[B]Daily Fundamental Dose: 08 – February – 2017[/B]
Hello Traders,
While the second drop in UK Halifax PMI after Brexit and upbeat US Trade Balance figures pleased market players during yesterday’s early-day trading, concerns over French election and comments from junior Brexit minister roiled sentiment on late-Tuesday. Additionally, lack of Trump actions on promised policy change also gained importance but failed to drag the US Dollar Index (I.USDX) down which registered second consecutive daily gain. The EUR declined after chances of the victory by front-running French election candidate were grabbed by a financial scandal which in-turn gave rise to popularity of anti-Euro candidates whereas GBP rallied noticeably after Junior Brexit minister said Parliament will have important say in Brexit discussion and the Bank of England policymaker indicated rate-hikes. Further, the JPY dropped against the USD, but gained across the board on macro uncertainty, whereas Gold maintained its advances. Moving on, the AUD, NZD and CAD declined for the first time in a week as commodities had to bear the burden of strong USD and industry reports might show higher US Crude stockpile.
Having witnessed noticeable moves during previous-day, traders chose to curtail earlier bullish bets on Wednesday and the third in nearly 2 week action of increased Bond Buying by the Bank of Japan (BoJ) boosted investor confidence in Japanese Currency (JPY). The NZD recovered some its recent losses ahead of the RBNZ meeting whereas Crude also witnessed pullback. Further, the GBP kept tracking on upside but the EUR couldn’t regain its strength.
For the rest of the day, monetary policy meeting by the Reserve Bank of New-Zealand and US Crude Oil inventory outcome will become important to watch together with observing political upheaval at EU & UK. Considering the recent upbeat stats from New-Zealand, chances of the RBNZ Governor to remain hawkish are high; however, he might not chose to signal any rate-change until 2017-end as labor market is still in its nascent stage of recovery. Hence, NZD might witness volatile moves but the overall direction of the Kiwi could be north-side except any surprise negatives. Furthermore, the US Dollar is likely to gain due to weakness at EU and the CAD might witness further declines if stockpile figures keep portraying global supply-glut.
[B]Technical Talks[/B]
GBPCAD’s failure to surpass short-term descending trend-line can fetch the quote towards 1.6360 re-test but disappointment from crude inventory-data might propel the pair to break 1.6510 TL and aim for 1.6560. Further, GBPNZD is also expected to witness sustained downside towards 1.7000 psychological magnet on RBNZ whereas break of 0.7600 support can trigger AUDUSD’s fresh pullback in direction of 0.7520.
Have a nice trading-day …………