[B]Daily Fundamental Dose: 20 – February – 2017[/B]
Hello Traders,
With slew of upbeat US data-points, coupled with hawkish comments from Fed policymakers, including Fed Chair, the US Dollar Index (I.USDX) managed to post second consecutive weekly positive closing. However, uncertainty at UK & EU kept favoring safe-havens whereas Chinese figures helped commodity basket to remain a bit strong. Present week starts with holidays at US on Monday due to President’s day and shifts market attention towards political threats at EU & UK. Let’s examine fundamentals.
[B]US Optimism & The Rise Of USD[/B]
It all started with the early-week release of US PPI which rallied to more than two-years high and helped USD to extend its prior up-moves. The rise was then backed by Fed Chair’s testimony which stated brighter chances of rate-hike soon and even ignoring impacts of Trump policies. Bulls were also pleased by strong housing and Manufacturing figures and the headline CPI, which in-turn nurtured the greenback gauge during the week.
At EU, the political trauma, due to lead of anti-Euro parties’ chances of winning at Germany & France, continued dragging regional currency towards south while economics were also not good enough provide intermediate upside momentum. Further, UK Retail Sales, PPI & Job figures flashed mixed signals and kept hurting the GBP whereas JPY and Gold could manage to post weekly gains. Additionally, Crude prices had to bear the burden of higher US stockpile & rig counts, dragging the CAD to south, but optimism surrounding production-cut restricted larger losses. Moreover, AUD and NZD also dipped as New-Zealand Retail Sales remained weaker while AU employment figures failed to please Aussie traders who now expect mild pullback after sharp rise.
[B]Few Details/Events This Week[/B]
Compared to last week, current week has lighter economic-calendar but minutes of FOMC & RBA meeting, UK GDP and EU PMI might offer noticeable market moves. Also, US Housing market numbers, Canadian CPI and Sales numbers could entertain traders with intermediate opportunities. Though, political uncertainty at EU & UK may continue maintaining their importance and can fetch respecting currencies further towards south.
While RBA minutes and EU PMIs are less likely to provide additional weakness to the AUD and EUR during their releases on Tuesday, Wednesday’s UK GDP & FOMC minutes may help GBP and USD to remain a stronger. Moving on, Canadian numbers are showing mixed forecasts for Friday’s CPI & Wednesday’s Retail Sales with Monday’s Wholesale Sales likely helping CAD to enjoy latest uptick in Crude prices. Furthermore, Japan’s higher than forecast trade deficit numbers provided noticeable weakness to the JPY and the less-risky currency may keep witnessing such drags going forwards unless EU & UK pessimisms help it.
[B]Technical Talks[/B]
While EURUSD continue indicating 1.0500 re-test, an uptick beyond 100-day SMA figure of 1.0735 can give rise to 1.0850 on the chart. GBPUSD and USDJPY are both showing intermediate downside towards 1.2280 & 111.50 support-levels with 1.2580 & 115.00 acting as nearby resistances to watch. Moving on, AUDUSD & NZDUSD can keep struggling between 0.7730 – 0.7600 & 0.7130 – 0.7250 levels whereas USDCAD can revisit 1.3200 mark on the break of 1.3140, 200-day SMA, with 1.2960 being important support.
Have a nice trading-day …………