[B]Daily Fundamental Dose: 07 – February – 2017[/B]
Hello Traders,
During the first full-day of the week, political uncertainty at EU, UK and US propelled market moves and pushed traders towards safe-havens, namely JPY and Gold. However, this time the fear is more at EU as France’s far-right National Front leader, Marine Le Pen, vowed on Monday to take the nation out of the EU if she gets elected in upcoming general election. Together with this, the ECB President, in his testimony, signaled benign inflation outlook and requirement of continued policy accommodation, which in-turn provided noticeable downtick to the EUR. Further, the GBP also got a hit when present PM, Theresa May, faced another legislative hurdle in her path to take Britain out of EU. On the other hand, US Dollar managed to post a daily positive closing even with its present uncertainty over latest “travel ban” as counter strength from GBP & EUR helped greenback. Additionally, upbeat sentiment at commodity front helped AUD and NZD but Crude and CAD dipped on the view that global oil supply-glut will take some time to fade.
During the early hours of Tuesday, New-Zealand Inflation expectations and RBA meeting provided additional strength to the NZD and AUD. The quarterly Inflation Expectations from Reserve Bank of New Zealand reached five quarter high and the Reserve Bank of Australia (RBA) held its monetary policy intact by signaling robust strength of commodity basket and improving economics. Moving on, German Industrial Production shrank the most since October 2014 while Swiss Consumer Climate tested the August 2014 high.
In addition to the present political upheaval, Trade Balance figures from US & Canada, coupled with Canadian Ivey PMI &
US JOLTS Job Openings, are some of the data-points that can make a day busier. Looking at the forecasts, US Dollar is likely to witness upswing while Canadian Dollar may continue witnessing Bear power. Though, buying in the JPY & Gold might remain continue, barring some profit-booking if USD put on heavy weight.
[B]Technical Desk[/B]
With the present political uncertainty at EU, coupled with EURUSD’s inability to surpass 100-day SMA, the pair more likely to witness further pullback towards 1.0660-55 support-zone with 1.0790 SMA mark being a strong near-term resistance to watch. Further, 1.2410 becomes crucial for GBPUSD traders with more downside expected while USDCAD might rally to 1.3210 if it successfully breaks 200-day SMA figure of 1.3130.
Have a nice trading-day …………