the USD to regain its losses, with the EUR/USD pair losing its ability to maintain its stance over 1.0600 points and has since then went below 1.0550, where it is still currently situated. Analysts are speculating that the strength of the USD would continue to surge for today’s trading session.
There are no major economic news releases expected from both the US and the European Union for today, and this means that the current market trends are expected to continue dominating the economy for today. The USD is expected to continue storming through the EUR/USD pair’s trading activity for today, even though this particular currency has exhibited unwavering strength over the past few days. This currency is expected to remain subjected to downward pressure for the rest of today’s session, and this could possibly induce the pair’s direction to move towards 1.0500 points.
The commodity-linked Canadian currency moved back as the dollar strengthened and oil prices declined. A bearish bias prevailed on Monday. The price tried to recover however, the 1.3260 hurdle prevents it to continue.
Upon reaching the aforementioned level, the greenbacks rebounded from the barrier and progress towards the 1.3190 region afterward.
The price continued to develop under the moving averages as indicated in the 4-hour chart. Shown in the same trading chart, the 50-EMA extended over the 100-EMA downwards. Moreover, the 50 and 200-EMAs maintained a lower position while the 100-EMA held an upward direction. Resistance lies at 1.3260, support entered the 1.3190. The MACD indicators improved which confirmed weak seller’s position. RSI hovered in the oversold readings.
The bearish sentiment is preferable to dominate as of now, another downtrend is further expected. The next target of the sellers are 1.3120 and 1.3190. The USD/CAD is able to bounce off its losses supposing that it breaks the 1.3260 handle upwards so it can reached the 1.3330 region.
The recent drop in the value of the US dollar proved to be good news for the Australian dollar, as this provided substantial support for the AUD during the previous trading session. In spite of the fact that the previous sessions were mostly made up of high bottoms and tops, the Australian dollar was still generally able to maintain its standing on the positive side of the chart. The AUD/USD pair closed down the previous trading session at 0.7353 points after increasing by +0.82% or 0.0060 points.
A number of Australian economic data was released during Monday’s trading session, with the Building Approvals data coming in at a positive 7.0% reading and the Australian retail sales data coming in at a somewhat dismal reading of 0.2% after failing to meet market expectations of 0.4%. Meanwhile, the US Labor Market Conditions Index dropped by 0.3 points, while the Consumer Credit data surged by 24.5 billion from its previous reading of 18.3 billion.
The AUD/USD pair will be starting off today’s trading session within a somewhat critical range within 0.7341 to 0.7385 points. If the currency pair moves just underneath 0.7341, then this will be an indicator of a larger selling pressure than buying pressure at the present levels of the pair. Since there are no expected economic news releases from the region for today, traders are most likely to focus on external events and its effect on the USD and subsequently, on its effect on the AUD. The US dollar could lose its appeal as an asset if oil prices drop further which will cause US Treasury yields to fall as well.
GBP/USD Fundamental Analysis: January 10, 2017
The sterling pound continued its weak trading activity during yesterday’s session as the fears and confusion surrounding the Brexit process as well as other such concerns continue to weigh down on the GBP, a trend which has been going on for the past weeks. The GBP/USD pair was unable to increase in value in spite of the marked dollar weakness during the previous trading session. Market analysts are speculating that the currency pair is currently locked within a highly bearish stance and could possibly incur more losses in the coming days.
Stock prices fell yesterday due to uncertainties surrounding the current position of commodity prices, particularly crude oil prices, as well as Brexit-related concerns. A lot of traders and investors are saying that the market might be well-headed for a hard Brexit, which means that the negotiations between UK leaders and EU officials might prove to be much harder than expected, and also implies that the UK might be unable to obtain free market zone access to the rest of the European Union once they formally leave the eurozone. In addition, Scotland seems to be taking measures to leave the UK in protest to Brexit, which means that the sterling pound is more likely to decrease further in value.
For today’s session, the current market trends are expected to continue since there are no scheduled releases from the UK and the US. The sterling pound is still expected to fail to bounce back from its recent low levels due to the various negative economic factors which continue to affect the state of the pound.
USD/CAD Fundamental Analysis: January 11, 2017
Just like the majority of other currency pairs, the USD/CAD pair had ranged and consolidated all throughout the rest of the previous trading session without any definite direction. The traders and investors transacting in this particular pair seem to be uncertain with regards to its direction and is first making sure that the currency pair first takes a definitive step on its chosen direction before they do actual buying and selling with the USD/CAD pair. The general trend for the USD/CAD pair is expected to be on an upward direction, and corrections along the way should be seen as long opportunities.
During the previous trading session, oil prices took a turn for the worse as the agreements between oil producers failed to go as smoothly as originally planned, mostly due to the lack of proper implementation from both parties. As a result, the CAD was kept from rising value as oil prices subsequently crashed in value. This is why the CAD was unable to take advantage of the recent decrease in the USD’s value, and the Canadian dollar is now finding it difficult to make substantial progress in both directions,whether upward or downward.
There are no major news coming out from both the Canadian and US economy for today. However, Trump is scheduled to address the US in a press conference later today and the market will be relying on this particular address since this will be the determinant of the general direction of the US dollar. As for the USD/CAD pair, the currency pair would most likely be affected once Trump addresses how he will be handling the international neighbors of US, with Canada being one of them.
The sterling pound merely continued its previous activity of consolidation and ranging albeit with no clear direction as of the moment. The range of the GBP/USD is tightening further as we speak, and the market is expecting an explosion any time soon. However, this major event’s direction has yet to be seen but it can be assured that there is a movement by up to 300-400 pips. However, the risk for the GBP/USD pair is expected to remain in the downward direction due to the weak GBP and strong uptrend in the USD.
However, the recent strength of the USD is expected to be tested today during Trump’s press conference since the market will be closely monitoring Trump’s approach with regards to a number of issues. If Trump decides to take the diplomatic route, then this could trigger a boost in the value of the USD, thereby putting immense pressure on the GBP/USD pair, even though the sterling pound is still currently undergoing pressure from the various confusions surrounding the Brexit process.
The UK is set to release its manufacturing production data for today’s trading session, and this will be an indicator of whether the UK will be able to maintain its current trend of positive data releases which are not yet affected by the Brexit process. If this particular data comes out as negative, then this could increase the pressure on the sterling pound.
USD/CAD Fundamental Analysis: January 12, 2017
The USD/CAD pair exhibited additional corrections during yesterday’s trading sessions as the US dollar weakened significantly following the press conference of president-elect Donald Trump. The market initially expected Trump to give hints on his proposed economic, fiscal, and monetary policies but instead disappointed market players after he merely talked about his personal interests and his business enemies. This then caused the dismal drop in the value of the dollar. The stock market was able to recover slightly towards the end of the session, but the same could not be said for the US dollar.
As oil prices managed to regain its losses during yesterday’s session, this has proved to be good news for the Canadian dollar since this lended the CAD some much-needed support and has triggered the USD/CAD pair to reach just under 1.3200 before settling to 1.3150 points. The economic news release from Canada came out better than what the market expected, and since oil prices are now looking good, these are expected to provide susbstantial support for the CAD in the long run. The USD/CAD pair could possibly test the 1.3000 level due to the recent weakness in the USD
For today’s session, there are no major releases from the Canadian economy but we have the unemployment claims data from the US which will be released during the North American trading session. However, the most dominant market trend today would most likely still be the effects of the recently concluded press conference, and this is why the pair is possibly up for more weakness and volatility for today.
The US dollar took the spotlight yesterday as the market reacted wildly to Donald Trump’s press conference during the latter part of the New York trading session. The market was initially subdued during the London and Tokyo trading sessions since the market was generally looking forward to gauge Trump’s demeanor, as well as to decipher his administration’s plans for the next 4 years and to see whether Trump will actually be pushing through with his proposed policies during his campaign.
However, Trump went in for a very disappointing run as he displayed his usual tactlessness and brashness and even highlighted his desire to build a Mexican border within two years. This move was wholly unexpected by the market, and this caused the USD to crash and plummet across the board. The GBP/USD pair, which has been languishing in the bottom rungs of the market for the past 2 months, was able to immediately recover its losses and was able to push through 1.2200 points and even reached 1.2250 before finally settling at just under 1.2200 points.
Since there are no major news releases expected from the UK for today, the previous market trend is expected to dominate today’s trading sessions. The bulls could possibly profit from a solid upward move from the GBP/USD pair if the pound would be able to break through 1.2300. Otherwise, the currency pair could be merely subject to short-term corrections.
USD/CAD Fundamental Analysis: January 16, 2017
The USD/CAD remained to trade close on its range lows on the back of the dollar’s strength recovery. While the prices of oil appeared to have an optimistic result which assisted the CAD keep in the short term.
The pair plunge under the 1.3100 level following the extensive weakening of the dollar, however, it immediately found buying pressure which supported the pair to return on top of 1.3100.
Over the past few months, the USDCAD showed a consistent uptrend and every correction met a prompt and strong bounce which seems to be repetitive. The way towards the 1.400 medium target suggest a slow progress and the main uptrend supported the bulls to purchase every correction.
Recently, the pair have acquired more buyers and there are banks that started to advise their clients regarding the 1.40 target.
The strong Canadian data with a weak economy of the country is the reason why traders are directed to maintain a hard clean break under 1.3000 which signals that an uptrend has ended.
There are no major economic data from Canada for this day since it was a bank holiday in the United States. It is further expected for a consolidation and ranging close to the range lows today.
GBP/USD Fundamental Analysis: January 16, 2017
The GBP/USD closed the week with a sluggish stance and struggled to maintain its gains. These events put on some fears against the pound bulls because this will weigh over the Cable upon the return of dollar’s strength.
The pair stayed below the 1.2200 on Friday until the weekend took place which triggered indications for a hard Brexit. This caused for the pair to create a large gap and traded shortly under 1.2000.
The strong economic data of the UK shown for the previous months did not influenced the sterling’s value at all. However, it is deemed that the British currency is able to withstand its current situation and will accumulate gains afterwards. Looking forward, the bulls still needs to endure the worst impact as the bears tend to insurge. The hard Brexit cause risk and confusion for the investors which made them think twice prior pound purchase.
In the last two weeks, there are news about the UK's possibility to employ hard Brexit, whereas, PM May’s speech is highly anticipated within this week. This event brought the Britain’s economy a tough time but we believe the country will become much stronger eventually.
For today, we expect no new UK economic release and losses is further expected with a fundamental near-term target of 1.17.
EUR/NZD Technical Analysis: January 17, 2017
A break higher than the minor resistance of 1.5007 is seen from 1.5235 level. This is followed by a next break at 1.5193 completes the second wave towards the 1.5837 third wave level. Beyond the third level indicates a long-term position while trying to confirm the latest correction completes the zig-zag correction. On the other hand, the support levels could go towards the 1.4778 level before the next unexpected surge comes in.
Currently the Resistance level of the pair comes in at 1.5007 then 1.5050 towards 1.5193 levels while the Support level is seen at 1.4841 then 1.4810 towards the 1.4778 levels. The Pivotal turn is at 1.4895 level with buying opportunity when the price breaks more than the 121.687 level.
The EUR/USD pair traded weakly during the previous trading session with the weak euro having more effect on the currency pair than the recent dollar weakness. The international economy is now very concerned with UK’s hard Brexit process, since this could spell disaster not only for UK but also for countries within the eurozone. Although the hard Brexit could have less negative effects for the UK, this could instead affect EU countries since most of them are doing business with UK, and the removal of a free trade zone with UK and the rest of the EU could become very disastrous for a lot of EU countries.
This was one of the reasons why the EUR/USD pair corrected largely during yesterday’s session and plummeted down to 1.0600 points yesterday and even went lower for some time. The currency pair could have experienced much larger corrections if not for the US bank holiday yesterday.
For today’s trading session, there are no important economic data coming from the eurozone but Theresa May will be speaking during the New York session with regards to the guidelines of the expected hard Brexit. May’s speech could have a negative effect on the value of the euro and traders are expected to take extra caution when it comes to trading with this particular currency pair.
GBP/USD Fundamental Analysis: January 18, 2017
The GBP/USD pair exhibited heightened volatility during the previous trading session as the dollar lost strength and the sterling pound regained much of its footing in the market. Theresa May’s speech yesterday helped in clearing up some of the murkier parts of the Brexit process, and this has helped in placating various investors and has minimized concerns surrounding the Brexit process, thereby increasing the value of the sterling pound. This has then prompted investors to pull out their funds from the USD, thereby causing the dollar to drop in value.
Theresa May has highlighted in her speech yesterday that the UK will indeed be going for a hard Brexit and will be eliminating any kind of access from the eurozone. However, the PM has reiterated that the UK government will be negotiating with eurozone leaders in order to have a different kind of trade relations with the European bloc. Since this has eliminated confusions surrounding Brexit matters, thereby increasing the pair’s volatility levels. The GBP/USD pair initially dipped to 1.2015 points prior to Theresa May’s speech but quickly climbed up to a daily high of 1.2414 points.
However, there are still a handful of concerns surrounding the Brexit process, and the expected invocation of Article 50 is also seen as a possibly risk for the stance of the currency pair as well as the UK economy. As such, these are expected to continuously pressure the GBP in the next few days.
For today’s session, UK will be releasing its claimant count change data as well as its average earnings data, while US will be releasing its CPI data later today. It remains to be seen whether these data sets would be continuing the string of good economic data during the past few days. If the UK data comes out as positive, then this push the pair upwards to 1.2500 points, although this might not be enough to actually push the currency pair beyond this particular barrier.
The Prime Minister of UK, Theresa May laid out few ground rules yesterday regarding the possible flow of the Brexit process. Global risks were also expected to lessen and in whatever time it might occur, it will likely weigh on the dollar.
The greenbacks were seen to be on its weaker stance prior this event that will hit the currency much harder. This will caused for the USD/CAD to test 1.3000 over and over, there is also a sudden solid bounce upwards.
The USD continued to suffer from the drawbacks due to the risky environment from Trump’s administration which continue to confuse traders and investors because of its vague plans.
Moreover, the expected thrice rate increase of the Fed will likely be supported by the dollar with the medium and long term, however the near-term risk that surround the new US government causes the dollar to soften.
Another test of lows is assumed to occur in case the Canadian data will present an optimistic result. Since the economic data from the region is relatively strong and identify whether this upbeat is from the BOC statement about rate policy or from the media conference of the BOC Governor.
Furthermore, the BOC is scheduled to hold its rate for today, in case the statement came in hawkish, the 1.3000 level are needed to test again.
The EUR received a much-needed boost from yesterday’s trading events, wherein the USD plummeted and weakened while the sterling pound regained its previous losses across the board. This has then caused the EUR/USD pair to break through the 1.0600 barrier after quite a time and even went up as high as 1.0700 points, where it traded momentarily before settling just below 1.0700 points.
In spite of the fact that Theresa May has indeed announced that the UK is headed for a hard Brexit process, the concerns surrounding this particular occurrence have somewhat diminished, prompting investors to pull out from the USD and onto high-risk areas such as the stock market. The US dollar has since then weakened, and the clarity of the Brexit process has helped in pushing the euro higher. Although the hard Brexit would most probably have an adverse effect on eurozone trades, the renewed clarity of the process has helped placate investors and has created upward support for the EUR/USD pair. The currency pair is now seen to possibly reach the 1.0850 trading region.
There are no major economic readings set to be released today from the eurozone, but the US will be releasing its Core CPI and CPI data during the New York session, and these will be closely monitored by investors since a string of good economic data could increase the chances of a Fed rate hike in the near future.
USD/CAD Fundamental Analysis: January 19, 2017
The USD/CAD pair was previously situated in a very critical support region and has reverted in the region just below 1.3000 points. The Bank of Canada has already released its statement regarding the central bank’s rates, and the bank also held a press conference later in the day. The pair’s strong bounce was seen as the US dollar and the Canadian dollar went in highly opposite directions during the previous trading session.
The USD had already regained its lost strength and has exhibited positive activity across the board after Yellen announced that the Fed could possibly go for more rate hikes in the future if the economic data from the US continues to be positive. On the other hand, the Bank of Canada announced that it will be making no changes on its current interest rates. However, the succeeding press conference from BoC’s Poloz has made it clear to investors that the Canadian economy has not shown any progress and has instead stayed in the same place. Moreover, Poloze expressed his sentiments regarding a possible trade war under the Trump administration, and this has adversely affected the CAD and has caused the USD/CAD pair to revert back from the 1.3000 trading range and was able to shot up through 1.3100 and even through 1.3200 where it currently sits above as of present time.
Market players are expecting that the USD/CAD pair might be in for a strong uptrend and could possibly reach 1.4000 points. For today’s trading session, Canada will be releasing its Manufacturing Sales data, while US will be releasing its oil inventory data as well as the Unemployment claims data. These are expected to induce volatility in the pair. However, it is highly likely that the USD/CAD pair will be in for an uptrend in the long run.
USD/ CAD Technical Analysis: January 23, 2017
The USD/CAD pair traded with a bullish tone on Friday. The uptrend reached the 1.3330 level in the beginning of the trading session. Later that day, the buyers were able to surpass the level as it persists to move higher in the mid-European trading session. Yet, it was not able to reach the 1.3400 level as the price withdraw back to 1.3330 losing its momentum during the New York trading session.
The Resistance level is seen at 1.3400 while the support level comes in at 1.3330 level. The Moving Averages broke in the upper channel and the price managed to linger higher for the day as the 20-EMA moves upward. On the other hand, the 100-EMA is moving lower while the 200-EMA moves in a neutral chart. Overall, the MACD histogram implies the buyers leading the market. Moving with it, the RSI was set within the overvalued readings where a new high is still possible.
Both the Retail sales and Consumer Price Index Reports did not meet the expectations of investors. Nevertheless, this has minimal effect to the currency but it is still under pressure despite the strong greenback.
The pair maintained its upward direction from 1.3018 level following the consolidation state of the uptrend at 1.3387 level. A close higher than the 1.3330 level may set it in motion to move towards 1.3400 level and if the pair strongly sets at 1.3400, this indicates the continues uptrend. However, if the market fails to break higher than the 1.3400 level, this would mean a negative outlook to the market.
Overall, the price trend remains bullish ranging from 1.3240 level to 1.3387 level until the next days to come but if the sellers dominate the market, this could move the price towards the 1.3190 mark instead. If the market is able to maintain the current support level at 1.3240 level, the market could anticipate a continuous uptrend with the next target at 1.3500 level.
EUR/USD Fundamental Analysis: January 23, 2017
The EUR/USD increased for the past few days following the sluggish stance of the greenbacks. The single European dollar benefited from the position of the greens as it climbs to 1.0700 and further extended its gains. The USD weakened with no definite reason as others deemed for the general correction while some claimed it’s all because of the skepticism for Trump’s administration. However, the American currency is clearly at a disadvantage point against the euro.
The EUR is relatively buoyant for the previous week, much more when its U.S peer manifested some strength. The euro continued to bounce back from a limited correction and eventually broke the 1.0700 level, en route 1.0840 region.
There are some issues that the weakness are caused by the speech of Trump coupled with the curtailment for the rest of Obamacare. Moreover, there exist a general risk about the US President’s team and their plans and these uncertainties weighed on the USD.
As the last week of January enters, the economic news is lessened while the upcoming is a beginning for the USD towards an unidentified state which brings higher volatility.
The US and Euroregion do not have major reports to be released for today, what we expect is the continuous fall of the greens.
Today’s trading session is expected to be very critical for the GBP/USD pair since UK is now awaiting for the release of the country’s SC ruling with regards to its eurozone membership, as well as the Brexit process, which is set to be released during today’s session. The GBP/USD pair has increased in value over the past 24 hours as part of market anticipation, with the currency pair closing yesterday’s session at over 1.2500 points after months of being unable to go over 1.2500 due to repeated pummeling from bears of the said currency. However, since yesterday was a generally good day for the sterling pound, the market is expecting that this currency pair would be able to reach 1.2700 or even 1.2800 in the short-term outlook for the GBP/USD pair.
The UK Supreme Court will be releasing its decision on whether the Article 50 will have to undergo scrutiny from the Parliament or otherwise, since the Article 50 is an essential factor on the carrying out of the Brexit process. The market is generally anticipating that the SC will be approving the Article 50 invocation, and if this does happen, then this will ensure that the whole of the Brexit process will be well-thought of, and this will ensure that equal distribution of ideas instead of the power becoming limited to select people in the government. This is expected to drive up the value of the GBP, but then there are also some risks that the Parliament approval might cause delays in the Brexit process since all views and ideas must be taken into consideration as part of the process.
There are no major news releases from the UK except for the SC ruling for the Brexit process, as well as from the US.
USD/CAD Fundamental Analysis: January 24, 2017
The USD/CAD pair continues to trade within a tight range and consolidated for the most part of yesterday’s trading sessions. The CAD was recently subject to an increased pressure after the Bank of Canada expressed it plans to implement an interest rate cut in the next few months as a result of the Canadian economy becoming increasingly stagnant after not showing much development in the recent economic readings. This added pressure in the CAD has however helped in offsetting the dollar weakness during the past few days.
The Canadian dollar is probably the only currency which the USD has gained in relation during the past few sessions and has continued to maintain its gains over this currency, while other major currencies have increased in value and has left the dollar behind. The US dollar has been in hot water recently, especially since the market is generally uncertain on Trump’s administration policies and how the newly-minted president plans to run the US economy. The market is constantly kept on its toes as Trump continues to act brash in spite of the initial euphoria during the US elections, where the market had hoped that Trump’s election might be generally be good news for businesses around the world. However, the current administration might have to undergo a lot of work before finally regaining the market’s confidence.
There are no major news releases from both the Canadian and the US economy, and as such, the USD/CAD pair is expected to experience more consolidation and ranging during today’s session. Since the weakness of both currencies are apparently cancelling each other out, the currency pair is unable to make any significant progress and the bulls might have a hard time pushing the currency pair towards 1.3400 points and higher.
As the Asian session emerged, the bullish momentum appeared to be short-lived yesterday. The price failed to hold its gains and reversed down from the 0.7250 level. Sellers expanded their profits breaking the price through 0.7200 region amid the EU trades. The selling interest was unable to maintain its position upon reaching the region and endured price rejection upwards.
The NZD/USD is confined on top of the moving averages based on the 4-hour chart. The 100 and 50-EMA kept its bullish stance while 200-EMA was flat. Resistance touched 0.7250 mark, support entered 0.7200 handle.
The MACD tool still presented the same position as buyer’s strength continued to grow. The RSI settled close to the oversold readings, confirming another lower trend.
Meanwhile, the 0.7250 barrier is the next bullish target. In case, a return occurred towards 0.7150 there is a probable decline against the 0.7100 support.
NZD/USD Technical Analysis: January 30, 2017
The American dollar was able to sustain a bid tone last Friday. Meanwhile, the markets highly anticipated for the further plans of Trump coupled with the GDP of the country for the fourth quarter. The NZDUSD kept intact in the ascending channel pattern on Friday. The price were pushed by the downward impetus toward its lower limit last 26th of January. Moreover, a recovery lasted overnight showed insignificant results. The European traders solely managed to drive the spot upwards
The pair was able to expand its recovery during the NA session. The price continuously sits on top of the moving averages according to the 4-hour chart. The 100 and 50-EMAs moved higher while 200-EMA is positioned in the neutral trend mentioned in the similar chart.
Resistance entered 0.7300, support reached the 0.7250 region. The MACD indicator confirmed weak buyer’s position as it decreased steadily. Bullish sentiment was likely to prevail for today. The short-term goal for the pair is 0.7311.
USD/CAD Fundamental Analysis: January 30, 2017
The USD/CAD pair closed down the week on a much lower note as compared to the previous trading week after the Canadian dollar exhibited strength across the board and the USD weakened in value yet again even though it was able to recover during the latter part of the week. This particular recovery of the US dollar looks like it will be here for the long run, and this is why dollar bulls are putting added confidence to the performance of the US dollar in the next trading sessions. In addition, the Trump administration has already went about making changes and fulfilling its campaign promises, such as the shifts in Obamacare and the Mexican border wall, and the pulling out of US from trading agreements with Canada and other neighboring countries. This has created unrest in the market, and could open the doors for a possible trade war which is very bad news even for the US economy.
This has then prompted the USD/CAD pair to drop significantly in value from 1.3450 to 1.3000 points, but was saved by the sudden surge in the USD’s value as the previous week came to a close. The Canadian dollar also received support from the resiliency of oil prices, which managed to stay put in spite of the recent increase in the value of the US dollar. Market players are expecting this uptick in the USD/CAD to continue and could possibly extend up to 1.4000if it manages to stay just above 1.3000 points.
The Canadian GDP will be released this week, and governor Poloz from the Bank of Canada will also be releasing a statement this week. On the other hand, US will be releasing a string of important economic data including the NFP, wage earnings, as well as the statement from the FOMC. These are all expected to induce volatility in the market, and traders should either exercise caution or wait for things to settle before trading with this currency pair.
USD/JPY Fundamental Analysis: January 31, 2017
The Japanese yen inched higher as opposed to the US dollar as a result of a flight-to-safety trend across the market, which was triggered by investor reactions to a sudden drop in global equity markets. Meanwhile, stocks were sold off as a result of Donald Trump’s immigration ban. The USD/JPY pair closed off the previous trading session at 113.778 after decreasing by -1.10% or 1.269 points.
A lot of investors have sought the protection of the Japanese yen after protectionism concerns arose due to the immigration ban since these could possibly have a negative effect on both exports and imports and could also create substantial risks for the economy. Towards the latter part of yesterday’s session, the Japanese Household Spending data came in with a reading of 0.3%, exceeding market expectations of 0.8% and the previous reading of -1.5%. However, the unemployment rates for the country remain stagnant at 3.1%. Meanwhile, the Bank of Japan chose to maintain its current benchmark interest rates at -0.10%, a move that was generally anticipated by the majority of market players. The central bank also increased its GDP forecast to 1.4% as opposed to its past prediction of 1.0% back in October. In addition, the BoJ also stated that it is expecting an inflation surge of around 2% come the fiscal year 2018.
Interest rate differentials could have a positive effect on the USD/JPY pair since the central bank chose to maintain its interest rates while the Fed hinted at high-frequency rate hikes for 2017. In the short term, the USD/JPY could be driven by volatility coming from the equity markets. However, the dollar-yen relationship could possibly be influenced by the positive interest rate differentials.
The market has been generally expecting the USD/CAD pair to undergo a period of ranging and consolidation as the US prepares to release its NFP report, and this was what happened with this particular currency pair during the past trading sessions. The USD/CAD is currently trading at over 1.3000 and is headed in a generally disappointing trading streak, but then again this region has strong support barriers, and this region might be a good place for traders to go long with a stop loss.
Oil prices have already settled down last month and has exhibited little activity on both directions. As a result, the Canadian dollar was able to obtain some support and the economic data scheduled to be released from Canada are also expected to be generally positive, and there are no major changes expected to occur within the Canadian economy. The drop in the value of the USD/CAD was mainly due to the weakness of the dollar, and once Trump makes major changes in the NAFTA agreement, then the trade relationship between US and Canada could be up for some major adjustments. This has no positive effect on both economies whatsoever, and this uncertainty has been fueling the drop in the value of the currency pair.
There are no major news expected to be released from the Canadian economy today but the market is expecting the release of the NFP report as well as the average earnings data and the non-manufacturing PMI data from the US. If these data comes out as positive, then this could further affirm an interest rate hike from the Fed in the near future, but a weak reading could cause the USD to further decrease in value.
GBP/USD Fundamental Analysis: February 3, 2017
The GBP/USD pair is currently trading at 1.2500 points after briefly reaching 1.2700 points after traders took sell opportunities every time the GBP/USD exhibited reversions. The Bank of England released its statement yesterday and maintained its current rates as expected, while the monetary policy meetings and inflation reports did not deliver anything significant to the economy and did not induce any market activity. However, these neutral readings had adversely affected the currency pair since the majority of market players were expecting hawkish comments from the BoE as well as from the inflation reports, but since both of these data came out as neutral, the market was generally disappointed and this put a significant amount of downward pressure on the value of the sterling pound. However, it was a good thing that the dollar was weak, since if the dollar were stronger then the pound might sink even lower.
The pound is expected to continue its losing streak, and any reversions are expected to be met with major sell-offs, especially with the oncoming volatility which will be caused by the implementation of the Brexit process. For today’s session, UK will be releasing its services PMI data and US will be releasing its NFP reports and wage earnings data. These string of economic readings set to be released today are expected to increase the pair’s volatility. The market is expecting a positive US labor report, and if this happens, then the GBP/USD pair might be able to break through 1.2500 and move further towards 1.2400 points.
The EUR/USD pair has been subject to a lot of messy trading activity during the past trading sessions as the pair had no definite direction and generally exhibited an uncertain trading stance. The currency pair has been vainly trying to break through the 1.0800 trading range and briefly made it through this barrier and even reached up to 1.0828 points but eventually reverted back to its original stance after a massive sell-off met the pair, causing it to fall back to 1.0800 and even went as low as just over 1.0760 points.
Today is the scheduled release date of the NFP report from the US, and the market volatility is expected to surge as this particular report is one of the major economic reports anticipated by the markets every month. The NFP report now is even more crucial than ever, because the Fed has previously stated that the central bank will be relying on positive economic data as basis for whether they will be hiking interest rates in the future or otherwise. In addition, the release of the NFP report is equally important to restore investor and trader confidence in the USD, especially since the past few days has seen the dollar subject to more weakness as Trump drew negative comments from his recently implemented foreign policies such as the immigration ban. This is one of the reasons why the general direction of the EUR/USD remains uncertain since the market wants first to confirm the results of the NFP report before making any concrete moves.
For today’s session, US will be releasing its NFP report as well as the non-manufacturing PMI data and average wage earnings data. Investors are hoping that these economic data comes out as positive in order to induce some strength in the ever-weakening stance of the US dollar.
NZD/USD Technical Analysis: February 6, 2017
The Kiwi against greenback declined on Friday's trading session. A strong support was found at 0.7250 level but was able to reverse the trend after forming a bullish candle while the resistance is found at 0.7350 level. If the price breaks higher than the psychological levels which will then result to a decline to the 0.71 level. Traders should expect high volatility in the market. Hence, fluctuations and rough trading for the pair.
USD/CAD Technical Analysis: February 6, 2017
The pair USD/CAD surged on Friday's trading session. It turned around finding a resistance towards the 1.30 level. The price could set into a new fresh low and this could further go down. However, if the price breaks higher than the candle pattern formed on Friday's session, there could be chances for buying opportunities. Traders should monitor the oil market as it has an influence to the Canadian dollar that usually affects the price inversely for the pair.
The EUR/USD pair will undergo pressure this week. Moreover, the NFP report was positive as the average earnings positioned at 0.1% lower than the expected 0.3%. When at first, it is expected for the bulls to take over the market but the trend doesn't have enough momentum bringing the price towards the 1.0800 as a resistance level which was the prior region. The greenback is being swayed because of the uncertainty from Trump and his team to change the policies and cannot be determined the next move of Euro.
The current psychological level at 1.0800 is a significant region and a break in this region could further bring the price towards the 1.12 mark which has been the region for some time last week. The market is trying to break the EUR/USD in the midst of the weakened dollar. At the same time, the market aims to stabilize the current rates but there were not enough support from the administration and economic policy changes and the reports of the economic data.
Although, a majority of the support for the currency supported from the economic data or the administration and at the same time influence the next Fed rate hike. However, it seems that the wage earnings reports are on the lows which could delay the rate hike process. This would put more pressure to the dollar today and this whole week and it is still uncertain until when the dollar rates would hold.
As for today, there will be no major economic news from the Euro or from U.S. regions. It is expected for the price to EUR/USD to remain in consolidation with a bullish bias with chances of a breakout near the 1.0800 level.
USD/JPY Fundamental Analysis: February 6, 2017
The USD/JPY pair attempted to rally several times during the past week due to the positive feel of the US equity markets as well as its effect on the US carry trade but there was a shortage of buyers which could have fueled an upside follow-through. The USD/JPY pair finished the previous trading session at 112.551 points after dropping by -2.17% or 2.496 points. This movement in the currency pair was largely due to Trump’s comments in the past week as well as statements coming from both the Fed and the BoJ.
The FOMC maintained its current rates last week at 0.50%-0.75% and was generally expected by the majority of market players, but the bearish tone of the USD/JPY pair was also largely influenced by the Fed’s refusal to give out hints with regards to its next interest rate hike.
There are no major news releases coming from either Japan or US for this week, and this means that the market will be affected by events that will have a bearing on the current stance of the US dollar. Currently, Trump is aiming for a weaker USD value in order for him to upgrade his statements with regards to currency devaluations and other unfair trade policies. The charts are indicating that the USD/JPY pair could possibly rise up to 109.919 points if sellers of the pair would be able to put enough pressure on the market to march through 112.00 points.
EUR/USD Fundamental Analysis: February 8, 2017
The market has been experiencing a lot of volatility recently due to the pronounced weakness of most major currencies, with traders having a hard time picking out definite directions, with profits going from positive to negative in just a matter of minutes. During yesterday’s session, the USD was able to regain the majority of losses against the EUR, with the EUR/USD pair falling down to 1.0700 points. For a brief moment it looked like that this particular stance of the currency pair would remain standing and would eventually become overpowered by the dollar’s strength but the following day saw the dollar losing its ground and dropping back to its previous lows. There is basically a surrounding fear and marked uncertainty felt within the market right now that all currencies are very weak, which has resulted in this very rare price action.
There are no major news data expected to be released from either the European Union or the US today, and this means more ranging and consolidation activity for the EUR/USD pair. This is generally okay for day traders but could spell disaster for long-term traders as they become hard pressed to find direction in this very chaotic market environment.
USD/CAD Technical Analysis: February 8, 2017
The decline in crude oil prices weighed on the Canadian dollar while the stronger US dollar added pressure to push the loonie downwards.
The USDCAD resumed a short-term uptrend on Tuesday. Moreover, the USD came in green against its Canadian peer. The spot gradually increased overnight reaching 1.3120 level prior to opening of the European session. There is a renewed buying pressure within the greens which supported the pair towards its fresh highs. The price spiked and touched 1.3190 region in the post-EU open.
The barrier restricted its developement as it holds the major enclosed the region. The price drove the 100 and 50-EMAs higher as shown in the 4-hour chart. The pair nearly reached the 200-EMA which became the resistance. Furthermore, the 50 and 100 EMAs shifted to an upward trend while 200-EMA headed lower. Resistance entered 1.3190 area, support holds 1.3120 handle.
The MACD approached the positive territory, preserving this area would mean a stronger stance for the buyers. RSI hovered around the overvalued range indicating another upward trajectory.
It is projected that a near-term bullish momentum will return. In order to resumed this bullishness, the pair should focus on top of 1.3190 mark.
The USD/CAD pair is still trapped within a tight trading range, however the currency pair’s bulls are fairly satisfied with the USD/CAD’s performance as the currency pair is still relatively strong in spite of the dollar weakness, and once the dollar regains its strength, then this will mean very good news for the pair’s bulls. The USD/CAD pair has recently undergone a very stressful period due to the dollar weakness combined with a surge in oil prices which has helped the Canadian dollar keep its head above water.
As the week unfurled, the market has seen oil prices being subject to tremendous pressure and corrections, thereby putting added pressure on the value of the CAD. This is why the Canadian dollar started losing some of its value at the beginning of the week and has provided support for the USD/CAD bulls. Strengthening the currency pair and revert back from its support barrier of 1.3000, with the USD/CAD currently trading at just under 1.3200 points. The pair is expected to continue its upward trend and would only go in for a trend reversal once it manages to break through 1.3000 points. Until then, the USD/CAD would probably exhibit reversions from its lows and the bulls would still be dominating the currency pair, with a medium-term target of 1.4000 points.
There are no major news scheduled to be released from the Canadian economy today but we do have the unemployment claims data from the US, as well as comments from some Fed officials. However, these are not expected to make a significant dent in the pair’s current stance and the pair is expected to consolidate at 1.3200 for the rest of today’s sessions.
EUR/USD Fundamental Analysis: February 9, 2017
The EUR/USD pair failed to make significant progress during the previous trading session and merely continued its current trend of ranging and consolidation and still failed to find a definite direction and was still unable to capitalize on the USD’s marked weakness. The currency pair has been finding difficulty with regards to breaking through the 1.0705 barrier, which has boded well for the US dollar in spite of its lack of progress. Under wholly different circumstances, this particular situation might have caused the dollar to undergo massive corrections but since other other major currencies have been trading on the weaker side of the chart as well, the USD has only managed to keep itself floating amidst the market weakness.
For the past few trading sessions, the euro has been consistently exhibiting a weak trading stance, which was mostly due to various uncertainties and concerns surrounding the European Union. There are now a lot of rumors swirling around whether the EU would still exist after a few years and whether the Brexit phenomenon would be repeated by other countries who would wish to leave the EU. Although a lot of eurozone leaders have attempted to pacify these rumors, this has nonetheless left an effect on the state of the EUR. The forthcoming French and German elections is also a cause of concern for the market since there are strong contenders who are in favor of leaving the union should they win the said elections. All of these factors are putting constant downward pressure on the euro, therefore preventing the currency to make any substantial progress.
US will be releasing its unemployment claims data today and some Fed officials are due to make statements at various forums, and these events are expected to induce volatility in an otherwise very docile currency market.
USD/CAD Technical Analysis: February 13, 2017
The USDCAD was neutral amid Friday night trades. The Asian recovery slowed down overhead the level 1.3120. The greens tried to resume its gains but attempts failed. Renewed selling pressure affected the spot rebounding the price lower than 1.3120 during afternoon session.
The USD fall behind 1.3050 level prior to the opening of the New York hours.
According to the 4-hour chart, the rebounded the 50-EMA lower and tested the 100-day moving averages. The pair is confined under the 200 and 100-EMA throughout the day. The 100 and 50-EMAs is neutralize while 200-EMA moved lower as shown in the same timeframe.
Resistance is at 1.3120, support entered 1.3050 region. The MACD histogram decreased which implied weak position for the buyers. RSI is confined in the overvalued territory near the neutral zone.
Bearish sentiment is expected to prevail. If the commodity-linked pair remained on top of the 1.3120 mark, sell order will be posted. The next possible target of the sellers is 1.3050.
EUR/USD Fundamental Analysis: February 14, 2017
The strength of the USD is now felt more than ever in the market, and this has caused other major currencies to experience the negative effects of the surge in the dollar’s value. For the EUR/USD pair, the currency pair has dropped to 1.0600 points and was only able to prevent itself from further decreasing due to its support barrier of 1.0580 points. However, the pair’s price activity looks very dismal and it is uncertain how long the bulls would be able to keep its hold on the pair before the bears manage to seize control and push the pair further downward. If this happens, then this could spell disaster for the euro.
The market is now able to fully adjust to Trump’s policies after an initial unrest caused by his team’s adjustments to certain regulations, with the market now sure of the administration’s approach with regards to policies, thereby improving investor confidence in the US dollar. This has helped to shift the market’s focus from the Fed’s future moves and Trump’s future implementations as well, and this has further helped to support the USD especially now that the Federal Reserve is keen on sticking to its statement that there will be a total of three interest rate hikes for this year.
The US will be releasing its PPI data today, and Fed chair Yellen will be making statements with regards to the central bank’s monetary policies during today’s speech in the New York session. The market will be monitoring Yellen’s speech later today and if Yellen becomes consistently bullish in her remarks, then the euro could be in for more price drops.
USD/CAD Fundamental Analysis: February 14, 2017
A lot of analysts have been saying that it is highly likely that the USD/CAD pair will be subject to an increased amount of pressure as oil prices continue to stay afloat and the economic data coming from the Canadian region continues to be consistently positive, a signal that the country’s economy gets better everyday. The currency pair is expected to remain under pressure as long as the US dollar remains under control, and this also means that the pair’s bulls would need to consistently strive to maintain the support barrier at 1.3000 points. This activity has been seen during the past trading session as the pair was able to surpass the 1.3100 barrier and is now currently going towards 1.3050 points.
The USD/CAD bears were also helped by the fact that Trump and Trudeau’s meeting yesterday was quite cordial, with Trump clarifying that the shifts he will be making on trade agreements will not have that much of an effect towards Canada. This helped to support the Canadian dollar which tried to surpass the dollar strength but eventually failed as the USD consistently surged in value.
There are no major news releases coming from Canada to day but the US will be releasing its PPI data and Yellen will be making comments on the central bank’s future monetary policy as well as the current state of the US economy. If her comments come out as bullish, then the USD/CAD pair might move towards and could even surpass 1.3100 points.
GBP/USD Fundamental Analysis: February 14, 2017
The GBP/USD pair exhibited a tight trading activity during yesterday’s session as the USD’s value surge was felt across the market. However, this activity somewhat failed to make a dent in the value of the sterling pound. A lot of analysts have been saying during the past few days that the GBP is practically the only currency which has resisted the negative effects of the dollar strength in spite of the fact that it continues to be weak as a result of the Brexit process. This is because UK government officials have been working very hard to make the Brexit process clear for everyone, and any kind of certainty is very much welcomed by market traders and investors.
Another reason for the GBP/USD’s resistance against the strength of the dollar is the continuously positive string of economic data coming from UK which is an indicator that the country’s economy has not yet been affected by the repercussions of the Brexit process. This could also mean that both the UK economy and the sterling pound might even become better and stronger in the long term even when it finally relieves itself from the European Union. These speculations was able to maintain the GBP/USD pair’s position at 500 pips, with more ranging and consolidation expected to continue in the near future in spite of the dollar strength.
UK will be releasing its CPI data today and this will be closely monitored by the market whether this will come out as positive and affirm the country’s strong economic status. US will also be releasing its PPI data today and Yellen will be making a statement with regards to the monetary policy of the Federal Reserve, including economic status and interest rate hikes.
NZD/USD Technical Analysis: February 20, 2017
The NZDUSD were kept below the pressured area and resumed its decline under the 0.7200 level on Friday. Having broke the level, sellers weakened and took a pause to regain some steam attempting to make another move downwards.
The major rebounded the 50-EMA towards a lower point as indicated in the 4-hour chart. The spot extended its development in the middle of 200 and 50-EMAs. The 50-EMA is trending lower, 100-EMA was neutralized and the 200-EMA moved higher. Resistance is at 0.7200, support lies at 0.7150.
MACD histogram lies at the center point. If the indicator approaches the positive zone, it will provide added strength for the buyers. While an entry in the negative territory will open an opportunity for the sellers to dominate the market. RSI escaped from the overvalued area and settled around the neutral region. Should the spot surpass the 0.7200 mark higher, will negate the medium-term negative outlook.
The bulls are able to drive the pair to 0.7250 handle. While a decline under 0.7150 will cause the support the sellers having a chance to continue its slide through 0.7100.
The EUR/USD pair was subject to some nice amounts of volatility during the past week after the currency pair was mainly influenced by the dollar strength during the first half of the week, but immediately went into reversal as the latter part of the week started. The currency pair is now expected to consolidate with a bullish undertone for this week, with projected support levels at 1.0500 points and resistance levels expected to be at 1.0800 points.
Last week, the EUR/USD finally looked like it turned for the better as the currency pair made a steady march towards 1.0500 after breaking through 1.0600 after a foreshadowing of a long-awaited dollar uptrend. This was also further supported by Yellen’s confirmation that the Fed will be implementing another rate hike this coming March. However, the effect of this positive news was offset by the release of the CPI data which showed weak wages data in spite of the overall data being highly positive. This turned out to be unappealing for the dollar bulls and caused the USD’s strength to die down, causing the pair to end at just over 1.0600 points.
For this week, there will be a US market holiday and there are no expected data to come out from both the EU and the US for the week. The EUR/USD pair will most likely continue its current trend of ranging and consolidating for this week.
USD/CAD Fundamental Analysis: February 22, 2017
The USD/CAD has still managed to keep itself afloat in spite of a small increase in oil prices during the previous trading session. The currency pair continued to trade within its ranges, but this could be a cause for celebration of the pair’s bulls as the USD/CAD traded within its range highs with no hints of weakness whatsoever. This movement was also partly due to the recent surge in the dollar’s value which ensured support for the pair’s bulls.
As of this morning, the USD/CAD has somewhat weakened in stance and spent most of the session consolidating within its range highs with no actual direction. The USD/CAD bulls are now monitoring the release of the FOMC minutes, whose hawkish outlook might possibly lend some much-needed support for the pair and finally create some sense of direction. If the minutes are able to meet market expectations, then the USD/CAD pair could possibly move towards 1.3200 and could even go beyond this range.
For today’s session, we have the FOMC meeting minutes set to be released as well as the release of the US housing data. Meanwhile, the Canadian economy will be releasing its core retail sales data which will have to be closely watched by the USD/CAD bears in order for them to regain dominance over the currency pair.
The GBP/USD pair continues to trade very well during the past trading sessions in spite of the US dollar regaining the majority of its losses. The GBP/USD pair remains to be one of the most resilient currency pairs, with the pair even bouncing back significantly as the dollar exhibited weakness and managing to hold on its own once the USD strengthened.
However, it is important to note that in spite of its relative strength, the GBP/USD pair is still trading within a very wide range of 400-500 pips, with the pair consistently trading within this range and not going much further. However, as the Brexit process starts to unfold and with the forthcoming invocation of Article 50, the pair might be in for some added volatility in the coming weeks. But it still remains to be seen whether the pair will be able to finally surpass its current ranges and record some significant change in trend.
UK will be releasing its second GDP estimate today which is expected to give the market an inkling of the current state of the UK economy. The GDP estimate would most likely come out as somewhat positive since the economic state of the country has been well during the past periods. The FOMC minutes will also be released later today, and this is expected to be an indicator of the GBP/USD pair’s short-term trend. If the market expectations with regards to the FOMC minutes is met, then the currency pair could possibly revert back to 1.2400 points.
NZD/USD Technical Analysis: February 23, 2017
An objective trend seems bearish. The New Zealand dollar resumed its reversal on Tuesday regaining greater portion of its previous losses. The price halted on top of the 0.7150 level as it trade in a tight range yesterday.
The spot remained unsteady near its fresh highs throughout the day. As shown in the 4-hour chart, the 50-EMA made a downward crossover to 200-EMA whilst the price resumed its development on the lower area of the moving averages. Moreover, the 50 and 100-EMA drove downwards while 200-EMA preserved a bullish pattern. Resistance pierced 0.7200, support plunge in at 0.7150.
The MACD indicator had a dip confirming addition strength for the seller. RSI hovered around the neutral zone.
The price met a support within 0.7150 loss and stalled through 0.7100.
EUR/USD Fundamental Analysis: February 28, 2017
The market saw a very dismal durable goods data reading while Trump continues to further delay his long-awaited tax cut policies, thereby contributing to the further dwindling of the value of the US dollar. As a reaction to this particular phenomenon, the EUR/USD pair was able to reach 1.0630 points in a matter of a few hours and seems poised to move further.
However, the US dollar suddenly reverted its losses for no apparent reason at all and this caused the EUR/USD to drop further to 1.0600 before settling at just over 1.0580 points. Some market analysts are crediting this sudden surge in the dollar’s value to Trump’s previous statements regarding the infrastructure increases, a favorite campaign topic of Trump during his candidacy. Previously, there have been rumors swirling around that this infrastructure policies would not come into effect until 2018, but since Trump has already re-discussed this particular proposal, the market has since then been speculating that the increase might be implemented within the year which could help in keeping the buoyancy of the market. The USD has been able to revert its losses as a result but the real determinant here would be the rate statement next month as well as the FOMC rates.
Now that the market is slowly shifting its focus from Trump’s policies towards the move of the Federal Reserve, it is highly likely that the market’s movements will be relying on the Fed’s decision on when they will be implementing the next rate hike.
There are no major releases coming from the eurozone today but the US will be releasing its consumer spending data as well as its Preliminary GDP data today which could bring in added volatility to the USD and affect the EUR/USD pair. The currency pair is expected to continue consolidating with bullish undertones for today.
USD/CAD Fundamental Analysis: February 28, 2017
The USD/CAD had a strong bullish trade during the previous session after the bulls were able to regain its dominance over this particular currency pair. The bulls had previously attempted last week to gain control over the pair after the release of a dismal retail sales data from the Canadian economy but was eventually unable to do so after the release of a very strong CPI data. The bulls had also attempted to break through yesterday but has failed from last week’s range highs.
The currency pair’s strong resistance and support barriers of 1.3060 and 1.3000 respectively has led the market to believe that the USD/CAD pair is in for some major uptrend and is evident of the importance of the support barrier with regards to the struggle between the pair’s bulls and bears. Since the bears have constantly failed to break through this pair, the pair’s bears are currently in full dominance of the USD/CAD. The USD/CAD was previously consolidating within the 1.3100 barrier but a surge in the value of the USD helped in boosting the currency pair following’s Trump’s statement that he will be adding up the country’s infrastructure spending. The pair eventually increased in value after oil prices somewhat dropped in value.
This drop in oil prices could cause trouble for the USD/CAD pair in the short and medium term since Canada is very reliant on oil prices. The pair’s bears could become seriously affected once the dollar strength and weak oil prices come together since this could trigger the pair to move significantly upwards.
There are no major news coming from the Canadian economy today but the pair could get some volatility from the US consumer confidence data and Preliminary GDP which will be released today. The USD/CAD could possibly consolidate within 1.3100-1.3200 points with a bullish undertone.
GBP/USD Fundamental Analysis: February 28, 2017
The GBP/USD took a heavy hitting during the previous session as the pair’s bulls were unable to create a continuously good run for the pair since every time a bounce in the pair manifests, the pair immediately drops as it is met with major selloffs. There are still overshadowing concerns with the currency pair since the Brexit process is still ongoing, and this ensures that the GBP/USD pair will be unable to go higher for quite some time.
The GBP/USD pair was hit even more harder yesterday after rumors that Scotland is currently planning to implement another referendum in their favor in order to discern whether it would still be beneficial for them to continue becoming part of the UK. If this happens, then this would be disastrous for the UK economy since other parts of the UK might also be encouraged to do the same. This is probably the worst that could happen to the UK, especially since Scotland had initially voted to remain part of the European Union but was outvoted by the majority of UK members. But then further confirmation of this particular rumor never happened, and this caused the GBP/USD pair to bounce back from 1.2400 and is currently trading at just under 1.2450 points.
There are no major news releases expected from the UK today but the US will be releasing its Preliminary GDP data and consumer confidence data. The currency pair would most likely remain under pressure for today, with the 1.2500 barrier presenting a possibly limit to any kind of uptrend in the pair.
GBP/USD Fundamental Analysis: March 3, 2017
The GBP/USD pair has been nursing its wounds during the past trading session as the currency pair is still at a loss on what it needs to do in order to propel its value higher up the chart. The sterling pound has been experience a lot of pressure this week, with the shadows of the ongoing Brexit process hanging over the currency, especially since it is still uncertain whether the impending talks between EU and UK leaders would go smoothly or otherwise. The invocation of Article 50 is drawing nearer and once the line is drawn, there will be no returning for both the European Union and the UK.
In addition to the pressure brought about by the Brexit, there have been also additional concerns that Scotland is planning to relieve itself from the UK, and though this has been nothing more than a rumor, it does not look like it’s going to die down any soon, and the USD is also undergoing a consistent rallying streak, another cause of trouble for the GBP/USD pair. The main reason behind the dollar strength is that the market is slowly getting used to Trump’s various eccentricities, and the Federal Reserve has also become increasingly hawkish, thereby cementing speculations that an interest rate hike is in the works.
The GBP/USD pair is expected to remain under pressure during today’s session. The UK is scheduled to release its services PMI data today but the market’s main focus would be Yellen’s speech at the New York session. The market will be monitoring whether Yellen will be giving out indications of a March rate hike, and if this is the case, then the dollar would possibly continue rallying and send the GBP/USD pair towards 1.2200 points.
USD/CAD Technical Analysis: March 6, 2017
The US dollar made some minor adjustments on Fridays as it moves close to its seven-week high versus other majors. The growing expectations of US rate increase within this month provided support for the greenbacks. The focus was turned to the testimony of Fed Chair Janet Yellen. Moreover, the greens were able to maintain its winning position on Friday.
The major came in green posting renewed highs during the onset of EU session.
Buyers demonstrated an active movement this morning subsequent to the flat Asian trading as they drove the price upwards and gapped the level 1.3400. The USDCAD preserved a bid tone, touching its renewed highs eventually.
The 4-hour chart presented the price extend its development on top of the moving averages while the MAs sustained a bullish pattern. The 100 and 50-EMA executed an upward crossover towards the 200-EMA. Resistance is at 1.3470, support entered 1.3400.
The MACD increased which confirmed a buy signal. RSI have seen consolidated around the positive readings.
In case that buyers dominate the market, the next target is 1.3470. In turn, the USD would likely pull back near 1.3330 mark.
EUR/USD Fundamental Analysis: March 8, 2017
The EUR/USD pair continued with its ranging and consolidation movement for the second consecutive day, with this current trend expected to continue for the subsequent trading session as well. There are no major economic news releases happening within the international market which might influence the movement of the EUR/USD pair, and this is why the market has been incessantly seeing this ranging and consolidation.
However, this particular movement coming from the currency pair is also part of the pair’s preparation for the onslaught of important economic data which are expected to be released in the middle of this week, especially since these economic data would most likely induce a lot of unprecedented volatility in the EUR/USD pair. So until these data gets released in the market, it is highly likely that the currency pair would continue consolidating. The USD experienced some minor corrections throughout the course of yesterday’s trading session, and this has become evident in the state of the EUR/USD pair after the currency pair dropped slightly in value and is now trading at just over 1.0550 points. The pair is expected to maintain its hold on this particular barrier as more buys are expected to come in at this region. This could also cause the currency pair to move towards 1.0600 points and will continue consolidating for the rest of the trading session.
There are no major news releases expected from the European Union for today but the US will be releasing its ADP employment data later today. This employment data is usually touted as a precursor to the NFP report and although its importance is now being overlooked, it still serves as a necessary gauge on how the the NFP report would eventually pan out. Any fluctuations in this particular data are most likely to show in the NFP report as well.
GBP/USD Fundamental Analysis: March 8, 2017
The GBP/USD pair continues to trade very weakly during the previous trading session. This could be initially attributed to the strengthening of the USD which was reflected across the board, but what has really affected the pound here is the fundamentals underlying the UK economy, as well as various uncertainties which is constantly putting pressure on the value of the GBP/USD pair.
Once the Article 50 gets invoked, the Brexit process is pretty much locked in, and this means that there would be several negotiations between EU and UK leaders immediately after the invocation. UK leaders are expected to be stricter with regards to EU trade access since the majority of them would like the UK to realize the several benefits that it would lose once the country finally becomes a separate nation from the European Union. This uncertainty as well as the tediousness of the Brexit process is likely to take its toll on the GBP/USD pair and this is starting to become more evident as the currency pair continues its weak trading stance, with the currency pair just hovering over 1.2200 points.
The UK will be releasing its yearly budget release today, and the country is expected to paint a pretty picture of their economy in order to boost public sentiment. This might give temporary resolve for the sterling pound but would eventually fizzle out as the fundamentals continue to put downward pressure on the state of the GBP/USD pair.
USD/CAD Fundamental Analysis: March 8, 2017
The USD/CAD pair continues trading within a limited trading range near its range highs, which is the pair’s current trend ever since the start of the week. The stability of oil prices has helped the Canadian dollar maintain its current stance, but since the USD has been consistently regaining its strength, the bears are having difficulty in exceeding the bulls’ progress and this is why the currency pair is firmly in control, with the bulls dominating the USD/CAD pair.
The Canadian trade balance data was released yesterday which came in at a value of 0.8 billion CAD which is very good news for the economy. The trade balance data from the US was als released yesterday and this reading somewhat fell short of initial market expectations/ However, neither of these data had a significant impact on the value of the USD/CAD even though the US dollar is now bracing itself for the onslaught of economic data releases later this week. Both the US and Canada will be releasing its employment data this coming Friday and market players are now preparing for the expected increase in volatility once the data gets released into the market.
For today’s trading session, there no major news releases from the Canadian economy although the US will be releasing its ADP employment data and unless this shows a drastic shift in its economic readings, the USD/CAD pair would most likely continue its ranging and consolidation.
USD/CAD Technical Analysis: March 9, 2017
The Canadian dollar was able to preserve its stance compared with the US dollar yesterday. The loonie received some support from the positive figures of Trade Balance a few days ago. Investors wait with expectation for the statistics of US labor market which could establish a route for the USD/CAD.
The pair was trading flat and toggled in the middle of the Wednesday night session. The price is positioned in tight channels of 1.3400 - 1.3430 all throughout the night.
Moreover, the USD resumed its short-term bullish trajectory during the earlier trades. The major further pulled out from the 1.3400 region and rallied higher heading to 1.3470.
As rolled out from the 4-hour chart, the price was developing beyond the moving averages. It further mentioned the 100 and 50-EMAs preserved its bullish pattern while 200-EMA move over the neutral grounds. Resistance touched 1.3470 mark, support hit 1.3400.
The MACD histogram is positioned within the same level confirming buyer’s strength. RSI oscillator hovered near the overbought readings and expected to support a fresh upward movement
The bullish market structure is expected to remain in its place in the short-term. Bulls’ next target is at 1.3470.
USD/CAD Fundamental Analysis: March 14, 2017
The USD/CAD pair spent most of yesterday’s trading session on a mostly ranging and consolidating manner, with the currency pair consolidating within the 1.3400-1.3500 region due to the lack of significant economic events from both the US and the Canadian economy. The market is now on a monitoring stance particularly on the USD and this has been reflected in the lack of any kind of activity in the USD/CAD pair.
The market is currently waiting for the onslaught of the release of several economic data from the US tomorrow, with the most important release being the FOMC announcement where the central bank is expected to implement its first interest rate hike for the year. Aside from the FOMC announcement, the CPI data as well as the retail sales data will also be released tomorrow. The high expectations for an interest rate hike tomorrow has helped keep the USD/CAD pair to remain within its range highs. However, the market is not yet sure as to how much hawkishness will be needed for the USD bulls, and this has become somewhat problematic for the USD/CAD pair as the pair has difficulty calculating its move immediately after the FOMC data release.
If the statement from the central bank comes out as satisfyingly hawkish, then the USD could boost its strength and could help the USD/CAD bulls to challenge the sells located at the pair’s 1.3500 barrier. If the data comes out otherwise, then the USD/CAD pair could possibly retreat to its previous trading range. For today’s session, the US economy is expected to release its PPI data which is not expected to induce added volatility into the pair.
GBP/USD Fundamental Analysis: March 14, 2017
Although the UK economy saw a lot of events and developments during yesterday’s trading session, this has done practically nothing to induce added activity into the GBP/USD pair. A slight bounce occurred in the pair during the previous session but this was automatically met with a selloff, especially since the bounce was somewhat thin and was unable to hold on and prevent the said selloff from occurring. The GBP/USD pair has however managed to surpass 1.2200 points and even managed to reach 1.2250 following market rumors that Theresa May might not be invoking Article 50 within the week. However, since there was no actual confirmation that the invocation would indeed be happening this week, the market became initially confused on the British pound’s rally and the lack of basis to this particular assumption has caused this bounce to eventually die out.
In addition, there have been rumors swirling around that the British government might not accept Scotland’s request to hold an independence referendum, especially since the UK is already neck-deep in uncertainties and another referendum would only cause more disaster for the country’s economy. These series of events has caused the GBP/USD pair to retreat towards 1.2200, where it is currently trading.
For today’s trading session, there are no expected data releases from the UK economy, while the US economy will be releasing its PPI data. However, all eyes will be on the FOMC rate announcement which is set to be released tomorrow. This, in addition to the impending invocation of Article 50, are both expected to keep the GBP/USD pair under pressure in the short term.
EUR/USD Fundamental Analysis: March 15, 2017
The USD increased in value as the market anticipates the release of the FOMC rate announcement later today. As a result, the EUR/USD consistently weakened yesterday and has managed to break through 1.0650 points and is currently situated at just above 1.0600 points. A lot of analysts have been saying that the currency pair could possibly consolidate within the 1.0600-1.0700 barrier during the week of the FOMC statement and could possibly maintain its place within the region up until the end of this week.
The expected rate hike this coming March is pretty much secured and what the market will be focusing now is the amount of hawkishness of this particular announcement, and this is where the uncertainty lies. The majority of market players have no idea on just how hawkish the statement should be in order to push the value of the dollar further. Nonetheless, the market expects that there would be some sort of clue on the Federal Reserve’s next move and if possible, hints on the next scheduled interest rate hike from the central bank. Of course, it would definitely be good news for the market if the statement outwardly gives out clues of the next rate hike, but then again the central bank is not known for such moves and could possibly state that the schedule of the subsequent rate hikes would depend on the status of various economic data in the future.
The volatility of the EUR/USD pair could possibly be increased by the release of the CPI index data and the retail sales data. The currency pair could possibly drop to 1.0600 points and could even reach 1.0580 for a short period if the data comes out as positive.
USD/CAD Fundamental Analysis: March 21, 2017
The USD/CAD pair merely continued its weak trading streak within a limited trading range as the currency pair awaits clues on its price action as dictated by its fundamental indicators. Previously, the USD/CAD pair had already dropped in value last week following the FOMC rate statement, which disappointed investors in general, and since then the currency pair has been unable to make any significant progress and if the pair does move forward, it will be more of a consolidation in order to recover its recent losses than any move towards a definite direction.
The USD/CAD is currently trading at just over 1.3350 points, with the market expecting the currency pair to consolidate within the 1.3300-1.3400 region. The pair is expected to return to its wider trading range and could possibly reach 1.3000 points in the near future. The USD/CAD pair, along with other major currency pairs, are expected to consolidate within a much higher range in spite of their collectively high volatility levels.
The Canadian economy has been consistently releasing a slew of positive economic data, and this is expected to be very good news for the Canadian dollar and could cause the USD/CAD pair to retreat to 1.3000 points. For today’s session, Canada will be releasing its core retail sales data, which will be closely monitored by market players as this will be an important gauge on the overall health of the Canadian economy. If the data meets market expectations, then the USD/CAD pair could retreat towards 1.3300 points and could be poised for more retractions depending on the strength of the said retail sales data.
EUR/USD Fundamental Analysis: March 22, 2017
The EUR/USD pair was able to move towards 1.0800 points, with the currency pair managing to stay at over 1.0800 for a brief period. However, since the pair has not yet managed to make a clean breakthrough at this very tough barrier since it only momentarily peeked over this level, the pair’s surge was eventually met with large selling and had no choice but to retreat at just under 1.0800 points.
However, in spite of this particular occurrence, the EUR/USD pair is still trading on a somewhat stronger note, thanks to the pair’s bulls who continue to trade on a strong streak. The EUR/USD pair’s move at under 1.0800 now seems as just more of a correction as the pair’s price are still well-maintained within its range highs. This is why the currency pair might give another shot at surpassing the 1.0800 barrier for today, especially since the forthcoming French polls might have Macron as its next President after all. This is a sigh of relief especially for the EUR currency, since Le Pen, Macron’s opponent, is a widely-known critic of the euro currency. In addition, the pairs bulls are getting a lot of encouragement from the very bullish stance of the ECB, who recently stated that the strength of the euro can be mostly attributed to an improvement in the EU economy. The USD has also been struggling to make significant gains in spite of the recent rate hike and there is a very definite possibility that the pair could possibly move towards 1.1000 points once makes a clean break through 1.0850 points.
There are no major news from both the EU and the US economy for today, and this is why the EUR/USD pair might again attempt to break through its barrier. Traders could opt to wait whether the currency pair is able to surpass 1.0850 during the course of the day.
GBP/USD Fundamental Analysis: March 22, 2017
The GBP/USD pair has been consistently making its way towards 1.2500 points and it looks like the pair’s bulls are more determined than ever to break through this particular range. As of the moment, the GBP/USD pair is now trading at just beneath 1.2500 points and is bracing itself once the currency pair pushes past 1.2500 points, where it is expected to be met with a lot of sells. The bulls must be able to weather these large-scale selloffs in order for the currency pair to go past this particular barrier.
The UK economy released its inflation data yesterday with a reading of 2.3% going well beyond the initial market expectations. This, along with one of the BoE officials voting for a rate hike just goes to show that the Bank of England’s data and policy seem to be in sync, thereby causing the sterling pound to increase in value. However, now that the GBP/USD pair as well as the euro are both in a very critical situation, the market is waiting whether the currency bulls would be able to break through these respective regions.
However, the positive bearing of the sterling pound does not mean that the currency does not run any risks. We still have the nearing invocation of Article 50 as well as Scotland’s recent demand for an independence referendum, although the market has chosen not to focus on these and instead focus on the weakness of the USD. There are no major news releases coming from both the US and UK economy for today and so the market will be focusing instead on the battle at the 1.2500 barrier, with the market focusing on whether the currency pair will be finally making it through this section or weaken eventually and resort to some more consolidation for the rest of the trading day.
USD/CAD Fundamental Analysis: March 22, 2017
The price action of the USD/CAD pair during the previous session was mostly dictated by the Canadian retail sales data, which came out better than expected. However, one downside to this is that the positivity of the data was somewhat offset by the data last month, which was revised on a much lower level. This correction has then helped remove some of the pressure off of the currency pair and enabled it to move towards 1.3350 before finally settling at just under this particular range. The pair eventually dropped towards 1.3260 where it is currently situated.
The pair was met with a lot of buying and this has helped the pair to slowly recover towards 1.3300 points, and the correction in the country’s retail sales data enabled the pair to go even higher. The Canadian dollar has also weakened as a reaction to the repeated failed attempts of oil prices to recover from its recent slump, causing the USD/CAD pair to recover towards 1.3350 points and even surpassed this particular barrier.
For today’s session, there are no major news releases from the US economy aside from the oil inventory data, which is expected to affect the status of the CAD based on the currency’s previous price action. Expect the Canadian dollar to drop in value as a reaction to this particular data and consolidate within 1.3300-1.3400 points for the duration of today’s trading session.
USD/CAD Technical Analysis: March 27, 2017
The Canadian currency was unable to sustain its upside momentum as it currently endures the continuous weakening following the weak prices of crude oil.
The greenbacks rebounded 1.3330 and reversed towards 1.3375 in which the buying impetus seems short-lived. The price headed back in the mid-session of Asia and begin to retreat afterward.
The pair continued to decline amid early European trades and attempted to cut through the 50-EMA, nevertheless, failed to do so which caused it to reenter under the moving averages. Furthermore, the 50-EMA remain to move lower, 100-EMA appeared neutral and the 200-EMA headed upwards.
Resistance covered 1.3400, support is at 1.3330.
The MACD histogram was spotted at the centerline. On one side, an entry in the positive territory will favor buyers’ strength and on the negative grounds will allow sellers seize the control within the market. RSI was confined in the neutral area.
A break under 1.3330 mark would indicate further weakening towards support level 1.3260.
EUR/USD Fundamental Analysis: March 28, 2017
The EUR/USD pair crashed during the previous session as the pair corrected its current upmove which has been the pair’s trend for the past few weeks. The USD finally recovered across the board, resulting to sellers taking advantage of this occurrence and selling the EUR. The dollar strength has helped to propel the pair’s value towards 1.0800 points, therefore eradicating the pair’s previous gains which was made last Monday.
Because of this, traders are now mulling over the fact that the EUR/USD pair could be in for more corrections as the sessions progresses. However, the market has no choice but to wait and see how the pair’s price action turns out in the next few days, particularly if whether the pair would continue its current trend of correction or if the pair backs down as it approaches its support barrier at 1.0800, where the currency pair is situated as of the moment. The USD remained weak last Friday up until Monday due to the repeated failed attempts of the Trump administration to pass the healthcare bill. However, the White House is now trying to make another attempt at passing the said bill after Republicans reached out to like-minded Democrats. In addition, the US economy continues to release a slew of strong economic data and this has caused the EUR/USD pair to fall further during the US trading session.
For today’s session, there are no expected releases coming from both the EU and the US economy. However, the month-end flows are expected to come anytime soon as March comes to a close, and since the USD’s strength is expected to persist today, the EUR/USD pair would continue to remain under pressure with the 1.0800 range remaining the essential barrier for the currency pair.
GBP/USD Fundamental Analysis: March 29, 2017
The GBP/USD had a very disastrous trading day yesterday as the currency pair crashed by over 200 pips following the USD’s recovery, as well as the nearing invocation of Article 50. A lot of market players have been saying that today will be a very interesting day for the GBP/USD pair as the Article 50 will be invoked later today, which will mark the start of the Brexit process and basically a point of no return for the British economy.
The GBP/USD pair has seen a consistent buildup of shorts during the past week as the market awaits a very large drop today. However, the value of the GBP/USD pair is also consistently moving higher and increasing towards 1.2600 points. This is a potentially very risky combination and the effect of this combo manifested yesterday, wherein both the USD’s strength and Brexit-related concerns caused the currency pair to drop from its range highs of 1.2600 towards 1.2400 points, where the pair is currently trading. The USD recovered amid possibilities that the Trump admin might again try to pass the healthcare bill by seeking help from like-minded Democrats. Theresa May will also be signing the order for Article 50, and it will be interesting to see how the sterling pound will react to this most recent development in the UK economy.
For today’s session, there are no major releases from both the US and the UK economy and this is why the market will be mostly focusing on the invocation of Article 50 and the subsequent reaction of the GBP/USD pair following the said invocation.
USD/JPY Fundamental Analysis: March 30, 2017
The USD/JPY pair dropped in value during the previous session in spite of the US dollar’s strong outlook against other major currencies. The ambiguity in the US equity markets, as well as weak Treasury yields might have contributed to the weakness in the currency pair. A lot of investors are now going back to the safety of the Japanese yen, mostly because of the alarming concerns with regards to the French elections, Brexit negotiations, and Trump’s frustrated attempts to fulfill his campaign promises. The USD/JPY closed down the previous session at 111.042 points after decreasing by 0.083 points or-0.07%.
For Thursday’s session, investors will be waiting for the release of the US GDP data as well as jobless claims data, in addition to comments from Fed officials including Kaplan, Dudley, Williams, and Mester. But of these four officials, the statement coming from Dudley is touted as the most interesting due to his position in the FOMC as a permanent voter. Dudley is expected to discuss topics such as the Fed’s monetary policy and the present financial climate of the US economy.
For the meantime, it seems as if the Fed and bond investors have contrasting views with regards to the path of US interest rates. This could be partly attributed to bond investors overvaluing the Trump administration’s ability to help prop up the economy by way of highly-aggressive economic policies. The USD/JPY pair could receive additional support if the Republicans would manage to convince investors that they can actually turn Trump’s proposals into actual laws. However, any additional doubts with regards to Trump’s ability to fulfill his role as President could induce additional selling pressure.
USD/CAD Technical Analysis: March 30, 2017
The commodity-linked pair is confined to a familiar range yesterday. The price was positioned in the middle points of 1.3400 and 1.3350 within the day.
The overnight recovery slowed down in the earlier trades as the spot attained the channel’s upper limit.
The morning session triggered renewed bearish tone. The greenbacks dropped sharply near the lower limit eliminating its gains throughout the night. Sellers unsuccessfully move downwards and hovered in the range.
In the 4-hour chart, the spot was sandwiched in the 100 and 50-EMA during the first part of the day. Meanwhile, the 50-EMA drove higher, 100-EMA shifted down and the 200-EMA preserved a bullish pattern.
Resistance is at 1.3400, support holds 1.3330 mark.
The MAcd indicator stayed on its previous level, favoring strength for the buyers. The RSI oscillator descended.
As mentioned in the same timeframe, technicals confirm a downwards continuation to 1.3330.
NZD/USD Technical Analysis: April 3, 2017
On Friday, the New Zealand currency was kept intact below the selling pressure on the back of the sluggish business confidence released by ANZ.
The suffering of kiwi extended its softening until Friday. The sellers ran out of steam despite maintaining the control and breaking under the level 0.7000. Moreover, they were able to drove the NZD/USD lower.
During the morning, the pair traded in a tight range, viewed in the middle points of 0.7000 and 0.6980.
According to the 4-hour chart, the spot crossed downwards to the 50-EMA and resumed its development under the moving averages. The 50 and 200-EMAs continued to move down while the 100-EMA steered higher.
Resistance touched the region 0.7000, support made an entry at 0.6950 mark.
The MACD weakened indicating strength for the sellers. In case the histogram stayed within the positive zone, the position of the buyers will strengthen. The RSI indicator is in the oversold levels.
The price was stuck in a range in order to get some steam used for further activities. There is a possibility of minor correction. Having broken the 0.7000, the radar will prompt 0.7050 level.
USD/CAD Fundamental Analysis: April 4, 2017
The USD/CAD pair had a fairly good trading session yesterday as it tested its range highs and is now trading at just under its range highs. The USD/CAD is expected to remain within the 1.3300-1.3400 region as of the moment and this was very evident during yesterday’s session. The market is now waiting for the string of economic data set to be released within this week. The market is now in a ranging and consolidation mood as traders prepare themselves for the possible repercussions of this said release of various economic data.
Oil prices dropped a bit below $51 yesterday, which is one of the main reasons behind the sudden weakness in the Canadian dollar. The Canadian economy is highly dependent on oil prices and as such, an increase in oil prices would mean an increase in the CAD and vice versa. And since oil prices dropped yesterday, this resulted to a weak CAD as well and caused the USD/CAD pair to go above 1.3350 points before moving towards its range highs of 1.3400 points. The currency pair was then met with a lot of selloffs, and although yesterday was a generally very dismal trading session, volatility levels are expected to increase today as several economic data are scheduled to be released within the week.
The Canadian Trade Balance Data will be released today, and the market will be monitoring this reading since this is a very essential economic basis for the Canadian economy especially due to its trade relationship with US. This is expected to increase volatility in the pair and could cause the USD/CAD to break through 1.3400 and could even reach 1.3500 points.
EUR/USD Fundamental Analysis: April 5, 2017
The EUR/USD pair is still trading within a very limited range, although the pair’s bulls have somewhat managed to maintain its hold on the currency pair in spite of the pair’s inability to move in any definite direction for quite a while now. The pair’s bulls were initially expected to surrender its gains in order to enable the EUR to advance towards 1.0500 points at least prior to the FOMC meeting, but so far this has not yet occurred and it is possible that the minutes will be released with the EUR/USD pair still trapped within its current trading range.
The market was taken by surprise yesterday as Fed member Lacker tendered his resignation after admitting that he had leaked top-secret information with regards to the 2012 FOMC meeting to a certain financial institution. Lacker has also stated that the firm’s analysts had the said information but regardless of Lacker’s manipulation of the said statement, it remains clear that he has illegally leaked confidential information and subsequently resigned when the said scheme was revealed. The USD had surprisingly no reaction to to this particular news once it was released.
However, during today’s session, the USD backtracked across the board as the EUR/USD pair surged from 1.0650 points and traded very near its range highs of 1.0680 points. As of the moment, the market is now in a consolidating move as a lot of economic data are expected to be released later today. The ADP Employment Change data will be released today, which is an important piece of economic news since this is largely considered as a basis for the result of the NFP report. The US Manufacturing PMI data will also be released, followed by the FOMC minutes towards the close of the NY session. A volatility surge is expected prior to the release of the FOMC minutes and as such, traders are advised to tread very carefully with regards to trading with the EUR/USD pair. The pair’s bulls are most likely to dominate the pair and could enable the EUR/USD pair to inch higher during today’s series of sessions.
USD/CAD Fundamental Analysis: April 5, 2017
The USD/CAD pair briefly made it towards 1.3400 points and even managed to surpass this region following a series of very dismal economic readings from the Canadian economy. However, the advancement of the Canadian dollar was almost immediately met with tremendous pressure from sellers, causing the CAD to retreat towards 1.3400 points. Analysts are now saying that unless the USD/CAD pair manages to surpass the large-scale selling at 1.3500 points, then the currency pair would be unable to make any significant progress as of now. But the pair’s bulls have yet to reveal how they plan to handle this dilemma in the pair as the USD is expected to be more level in the next few days on the back of an increase in oil prices.
The 1.3500 region has proven to be very crucial for the USD/CAD pair since the currency pair has been unable to overcome this pair for several times in a row. The currency pair would have to have large-scale buys in order to push past through this region and reach 1.4000 points. As of the moment, the Canadian economy has been throwing up some fairly decent economic data, although the Canadian trade balance data had somewhat paled and could be a precursor to a dismal future for the country’s economy. The trade balance data was at a negative while the market was expecting a positive reading, and this basically means that the country’s imports and exports are most likely to suffer in the long run.
However, the increase in oil prices could possibly provide a short-term breather for the Canadian economy, and since the USD is expected to experience short-term consolidations, the USD/CAD pair would most likely follow this particular trend and consolidate within 1.3300-1.3500 points. However, the pair is still not strong enough to surpass 1.3500 in the near future.
For today’s session, there are no releases from the Canadian economy but the US will be releasing several economic readings, such as the ADP employment change data and the FOMC meeting minutes. The NY session could possibly be met by a significant amount of volatility and if the pair’s price touches the 1.3500 range, then this could be a great opportunity for a stop loss.
GBP/JPY Technical Analysis: April 6, 2017
The British pound against the Japanese yen broke in the upper channel during the Wednesday session which is a sign of consolidation. The market will most likely try to reach the 140 handle but there is a noise down below for a long-term pressure. A break lower than the 50% Fibonacci retracement level gives a bearish bias which would push the trend to fall towards the 134 handle. Overall the pair gives a choppy atmosphere and with trading activity moving fast. With the ongoing Brexit process, this would affect the trading for this pair.
NZD/USD Technical Analysis: April 7, 2017
The New Zealand dollar surged following a break higher than the peak of the hammer during the Thursday session. A strong resistance level is found at 0.70 handle. It is anticipated for the pair to have a volatility and it could increase towards the 0.71 handle when the jobs data comes out and break higher than 0.70 mark. There could also be reversals and the support level to position close to the 0.69 handle. Nevertheless, traders should expect volatility for today’s trading session.
GBP/USD Fundamental Analysis: April 11, 2017
The GBP/USD pair has managed to make a slight recovery during the previous trading session as the USD strength wavered slightly and is now trading at just over 1.2400 points. The strength of this currency pair is not expected to translate into a bullish stance since the pair could possibly persist with its ranging and consolidation action on both sides of 1.2400 points. The market has been very slow during yesterday’s session and this is expected to seep through up to today’s session, especially since the majority of traders are now in a stop and stare mode as they do not have any kind of significant trade bases as of the moment.
The uncertainties surrounding the Syrian war has somewhat died down since there are no recent updates with regards to the ongoing war in the region. However, there’s no denying that these problems continue to exist and this is why traders are still afraid to direct their trades into any direction lest they be caught once the pair reverses its price action due sudden events such as the US airstrike on Syria last week. The GBP/USD pair is now caught within the range of 1.2100-1.2600 and does not look poised to move in any direction now that the Brexit negotiations are about to begin. The start of the negotiations are not expected to induce significant volatility since both sides are expected to hold their own. This is also the reason why traders are refusing to take specific trade directions for the moment.
For today’s session, the UK CPI data is scheduled to be released while there are no major releases from the US economy. The GBP/USD pair is expected to stay put no matter how the CPI data pans out within the day.
EUR/USD Fundamental Analysis: April 12, 2017
The Euro paired against the U.S. dollar climbed higher during Tuesday’s session as it rebounded in the support level near the 1.0580 and broke towards the 1.0600 mark. It is favorable to go long as it extended towards the 1.0630 mark. It seems that the decline in prices has reached its end and is now anticipated to rise leaving the market wondering how high can it go. However, there is not enough momentum to bring the price up since the greenback has recently recovered that brought the pair back to the 1.06 mark.
There has been a lot of happenings involving geopolitical events in the past 24 hours that shook the market causing high volatility in the trend. The tension with North Korea and the situation in Syria where U.S. is trying to take control have been increasing concern day-by-day.
Moreover, Trump is trying to regain its pride and stand in the global economy.
It seems that Trump is losing its foothold as this puts pressure in the dollar but in effect brought the price up for the EUR/USD pair instead. With all his promises such as higher infrastructure spending, lower corporate taxes, improved health care programs, these were not yet achieved and the market is becoming impatient.
For major news today, traders should look out for the U.S. Crude oil inventory data to be released today but would not have much of an effect on the EUR/USD pair. It is foreseen that the pair will most likely react but in a small range due to rising geopolitical problems and associated risks which could persist for some time.
USD/JPY Fundamental Analysis: April 18, 2017
The US dollar crashed to its lowest levels within a five-month period against the Japanese yen as a reaction to North Korea-related tensions during the previous weekend. However, as the USD/JPY pair came within a major retracement barrier at 107.856 points, the USD managed to recover its losses and closed down on a much higher level than expected. The USD/JPY pair closed down the previous session at 108.904 points.
The current volatility level of the USD/JPY pair has been mostly influenced by the price action of the US Treasuries. US bond prices crashed during the previous session immediately after reaching an all-time high since November last year. Now that both the USD/JPY pair and Treasury yields are on their lowest rungs since November 2016, a lot of investors are now speculating that the Trump administration will be unable to complete its campaign promises within the preset timeframe, including the implementation of a new healthcare plan, tax cuts, and even imposing an increased fiscal spending mechanism. In addition, some traders are also saying that the USD was propelled forward by reports that Trump is leaning towards appointing a bank-friendly figure for the Federal Reserve’s vice chair for bank supervision post.
For today’s session, the course of the USD/JPY pair is expected to be dominated mostly by investor sentiment as well as Treasury yields. The currency pair will be able to regain its momentum only if there is an increase in yields and if investors put their interests towards high-earning assets.
The GBP/USD pair traded on a strong note during yesterday’s session as it was able to not only maintain its gains but has also managed to propel itself forward and attempt to make a dent in the resistance region situated at 1.2600 points. As of the moment it is still unable to make a significant impact in this particular region but it has yet to be seen whether it will be able to make a dent as the European traders are now going back to work after the holidays. A retraction towards the 1.2500 trading range is expected to occur before making any serious gains.
The sterling pound has been doing really well as the market is now waiting for the start of the Brexit negotiations between the EU and UK officials. The negotiations are expected to be very long and very winding, and both sides should be able to hold onto their respective gains. The Brexit process itself is also expected to affect the sterling pound in the long run. The string of economic data released from the UK economy looks good so far, with the Bank of England managing to hold the current economic situation together, however it remains to be seen whether it will still be able to do so once the negotiations begin. The 1.2600 region is expected to be sustained but as the negotiations wear on, this is expected to induce additional volatility into the pair and this is why traders should be extra careful when it comes to trading with the GBP/USD pair in the medium term outlook.
There are no major news releases from both the UK and the US economy for today, and as such, the GBP/USD pair is expected to continue its current trend of ranging and consolidation with a bullish undertone as it again tries to break through the 1.2600 range.
AUD/JPY Technical Analysis: April 21, 2017
The Australian dollar against the Japanese yen rebounded strongly on a major support level for this day following a downtrend which came to a stop. There also has been a sharp response to the Wall Street concerning risks amid the weakness of the currency and uncertainty brought by the French elections on Sunday. This could also be a way to encourage the bulls before the next retest.
The pair rebounded from the former resistance level at 81.50 which the shifted into a strong support. It jumped as much as 100 pips although this is about to decline.
The vertical trend line is near the 200-day Moving Average. The region close to 81.50 which becomes a significant psychological level. This further went up as it is now found at 82.15 level surpassing the current level and similar to200-day Moving Average. It could further go up and break over the current levels towards the next target levels at 82.80 then 83.30.
However, if the market fails to sustain the 82.15 support level then there is a chance to break lower than the critical level of 81.50 as a support. When this happens, this could be followed by a correction towards 78.50 with 61.8% Fibonacci level up to the 78.50 region in the next decline.