Daily Fundamental Dose

Trading Discussion News and Economy
806

Daily Fundamental Dose: 21 – June – 2017

Hello Traders,

With increasing oil production from Libya, Nigeria and US widening the already prevalent Crude supply-glut, energy prices entered into Bear market on the break of $43.00 mark. As a result, commodity basket witnessed a shock which could be observed in declining quotes of AUD, NZD and CAD. However, the US Dollar remained strong and managed to ignore Fed Vice-Chair’s inability to provide any monetary policy signals. The EUR got another push towards south due to weaker than forecast German PPI while GBP plunged as BoE Governor played down concerns favoring rate-hike strengthened after last week’s meeting wherein 3 out of 8 policymakers voted for such change. Additionally, the JPY and Gold refrained from registering any big moves due to strength of the US Dollar and lack of any big announcements.

On early Wednesday, commodity currencies remained volatile as China’s inclusion to MSCI favored the industrial economy, which in-turn helped the commodity basket, but overall weakness in energy and the base metals’ market curbed their recovery. Further, the JPY and Gold seems gaining a lift as renewed volatility helped safe-havens whereas GBP and EUR are recovering a bit from their recent lows.

Moving forward, Wednesday becomes a comparatively busy day for traders than the previous two days. The day started with Japanese All Industries Activity Index and minutes of latest BoJ meeting that helped JPY while US Existing Home Sales, weekly announcement of US Crude Oil stockpile data and the monetary policy meeting by the RBNZ (Reserve Bank of New Zealand) are left to entertain market players for the rest of the day.

Considering latest improvement in US details, the housing market detail may help the USD to extend its present recovery while Crude traders would welcome a higher drawdown in inventories. At the central bank’s front, RBNZ isn’t expected to alter its monetary policy but recent reports of weaker than expected New Zealand GDP may push policymakers to justify the economic strength, which if happens could help NZD to recover its immediate losses.

At political front, the Theresa May government is still in talks with Northern Ireland’s Democratic Unionist Party to gain the required 10 seats to form parliamentary majority and a positive outcome of which can help GBP to reverse post-election drop. The US political environment seems almost silent with no news on Trump’s hand in 2016 Presidential election or from North Korea and hence any small announcement on either subject may gain stronger response.

Technical Talk

GBPUSD’s close below the 1.2630, comprising 100-day SMA, indicates brighter chances of its further south-run towards 200-day SMA level of 1.2560 while USDCAD needs to surpass 1.3300 and the 1.3320 in order to justify its strength while targeting 1.3390 with 1.3230 and the 1.3200 being nearby supports to watch during pullback. In case of EURNZD, the pair struggles between 100-day SMA level of 1.5365 and a month-long descending trend-line resistance of 1.5435-40 with comparative NZD strength indicating a dip towards 1.5330 & the 1.5260.

Have a nice trading-day ……

807

Daily Fundamental Dose: 22 – June – 2017

Hello Traders,

While lack of economics has been trying to curb financial-market moves since early weekdays, plunge in Crude prices, coupled with UK & US policymakers’ comments, let the traders enjoy volatility. Moreover, RBNZ’s latest monetary policy meeting registered noticeable flip in NZD but the kiwi failed to counter big draw-down from commodity basket. Moving on, with majority of scheduled economics already being out, investors would observe the upcoming consumer-centric figures from Canada and EU’s Flash PMI numbers in order to determine near-term trade sentiment while political news can keep entertaining them. Let’s quickly analyze them.

Economics Laid Low But Politics Played Its Role

Even with no big economics were published during the week till now, hawkish comments from some of the FOMC members and opposite tone of BoE’s Chief Economist to that of the Governor offered active sessions to USD and GBP traders respectively. However, the US Dollar Index (I.USDX) has been strong but the Pound couldn’t sustain its last week’s gains. Further, the EUR failed to please volatility traders but commodity basket was in heavy losses after Crude prices entered Bear market on supply-glut concerns. Additionally, JPY and Gold benefited a bit from declining energy prices pushing risk-averse investors to safe-havens whereas AUD, NZD and CAD dropped due to the same reason.

Anticipated Catalysts For Rest Of The Week

During early Thursday, concerns that weak energy prices might not favor Fed’s anticipation about inflation and could also hurt the central bank’s rate-hike plan dragged the US Dollar towards south. Though, news from US Homeland Security Department indicating least damage done by Russian hackers during 2016 Presidential election helped the greenback. The Euro, on the contrary, benefitted from speculation that British policymakers may now adhere to soft Brexit whereas GBP remained subdued. In all these, JPY and Gold were the clear winners while commodity currencies had to bear the burden the of Crude’s downturn.

Looking at the rest of the week details, Canadian Retail Sales and US Jobless Claims might offer active sessions for USD & CAD traders on late-Thursday while Friday’s Flash PMIs from EU & Germany, followed by Canada’s CPI and US New Home Sales, could close the week.

Following a higher than forecast Canadian Wholesale Sales, traders would closely examine numbers from Retail Sales and CPI to analyze whether the economy is actually as strong as revealed by the BoC member during last week or not. The Retail Sales might register weak growth of 0.3% from 0.7% earlier and the CPI could also flash soft figure of 0.3% mark against 0.4% prior. Hence, while declining Crude prices showing a downward direction to the Canadian Dollar (CAD), weak economics may add the fuel to its south-run. However, numbers like earlier announcement of Wholesale Sales can help the Loonie recover some of its latest losses.

At EU, Flash reading of Manufacturing & Services PMIs from Germany and EU could wake up the EUR traders. Forecasts suggest, German Manufacturing and Services PMIs would release 59.1 and 55.4 numbers compared to 59.5 and 55.4 respectively while EU Flash Manufacturing PMI might remain near to its 57.00 earlier with 56.9 & Flash Services PMI could also follow the same style with 56.3 mark versus 56.4 previous. With little expected change in EU economics, chances of EUR’s muted response to scheduled data-points and reliance on UK & US news to determine moves are high.

Other than the economics, latest news from US, favoring Trump administration on alleged relation with Russia during 2016 Presidential election, and any updates from North Korea could guide the USD moves. Moreover, British PM is still struggling to form the parliamentary majority with required 10 seats and there prevails no clear sign from BoE to direct GBP’s near-term trend which in-turn could hurt the Pound. Additionally, commodity currencies might witness a pullback after declining during earlier days whereas short covering in Crude could add strength into those quotes.

Technical Analysis

EURUSD’s immediate up-moves are likely confined by short-term descending trend-line, at 1.1200 now, that signals the pair’s extended declines to 1.1080-75 support but the GBPUSD bounced-off from 100-day SMA level of 1.2630 and may aim 1.2750; though, a dip below 1.2630 can flash 1.2555 support-level, comprising 200-day SMA, on the chart. Moving on, USDJPY again indicates 200-day SMA re-test, at 110.75, with 100-day SMA level of 111.85 limiting its immediate advances but the USDCAD may clear the 200-day SMA resistance of 1.3340 and can run towards 1.3430 north-side number with 1.3180 being near-term strong support. Additionally, AUDUSD and NZDSD are both expected to remain weak with 0.7515 and 0.7120 acting as immediate supports and 0.7610 and the 0.7300 are likely respective resistances to watch.

Have a nice trading-day ……

808

Daily Fundamental Dose: 23 – June – 2017

Hello Traders,

Thursday turned to be another day of the dull week when lack of required triggers, be it economical or political, curbed market sentiment. The US Dollar remained sluggish with mixed clues from Jobless Claims and House Price Index while EUR failed to register any noticeable moves but closed in negative territory. The GBP gained for consecutive second day as BoE policymaker, Kristin Forbes, became loud mouthed in supporting a rate-hike whereas NZD witnessed mild pullback and AUD continued it’s latest south-run. Further, Canadian Dollar (CAD) proved to be a winner of the day with upbeat Retail Sales and short-covering in Crude prices while JPY and Gold also stretched their recoveries as dormant market conditions pushed traders towards safe-havens.

During early Friday, investors became active ahead of the heavily-filled calendar but the moves were against the US Dollar as expected upbeat releases from EU and Canada might outweigh positive forecasts for US New Home Sales. The JPY ignored soft Flash Manufacturing PMI as market players expect volatility on the last-day of the week which mostly remained inactive and ran towards risk-safety. Further, GBP continued its up-moves on renewed concerns that Theresa May will be able to get the required 10 seats to form parliamentary majority whereas hawkish comments from BoE members added strength into the Pound.

Looking at the forecasts for scheduled data-points, German Manufacturing and Services PMIs would release 59.1 and 55.4 numbers compared to 59.5 and 55.4 respectively while EU Flash Manufacturing PMI might remain near to its 57.00 earlier with 56.9 & Flash Services PMI could also follow the same style with 56.3 mark versus 56.4 previous. Additionally, Canadian CPI is likely to print soft figure of 0.3% mark against 0.4% prior while US New Home Sales can please housing market optimists with 599K numbers compared to 569K earlier.

On the political front, things are getting calmer day by day and any news from Trump administration’s alleged role in 2016 Presidential election or from North Korea, coupled with Brexit developments and BoE’s stance on rate-hike, could receive higher attention.

With comparatively many details on hand, Friday is likely to close the week with much required active sessions but USD’s gains become doubtful with GBP and CAD likely being stronger currencies at the end of the week. Moreover, Crude can keep suffering from global supply-glut but the JPY and Gold may regain investors’ confidence.

Technical Talk

USDCAD’s break of immediate ascending trend-line support indicates the pair’s further downturn towards testing 1.3160 with 1.3285 being nearby resistance. Further, EURUSD is also aiming 1.1190 and the 1.1230 ahead of crucial PMI releases with 1.1130 being immediate support. Additionally, AUDJPY also bounced-off from short-term ascending trend-line and is aiming for 84.80 & 84.80 resistances but a dip below 83.85 TL can fetch the quote to 83.55 and 83.20.

Have a nice trading-day ……

809

Daily Fundamental Dose: 26 – June – 2017

Hello Traders,

Although lack of major catalysts confined market moves during last week, Crude prices turning bearish and contrasting signals from BoE policymakers grabbed attention by offering active sessions to traders. On the economic front, EU PMIs, monetary policy meeting by the RBNZ and the Canadian data-points were considered as important events but couldn’t propel noticeable market activity. However, the US Dollar managed to remain on a positive side but the EUR couldn’t stretch its advances. The GBP, on the other hand, initially lost as BoE Governor talked down concerns for rate-change but the central bank’s chief economist and one outgoing policymaker provided strong push to the Pound on such speculations. Further, the AUD avoided Moody’s downgrade to major AU banks while NZD and CAD weakened on commodity basket’s drop. Additionally, JPY and Gold flashed mixed signals as not so strong comments from BoJ officials dragged JPY to south while Gold benefited from safe-haven support due to Crude’s decline.

During the start of a comparatively busy week, the Crude prices extended their latest pullback while USD remained under pressure even if one of the FOMC member, John Williams, reiterated his support for another rate-hike and start cutting down the balance-sheet. Commodity currencies, namely NZD, AUD and CAD, also portrayed a bit of recovery while JPY and Gold softened. Moreover, GBP and EUR both remained strong as progress on Brexit negotiation, coupled with greenback’s weakness, helped these currencies.

Moving forward, German IFO Business Climate Index and the US Durable Goods Orders, coupled with ECB President, Mario Draghi’s, speech are likely catalysts to help investors. While German IFO number might not provide a smile on EUR traders’ face, upbeat Durable Goods Orders and Draghi’s speech seem crucial. The US data is expected to help the greenback recover from its latest decline while Draghi’s refrain to discuss policy changes could hurt the EUR.

Other than scheduled stats/speeches, news from Geo-political front also become crucial as Trump administration again proposed the repeal/replace of Obamacare program and allegations on their contact with Russia during Presidential election is still live. Also, EU-UK talks relating to Brexit may generate few intermediate moves against the GBP if EU policymakers consider UK proposals as hard demands.

Technical Talk

With the break of immediate descending trend-line, GBPUSD seems heading towards 1.2815-20 with 1.2700 being nearby support while USDJPY is again heading to 111.75-80 resistance-region but a dip below 111.00 can fetch it 110.60. Further, USDCHF’s moves are confined within short-term symmetrical triangle with 0.9670 acting as adjacent support and 0.9755 being formation-resistance.

Have a nice trading-day ……

810

Daily Fundamental Dose: 27 – June – 2017

Hello Traders,

All those who expected US Durable Goods to offer a strong start to the greenback remained less happy on Monday as a five-month low reading raised concerns about the strength of world’s largest economy and the Fed’s rate-hike promises. The EUR remained sluggish as Mario Draghi, ECB President, continued defending the easy monetary policy of the central bank at Sintra conference whereas the GBP weakened on news that EU officials aren’t impressed with UK’s Brexit proposals. Further, the JPY stretched its pullback with soft SPPI number but the Gold plunged after a false order got activated. Additionally, commodity currencies, namely AUD, NZD and CAD, celebrated the pullback in Crude and the rest of the basket which got additional support from hawkish comments of Chinese Premier.

Tuesday started with heavy volatility, which mostly favored the GBP, on the news that UK PM, Theresa May, finally got the official support from Northern Ireland’s Democratic Unionist Party (DUP) and its 10 lawmakers to form the government in British parliament. Moving on, the Canadian Dollar (CAD) got a hit due to US Commerce Department levying extra duty on Canadian softwood lumber but the AUD and NZD remained strong due to rising commodity prices. On the other hand, Gold and JPY are on the run to recover yesterday’s losses with the EUR being a bit stronger compared to the USD ahead of FOMC policymakers’ scheduled speech at London’s Royal Academy.

While yesterday’s US Durable Goods Orders disappointed greenback Bulls, today’s monthly reading of CB Consumer Confidence will become another reading to grab traders’ attention; though, with the Fed Chair’s and some of the Fed members’ speeches up for release, chances of witnessing volatility in greenback become too high. At UK, the BoE is also expected to publish financial stability report together with Governor Mark Carney’s press conference.

As market players continue being more worried about the Fed’s optimism due to latest rout of downbeat data-points, dovish comments from Fed Chair and/or weak Consumer Confidence may harm the USD more while upbeat statement is less likely to offer much strength to the US currency. At UK, BoE Governor is less likely to alter his last week’s comment supporting the prevalent monetary policy, which in-turn could drag the GBP towards south whereas EUR has lesser triggers and may remain sideways. Additionally, commodity basket has also rallied since last four days without any big announcements and hence chances of weakness in AUD, NZD and CAD can’t be denied. However, in all these scenarios, JPY and Gold are likely to benefit via safe-haven buying.

Technical Talk

AUDUSD again aims to conquer with fortnight long descending trend-line, at 0.7615, breaking which it can move up to 0.7635 and 0.7660 with 0.7570 & 0.7530 acting as nearby supports. Further, NZDUSD finally cleared the longer-term TL, around 0.7280 now, and can target 0.7335 and 0.7350 while AUDJPY could find it hard to surpass 85.05-10 horizontal-resistance that confined the pair’s up-moves during April and early current-month and may re-test 84.75 & 84.45 support-levels.

Have a nice trading-day ……

811

Daily Fundamental Dose: 28 – June – 2017

Hello Traders,

Even if no major economic events were scheduled for publish, global market remained volatile during Tuesday as speeches from influential central-bank leaders propelled trade sentiments. Notable among them were heads of BoE, ECB and Federal Reserve. While ECB’s President, Mario Draghi, finally agreed on the need for paring back stimulus, the BoE Governor revealed threats from Brexit and a higher consumer-credit. In doing so, currencies of EU and UK remained benefited as investors expected respective central banks to act. The US Dollar, on the other hand, lost heavily after Fed Chair pointed to high asset valuation while delay in voting on a healthcare reform bill at U.S. Senate raised worries over the capacity of Trump administration to offer promised policies. At the economic front, traders’ optimism after better than forecast US CB Consumer Confidence weakened as index of consumer expectations for next 6 months dropped to January lows.

Further, Commodity currencies benefited from the USD’s plunge while JPY fell as traders’ perceived optimism at EU and no signals of monetary policy change from BoJ as a negative signal for the Japanese Yen. Additionally, Crude also stretched its pullback before the day-end but later-on adhered to selling on higher than expected inventory details from API.

It seems that the volatile day wasn’t enough for Forex traders as early Wednesday continued extending the pre-established moves against the US Dollar that favored EUR, GBP and commodity currencies, namely AUD, NZD and CAD. However, JPY failed to post signs of pullback and is also declining ahead of the BoJ Governor’s speech.

Moving towards rest of the Wednesday, the last day of ECB’s Forum on Central Banking in Portugal, economic calendar continue to remain silent with only US Pending Home Sales up for release. However, scheduled speeches from heads of BoE, BoC, ECB and BoJ might offer noticeable moves of GBP, CAD, EUR and JPY. Further, US Crude Oil inventories’ data also becomes important for energy traders.

While US housing data is expected to flash welcome numbers, hawkish speeches from central bank leaders might supersede the detail’s impact to strengthen the greenback. Though, any unexpected U-turn in the central bankers’ tone, from what they said yesterday, could hurt their respective currency. Moreover, Crude can rejoin its downturn on lesser than expected drawdown in inventory levels while political plays at US might raise bars for the USD’s up-move.

Technical Talk

While USDJPY’s successful break of 100-day SMA level of 111.80 indicates brighter chances of its run-up to 112.70-75, GBPUSD seem struggling to extend its up-moves beyond 1.2830 and may revisit 1.2760 support. Further, CADJPY cleared six-month old descending trend-line, at 84.95 now, and could flash 85.90 on the chart with a dip below 84.95 signaling its correction to 84.20.

Have a nice trading-day ……

812

Daily Fundamental Dose: 29 – June – 2017

Hello Traders,

With the European Central Bank Forum on Central Banking, in Portugal, been a platform for majority of central-bank leaders to convey their hawkish moods, global investors ascertained that US Federal Reserve isn’t the only one to offer rate-hike. As a result, the single most advantage of the greenback got eroded and the US Dollar dropped heavily against majority of its counterparts during last three-days. However, the game is still not over as the economic calendar was a bit shy till now and will start flashing some important releases, including GDP and Inflation numbers, during Thursday and Friday. Hence, there are many aspects for traders to observe while analyzing the upcoming Forex market moves.

Central Bankers Ruled The Market

Due to lesser economic details scheduled for publish at the start of the week, ECB’s forum in Portugal grabbed all the limelight as heads of crucial central-banks, namely Federal Reserve, Bank of England, Bank of Japan and Bank of Canada, were ready to reveal their outlook on respective central bank’s upcoming action.

The global policymakers availed this opportunity and suddenly turned the tables against USD. Among them, the ECB President, Mario Draghi, was a hard hitter as the leader finally conveyed his likeliness for tighter monetary policy while leaders of Fed, BoE and BoC also followed the suit by favoring a rate-hike. Due to this, global equity markets got a boost, together with a rally of GBP, CAD & EUR, and the USD lost its importance of being the only currency of a central-bank which was acting on rate-hike till now. Though, the greenback wasn’t only currency to drop even after registering upbeat second-tier economics as Japanese Yen (JPY) also had to bear the burden of macro optimism and refrain by the BoJ policymakers to commit strongly in support of their mammoth asset purchases curtailing. Further, the Dollars of Australia and New Zealand also gained as commodity basket, excluding Gold, celebrated the greenback’s weakness and China’s optimism whereas Crude got a boost from dip in US oil production & a hike in inventory levels.

Economic Calendar Regains The Focus

Following an end of two-day long central-bank forum, investors again look to economic calendars in search of clues to extend the volatile sessions experienced in early-week. The same could be witnessed during Thursday’s early trading hours after Japanese Retail Sales’ drop dragged the JPY while weaker ANZ Business Confidence triggered NZD’s pullback. However, the EUR and GBP are still on their upward trajectory, together with CAD that is backed by Crude price advances.

Looking at the scheduled data-points, Final reading of Q1 2017 US GDP, up for release on Thursday, might grab investors’ attention today as the reading is likely to confirm its second estimate of 1.2% growth-rate, which in-turn was higher than advance forecast of 0.7% but lagged behind the 2.1% prior. The same would followed by Inflation numbers from EU and Japan, together with GDP figures from Canada and UK, on Friday. Additionally, China’s official Manufacturing PMI and US Chicago PMI are some other data-points that could entertain market players on Friday.

While EU Flash CPI could weaken a bit by flashing 1.3% mark versus 1.4% previous, Japan’s National Core CPI may please JPY bulls with 0.4% mark against 0.3% prior with Tokyo Core CPI expected to add strength into the optimism with 0.2% number versus 0.1% earlier. Further, final reading of Q1 2017 UK GDP indicates no change in growth figure from 0.2% initial estimate but the Canadian GDP could trigger CAD’s pullback with expectedly weaker number of 0.2% compared to 0.5% prior.

Moving on, China’s Manufacturing PMI is likely to post another disappointing figure of 51.0 against 51.2 whereas US Chicago PMI may soften a bit to 58.2 from 59.4 registered during last month.

Hence, with the renewed importance of economic calendar, slew of top-tier details form US, EU, UK, China and Canada are likely to direct global financial market moves during the rest of the week.

Among them, US details might help greenback to recover its latest losses but EUR and CAD could witness a pullback. Also, weaker Chinese data-points may result into weaker AUD and NZD while upbeat Japanese inflation can restore JPY’s strength.

In addition to scheduled details, political turmoil at US, which again rejected Trump’s healthcare program, and the Brexit discussion could offer important news to keep markets running.

Technical Analysis

Considering the EURUSD’s clear break of 1.1310, a close beyond 1.1430 could help the pair to meet 1.1480 and the 1.1510 resistances while a downside break of 1.1310 can have 1.1280 and the 1.1220 as following supports to avail. In case of GBPUSD, the 1.3050 still remains intact, breaking which it could rally to 1.3110, but a drop below 50-day SMA level of 1.2855 can fetch the quote to 1.2800 re-test. Further, the USDJPY needs to clear 112.80 in order to claim the 114.30 with 111.80 and 110.60 acting as nearby supports while USDCAD’s break of year-long support-line, at 1.3175, signals its plunge below 1.3000 psychological magnet by aiming 1.2950. Moreover, AUDUSD and NZDUSD are near to their important resistance-levels of 0.7700 and the 0.7350 with overbought RSI and expected pullback signaling 0.7580 and the 0.7270 re-test respectively.

Have a nice trading-day ……

813

Daily Fundamental Dose: 30 – June – 2017

Hello Traders,

Irrespective of the upward revision to Final reading of US Q1 2017 GDP, traders showed no mercy to the US Dollar as aftershocks of hawkish rhetoric from global central bankers, spread during early-week, continued marking their presence on Thursday. The greenback stretched it’s across the board weakness while EUR rallied to the strongest levels in 14-month period and the GBP marked a five week high. Moreover, Canadian Dollar strengthened to the highest levels in five month whereas rest of the commodity currencies, namely AUD & NZD, also registered gains. Additionally, JPY also strengthened but Gold and Crude prices witnessed a bit pullback.

During early Friday, when the Trump administration’s proposed travel ban from six muslim-majority countries take effect, traders seem covering some of their latest profits from EUR, GBP and CAD. However, the US Dollar is still not strong as early-day releases from Japan and China helped commodity currencies and JPY. The Japanese Inflation gauge registered consecutive fifth month of advance and the Chinese official Manufacturing PMI rallied to three-month high.

For the rest of the day, UK’s Final GDP, Flash reading of EU CPI and Canadian GDP can entertain short-term traders while the core PCE deflator from US, the Fed’s favorite measure to judge inflation, the Chicago PMI and Income-Spending details could help forecast upcoming USD moves. Further, political news from US, coupled with BoC’s quarterly Business Outlook Survey may offer additional burden on Traders to observe before they conclude the week.

While details from EU and Canada are less likely to help investors maintain their upbeat sentiment for the EUR and CAD respectively, strong numbers from US may trigger the greenback’s short-covering. Also, UK’s no change in GDP may raise another question for BoE to answer before they solve the case of rate-hike chances.

To sum up, with the renewed optimism concerning lapse of loose monetary policy at major global central banks, the US Federal Reserve lost its first-mover advantage. Moreover, latest sluggish details from the world’s largest economy raises questions on the Fed’s promised rate-hike, which in-turn add burden on the greenback to clear prior to aiming an upside.

Hence, unless slew of positive data-points support US policymakers to assure investors about the strength of the economy, chances of the greenback’s return to positive path are lesser. Though, positive news from political front and/or downticks from rest of the world, could offer counter-strength to the USD.

Technical Talk

Even if the EURUSD sustained trading above 1.1410, it still needs to surpass 1.1450, 1.1465 and the 1.1500 in order to claim 1.1535 and the 1.1615 mark while a downside break of 1.1410 could fetch the quote to 1.1360 and the 1.1300 support-levels. Moving on, USDCAD is near to the 1.2960 and the 1.2900 rest-points with 1.3055-60 acting as near-term important resistance whereas GBPNZD is likely reversing towards 1.7730 and the 1.7660 supports as it failed to surpass 1.7870-90 horizontal-region.

Have a nice trading-day ……

814

Daily Fundamental Dose: 03 – July – 2017

Hello Traders,

Last week’s appearances by influential global central-bank leaders triggered macro optimism among the investor fraternity, which in-turn helped EUR, GBP and CAD the most. However, the US Dollar had to bear the burden of such positivity as traders ascertained that soon the Fed wouldn’t be the only major central-bank to accept rate-hikes. As a result, the greenback gauge (I.USDX) had to register a big drop on a weekly basis even after flashing upbeat GDP figure. On the other hand, Crude Oil was also a big gainer after a drop in stockpile and declining US rig counts, coupled with USD’s weakness, helped energy market that could also be witnessed in the prices of AUD, NZD and CAD. Further, the JPY and Gold remained a bit shy as market optimism hurt safe-haven demand.

Moving towards the start of July month, early-day moves were mostly affected by Japanese market outcomes and then Chinese data-points. At Japan, Tankan Manufacturing PMI revealed a third straight quarterly gain whereas exit polls showing Abe’s Liberal Democratic Party losing the Tokyo election triggered the JPY moves. In case of commodity basket, China’s Caixin Manufacturing PMI registered upbeat outcome and signaled strength of world’s second largest economy that helped commodity currencies but AUD failed to reveal the good-news after AU Building Approvals dropped heavily.

Traders are now waiting for slew of manufacturing numbers from UK, EU and US wherein US figures may help the greenback to recover some of its latest losses while GBP may have to trim its gains with EUR less likely to be affected more. Additionally, political wave at US, Japan and between EU-UK, should make traders busy.

Considering the latest run of optimism driven by global central bankers, chances of the EUR, GBP and CAD to extend their up-moves are higher; however, tomorrow’s RBA and this week’s FOMC statement, coupled with US Job details, will become crucial for financial market players to observe. Given the US central bank continue sending hawkish signals, which also gets a back-end support from headline data-points, the USD can regain its strength. Though, chances of its run-up beyond EUR gains are too little.

Technical Talk

With the EURUSD and GBPUSD’s inability to surpass 1.1450 and the 1.3050 resistances respectively, chances of their pullback to 1.1375-80 and the 1.2970-75 are high. On the other hand, AUDCHF again confronts the medium-term TL resistances of 0.7390 which might fetch it to 0.7320 & 0.7270 re-test.

Have a nice trading-day ……

815

Daily Fundamental Dose: 04 – July – 2017

Hello Traders,

Even if early-Monday Manufacturing numbers stretched last-week’s moves against the US Dollar, release of US ISM Manufacturing PMI, which rallied to almost three-year high, helped greenback to register a positive start to the week. On the other hand, EUR witnessed some profit-booking moves while GBP dropped after UK Manufacturing PMI flashed three-month low. Further, commodity currencies also witnessed correction and bowed down against US Dollar while JPY and Gold lost heavy weights on USD’s up-moves and improving market sentiment. Additionally, Crude prices stopped its eight-day long up-moves on the news that some of the OPEC members which are barred from production-cut are hurting the OPEC’s agenda with higher output.

During the start of Tuesday, the Australian details/events propelled markets. Among them, better than forecast AU Retail Sales initially helped the AUD but RBA’s no rate-change and desire to wait for increase in wages to term the labor market improvement as strong dragged the Aussie towards south against majority its counterparts. At geo-political front, North Korea test-fired another missile towards Japan that gave a fresh push to the tensions between Korea, Japan and US.

With the scheduled AU details already out and loud, absence of US traders from market, due to Independence Day holiday, might curb rest of the day momentum. However, UK Construction PMI and the latest act of North Korea can keep offering intermediate trade opportunities. Further, EU-UK developments on Brexit might also helped determine near-term moves of the EUR and GBP respectively.

As UK Manufacturing PMI is likely to print another downbeat number for the GBP, the Pound might extend its latest pullback while EUR and USD may portray tepid trading signs due to lack of signals. Moving on to the JPY, renewed Geo-political tension may help rejuvenate the safe-haven demand, which can also support Gold, but recent defeat of Abe’s party in Tokyo may hurt the Japanese currency. Furthermore, commodity currencies are expected to witness some more pullback as weakening Crude prices and push traders towards profit-booking.

Technical Talk

USDJPY failed to surpass 113.50 TL resistance and might revisit 112.30 and 112.00 supports while AUDUSD is struggling with immediate ascending trend-line support of 0.7620, breaking which it can test 0.7570 but sustained trading around 0.7650 can refill it’s strength. For AUDNZD, the pair reversed from 1.0545-50 horizontal-line and is presently running towards 1.0420 and the 1.0400 support with 1.0500 acting as immediate resistance.

Have a nice trading-day ……

816

Daily Fundamental Dose: 05 – July – 2017

Hello Traders,

While holiday at US curbed market moves on Tuesday, RBA’s inability to impress Aussie Bulls and another blow to the GBP, in form of weaker than expected Construction PMI, kept making Forex traders busy. The EUR remained sluggish with an increase in Spanish unemployment change while CAD rallied as BoC Governor again signaled a rate-hike via German Newspaper. Further, JPY and Gold got a bit of support on the news that North Korea test-fired another missile but the USD refrained from registering downside as majority of bears were away celebrating national independence-day. Additionally, Crude prices remained a bit worried and refrained from registering heavy upside on news of higher OPEC output but Geo-political tensions confined its drop.

As majority of market participants return from US holidays, early-Wednesday moves remained quite active mainly due to the response from US concerning North Korea’s missile test. The world’s largest economy considered it as a threat and stands ready to drag the case at United Nations Security Council’s emergency meeting on Wednesday. As a result, safe-havens, namely JPY and Gold, got additional support while US Dollar declined. Moving on, China’s Caixin Services PMI disappointed commodity basket optimists as the gauge flashed weaker than forecast figure and questioned industrial player’s economic strength after the Manufacturing PMIs registered strong numbers.

Looking at the rest of the day schedule, Services PMIs from EU and UK, coupled with US Factory Orders and FOMC minutes are likely to entertain traders with geo-politics also playing its crucial role. The EU and UK details might not help respective currencies as latest figures from both the economies haven’t been so good. However, EUR may reveal lesser damages, if at all it happens, as North Korean news keep troubling the greenback, which in-turn may provide counter-strength.

In regards to US details/events, the Factory Orders are expected to test the six-month low and can weaken the USD further by raising question on the strength of world’s largest economy while FOMC minutes is a surprise component to watch. The Fed policymakers announced rate-hike in June and also discussed cutting down the US balance-sheet debt; however, they refrained from signaling any strong time-frames which investors might be interested in looking for while analyzing today’s minute statement. It should also be noted that May-month minutes showed many FOMC members remained worried for inflation and if the same is revealed today, the USD could have major negative before the Friday’s Jobs report.

Technical Talk

With its sustained closing below 1.2950, the USDCAD seems vulnerable to visit 1.2860 & 1.2820 support levels while a break of 1.2950 needs to surpass 1.3015 in order to claim 1.3050. In case of NZDUSD, the pair bounced from 0.7260 and may challenge 0.7315-20, breaking which chances of witnessing 0.7350 can’t be denied but a dip below 0.7260 can fetch it to 0.7230 & 0.7200 round-figure support. Furthermore, EURCAD broke 1.4725-30 horizontal-support and is aiming 1.4600 and the 1.4560-55 re-test with 1.4790 and the 1.4830 acting as nearby resistances.

Have a nice trading-day ……

817

FxAnil how do you position yourself for a trade after you have done your follow up on the news feed

818

Hi Bijhoza,

I like reading and hence fundamentals are my first priority; however, I don’t ignore technicals and do respect as and when receiving any trade signals.

Hence, after I’m done with the day’s fundamental and technical analysis, I would look for the signal and if it fits in my plan, backed by analysis, I take the trade.

Regards,
Anil

819

Daily Fundamental Dose: 06 – July – 2017

Hello Traders,

Following last-week’s hawkish rhetoric by major central-bankers, global investors welcomed the first week of July in search of evidences that the US economy, which so far seems lagging behind rest of its counterparts, is capable enough to help Federal Reserve perform rate-hike and balance-sheet curtailing promises or not. However, greenback Bulls remained disappointed after Wednesday’s FOMC minutes revealed that most of the policymakers are divided about the timing of balance-sheet tapering and inflation outlook. Additionally, North Korea’s another missile-test, which US termed as capable of hitting them, harmed the USD and pushed global leaders to discuss the issue at this week’s G20. Hence, Friday’s NFP and a two-day long G-20 meeting now grab financial market players’ attention to foresee upcoming moves.

US Holiday, FOMC Minutes, PMIs & Geo-Politics Played Their Role

While Monday’s US ISM Manufacturing helped the US Dollar to remain strong, independence-day holiday on Tuesday, followed by the response to North Korea’s missile-test and downbeat FOMC minutes on Wednesday, dragged the greenback towards south. On the other hand, EUR remained sluggish but took the advantage of USD’s weakness as no major economics were scheduled for publish whereas GBP had to bear the burden of soft headline PMIs. Further, the Australian Dollar (AUD) couldn’t stretch its previous north-run after RBA refrained from being optimistic on rate-hike while NZD registered no major swings due to lack of data-points but the CAD rallied on another hawkish statement by BoC Governor. Additionally, Crude prices dropped on concern that Russia seems not ready for exceeding production-cut, if at all it is being agreed by OPEC, and dragged the commodity currencies downwards on Wednesday. Moreover, JPY managed to regain its safe-haven support due to latest North Korean action but the Gold failed to reflect the same as traders are yet to recover early-week losses by the yellow metal and wish to wait for upcoming data-points before taking any decision.

Eventful Days Lie Ahead

With the recent intercontinental ballistic missile test by the North Korea pushing global leaders to reveal their disappointments at this week’s G20, an otherwise medium-level event gains high importance. Furthermore, Friday’s NFP, an evergreen crucial data-point to gauge US economical strength, coupled with slew of second-tier details on Thursday, could keep entertaining market players for the days to come.

During early Thursday, investors ignored upbeat Trade surplus figures from Australia and overall commodity basket seems weak with recent plunge in Crude prices. However, rest of the day details, namely US ADP Non-Farm Employment Change, Trade Balance and ISM Non-Manufacturing PMI, together with Canadian Trade Balance details, are likely triggers that could generate intermediate trade moves.

While ADP is indicating soft number of 181K compared to 253K previous, Trade Balance might point shrinking deficit to -46.3B from -47.6B but ISM Non-Manufacturing PMI could add weakness into the greenback with 56.6 number against 56.9 earlier. In case of Canadian Trade Balance, deficit is likely to be widened to -0.50B from -0.37B, mainly due to latest strictness of US.

Moving towards Friday, the early-day releases of UK Manufacturing Production & Goods Trade Balance could help determine near-term GBP moves while the rest of the day moves are likely to be governed by employment details from US & Canada, together with news from G20. While expected increase in UK Manufacturing Production, to +0.4% from +0.2%, can counter widening Goods Trade Balance deficit of -10.9B versus -10.4B earlier, chances of an otherwise reading hurting the Pound are high.

If we analyze job statistics from US & Canada, figures from Canada aren’t likely to impress the Loonie traders while the same from US may help the US currency to recover its latest losses. The NFP, which softened a bit during previous release to 138K, could print 175K mark while Average Earnings that remained unchanged earlier at 0.2% bears forecast of 0.3% growth. Further, the Unemployment rate is expected to register 4.3% mark for second consecutive time. Additionally, the Canadian Employment Change is expected to soften by registering 15.0K addition from 54.5K prior while the Unemployment Rate might remain unchanged at 6.6%.

At the Geo-political front, US President, Donald Trump, is heading towards meeting his Russian counterpart, Vladimir Putin, for the first-time on G20 after being the global leader and the latest North Korean attempt to tease world’s largest economy is the talk of the town. Even if majority of the global leaders supported Mr. Trump when he demanded tough actions against North Korea in Wednesday’s emergency meeting, the Vladimir Putin refrained from being too harsh which in-turn may raise a negative impression of the leader in the eyes of US that is already famous for being loud. However, the bond between Trump and Putin gained fame when the Republican leader was campaigning for US presidential election and hence chances of positive outcome from G20 are high.

Given the US data-points manage to portray strong employment scenario at the world’s largest economy and the Russia joining hands with US to tame North Korea, chances of the USD’s rally to recover latest losses can’t be denied.

In case of GBP, slew of weaker data-points continue forcing Pound traders to ignore latest hawkish comments from BoE leaders and extended round of downbeat prints on Friday could hurt the UK currency more. Further, the EUR, left with no major details except ECB meeting minutes, might depend upon USD to portray its immediate moves while JPY and Gold are likely to benefit from present geo-political crisis concerning North Korea if the G20 fails to generate any fruitful outcome.

Additionally, commodity currencies and the Crude are also expected to stretch their latest downturn as scheduled details bear negative forecasts.

Hence, upcoming stats from US, Canada and UK, coupled with news from G20, become important for global investors to rely on while forecasting moves of financial markets.

Technical Analysis

At the technical side, EURUSD’s failure to surpass 1.1450 might fetch it to 1.1280 but an otherwise case can flash 1.1500 & 1.1530 on the chart while GBPUSD bounced-off from immediate ascending trend-line support of 1.2900 and may aim for 1.3050 again. Further, USDJPY needs to break near-term TL resistance, at 113.40 now, in order to aim for 114.40 with 112.50 acting as adjacent support. Moving on, USDCAD continues indicating 1.2900 unless it breaks 1.3050 on a daily closing basis while AUDUSD’s break of support-line favors 0.7550 re-test but a break of 0.7630 can help it target 0.7710. Additionally, NZDUSD struggles around 0.7250 support and 0.7310 resistance whereas Crude’s failure to surpass 50-day SMA level of 46.80 signals its 43.50 re-test.

Have a nice trading-day ……

820

Daily Fundamental Dose: 07 – July – 2017

Hello Traders,

Thursday wasn’t a different day for disappointed USD Bulls as slew of downbeat data-points continue raising doubts on the Federal Reserve’s ability to deliver promised rate-lift and start trimming balance-sheet debt. While weaker than expected ADP and a higher Jobless Claims threatened traders before today’s NFP, wider Trade Balance ate away optimism spread through positive ISM Non-Manufacturing PMI. The EUR remained positive even if ECB minutes couldn’t confirm the latest hawkish stance of the central bank while the GBP rallied with no major details. Moving on, the JPY and Gold remained sluggish while commodity currencies declined with Crude ignoring large stockpile draw-down due to increasing output from US & OPEC. At the geo-political front, show of anger by US President to the North Korea’s missile-test gained the headlines.

During early Friday, Bank of Japan surprised global investors with the announcement of first unlimited fixed-rate bond-purchase since February, which in-turn dragged the JPY to south and helped the USD to gain a bit. However, dovish comments from Fed Vice Chairman concerning the uncertainty surrounding government policy tamed the greenback’s rise. In case of commodities, sustained weakness in Crude prices kept on hurting the CAD prices while AUD and NZD recovered from their latest lows on short-covering.

Being the NFP-day, there is no doubt that global market players are eagerly waiting for the crucial Job releases from US. Though, recent employment stats have been quite negative and hence increasing pressure on the buyers amid presently weak outlook for the USD. Other than the jobs data, release of Fed’s semi-annual monetary policy report, UK manufacturing Production & Trade Balance, followed by Canadian employment stats, and the on-going G20 could keep entertain traders.

While NFP is expected to post higher than previous figure and Unemployment rate might remain unchanged, the focus seems on the Average Earnings which is likely pleasing greenback buyers with an increase. Though, latest pattern in US economics isn’t favoring all around happiness and a cautious statement from Fed report might drag the USD further towards south. For Canadian Dollar (CAD), soft employment change and declining Crude prices might extend the Loonie’s near-term weakness while forecasts relating to UK details indicate that the GBP can maintain its strength. Moving on, updates from G20 in support of US’s hard stance against North Korea could add volatility into the market.

Technical Talk

EURUSD again aims to confront 1.1430-50 area and a weaker greenback might propel the pair to meet 1.1510 with 1.1370-65 being nearby support while GBPUSD gains support from short-term ascending trend-line, at 1.2945 now, and may again challenge the 1.3000 psychological magnet. The USDJPY, however, broke four-month old descending trend-line of 113.25-30 and can target 114.00 and the 114.30-35 resistances.

Have a nice trading-day ……

821

Am I allowed to post fundamental analysis on currency pairs on this thread? I’d like to draw some attention to all NZD pairs…

822

Daily Fundamental Dose: 14 – July – 2017

Hello Traders,

While a rate-hike from Bank of Canada (BoC) offered noticeable strength to the Loonie (CAD), uncertainty surrounding Trump administration’s linkages with Russia and a bit dovish tone of the Fed Chair, in her latest testimony, dragged the US Dollar towards south during present week. The EUR, however, rallied to May 2016 highs on news that ECB may soon communicate its plan to dial-back the QE whereas the GBP got support from BoE policymaker’s hawkish comments and declining unemployment rate. Further, AUD and NZD also enjoyed USD weakness and presently strong commodity basket while JPY and Gold benefited a bit with no major triggers. Additionally, Crude prices celebrated a dip in US stockpiles to nearly ten-month low but gains were tamed on updates that OPEC members aren’t strongly adhering to production-cut accord.

Even if the Fed Chair remained strong on her plans to announce another rate-hike and refrained from confessing that the Inflation problems in the economy will last longer, investors remained cautious as there are many stats speaking against her. As a result, Friday’s early-day moves remained mostly against US currency and kept on supporting rest of the major currency. However, Crude witnessed some profit-booking and CHF was also a bit silent.

With majority of the scheduled details/events are out, market players are eagerly waiting for Friday’s US Inflation figures which could justify whether the Fed Chair’s expectations are worth appreciating or not. Moreover, US Retail Sales and Preliminary reading of UoM Consumer Sentiment are some other consumer-centric data-points that could help determine near-term moves of the greenback.

Looking at the latest forecasts, US headline CPI is likely to reverse it’s -0.1% prior with a +0.1% mark on a monthly basis but the yearly figure is still expected to remain below Fed’s 2.0% target. Further, the Retail Sales may please USD Bulls with 0.1% growth against -0.3% prior contraction while Consumer Sentiment gauge might remain unchanged at 95.1 mark. Hence, the economic calendar is showing favorable signs for the US currency which is on the way to register a weekly decline.

On the political front, latest announcement from Donald Trump’s eldest son strengthened the case against Trump administration and favored greenback pessimists who term present US government’s optimistic plans as paper-tiger. At EU & UK, bot the economies are showing contrasting signs concerning Brexit discussion but the hawkish tones from ECB & BoE can keep supporting EUR & GBP respectively.

Technical Talk

EURUSD’s latest break of 1.1450 failed to counter the 1.1500 round-figure and positive releases from US may fetch the pair to 1.1320 re-test. Moving on, GBPUSD is struggling with 1.2960 TL resistance, breaking which it can challenge the 1.3000 psychological magnet while EURCAD still has some strong supports, near 1.4475 & 1.4435 that can trigger the pair’s U-turn towards 1.4560 and 1.4650.

Have a nice trading-day ……

823

Hello sir, now since the core CPI and CPI disappointed which resulted in a week dollar and mixed Labour market result be lastly political interference. How long will this weakness hampering the dollar?

824

IMHO, the greenback is now likely to witness further downside unless something too optimistic comes up from US politics. The Federal Reserve optimism is in doubts because of sluggish economics and hence a fortnight or so seems a quite accepted time-frame to see USD’s further south-run. However, a drastic plunge is still not likely as ECB can offer noticeable moves.

Hope it was helpful.

825

Daily Fundamental Dose: 17 – July – 2017

Hello Traders,

With another data-driven disappointment from US, coupled with political turmoil over Trump administration’s linkages with Russia, the US Dollar Index (I.USDX) plunged to the lowest levels in 10 months during last week. As a result, the EUR & GBP gained noticeable strength, even after witnessing not so hawkish details, whereas commodity basket managed to enjoy upbeat sentiment at China. The AUD and NZD rallied with traders’ shift to commodity currencies while CAD got additional support from BoC’s rate-hike and rising Crude prices due to sharp drop in US stockpile figure. Further, the JPY and Gold strengthened on greenback’s weakness but the CHF remained sluggish because of improvement in investors’ risk appetite.

Moving forward, Monday started with an additional support to commodity Bulls on China’s upbeat GDP and Industrial Production figures. The GDP topped forecasts with 6.9% growth while the Industrial Production rallying to April highs. Due to the same, AUD, NZD and CAD got extra-strength; however, buyers remained cautious due to too long up-moves and triggered a pullback of such currencies. Additionally, Japanese markets are closed due to Marine Day but Crude kept pleasing buyers as upbeat Chinese stats signal higher energy demand and US rig counts also slowed down during last week.

Having witnessed active sessions during the early-day, traders might be interested in observing Final reading of EU CPI, US Empire State Manufacturing Index and quarterly announcement of New Zealand CPI. On the political front, second round of Brexit talks between EU-UK will start on Monday while updates concerning Trump’s role in 2016 Presidential election could keep pumping market uncertainty. Moreover, one of the RBNZ officials recently spoke in favor of weaker Kiwi and such news might offer extended profit-booking moves in NZD.

While there is no change expected in EU inflation, which can keep helping the regional currency, likely soft numbers from US & New Zealand may hhurt respective currencies more. Also, strong arguments against Trump’s connection with Russia could further raise doubts on the administration’s capacity to offer promised policies, which together with sluggish economics, can weaker greenback more. Hence, an active start of the week could be stretched during the rest of the day; though, less likely that it might favor the USD unless any strong positive pops-up.

Technical Talk

With the AUDUSD’s failure to surpass April 2016 high, coupled with overbought RSI, indicating the pair’s pullback, the 0.7780 & 0.7750 gain importance with a break above 0.7835-40 favoring pair’s rally towards 0.7900 round-figure. In case of the NZDUSD, lower high formation around 0.7370 signals 0.7300 come-back but successful clearance of 0.7370 can propel the quote to 0.7410. Further, the CADCHF is struggling with seven-month old descending trend-line figure of 0.7630 and may re-test 0.7600 support-mark.

Have a nice trading-day ……