[B]Daily Fundamental Dose: 12 – May – 2017[/B]
Hello Traders,
While relief over centrist Emmanuel Macron’s victory in French Presidential election and US President’s ire over FBI chief remained in the highlights during early weekdays, monetary policy meetings by the RBNZ & BoE, together with US PPI & Jobless Claims, helped traders forecast near-term market moves on Wednesday and Thursday. Additionally, Chinese Inflation numbers, trade balance and the oil fundamentals acted as second-tier news to offer intermediate Forex moves till Friday when the US consumer-centric details are likely to make investors busy. Let’s discuss things in detail.
[B]So Far So Good For The USD[/B]
Even if early week woes over Trump-fired FBI chief and soft retailers’ numbers tried hard to hit the US Dollar, upbeat PPI and Jobless Claims, coupled with chances of witnessing better Retail Sales, CPI and Consumer Sentiment figures, continued strengthening the greenback till now. On the other hand, EUR had to trim majority of its latest gains as one of the ECB policymakers repeated Draghi’s comments that favored loose monetary policy whereas GBP plunged on dovish BoE and a trimmed UK growth forecast. Further, NZD became the victim of RBNZ which kept supporting easy policy and the AUD dropped on soft data-points. Moving on, Crude reflected the gains on depleting US stockpile and optimism surrounding extended production-cut accord by OPEC & non-OPEC producers but the CAD couldn’t enjoy this strength due to Moody’s downgrade to majo Canadian banks. At the end, JPY and Gold continued remaining weaker as investors kept searching for riskier assets and ignor safe-havens while USD is rising.
[B]Consumers Could Portray Greenback Moves[/B]
Following weak sales numbers by leading American department stores, traders are all worried about today’s consumer-centric details, namely CPI, Retail Sales and Consumer Sentiment, which could be witnessed since morning. However, consensus shows something different as CPI is likely to reverse its prior -0.3% figure with +0.3% mark and the Core CPI could also flash +0.2% number compared to -0.1% earlier. Moreover, Retail Sales are expected to please USD buyers with +0.6%, with Core reading consensus showing +0.5%, against their -0.2% & 0.0% respective previous outcomes, whereas Prelim UoM Consumer Sentiment could reprint 97.00 figure.
In addition to the US data-points, news releases from G7, comments by some of the FOMC members and any announcements from North Korea or Trump administration could offer intermediate trade opportunities.
[B]Hence, US Dollar Index (I.USDX) is on its way to register a weekly gain and US details could be the reason for that; however, disappointments may receive higher attention and can drag the greenback again towards south in case Trump and the data-points remain unfavorable.
For the rest of the currencies, there seem less or no major events scheduled which again increases the importance of US outcomes.
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[B]Technical Talk[/B]
As EURUSD is near to 1.0830 support and the GBPUSD also struggles around 1.2850 rest-point, chances of both these pair’s declining further are high. If that happens, 1.0770 & 1.2760 can comeback on the chart for mentioned quotes whereas 1.0930 & 1.2950 may act as nearby resistances. Further, USDJPY continue to be supported by an upward slanting trend-channel and may reprint 114.40 but a dip below 113.00 seems as a trigger to fetch the pair towards 112.30 & 112.00 re-test.
Have a nice trading-day ……