Daily Fundamental Dose

[FxAnil]

Daily Fundamental Dose: 16 – January – 2018

Hello Traders,

Monday’s U.S. holiday and fewer economic details from rest of the globe couldn’t restrict the forex market volatility as hawkish comments from ECB & BoE policymakers, coupled with oil spill at East China Sea, offered enough of moves to please global traders. However, the US Dollar Index (I.USDX) had to gulp down fourth consecutive negative closing as signals for monetary policy tightening at elsewhere in developed world economies hurt the greenback’s demand. The ECB Governing Council member, Ardo Hansson, said that the central-bank shouldn’t have any problems in closing asset purchase at one go after September while BoE’s MPC member, Silvana Tenreyro, forecasted increase in productivity and strong economy while going forward. As a result, the EUR and GBP managed to extend their recent upsides while JPY maintained its last week’s strength on speculations concerning monetary policy tightening by the Bank of Japan. Further, news of oil spill being wild near East China Sea offered additional upside to the Crude prices whereas weaker USD and stronger commodity basket kept fueling the Gold, AUD, NZD and CAD.

During early Tuesday, when US traders are scheduled to comeback after extended weekend, market moves were in favor of the US Dollar after Japan’s Finance Minister, Taro Aso, said sudden increase in JPY value seems problematic, which in-turn dragged the JPY down for the first time in nearly seven days. The Crude prices also witnessed some profit-booking as energy traders assume return of US players to be negative for short-term after the nation registered increase in rig counts at the end of last-week. However, EUR, GBP, AUD and CAD continued their north-run while NZD dipped a bit after NZIER Business Confidence flashed the least reading in more than two-years.

At the economic front, monthly readings of UK CPI, US Empire State Manufacturing Index, Australian Westpac Consumer Sentiment and Japan’s Core Machinery Orders are likely to grab market attention. Among them, UK CPI could receive highest eye-share as recent hawkish comments from BoE policymaker might be justified if the headline inflation gauge defy its 3.0% forecast and surpass the prior 3.1%. In case of the US Empire State Manufacturing Index, the manufacturing indicator is likely to please greenback buyers with 18.5 mark against 18.00 prior while forecast of dip in Japanese Core Machinery Orders can trigger the JPY’s downturn. At the end, AU Westpac Consumer Sentiment has recently pleased the Aussie Bulls and if it continue doing the same, the AUD has limited scope to decline.

Other than economic calendar, political plays at EU & UK are also likely to entertain global investors as two-day debate at British House of Commons, relating to EU Withdrawal Bill will start from today and the UK PM, Theresa May, might find it hard to gain support for her proposal. At EU, German Chancellor Angela Merkel’s future as the leader of EU’s largest economy seems in problems if her grand coalition to remain in power undermines some of her authorities for which latest developments and this weekend’s meet of various political leaders is crucial to watch.

Technical Talk

GBPUSD’s latest surge is still left to clear the 1.3820-40 resistance region, which can help it visit the 1.3900 mark. As a result, overbought RSI might play its role in dragging the pair back to 1.3730 & 1.3650. Further, USDCHF has to conquer 0.9660 & 0.9700 in order to justify its strength otherwise it can re-test 0.9600 and the 0.9550 rest-points. At the end, AUDJPY recently took a U-turn from the near-term horizontal resistance-zone of 88.40-45 and may re-test 88.10 and the 87.50 supports while an upside break of 88.45 may propel the quote further towards 88.80 & 89.10.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 17 – January – 2018

Hello Traders,

Tuesday proved to be a good-day for the US Dollar after nearly a week-long downturn as worries over the German Chancellor’s ability to form a “grand coalition” and news suggesting ECB’s inclination to wait for some more time before announcing any steps to close down its bond-purchase program dragged the EUR down and helped the greenback. As a result, the US Dollar Index (I.USDX) managed to ignore downbeat print of Empire State Manufacturing PMI and register first positive daily closing in previous five days. On the other hand, the GBP could extend its upward trajectory inspite of softer CPI as Brexit related debate at House of Commons seem favoring the UK PM, Theresa May, while commodity-linked currencies, namely AUD, NZD and CAD, took a U-turn on profit-booking session of Crude oil and other commodities. Moving on, the JPY kept being strong with pre-established speculation concerning BoJ’s policy moves whereas Gold had to decline on USD’s strength.

Even after witnessing a favor during yesterday, the US Dollar dropped to fresh three-year low on early Wednesday while news broke out that German Chancellor is gaining enough support to form her grand coalition and remain in power. However, that optimism for the EUR didn’t last too long with some EUR traders still doubting on Angela Merkel’s ability to secure the same power & position she has been enjoying till now. With this, the US Dollar regained its recent strength and the commodity basket continued witnessing downside pressure.

At the economic front, recent release of Japan’s Core Machinery Orders unexpectedly rallied but couldn’t help the JPY as speculations grew that BoJ will remain calm on its excessive monetary policy measures during next week’s meeting. Further, drop in New Zealand’s ANZ Commodity Prices dragged the NZD towards south while AUD also dipped on broader commodity market pullback. Moreover, the CAD also dropped across the board ahead of monetary policy meeting by the Bank of Canada (BoC) while GBP dropped on recent news mentioning that Brexit reversal is still in the heart of Britishers.

Looking forward, today’s monetary policy meeting by the BoC is likely to become highlight of the day as the central bank is all set to announce a 0.25% rate-hike to its benchmark Overnight Rate when investors are expecting three such actions during the present year. Though, excessive rise in Crude price and lack of successive upbeat economic data-points might push the BoC Governor to be cautious while attending press conference, which in-turn may drag the CAD down even after witnessing a rate-hike.

Other than BoC, Final reading of EU CPI and US Industrial Production are some other details scheduled for release today. While EU Final CPI may flash a bit softer figure of 1.4% versus 1.5% initial estimate, the US Industrial Production may register 0.4% growth against 0.2% prior to report a solid year for manufacturing and help the USD extend its latest up-tick.

In case of political news, UK & German headlines could keep directing intermediate moves of the GBP and the EUR while nearness to US Government Shutdown and Congressional efforts to avoid the same could portray immediate greenback moves.

Technical Talk

Irrespective of the USDJPY’s latest U-turn from 110.00, the pair needs to surpass the 110.90–111.00 region in order to justify its strength in targeting the 111.35 and the 200-day SMA level of 111.70. If the pair fails to clear the 111.00, chances of its come-back to 110.30, 110.00 and the 109.80 can’t be denied. Moving on, USDCAD’s reversal from 1.2410-20 should clear 1.2500 if it is to aim for 1.2530 and the 1.2610 otherwise it can revisit the 1.2410 and the 1.2355 supports. At the end, GBPCAD’s latest up-moves are being challenged by the 1.7175-85 horizontal-region, which if broken could help the pair target the 1.7250; however, inability to do so can reprint the 1.7070, the 1.7030 and the 1.7000 as rest-points.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 18 – January – 2018

Hello Traders,

With the major economic detail/events, namely UK CPI, BoC, AU Jobs Report and Chinese GDP & Industrial Production, scheduled to release during week are already out, investors are left with only few consumer-centric stats from UK & US to trade for the rest of the weekdays. However, political & economic plays at EU, US, UK & Japan might offer intermediate trade opportunities for global market players.

Let’s first describe about the market moves till now before progressive towards the fundamental forecast for the rest of the week.

Another Disappointing Week For The USD Bulls

Having avoided a negative weekly closing during previous week, the US Dollar Index (I.USDX) registered another loss in the last week as softer CPI & Retail Sales, coupled with signals indicating tighter monetary policy elsewhere in the developed world, dragged the greenback towards south. With this, optimism concerning increased future commodity demand gained strength and propelled AUD, NZD and CAD whereas EUR & JPY managed to surge on speculations that the ECB & BoJ may soon join the Federal Reserve by cutting their bond purchases. Further, GBP recovered its prior losses on Brexit relating optimism while Gold benefited from the USD’s downturn. Moreover, Crude prices extended its north-run on depleting stockpiles and optimism surrounding global production-cut accord.

Greenback Still Needs Some Boost To Please Buyers

The US Dollar maintained its southward trajectory during early present week as holidays at US diverted investor attention more towards hawkish signals from rest of the developed world’s central-banks. However, recent improvement in US Industrial Production and concerns that US policymakers will easily avoid government shutdown, coupled with worries by Japanese & European central-bankers over recent rally of respective currencies, helped the greenback recover some of its latest losses. Though, the USD is still not strong enough to mark positive week unless the upcoming data-points portray rosy picture of world’s largest economy.

On the other hand, commodity-linked currencies, namely AUD, NZD and CAD flashed mixed moves wherein AUD seems failing to justify latest upbeat employment report & China’s hawkish Industrial Production & GDP while CAD traders remained worried for the BoC’s future moves amid NAFTA uncertainty even after receiving a 0.25% rate-hike. Moving on, the NZD was quite upbeat with strong GDP prices index. In case of the Japanese currency, latest news from BoJ policymakers indicates less likeliness to move swiftly towards tightening, which in-turn confined the JPY’s advances. Moreover, Crude prices continued rising after API register another drop in inventory details and the Geo-political crisis in Nigeria became strong. At the end, Gold also struggled to maintain its rally whereas GBP seems finding a favor from later Brexit related debate at UK’s House of Commons.

All Eyes On US & UK Details For Now

While majority of front-line data-points/events have already played their role till now, global investors have only few details from US & UK to observe. Among them, US Housing & Philly Fed Manufacturing Index, up for Thursday, followed by Preliminary reading of UoM Consumer Sentiment on Friday, could direct near-term USD moves while Friday’s UK Retail Sales may help forecast upcoming trend of the GBP.

Looking at the US details, housing market details, namely Building Permits and Housing Starts, might weaken a bit due to holiday season by registering 1.29M and 1.27M respective numbers versus 1.30M earlier mark for each. However, monthly release of Prelim UoM Consumer Sentiment could disagree with latest consumer-centric stats by registering an upbeat figure of 97.2 against 95.9 revised down prior. Additionally, the Philly Fed Manufacturing Index could hurt the USD with its 23.6 forecasted figure against 26.2 previous.

In case of the UK Retail Sales, which is the engine of British GDP, the crucial detail might disappoint the GBP buyers with its -0.8% mark against 1.1% prior growth. Moreover, Canadian Manufacturing Sales, scheduled for Friday, might help the CAD to restore investor confidence with 1.9% gain against -0.4% prior.

Moving towards the political & economic plays at US, UK, EU & Japan, US Republicans must convince the hardliner Democrats in Congress in order to win another intermediate approval to avoid government shutdown by Friday otherwise the USD might have to bear the loss of policymakers’ failure. For UK, Theresa May still has to clear the House of Lords in order to gain rest of the British politicians’ support for her Brexit proposal and developments concerning the same could determine the GBP’s near-term trend. Looking at the EUR & JPY, recent change of language from both the central-banks’ policymakers concerning the bond purchase may give reasons for the currency traders to cover some of their latest gains from these currencies.

Given the mixed expectations from upcoming US data-points and looming uncertainty over government shutdown, the USD might again register a weekly loss while the GBP could adhere to profit-booking on not so positive economic & political developments.

Further, the EUR and the JPY are also likely shed some of their latest gains but the CAD could take a U-turn from yesterday’s downturn if the Crude prices maintain up-move and Manufacturing Sales also meet forecast.

For AUD traders, upbeat Employment stats and strong Chinese numbers may help the Aussie extend its north-run while NZD can maintain its advances due to lack of any releases and strong commodity basket.

Technical Analysis

EURUSD has to sustain its trading beyond 1.2240 in order to aim for 1.2360 & 1.2400 otherwise it can come-back to 1.2080 & 1.2000 whereas GBPUSD must surpass 1.3835-50 region to register 1.4000 on the chart else it may re-test 1.3660 and 1.3540 supports. Further, USDJPY might find it hard to clear 110.00 – 109.80 support-zone, breaking which it can drop to 109.00 & 108.60 but 110.90 – 111.00 can keep limiting the pair’s near-term advances. Moving on, AUDUSD seems all set to meet 0.8120 & 0.8160 with 0.7840 being nearby support whereas NZDUSD must sustain its 0.7300 break to flash 0.7360 & 0.7400 marks otherwise chances of it coming down to 0.7190 can’t be denied. At the end, USDCAD traders should observe 1.2330 & 1.2240 supports during the pair further downside while 100-day SMA level of 1.2590 could keep limiting the pair’s short-term upside.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 19 – January – 2018

Hello Traders,

Irrespective of the lowest Jobless Claims number since 1973, the US Dollar Index (I.USDX) couldn’t register a positive daily closing on Thursday as fears emanating from possible government shutdown, coupled with disappointing housing & Philly Fed Manufacturing details, kept raising bars for the greenback’s recovery. Due to this, EUR and JPY managed to extend their north-runs while commodity-linked currencies, namely AUD, NZD and CAD, benefited from China’s upbeat GDP & Industrial Production outcome. Moving on, the GBP also remained strong with no major releases whereas Gold witnessed profit-bookings. At the end, the Crude prices also weakened despite strong draw-down of US inventories due to expected weakness in demand when the winter ends and EIA report showing higher US production.

Having posted second D1 loss during yesterday, the US Dollar Bears kept ruling the trade sentiment around early-Friday when the news broke that Democrats are ready to block the government spending bill when it arrives in Senate for voting. Given the small majority in Senate, Republicans are worried for what could happen if the opponents defeat them. As a result, the market-players continued favoring EUR, JPY and commodity currencies but the Crude seems finding it hard to confront the sellers.

Looking at the rest of the day’s economic calendar, monthly release of UK Retail Sales, Canadian Manufacturing Sales and US Preliminary UoM Consumer Sentiment are up for publishing. While UK Retail Sales might hurt the GBP with -0.8% figure against +1.1% prior, the US Consumer Sentiment could help the USD to recover some of its latest losses by flashing 97.00 mark compared to 95.9 earlier. Further, the Canadian Manufacturing Sales is also expected to reverse prior contraction of -0.4% by registering +1.9% growth and may propel the Loonie’s northward trajectory.

Other than scheduled economics and US government shutdown fears, growing speculations for the monetary policy normalization at ECB, BoJ & RBA are also likely to affect the market mood and may keep fueling respective currencies. Additionally, upbeat Chinese data-points and expectations of higher US oil production may play their roles in directing commodity moves.

To sum up, government shutdown fears, consumer-centric details and speculations for upcoming monetary policy moves from major central-banks are all likely to offer an active Friday to global investor fraternity. However, US Dollar is still struggling to overcome its latest losses and may post another negative weekly closing except any surprises please the greenback buyers.

Technical Talk

AUSDUSD’s sustained trading beyond 0.8000 enables it to confront the 0.8040 and the 0.8060-65 barriers but a downside break of the psychological-mark could well flash 0.7970 & 0.7935 on the chart. For NZDUSD traders, surpassing 0.7315 & 0.7330 become prerequisite if they wish to see 0.7400 otherwise chances of witnessing 0.7265 and 0.7240 as quotes can’t be denied. In case of the EURCAD, the pair has to conquer 1.5250-60 area in order to challenge the 1.5300 & 1.5370 resistances else it can come-back to 1.5140 and the 50-day SMA level of 1.5075.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 22 – January – 2018

Hello Traders,

While soft US economics and optimism concerning ECB & BoJ’s next policy moves confined the greenback’s up-moves during last-week, the Republican leaders’ failure to avoid US Government shutdown dragged the US Dollar Index (I.USDX) towards marking second consecutive weekly negative closing. With this, the EUR & JPY remained stronger enough but the GBP failed to sustain its early-week gains, earned through Brexit optimism, due to disappointing Retail Sales. Further, AUD and NZD continued extending their north-runs with rising bets on improved global economic growth favoring commodity demand but the CAD couldn’t portray BoC’s rate-hike as the central-bank seemed less hawkish while communicating its economic forecast. Moving on, Crude prices witnessed profit-booking on expectations of rising US production whereas Gold also dipped due to macro optimism cutting safe-haven demand.

Irrespective of the USD traders’ disappointments spread through third-day of government shutdown, the greenback started the week on a positive-side during early-Monday after some of the US policymakers said they might postpone discussing crucial factors that has hindered the intermediate spending plan in recent-days to let the government workers get back to work by Tuesday. As a result, the EUR and JPY had to trim some of their latest gains but the GBP remained strong due to Brexit relating optimism. Commodity-linked currencies, namely AUD, NZD and CAD, also weakened with strong Dollar hurting the commodity basket while Crude recovered from recent lows after US rig count numbers dropped.

Looking forward, political plays surrounding US Government shutdown and formal announcement of Germany’s Grand Coalition are likely to grab the investors’ attention during the rest of the day while Brexit relating developments may offer intermediate directions to the GBP traders. Moreover, scheduled release of Canadian Wholesale Sales and speculations concerning tomorrow’s BoJ meeting might entertain the CAD & JPY traders.

Considering latest communications from US policymakers, it seems that the Republican leaders might win over hardliners Democrats and may pass government spending bill till Feb 08, which inturn could help the USD to stretch its recent recovery. However, Democrats are less likely to help the ruling party as they have the strength of decision power in Senate. On the other hand, German Chancellor, Angela Merkel, is all set to claim fourth term as the nation’s leader but the formation talks for grand coalition will start today to announce the result on Tuesday, which may trigger intermediate pullbacks of the EUR. In case of the GBP, Theresa May’s Brexit proposal is to be put in House of Lords for discussion and can offer bargaining power to the opposition leaders that can hurt the British currency unless everything sets out.

Hence, even with no major economic events are up for release on Monday, political plays at US, Germany and UK are likely to entertain market-players before their gear up for crucial week containing monetary policy decisions from ECB and BoJ, coupled with headline stats from US, UK, Australia and New Zealand.

Technical Talk

While 1.2300–1.2160 range presently confines the EURUSD’s moves, brighter chances of the U.S. Government’s ability to re-start government offices indicates the pair’s downturn. For GBPUSD, short-term ascending TL, at 1.3850 now, favors the quote’s advances to 1.3950 and then to the 1.4000 while a break of 1.3850 can quickly fetch it to 1.3800 and then to the 1.3750. At the end, GBPCAD is struggling with medium-term TL resistance of 1.7355 in order to target 1.7460; however, overbought RSI signals the pair’s pullback to 1.7290 and then to the 1.7230 supports.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 23 – January – 2018

Hello Traders,

Even if the U.S. policymakers managed to restart the government offices till Feb 08 on Monday, the US Dollar couldn’t mark a positive daily closing as upbeat global growth forecast from IMF and optimism surrounding EUR & GBP dragged the greenback gauge (I.USDX) again towards south. Given the IMF’s upward revision to 2018 & 2019 growth prediction, commodity-linked currencies, namely AUD, NZD and CAD, managed to shine while speculations that Britain will reach a favorable divorce deal with the European Union propelled the GBP. Further, the EUR maintained its strength ahead of Thursday’s ECB but the JPY & Gold witnessed profit-bookings as IMF’s news cut safe-haven demands. Moving on, Crude prices restored latest up-moves after comments from Saudi Arabia signaled that global production-cut accord could stretch till the year-end.

While Monday’s market moves were broadly driven by the IMF news, UK optimism and US policymakers’ ability to stretch government spending, Tuesday witnessed quite an active start of the day due to monetary policy meeting by the Bank of Japan (BoJ). In its policy statement, the central-bank tweaked its view on Inflation to somewhat less pessimistic while holding the present monetary policy unchanged, which in-turn offered noticeable strength to the JPY. However, BoJ Governor, Hruhiko Kuroda, in his press conference after monetary policy decision, negated speculations of of QQE exit by expecting some more time to rely on the ultra-lose monetary policy. As a result, the JPY shed its early-day gains and rather traded negatively while writing the article.

Having witnessed BoJ driven market moves during early sessions, investors may now concentrate more on the EU & Germany’s ZEW Economic Sentiment figures, followed by the EU Consumer Confidence release. Forecast suggests upbeat German & EU ZEW figures to surpass their prior marks of 17.4 & 29.0 by registering 17.8 and 29.7 respectively while EU Consumer Confidence is likely to remain unchanged at 1.0 level.

On political front, talks concerning annual meet of World Economic Forum at Davos and Brexit developments are likely to offer intermediate trade opportunities to investors while NAFTA discussion could helped determine immediate moves of the CAD. Additionally, market forecasts for the ECB and upcoming front-line details from EU, US & UK are likely factors that may continue entertaining investor fraternity.

Technical Talk

USDJPY has to clear the 111.20 resistance-mark in order to revisit the 112.00 otherwise it can comeback to 110.50 & 110.00. USDCHF also seems challenged by immediate descending trend-line resistance of 0.9640, breaking which it can rise to 0.9665 & 0.9700 but failure to surpass the same can drag it back to 0.9590 & 0.9570. In case of the GBPAUD, pair’s sustained break of 50-day SMA favors its rally towards 1.7560-70 and the 1.7630-50 resistance-regions while a downside break of 1.7440 may reprint 1.7360 support-level on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 24 – January – 2018

Hello Traders,

Observing Tuesday’s market reaction to the BoJ meeting’s result, it seems that global traders aren’t interested in following any signals which don’t favor monetary policy tightening from Japan & Europe. As a result, even if the Japanese central-bank firmly talked down speculation concerning exit of its massive stimulus, the JPY managed to register heavy gains barring initial dip. Further, strong ZEW economic sentiment figures from EU & Germany supported bets for the ECB’s hawkish statement when it meets on Thursday and propelled the EUR whereas GBP rallied on expectations that UK will manage to get a good Brexit deal. Moving on, NZD and CAD extended their north-runs but the AUD weakened due to dip in Iron-Ore prices. Additionally, Gold and Crude kept being strong when the US Dollar Index (I.USDX) posted second consecutive daily loss on softer economics and investors’ belief that Fed won’t be the only central-bank to tighten its monetary policy while going forward.

While BoJ and ZEW numbers entertained traders during the previous-day, early-Wednesday moves were governed by a surprise rise in API Crude stockpile and consecutive thirteen month gain of Japanese export figure, coupled with welcome Flash Manufacturing PMI from Japan. With this, the Crude witnessed some profit-booking but the JPY kept stretching its up-moves whereas EUR, GBP and commodity-liked currencies, namely AUD, NZD and CAD, maintained their earlier patterns.

If we analyze today’s economic calendar, it can be known that slew of top-tier details, namely EU Flash PMIs, UK Jobs report, US Existing Home Sales and New Zealand CPI, are up for release and can offer an interesting trading-day. Forecasts suggest EU Flash Manufacturing PMI to post 60.4 figure against 60.6 earlier while Flash Services PMI may register 56.5 number compared to 56.6 previous. In case of UK Jobs report, the Average Earnings & the Unemployment Rate are both expected to be at the same past levels of 2.5% and 4.3% respectively but the Claimant Count Change may help the GBP with its 2.3K mark versus 5.9K earlier. Moreover, US Existing Home Sales can weaken to 5.72M against 5.81M prior whereas quarterly release of New Zealand CPI may trigger NZD’s pullback if matching 0.4% consensus versus 0.5% earlier.

As can be noticed from scheduled data-points, UK Job numbers may help the GBP to maintain its strength but the EUR, USD and NZD could adhere to downturn if forecast prove right. Though, present market sentiment is strongly against the USD and hence lesser damages to the EUR & NZD can be expected unless the economics post extremely negative outcomes.

At the political front, global economic leaders’ gathering at Davos, Brexit related developments at UK’s House of Lords and news concerning NAFTA are likely events that can offer intermediate trading moves to global financial market. However, lack of big positive triggers for the USD and increased optimism concerning rest of the world economies might keep hurting the greenback for one more day before the ECB takes up the market attention and try to calm down the EUR Bulls.

Technical Talk

Unless surpassing the 0.8330-40 region on a daily closing basis, chances of the AUDUSD’s pullback to 0.7975 & 0.7940 can’t be denied while an upside break of 0.8340 can help it mark 0.8410 as a quote. For NZDUSD traders, 0.7390 & 0.7410 are likely resistances to watch if the pair keeps rising with 0.7315 & 0.7265 being nearby supports during the course of its decline. At the end, AUDJPY signals further downside to 87.60 & 87.25-20 due to its sustained trading below 88.35-40 resistance-region.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 25 – January – 2018

Hello Traders,

With the recent economic & political plays already fueling EUR & GBP towards multi-year high, in addition to portraying noticeable downturn of the USD, global investors actively search for clues to forecast upcoming market moves. To their help, next two-days will be crucial for the financial pundits as ECB’s monetary policy meeting and initial estimates of GDP from UK & US are scheduled to release. Additionally, on-going WEF meet, US Durable Goods Orders, Canadian CPI and Retail Sales are some other factors that traders might be interested in observing.

Let’s discuss all these events step-by-step after highlighting the present market scenario.

Tale of Last Week: Additional Downturn of The US Dollar

Given the rise in speculations concerning ECB & BoJ’s favor for monetary policy tightening, coupled with US policymakers’ inability to avoid government shutdown and softer economic data-points, the US Dollar Index (I.USDX) registered second consecutive negative weekly close. However, the same provided noticeable strength to the EUR & JPY whereas GBP had to liquidate early-week gains due to disappointing UK Retail Sales growth. Commodity-linked currencies, namely AUD NZD and CAD, also took advantage of weaker greenback and upbeat economics at home but the Canadian Dollar (CAD) had to decline after BoC’s rate-hike failed to counter cautious statement from the central-bank. Further, Crude witnessed a profit-booking wave on expectations of increasing US production while Gold couldn’t defeat global economic optimism amid strong equity market performance and dropped on a weekly basis.

No Mercy For the Greenback

Even after successfully restarting the government offices, the U.S. authorities couldn’t please buyers as global sentiment remained tilted towards ECB & BoJ’s expected contractionary monetary policy even if Bank of Japan (BoJ) firmly tried to conquer such bets. Additionally, US Treasury Secretary, Steven Mnuchin, endorsed weaker currency during his appearance at World Economic Forum in Davos, which in-turn dragged the USD further towards south.

Moving on, EUR and JPY kept being traders’ favorites whereas GBP also registered noticeable upside on Brexit related optimism and absence of negative economic details. Further, AUD and CAD managed to shine with commodity basket strength but the NZD recently liquidated some of its gains on softer CPI. At the end, Gold and Crude both portrayed USD’s weakness by rising heavily wherein the Crude got extra support from depleting stockpiles and increased optimism for the global production-cut agreement.

It’s High Time To Rethink About Market Behavior

Having observed roaring strength of EUR & JPY off-late, despite ECB & BoJ’s repeated efforts to avoid being so hawkish, it seems that such high prices of ex-USD currencies shouldn’t be ignored. As a result, investors will put more emphasis on Thursday’s monetary policy meeting by the European Central Bank (ECB) and Friday’s GDP figures from US & UK in order to determine chances of a pullback in latest moves. Moreover, Thursday’s Japanese CPI and Canadian Retail Sales, followed by Friday’s US Durable Goods Orders and Canada’s Inflation print, are likely second-tier economics to entertain market-players.

Although the ECB isn’t expected to alter its present monetary policy at today’s meeting, Mr. Draghi’s earlier signals to start discussing QE tapering, which eventually can lead to a rate-hike, makes the event even more important at a time when the EUR is trading at multi-year highs. However, the central-bank President might pour some cold water on the Bulls’ view that the bank is speeding towards Fed-like rate-lifts as strong currency isn’t so favorable to the economy.

In case of the GDP figures, the U.S. GDP has pleased buyers during its previous outcomes of 3.2% and 3.1% and is likely to mark a 3.0% growth this time whereas UK GDP could remain unchanged at 0.4% growth-mark. Further, consensus relating to the monthly reading of US Durable Goods Orders suggests a 0.9% growth of orders against +1.3% prior while +0.6% gain of Core Durable Goods Orders versus -0.1% earlier contraction.

Other than what is already discussed above, Japanese Inflation figures, namely the National Core CPI and the Tokyo Core CPI, are both expected to remain unchanged at 0.9% and 0.8% respectively whereas Canadian CPI could reverse prior +0.3% gain by flashing -0.3% contraction of the headline inflation gauge. At last, Canadian Retail Sales is expected to register a soft growth figure of 0.7% against 1.5% prior while Core Retail Sales may mark no change in growth with 0.8% figure.

At the political front, speeches by the global leaders at the on-going WEF gathering might keep offering trading sessions to investors, especially when US is going against the macro wave of globalization by putting America first agenda.

Considering the higher levels of ex-US currencies, which aren’t benefiting many, chances of the ECB President to disappoint Bulls and trigger the EUR’s pullback are brighter; however, any mention of the QE tapering and/or optimism concerning the economic performance and policy tightening may further propel the regional currency and hurt the USD in-turn.

On the US part, GDP and Core Durable Goods Orders may please the buyers even with not so strong numbers provided ECB and WEF comments don’t harm the currency. However, the GBP may trim its gains if UK GDP disappoints Pound buyers and Brexit issues threaten the optimists.

For the rest, AUD and NZD may remain strong but could liquidate some of their recent gains if USD starts recovering while CAD may adhere to pullback on soft consumer-centric numbers but firm Crude prices may confine the Loonie’s downturn. In all these, JPY and Gold are expected to witness profit-booking due to global optimism and expected strength of the US Dollar.

Technical Analysis

EURUSD’s sustained trading above 1.2400 enables it to confront the 1.2510 but overbought RSI can trigger its pullback around then while 1.2350 & 1.2290 seem nearby supports for the pair. The GBPUSD may also find it hard to surpass the 200-week SMA figure of 1.4400 and can come-back to 1.4030 whereas USDJPY has 108.50 support to break if it is to aim for 107.80 otherwise chances of its pullback to 110.00 & 110.80 are brighter. Moving on, AUDUSD still has 0.8130 to surpass in order to meet the 0.8250 but a downside break of 0.8030 can drag it back to 0.7950. At the end, NZDUSD couldn’t surpass 0.7435-40 area and is indicating 0.7290 re-test while USDCAD has 1.2240 and the 1.2410 as near-term important levels to watch.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 29 – January – 2018

Hello Traders,

While protectionist rhetoric from U.S. President Donald Trump and comments favoring weaker greenback by some of his top officials at WEF could be considered as major reasons for the US Dollar’s third consecutive weekly decline, softer than expected GDP print and hawkish mood at ECB & BoJ were some additional factors that dragged the USD towards south during last week. With this, the EUR and JPY rallied considerably across the board whereas the GBP benefited from stronger than expected GDP and upbeat statements from the BoE Governor. Further, AUD, NZD and CAD managed to portray rising commodity prices while the CHF surged due to its safe-haven demand when the US currency drops. Additionally, Crude continued extending its north-run on depleting stockpile and optimism concerning global demand-supply gap by major oil producers whereas Gold aptly described USD’s south-run by testing the highest levels in eighteen months.

Having witnessed heavy selling pressure in recent times, the US Dollar remained a bit stronger during early-Monday when BoJ officials clarified that Governor’s strong remarks at WEF were in-line with its latest monetary policy meeting and nothing more. On the other hand, the GBP liquidated some of its latest gains on fresh news mentioning increasing burden on UK PM, Theresa May, from her own party members concerning the Brexit proposal. However, the EUR seems less affected and maintained its upward trajectory after ECB Governing member supported sooner end of quantitative easing.

Moving forward, the economic calendar has US Core PCE Price Index, Personal Income & Spending Details to entertain traders for the rest of the day while NZD Trade Balance may please Kiwi players a bit. If we look at the forecasts, Core PCE, Fed’s preferred measure of inflation, is likely to register 0.2% mark against 0.1% prior but the Personal Income isn’t expected to change from 0.3% earlier while Spending may soften to 0.5% from 0.6% previous. In case of New Zealand Trade Balance, a bigger drop in deficit could help the NZD to further magnify its strength.

At the political front, news relating to Brexit developments and speculations concerning Trump’s first State of the Union address can entertain short-term traders while hawkish mood at commodity desk may keep propelling commodity-linked currencies, like AUD, NZD and CAD. Moreover, JPY can witness a bit of pullback on recent news from BoJ.

Hence, even if political and central-bank related news can keep entertaining traders during the day, fewer data-points might offer traders a softer start to the week.

Technical Talk

Even after bouncing off 108.30 support, the USDJPY can’t be termed strong for even short-term unless it breaks the 109.50 TL resistance. As a result, chances of its drop to 107.50 are brighter while an upside trade beyond 109.50 can help the quote flash 110.30 on the chart. The USDCHF is also trading around the 0.9320 support, breaking which it can test the 0.9260; though, break of 0.9430 may favor prices to regain their status beyond 0.9500 mark. Additionally, GBPJPY’s break of immediate ascending trend-channel indicates its further downside to 153.10–153.00 with 154.10 & 154.60 acting as immediate resistance to watch.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 30 – January – 2018

Hello Traders,

Having witnessed persistent selling in the past few weeks, the US Dollar Index (I.USDX) managed to secure a reprieve from further downturn on Monday as welcome figures of Core PCE & Personal Income buoyed U.S. Bond yields ahead of Mr. President’s State of the Union speech. The EUR, on the other hand, trimmed some of its latest gains on softer German import prices while GBP dipped on Brexit pessimism. Further, JPY and Gold had to stop their upward trajectory after the USD’s pullback hurt safe-haven demand and BoJ negated speculations of an end to its mammoth monetary easing. Moreover, commodity front also marked downside after stronger greenback raised bars for their further north-run, which in-turn dragged the commodity-linked currencies, namely AUD, NZD and CAD, towards south whereas affected the Crude prices in a negative-tone.

Unlike Monday, today’s economic calendar is a bit longer and comprises some important details/events that have already started playing their roles during early-day trading session. At first, welcome figures of BoJ Core CPI and Retail Sales managed to counter the uptick in Unemployment Rate and contraction in Household Spending. As a result, the JPY seems recovering its yesterday’s losses. Moving on, GBP couldn’t enjoy year’s high consumer confidence figure while upbeat NAB Business Confidence and Trade Balance numbers failed to rejuvenated AUD and NZD’s strength.

Looking at the rest of the day’s catalyst, U.S. President, Donald Trump, is scheduled to deliver his first State of the Union speech and the Bank of England Governor, Mark Carney, is to present his testimony in front of House of Lords Economic Affairs Committee. In case of data-points, EU Flash GDP and US CB Consumer Confidence are likely triggers that traders might be interested in reading.

While Mr. Trump is expected to speak for his much-anticipated infrastructure plan and could also persuade listeners to favor him on immigration and global trade overhauls, Carney’s testimony might praise recent rise in GBP and a softer Inflation mark which in-turn seems helping the central bank to avoid taking any fresh measures. Further, the EU GDP is expected to remain unchanged at 0.6% but the U.S. CB Consumer Confidence may register an uptick to 123.2 from 122.1 prior.

Given the no change consensus of EU GDP and upbeat expectations from US detail, chances of the USD to extend its recent advances are much brighter. However, Trump’s protectionist talk and mention of currency strength, if any, could confine the greenback’s near-term advances. For the GBP traders, BoE Governor should praise latest economics numbers and avoid Brexit threat in order to help the Pound recover its losses but an otherwise case could harm the currency in a bitter way.

Technical Talk

Considering the EURUSD’s recent pullback, the 1.2290 and the 1.2210 are likely important supports to watch while an upside break of 1.2385 may not hesitate in reprinting 1.2430 & 1.2480 on the chart. In case of the GBPUSD, the pair just dropped below an immediate ascending trend-line support of 1.4050 and may revisit 1.4000 and the 1.3940 rest-points but successful break of 1.4080 can help it aim for 1.4130. At the end, NZDJPY has to close below 79.40 in order to meet 100-day SMA level of 79.00 otherwise it can come-back to 80.15 and the 80.50 resistance-levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 31 – January – 2018

Hello Traders,

Even after witnessing better than forecast CB Consumer Confidence reading, the US Dollar Index (I.USDX) couldn’t beat the Bears as President Donald Trump’s first State of the Union speech lacked details of spending plan, immigration laws and global trade outlook. On the other hand, testimony by the BoE Governor propelled GBP when he praised economic improvement and declined to have Brexit bias. Further, the EUR ignored wider contraction of German CPI on strong GDP mark whereas JPY benefited from BoJ Core CPI’s upbeat print. Moving on, the AUD and CAD had to bear the burden of declining Crude prices due to expected uptick in US stockpile while NZD remained strong. Additionally, Gold also stretched its latest pullback towards marking second consecutive negative daily closing but the CHF regained its strength because of increase trade surplus.

While Tuesday’s events offered active trading sessions to market players, the Wednesday becomes even more crucial for global investors due to the last FOMC meeting by present Fed Chair, Janet Yellen. Other than that, Flash reading of EU CPI, US ADP Non-Farm Employment Change and Canadian GDP are some other data-points that can trigger intermediate market moves.

During early-day trading sessions, soft prints of AU CPI and an eight month low of China’s official Manufacturing PMI dragged the commodity basket to south; though, a three-month high Non-manufacturing PMI confined larger losses. Further, the Bank of Japan increased the amount of medium-term bond buying at a regular operation which was contrasting to its early-month news of cutting longer-term bond purchase and the same seems dragging the JPY down at present.

Looking forward, consensus showing weaker EU CPI print and a smaller gain of ADP numbers might entertain EUR & USD traders before the FOMC takes place while expected rise in Canadian GDP can help the Loonie recover some of its latest losses ahead of Crude inventory. In case of the FOMC, the central-bank is neither expected to alter its monetary policy nor likely to change its economic outlook in policy statement. However, the present meeting is the last one for Fed Chair Janet Yellen who successfully proved herself by pulling the world’s largest economy out of financial crisis with her bold efforts and she may not avoid saying her final words favoring the rate-hikes. As a result, global investors are all concentrating on the event to know more about Fed’s upcoming policy actions.

Given the EU CPI meets forecast and/or the Fed Chair repeat her support for hawkish monetary policy, chances of the EURUSD to decline are much brighter; though, an otherwise case might not propel the pair much as Friday’s US jobs report is still left for publishing.

Technical Analysis

AUDUSD’s sustained trading above short-term ascending trend-line support, at 0.8050 now, continue favoring the pair’s rise to 0.8135 and then to the 0.8165 but a downside break of 0.8050 can quickly drag it to 0.8000 mark. Further, NZDUSD has to clear the 0.7400 mark in order to meet the 0.7440 resistance otherwise it can come back to 0.7310 & 0.7280. For EURCHF traders, 100-day SMA, near 1.1625, and the 1.1540-35 horizontal-region are two important levels to watch with either side breaks indicating 1.1670 and the 1.1500 to appear as quotes.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 01 – February – 2018

Hello Traders,

Global investors’ sustained focus on fresh themes of stimulus’ exit elsewhere at the developed world economies, mainly the ECB & BoJ, defied FOMC’s upbeat statement favoring more rate-hikes and increasing inflation, which in-turn dragged the US Dollar further towards south. However, headline job numbers from the U.S. and PMI figures from UK & US are still to fuel market moves going forward.

Let’s understand these economic plays in detail.

Too Many Draw-downs For The Greenback

In addition to U.S. treasury secretary’s comments favoring weaker USD at WEF, softer than expected GDP print and hawkish mood at ECB & BoJ portrayed third consecutive weekly drop of the US Dollar Index (I.USDX) during last week. As a result, EUR and JPY rallied on comparative optimism by their respective central-banks while GBP surged on positive political environment concerning Brexit and welcome GDP mark. Further, commodity-linked currencies, namely AUD, NZD and CAD, benefited from global buying wave on expectations of strong economic growth going forward whereas Crude rallied on depleting stockpiles & global oil producers’ readiness to extend output cut accord. Moving on, the Gold and the CHF also stretched their northward trajectories as declining USD pushed investors to safe-havens.

Buyers Keep Avoiding The USD

Even after registering improvements in second-tier data-points, not to forget upbeat FOMC statement, the US Dollar continue to remain despicable for traders during the present week as lesser details of growth plan by the U.S. President in his State of the Union Address, coupled with hawkish tone of ECB policymakers, continued hurting the US currency. With this, the EUR managed to avoid soft CPI mark but the JPY seems struggling to justify strong Manufacturing PMI & Industrial Production growth.

Further, the NZD and the CAD took advantage of welcome Trade Balance & GDP stats respectively but the AUD dropped on soft Inflation mark and weaker than forecast reading of China’s official Manufacturing PMI. However, the GBP kept being strong as BoE Governor sound more hawkish in his testimony and Brexit related news are so far positive while Crude and Gold witnessed profit-booking after heavy rise.

All Eyes On NFP & PMIs For Now

Irrespective of the USD’s sustained downturn, monthly release of Employment report, ISM Manufacturing and Factory Orders are still to be out and the same gain higher importance for global investors considering latest upbeat tone of the Federal Reserve. Additionally, UK’s Manufacturing & Construction PMI are some additional dara-points that could help determine near-term GBP moves.

Starting with Thursday, the UK Manufacturing PMI is expected to register 56.6 mark against 56.3 prior while US ISM Manufacturing PMI could tame the USD-linked positive vibes through 58.7 number versus 59.7. Further, Friday’s UK Construction PMI may soften to 52.0 from 52.2 prior whereas US Jobs report is likely to please the USD traders as NFP might post 181K mark compared to 148K earlier while the other two numbers, namely Unemployment Rate and Average Hourly Earnings, are expected to remain unchanged at 4.1% and 0.3% respectively.

Considering no major economics from rest of the globe, except US & UK, chances of the upbeat NFP to help the USD recover some of its latest losses are high while the GBP may not have too much to be happy about and can witness pullback unless the PMIs register extremely positive prints.

Technical Analysis

EURUSD continue finding it hard to close beyond 1.2430, which in-turn signals the pair’s pullback to 1.2330 & 1.2200 but an upside break of 1.2430 enables it to easily flash 1.2540 on the chart. Further, GBPUSD has to surpass the 1.4260 in order to meet the 1.4350 otherwise it can come-back to 1.4025 while USDJPY must clear 109.80 resistance-line if it is to meet the 110.20 & 110.80 with 109.00 and the 108.50 being nearby supports to watch. Moving on, AUDUSD finally broke the 0.8050 TL support and is likely coming down to re-test 0.7930 whereas NZDUSD has 0.7280 & 0.7430 as important levels to observe, breaking which 0.7500 and the 0.7230 can appear as quotes. At the end, USDCAD again indicates 1.2240 test with upside being capped by 1.2360 TL resistance.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 02 – February – 2018

Hello Traders,

With the talk of monetary policy tightening elsewhere at the developed world continue gaining investors’ attention, upbeat prints of US Jobless Claims and ISM Manufacturing PMI failed to help the US Dollar Index (I.USDX) and resulted third consecutive negative daily closing by the greenback gauge. With this, the EUR managed to extend its north-run for one more day while GBP ignored softer Manufacturing PMI and rose again. However, AUD and JPY had to suffer losses as traders remained cautious after a miss of AU CPI and recent actions of the BoJ to tame hawks signaled corrections in such currencies. Further, NZD and CAD kept being strong on sturdy commodity basket, including the Gold, whereas Crude rallied on the news of higher compliance of the global oil-production cut accord.

Even if macro moves remained against the USD off-late, market-players took a U-turn during early-Friday when headline employment reports from the U.S. are scheduled to release. Adding to this, BoJ undertook another dovish action to control rising bond yields by announcing preparedness to buy unlimited amount of 5-to-10 year notes at a fixed rate. As a result, the greenback managed to start the crucial day on a positive side while JPY witnessed another drawdown. Moreover, Australia’s quarterly PPI marked the highest level since late-2015 but couldn’t help the Aussie as traders considered recent break of AUDUSD’s TL support as a sign of the pair’s fresh south-run.

Moving forward, UK Construction PMI might offer intermediate trading moves to the Forex traders before Job numbers come into play while US Factory Orders could keep engaging investors then after. Forecasts suggest a softer print of the Construction PMI to 52.0 from 52.2 with Factory Orders likely growing by 1.5% against 1.3% prior.

Given the January employment report likely bearing the impact of US President’s tax-cut, investors might concentrate more on the Wage details, which could flash 0.2% growth against 0.3% earlier, to ascertain the inflation expectations and the chances of Fed’s rate-hike. If we observe the rest, NFP are likely to mark 181K figure against 148K prior whereas the Unemployment rate is expected to remain unchanged at 4.1%.

At the Geo-political front, North Korea recently pushed UN to order US to abandon plans of its upcoming military drill near South Korea as it can harm the recent improvements in Korean relations. Further, Brexit developments are getting in favor of the UK PM, Theresa May, and could help the GBP extend its latest north-run unless some of the dissatisfied opposition leaders threaten her proposal.

While US employment details are more likely to help the USD recover some of its latest losses, the outcome must be strong enough to beat the present wave against the greenback in order for the currency to post a weekly gain. In case of the EUR, the regional currency may keep being strong due to absence of any major releases while JPY and AUD may extend their latest pullbacks if the US numbers please investors.

Technical Talk

EURUSD is near to 1.2540 resistance-mark, breaking which it can rally to 1.2610 and the 1.2650 while 1.2430 and the 1.2330 are likely nearby supports for the pair traders to watch in case of its U-turn. Further, USDJPY must clear 109.80 resistance-line if it is to meet the 110.20 & 110.80 with 109.00 and the 108.50 acting as adjacent rests for the pair. Additionally, GBPNZD confront the 1.9400 TL resistance, which if broken could help it mark 1.9465 and the 1.9510 on the chart but 1.9240 and the 50-day SMA level of 1.9175 can entertain sellers during the pair’s pullback.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 05 – February – 2018

Hello Traders,

While absence of any strong positive remarks from U.S. President’s first State of the Union Address and hawkish tone of some ECB policymakers continued exerting downside pressure on the USD during early last-week, the greenback gauge (I.USDX) managed to post its first positive week in previous four based on solid jobs data that showed rising wages and better than forecast NFP. As a result, the EUR and the GBP had to trim their prior gains while JPY went further towards south as BoJ’s latest announcement to buy unlimited amount of 5-to-10 year notes at a fixed rate offered additional weakness to the Japanese currency. Further, AUD, NZD and CAD dropped heavily due to the USD’s strength dragging commodity basket down whereas CHF and Gold registered losses because rising greenback cut safe-havens. Additionally, Crude marked a negative weekly close with increase in US stockpile and rig counts threatening global oil-production cut’s efficiency to counter supply-glut.

With the Friday’s strong US employment report shifting the market focus back to the speculation that the Federal Reserve may inflate interest-rates more than they initially promised, the US Dollar remained upbeat at the start of week. However, early-day release of China’s Caixin Services PMI, which tested more than five year’s high, offered some relief to the commodity-linked currencies, namely AUD, NZD and CAD. For the rest, upcoming PMI figures from EU, UK and US are likely playing their roles in restricting forex moves.

Looking at the scheduled details, Final figure of EU Services PMI is expected to confirm the 57.6 Flash consensus while UK Services PMI, core to British GDP, may remain near to its prior 54.2 mark by flashing 54.1 number. Moving on, US ISM Non-Manufacturing PMI could help the USD extend its latest recovery by registering 56.5 mark versus 55.9 earlier. Other than PMIs, ECB President’s testimony on Annual report and German leader’s inability to conclude the grand coalition talks by self-decided Sunday deadline may entertain global investors.

Given the recent cautious tone of the ECB President, repetition of the same during testimony might hurt the EUR more irrespective of the upbeat PMI but any hints of future monetary tightening could extend the regional currency’s north-run and may hurt the USD adversely. Furthermore, German leader might push herself to the greatest on Monday to move forward during the coalition talks as absence of which could disappoint the political leaders and to the EUR buyers as well. In case of the GBP, the Brexit developments are impressive off-late and an upbeat Services PMI can further inflate the UK currency whereas US details’ positive outcome may add strength into the US Dollar.

Technical Talk

Considering GBPUSD’s recent failures to surpass 1.4130, the pair is expected to re-test 1.4070 and then the 1.4000 supports while an upside break of 1.4130 can again propel it to 1.4210. Further, USDCHF seems find it hard to conquer the short-term descending trend-line resistance, at 0.9330, which in-turn can drag the pair to 0.9250 and then to the 0.9200 with 0.9360 being upside level to watch if 0.9330 is broken. At the end, EURNZD struggles to clear the 1.7100–1.7115 resistance-region and can come-back to 1.7000 and 50-day SMA level of 1.6935. Though, pair’s successful breach of 1.7115 enables it to claim the 1.7220 resistance-mark.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 06 – February – 2018

Hello Traders,

Friday’s upbeat jobs report initially perceived to have a tepid impact by U.S. bond yields as rising wage gains rejuvenated inflation hike concerns and potentially higher interest rates; however, investors took it too seriously and portrayed heavy losses of the Wall Street on Monday that pushed Dow Jones towards posting the biggest intraday drop in history. With this, traders liquidated their previous long positions in favor of commodities and rather rushed to safe-havens and the USD, which in-turn helped the Gold, JPY and the greenback to register daily positive closings. On the contrary, commodity-linked currencies, like AUD, NZD and CAD, plunged and the EUR, together with GBP, marked losses. Further, the broader selloff in commodity basket didn’t left Crude behind and made the energy vehicle test negative zone for second consecutive day.

Having witnessed heavy selling pressure on Monday, market-players adhered to profit-booking during early Tuesday which helped the EUR and the NZD; though, disappointing Retail Sales and Trade Balance, coupled with RBA’s no rate-change outlook, continued hurting the AUD whereas CAD still nursed losses on weaker Crude prices. Moreover, WGC’s report mentioned least annual Gold demand in 2017 since 2009 but failed to confine the yellow metal’s latest advance while JPY gave attention to Bank of Japan Governor, Haruhiko Kuroda’s, latest efforts to rule out speculations concerning rate-hike by citing weaker inflation. Additionally, Barclays announced heavy UK consumer spending but couldn’t help the GBP as investors remain cautious ahead of “Super Thursday”.

While aforementioned details/events entertained traders during the day-start, Trade Balance numbers from US and Canada, followed by New Zealand’s quarterly release of employment stats, are likely providing crucial information for them to observe for the rest of the day. Forecast suggest a mild cut in Canadian deficit to -2.3B against -2.5B prior but a hike in US Trade deficit to -52.1B from 50.5B earlier. Further, New Zealand Employment Change are likely weakening to 0.4% from 2.2% previous whereas Unemployment Rate could inch a bit up from 4.6% towards marking 4.7% figure.

If we observe the scheduled data-points, USD might witness a bit pullback after its recent surge while CAD could recover some of its losses and the NZD may continue remaining weak. However, recent changes in the financial markets, which indicate plunge of equities, continue supporting rise of USD, JPY and Gold while hurting commodity basket, EUR and the GBP. It should also be noted that yesterday’s market behavior was too fierce and traders may become less active today due to the same but couldn’t leave a chance of gain if there are unidirectional moves.

Technical Talk

Even after declining heavily, the USDJPY couldn’t smash the 108.30 support-mark, which in-turn signal brighter chances of its U-turn to 109.80 & 110.50 but a downside break of 108.30 can quickly fetch it to 107.30. Further, USDCAD must surpass the 50-day & 100-day SMA confluence region of 1.2595 – 1.2600 in order to meet the 1.2670 otherwise it can come down to re-test the 1.2490 and the 1.2430 support-levels. At last, GBPJPY break of ascending TL and 50-day SMA, around 152.40 now, could drag the pair back to 100-day SMA level of 150.85 and then to the 150.00 while a daily close beyond 152.40 may reprint 153.00 on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 07 – February – 2018

Hello Traders,

“All that goes down has to come up” seems a fair saying for the global financial market’s recent performance. Having shaken by equity slumps during Friday and Monday, investors could restore their confidence after Tuesday’s market recovery. With this, the JPY and Gold had to give up majority of their recent gains while USD also remained down and the same helped EUR, GBP and commodity currencies, like AUD, NZD and CAD, to recover some of their earlier losses. In case of scheduled economics, larger than expected trade deficit figures from US & Canada affected both the currencies negatively but the CAD got support from rising Crude prices, due to the unexpected decline in API stockpile. Further, New Zealand’s Employment report was quite hawkish with Unemployment rate declining to the lowest since late 2008 levels and the Employment Change also marking higher growth than forecasts, which in-turn propelled NZD further towards north.

Following a day of relief on Tuesday, market-players again observed their pre-established outlook favoring the monetary policy tightening at rest of the world economies and cut down the USD. As a result, JPY and Gold seem re-elected as traders’ best bets to buy whereas Crude also remained on the card of Bulls with expectations of inventory draw-down. Moving on, EUR and GBP took advantage of greenback’s latest down-tick while AUD, NZD and CAD benefited from pullback in commodity prices.

Looking forward, UK Halifax HPI, Canadian Building Permits and official Crude Oil inventory release from US are some of the second-tier data that could entertain traders while speech from New York Fed President William Dudley and RBNZ’s monetary policy, coupled with quarterly press conference and monetary policy statement, could generate headlines.

While UK Halifax HPI & Canadian Building Permits are expected to reverse their prior contraction and help the GBP and CAD, the Crude stockpile details may help the energy counter to extend its north-run.

In case of central-bankers, the FOMC member might repeat his support for tighter monetary policy and aggressive rate-hikes while going forward, which in-turn could help the USD, whereas RBNZ may emphasis on recent improvement in job numbers to counter not upto the mark inflation and weaker growth figures. However, the RBNZ could avail the excuse from slower inflation, rising NZD and soft GDP in order to safeguard its long wish to offer no change in monetary policy. As a result, the NZD may have to liquidate its major gains if the central-bank remains a bit dovish while offering no alteration in present policy but the Kiwi, as it is popularly know, could rally if the policymakers praise economic improvement and signal rate-hikes going forward. Hence, investors will closely observe today’s comments from both the central-bankers, namely FOMC & RBNZ, in order to determine near-term market moves.

Technical Talk

AUDUSD’s inability to surpass the 0.7910 seems again dragging the pair back to 0.7835 and then to the 0.7800 while an upside break of 0.7910 can propel it to the 0.7960. For the NZDUSD traders, 0.7250 and the 0.7350 are likely important levels to watch with 0.7210 and 0.7400 being the follow-on figures in case of either-side breaks. Moreover, AUDCAD also failed to extend its pullback and seems declining to ascending trend-line figure of 0.9840 and then to the 50-day SMA level of 0.9820 whereas 200-day SMA level of 0.9895 and 0.9925 could restrict the pair’s near-term upside.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 08 – February – 2018

Hello Traders,

Having witnessed the worst-day in history for Dow Jones Industrial Average Index, followed by its gradual recovery, global investors are all waiting for the upcoming Quarterly Inflation Report (QIR) from the Bank of England as “Super Thursday” mood is gaining momentum. However, it isn’t the only thing that could keep entertaining investors for the rest of the week because China’s inflation numbers, UK’s Manufacturing Production & Canadian Jobs report are there to observe for tomorrow.

Let’s take a look on what’s happened and discuss fundamentals concerning the aforementioned details/events.

Employment Details Proved To Be Savior For The USD

While talk of monetary policy alterations at the ECB & the BoJ provided noticeable damages to the US Dollar during previous three weeks, strong wage growth and upbeat NFP rejuvenated concerns for increase in Inflation and more rate-hikes from the Fed at the end of last-week, which in-turn helped the greenback to post its first positive weekly closing in earlier four. As a result, the EUR and the JPY had to decline whereas rising USD triggered profit-booking of the commodities that dragged AUD, NZD and CAD towards south. Further, GBP couldn’t enjoy optimistic testimony of the BoE Governor due to downbeat PMIs while Gold witnessed dearth of safe-haven demand on account of rising investor bets favoring the US Dollar. Additionally, Crude prices also weakened with higher US stockpiles and rig counts challenging the recent positivity among energy traders.

Wild Market Moves & Greenback’s Sustained Strength

Friday’s surge in U.S. Treasury yield, followed by the USD’s up-move, wasn’t a one-day affair as global equity markets registered heavy draw-down on Monday based on the expectations that more US rate-hikes could hurt the multi-year high equities. With this, USD and JPY rallied across the board while rest of the currencies had to take the losses wherein commodity-liked currencies, like AUD, NZD and CAD, were bitterly hurt. The GBP had an additional burden in the form of weaker than expected Services PMI that dragged it southwards whereas EUR couldn’t confront the strong US currency. Moreover, the Gold couldn’t justify rise in safe-havens because of strong US Dollar while Crude had to become the victim of commodity selling.

BoE Takes The Center-Stage Of Attention For Now

With every action following a counter-action, market sell-off also witnessed a bit of relief on Tuesday. Though, it couldn’t last long as Wednesday’s strong comments favoring the Federal Reserve’s rate-hike by some of the FOMC members accelerated the USD’s north-run and adversely affected rest of the Forex market. With this, commodity frontier again got a punch in the face that dragged the Gold and Crude towards south whereas dovish RBNZ announcement, postponing a rate-hike time-frame and target to achieve the inflation, followed by news of higher US production and disappointing stockpile details, became additional negatives.

While concerns that the Federal Reserve could accelerate its tightening schedule this year gain much of the market attention till now, Thursday’s monetary policy meeting by the Bank of England, which comprises quarterly inflation report (QIR) and economic forecasts, become the eye-candy of analysts on Thursday.

During its latest QIR release in November, the BoE inflated the GDP and Inflation forecasts for the near-term while cutting down unemployment expectations. However, the inflation softened recently and the GDP rallied while unemployment remained unchanged then after.

Considering the recent changes in UK economics and rising GBP, the BoE Governor is more likely to praise the Sterling’s performance and may even emphasize on the currency strength’s ability to push the central bank towards another rate-hike after it announced once in a decade lift late last-year.

Hence, while BoE is more likely to turn out as a positive event for the GBP, be it expected hike in economic forecasts or hawkish words from Governor Carney, any disappointments could have higher repercussions as market players are already aiming central-bank’s rate-hike by mid of this year and absence of signals supporting the same could make the recent decline in the Pound stronger.

Other than the BoE, Friday’s headline Inflation releases from China, UK’s Manufacturing Production and Canadian Employment report are some additional data-points that may entertain global traders for the rest of the week.

Following its surprise miss of the Trade surplus, China’s inflation numbers are also expected to add pessimism for commodity players. The CPI might register 1.5% mark against 1.8% prior while PPI could flash 4.3% numbers compared to 4.9% earlier.

Moving on, UK Manufacturing Production growth is likely to soften to 0.3% from 0.4% prior while the Goods Trade Balance may reveal shrinking deficit of -11.5B against -12.2B earlier.

At the end, Canadian employment details may not please the Loonie traders as the Employment Change is expected to flash +10.3K mark versus +78.6K earlier and the Unemployment Rate might also increase a bit to 5.8% from 5.7% previous mark.

In case of politics, US senate leaders announced a two-year budget agreement worth of nearly $300 billion of additional funding on Wednesday to avoid frequent government shutdown crisis. However, the same needs to be approved by the House of Representatives and the Senate in order to reach the President for being a law. Moreover, Brexit front and the German play of politics to satisfy coalition members could continue offering intermediate market moves.

Given the recently soft Chinese data-points, dip in inflation could provide additional weakness to the commodities’ front, which in-turn could negatively affect the AUD, NZD and CAD, whereas disappointing Canadian job numbers may weaken CAD more.

Further, US political crisis are less likely to offer much drawbacks to the USD as this time both the political parties, namely Republican & Democrats, seem joining hands to make America better. Though, some democrats are still demanding ease of immigration laws to support the latest amendment while worrying about the budget deficit and may cause intermediate pullbacks of the USD.

Technical Analysis

Even after breaking the 1.2360 support, the EURUSD still has an upward slanting trend-line, around 1.2160-55, which may confine its further downside, breaking which it can come to 1.2080 while an upside break of 1.2360 can again fuel the pair to 1.2430 and then to the 1.2500. For GBPUSD, the 1.3830 and the 50-day SMA level of 1.3650 are strong support to watch with 1.4000 and the 1.4120 being important resistances to observe. Further, USDJPY seems struggling in a range of 108.30 and the 110.30 whereas USDCAD must clear 1.2600 on a daily closing basis in order to aim for 1.2720 otherwise it can come down to re-test 1.2400 mark. Additionally, AUDUSD might bounce off the 50-day SMA level of 0.7800 to 0.7870, failing to which can drag it further down to 200-day SMA level of 0.7745 while 0.7270 and the 200-day SMA level of 0.7140 are likely crucial levels for the NZDUSD traders.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 09 – February – 2018

Hello Traders,

While rapidly-rising bond yields, backed by weaker than expected Jobless Claims, again played their roles in dragging US equities to south, the US Dollar managed to register gains when compared to EUR and commodity-linked currencies; however, the U.S. policymakers’ inability to agree on spending bill rejuvenated government shutdown fears and confined the greenback’s strength against the GBP and the safe-havens, like JPY and CHF. Further, the BoE sound a bit hawkish when discussing rate-hike outlook and left majority of its economic forecasts unchanged, which in-turn helped the Pound to rise across the board. Moving on, Crude dropped for one more day after Iran announced its readiness to increase production whereas Gold gained on broader safe-haven demand.

Having gone through another day of equity market’s decline, global investors concentrated more on the U.S. Government shutdown case during early Friday and trimmed some of their recent USD longs. Though, commodity-liked currencies couldn’t benefit from the same as weaker inflation numbers from China and RBA’s statement mentioning still some time to gain full employment and inflation targets kept fetching AUD, NZD and CAD towards south.

Concentrating on the rest of the day’s scheduled events/details, monthly releases of UK Manufacturing Production & Goods Trade Balance, followed by Canadian employment report, are likely to entertain investors while developments concerning US spending bill at House of Representatives & Senate could please momentum traders. On the a bit broader scenario, global equity sell-off might keep threatening market-players.

Consensus signals a 0.3% growth of UK Manufacturing Production versus 0.4% prior and -11.6B Good Trade Balance against -12.2B earlier. In case of Canadian Employment stats, the Employment Change might soften to 10.3K compared to 78.6K previous-mark whereas Unemployment Rate could inflate a bit to 5.8% from 5.7%.

Given the severity of government shutdown, US policymakers are less likely to keep dragging the issue of higher deficit and immigration laws to halt the spending bill, which in-turn may trigger the relief rally of the US Dollar and the same can be negative for the US indices. For the GBP, optimism generate by the BoE may get a boost if scheduled details flash welcome numbers but the CAD can magnify declining Crude’s impact if the Job stats meet forecasts.

Technical Talk

Given the USDCAD’s failure to surpass 100-day SMA level of 1.2610, the 1.2580, comprising 50-day SMA, regain its importance as support, breaking which the pair can come-back to 1.2550 while an upside break of 1.2610 still needs to justify its strength by conquering the 1.2620-30 resistance-region. GBPUSD traders may concentrate of 1.4000 and the 1.4025 resistance-levels if the pair sustains its latest pullback otherwise 1.3900 and the 1.3830 can please the sellers. At the end, GBPCHF must surpass the 100-day SMA level of 1.3130 if it is to revisit the 1.3200 round-figure, failing to which can drag prices to the 1.3000, the 1.2970 and the 1.2920 supports.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 12 – February – 2018

Hello Traders,

With the fears of Fed’s rate-hike fueling treasury yields and dragging down the equities, the US Dollar Index (I.USDX) managed to post consecutive second positive weekly closing in last-week. Strong USD and investors’ rush towards risk-safety was so fierce that commodity basket ended-up losing majority of its recently acquired gains, which in-turn dragged the AUD, NZD and CAD to south while dovish comments from RBA & RBNZ, coupled with disappointing Canadian employment details, provided additional damages to such commodity-linked currencies. On the other hand, the EUR had to bend down in front of the greenback whereas BoE’s soft notes & weaker than expected UK Services PMI hurt the GBP. Further, Crude couldn’t confront the selling pressure due to higher US production and news that Iran might also increase its oil output while Gold became the victim of USD’s up-move and marked negative weekly closing.

While declining risk appetites and magnified market volatility prompted investors to cut their positions during last-week, Friday offered respite to the market players and the same mood prevailed during early-Monday as Japanese terminals were closed for National Foundation Day and there were no big events scheduled for release. However, comments from some of the BoE MPC members, coupled with US President’s delivery of 2019 budget blueprint, could act as near-term trade catalyst. Furthermore, improving relationship between Korean nations are also playing their role in restoring investor confidence.

Even if the second version of Mr. Trump’s Budget proposal indicates $1.5 trillion in infrastructure upgrades and mexico-border issue to provide his election promises right, Democrats are all united to question the proposal and give troubles to the Republican leaders. Additionally, the recent act of US policymakers to extend government spending through late-March seems another intermediate remedy of the problem and not the exact solution as agreed previously. As a result, political pessimism concerning the U.S. Republicans’ inability to perform on their promised may keep extend the USD’s latest pullback.

Looking at the rest of the world, Monday has too little information/events to observe and hence USD moves might be the sole factor that could drive near-term market moves. As a result, recent correction in the greenback, coupled with improvements in equity and commodity markets, may help the AUD, NZD and CAD, coupled with EUR and the GBP. Herein, the EUR and the NZD might be the biggest gainers due to their welcome economics whereas JPY and Gold can take advantage of the greenback’s weakness.

Although Monday is less likely to trigger any big moves, headline inflation readings from US, UK and New Zealand, coupled with AU jobs report and EU Flash GDP, are some of the important facts that may portray a crucial week going forward. Moreover, Trump’s budget proposal and Brexit plays at UK can entertain short-term traders.

Technical Talk

EURUSD seems finding it hard to surpass the 1.2300 round-figure and may come back to 1.2240 & 1.2200 supports while an upside breaks of 1.2300 can propel the quote to 1.2360. Further, USDJPY has to conquer 108.30 in order to revisit 107.30 support otherwise it can aim for 109.25-30 and the 109.80 resistances. At the end, GBPAUD’s inability to surpass 1.7990–1.8000 area can’t be termed as its weakness unless it closes below a month-old ascending trend-channel support of 1.7555 with 1.7760 and the 1.7800 being nearby resistances for the pair to tackle during its U-turn.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 13 – February – 2018

Hello Traders,

Monday offered an extended rebound of Wall Street following last week’s steep fall and portrayed the US Dollar’s negative daily closing at a time when the U.S. President proposed a $4.4 trillion federal budget for fiscal 2019. Given the brighter chances of Mr. Trump’s proposal to get rejected by the Congress, the greenback witnessed some profit-booking, which in-turn helped commodity prices and improved broader risk sentiment. With this, the AUD, CAD and NZD managed to recover some of their latest losses while EUR and GBP took advantage of the USD’s downturn by flashing a positive close at the day’s end. Further, the JPY continued extending its north-run whereas the Gold gained a bit as softer US currency triggered the yellow-metal’s U-turn. Additionally, Crude also ran further up from its lows marked in last-week as a result of the USD’s latest drop.

Having witnessed signs of market stabilization on Monday, global investors stretched their bets favoring riskier assets during early-Tuesday but JPY didn’t lose its charm when the national markets re-opened after a holiday. The Ninja buyers refrained to respect softer PPI figures whereas AUD benefited from six-month high NAB Business Confidence. Moving on, US Vice President yesterday said that the nation stands ready to talk with North Korea on its nuclear program even after maintaining pressure on Kim Jong Un’s regime as the hermit kingdom’s latest act to join hands with South Korea is a welcome sign. Moreover, RBA’s Assistant Governor, Luci Ellis, seemed cautious for the wage growth despite improvement in Unemployment rate but the same couldn’t hurt Aussie buyers’ optimism as they wait for Thursday’s latest employment details.

While broader market mood remained upbeat at the day-start, investors are likely to focus more on the monthly reading of UK CPI, scheduled for release during the rest of the day, as the BoE recently sound a bit hawkish during its QIR release. The headline inflation gauge might soften a bit to 2.9% from its previous outcome of 3.0% and may support the central-bank when it said that recent improvements in the GBP may help cut the inflation. As a result, unless being drastically down, the UK CPI might help the Pound to extend its latest recovery; however, an otherwise case could call for the BoE’s action and may propel heavily volatility into the pair connecting the GBP.

Other than UK CPI, a speech from Federal Reserve Bank of Cleveland President Loretta Mester could become important for traders to watch. Given the latest hawkish mood at the Fed, as reflected by some of the influential FOMC members during last-week, a positive talk demanding more than three rate-hike from the Federal Reserve could again trigger the USD’s gain and hurt the equity indices that have very recently started gaining strength. At the political front, U.S. Democrats’ reaction to the Trump’s budget proposal and news concerning the Brexit might offer intermediate market moves.

Technical Talk

In spite of the GBPUSD’s latest U-turn from 1.3765-55 support-zone, the pair has to clear the 1.3900 round-figure in order to aim for 1.3950 and the 1.3980 resistances otherwise it can come back to 1.3755 and then to the 1.3700. Further, USDCHF seems coming back to 0.9280 with 0.9330 being intermediate halt during the pair’s decline but an upside break of 0.9410 can again propel it to the 0.9470 resistance-mark. Moreover, GBPNZD has to close below 1.9035 level, comprising 100-day SMA, if it is to re-test the 1.8950 and the 1.8830 supports, failing to which can trigger its short-covering rally towards the 1.9150, the 1.9250 & the 1.9340 nearby resistances.

Have a nice trading-day ……