[B]Daily Fundamental Dose: 14 – February – 2017[/B]
Hello Traders,
Following its first week of gains, the US Dollar Index (I.USDX) managed to extend the upward trajectory on Monday, even without any major economics, as Trump’s promise to deliver “phenomenal” tax plan maintained its strength to please greenback traders. The USD Bulls were strong enough to avoid news of resignation by Donald Trump’s national security adviser over the allegations of his Russian contacts but remained cautious ahead of Fed Chair’s Testimony on later Tuesday. The Pound also observed its previous advances, mainly due to upbeat economics, but the EUR had to drop across the board on French political worries and Greek debt strains. Further, the AUD and NZD weakened as strong USD hurt commodity basket a bit whereas JPY & Gold had to stretch their prior weakness on renewed market optimism. Additionally, Crude prices advanced as OPEC revised up its forecast for 2017 worldwide oil demand in monthly report, which in-turn helped CAD prices.
As we come to the active Tuesday, Australian Business Confidence rallied to two-years high and the Chinese PPI grew the strongest since 2011 with CPI revisiting June 2014 high. With this, Commodities and commodity currencies, like AUD, NZD and CAD, got boost while US Dollar shed some of its latest gains. Further, the JPY and Gold also recovered from their latest lows as traders become cautious due to active economic calendar.
For the rest of the day, investors are likely to put more emphasis on UK CPI and Fed Chair’s testimony in order to determine GBP & USD’s move whereas EU & German GDP & ZEW Economic sentiment figures can serve as second-tier details to propel market liquidity. As today’s semi-annual testimony by the Fed Chair being the first under Trump administration and fresh head of Senate Banking Committee, chances of her trying to justify good works of US Federal Reserve are higher. In doing so, Janet Yellen might choose to provide loose links of upcoming rate-hike, though no strong ties are expected to be revealed, which in-turn can help greenback to regain its strength. However, any disappointment might have higher repercussions, as far as USD & GBP are concerned, and hence economics need to be traded with caution.
[B]Technical Desk[/B]
Being few hours away from important EU, US & UK details, EURGBP becomes an important pair to observe as its recent pullback dragged it to 200-day SMA, at 0.8445, which is likely to trigger the pair’s bounce to 0.8500. Further, 1.0590 & 1.0640 become crucial levels for EURUSD during the day whereas AUDUSD’s break of 0.7700, which gains less favor at the moment, could quick flash 0.7750-55 on the chart.
Have a nice trading-day …………