Daily Fundamental Dose

Trading Discussion News and Economy
656

[B]Daily Fundamental Dose: 02 – December – 2016[/B]

Hello Traders,

Following a good-run on Wednesday, mainly due to upbeat data-points, the US Dollar had to take a step backwards on Thursday as nearly four-month high Jobless Claims and weaker than expected ISM Manufacturing PMI stopped traders from supporting greenback ahead of today’s crucial NFP details. The EUR remained sluggish with French President’s call to not appear for 2017 election giving a positive sign whereas looming Italian referendum providing setbacks to regional currency. Further, the JPY couldn’t manage to strength with continued absence of safe-havens while GBP rallied across the board as Britain’s Brexit minister signaled to consider paying into the EU budget for market access, which in-turn becomes a strong signal for new-UK. Additionally, AUD and NZD celebrated positive Chinese PMIs while CAD maintained its previous-day surge on OPEC deal.

After all the volatile moves due to this week’s heavy calendar, market players are taking a halt during early Friday when the US Bureau of Labor Statistics is scheduled to publish November month job figures. During early-day release, the AU Retail Sales increased more than expected and hence gave additional strength to the AUD while UK Construction PMI and Canadian labor market figures are still left to be flashed.

Today’s US job figures will provide a clear picture of November month’s performance by the world’s largest economy. Other details for the month, like factory activity and construction spending, coupled with Trump victory, have already portrayed brighter chances of December rate-hike. Hence, an upbeat NFP print, against 177K expected and 161K prior, could brighten the lights for the US Federal Reserve to announce another rate-hike in nearly a decade. It should also be noted that Unemployment rate is likely to remain stagnant at 4.9% while Earnings may soften with 0.2% growth as compared to 0.4% previous mark.

[B]Technical Points[/B]

Given the US jobs details manage to please greenback traders, chances of the EURUSD to revisit 1.0550 support are much higher while a disappointment can trigger the pair’s rally towards 1.0800 mark. Further, GBPUSD is also expected to continue its recent north-run with latest optimism relating to Article 50 discussion while EURCAD may revisit December 2015 lows on upbeat Canadian labor market numbers, later today, and a disappointment from Italian referendum, scheduled for Sunday.

Have a nice trading-day …………

658

My outlook for the coming week -
Fundamental trades for AUD/USD short , EUR/GBP Short, GBP/AUD Long and USD/JPY Long

659

[B]Daily Fundamental Dose: 05 – December – 2016[/B]

Hello Traders,

A tragic week including OPEC meeting, US jobs report and headline PMIs from major economies came to an end with US Dollar’s first weekly loss in four as mixed labor market figures, comprising contraction in earnings and dip in Unemployment, ahead of crucial December meeting of the Federal Reserve pushed greenback traders to curtain their bullish bets.

[B]What went wrong?[/B]

Even after registering strong PMI figures and a rise in GDP, the greenback couldn’t extend its previous north-run as investors wished to cash-out from USD ahead of the crucial December meeting where in the US central bank is expected to announce another rate-hike. The EUR remained fragile due to Sunday’s Italian referendum while GBP managed to rise as some amongst the UK politician signaled readiness to pay for EU entry-gate status. The JPY left with no change and kept weakening together with Gold prices but Canadian Dollar managed to shine on OPEC deal that resulted a first in eight-year compromise by global oil producers, including Russia and some other non-OPEC countries, to safeguard their interest amidst present supply-glut. Furthermore, the AUD and NZD also maintained their up-move on expectations of additional commodity demand.

[B]Do We Have Good-Start?[/B]

Unlike previous week, the market reversed in favor of the US Dollar on early Monday mainly due to Italian referendum which provided another shock to the EU, after Brexit, wherein present Italian PM now have to resign as people voted 60% against his proposal to rein in the senate’s power. The EUR plunged heavily while the GBP also reversed on news that there are differences amongst UK leaders when the matter relating to payment for maintaining EU entry-gate system is observed. Additionally, the New-Zealand Dollar also got a hit when present PM said he will quit the position for personal reasons which in-turn dragged the AUD to south as well. Moreover, CAD also weakened on speculations that some of the non-OPEC countries which hasn’t agreed to last week’s declaration may boost their production and the supply-glut will remain for quite some more time.

[B]What Next?[/B]

Moving on, this week’s economic calendar is comparatively thinner than last week and may give rise to less volatility. However, monetary policy meetings of the BoC, ECB and RBA, coupled with AU GDP, Chinese Inflation and US Factory Orders & Consumer Sentiment, may keep making markets alive.

Given the present state of market in favor of the USD and pessimist at EU, chances are higher that greenback will regain its strength but the JPY may take a U-turn on fresh uncertainty. Further, some of the commodity currencies, like NZD and CAD, may also take a step-back due to their own fundamentals.

Hence, it would be better to favor the US Dollar during this less-economically viable week but any surprise announcements from EU and form the President-elect Donald Trump should be given proper attention.

[B]Technical Talks[/B]

Considering Italian referendum result and presence of ECB, the EURUSD is more likely to extend its south-run to 1.0430 & 1.0320 while USDCAD may again reverse to north with 1.3460 & 1.3580 targets. Additionally, the USDJPY can witness a pullback towards 111.80, breaking which 110.00 can’t be denied while extended advances may flash 115.50 on the chart.

Have a nice trading-day …………

660

Agree with AUDUSD, GBPAUD and EURGBP but afraid of taking USDJPY as its been “too far, too fast” and the 116.00 still left undone. This might trigger a pullback in pair prices.

661

Yes, I understand that fear ! I had similar reservations, but I am finding it easier to trust the trend, then doubt it. Especially heading into the Fed’s expected rate rise. I am up 54 points at the moment (entered 113.87). Will add to my position if I get another 30 or 40 points. I have a Multiple entry strategy, so I am not married to one price - rather I trade a basket of up to 5 positions…

662

I look for the reasons of depreciation of dollar and if they are, then they aren’t absolutely clear to me. Almost one and all members of FOMC and other representatives of the Federal allowance speak about a fast raising of a rate on federal funds, and it is already perceived as the come true fact. And time so, so current price of dollar already, it seems, as considers a raising toughening of policy of FRS at the next meeting, speak about it on all corners. Besides, the future of CME for a rate on federal funds to a December meeting got out out of limits of all expectations - probability of a raising of a rate of 98.6%. And a meeting not far off, almost exactly in two weeks.

663

[B]Daily Fundamental Dose: 07 – December – 2016[/B]

Hello Traders,

After three-days of continuous disappointment for USD traders, Tuesday’s two-year high US Factory Orders finally managed to provide a positive closing to the greenback. Adding to this, concerns about ECB might stretch it QE weakened the EUR, which in-turn helped the US Dollar to avoid higher Trade deficit figures. The GBP also weakened on court hearings concerning when to start Article 50 negotiation while JPY and Gold maintained their downside with sustained weakness in safe-haven demand. Further, the AUD had to bear the cost of dovish RBA statement while NZD also weakened with looming uncertainty over the nation’s next PM. Moreover, the CAD also softened a bit with absence of further advances by Crude prices on speculations that last month’s production accord has many loopholes.

Moving on, early Wednesday’s release of AU GDP provided another shock to the Aussie as the figure dropped the lowest since June 2011, indicating much required efforts by the RBA. Unlike Tuesday, today’s heavily packed economic calendar, comprising UK Manufacturing Production, BoC meeting, Crude Inventory, RBNZ Governor’s speech and Japanese GDP, could keep providing liquid moves to Forex traders.

Considering the renewed strength of US Dollar, coupled with speculations the ECB might again jump to easy path, chances of the greenback to maintain its advances are much higher. However, today’s BoC and UK details may help soothe some pairs of the CAD and GBP respectively. Furthermore, Crude inventories and RBNZ’s speech are also expected to provide additional weakness to CAD and NZD whereas JPY is less likely to benefit from GDP and Current Account figures.

[B]Technical Figures[/B]

With EURGBP’s repeated encounter with 0.8470-75 region, weaker UK readings may propel the quote towards 0.8505-10 while short-term ascending trend-channel keep favoring USDJPY upside to 114.70-80 region. Further, NZDUSD is more likely to revisit 0.7070 after reversing from 50-day SMA.

Have a nice trading-day …………

664

Seems interesting!

Keep it up:35:

665

[B]Daily Fundamental Dose: 09 – December – 2016[/B]

Hello Traders,

Thursday proved to be a good-day for USD traders when the ECB President, popularly known for his hawkish mode, accepted weakness in the EU economy and extended QE deadline from March 2017 till the year-end. Global traders initially were surprised by the ECB statement mentioning a reduction in QE from 80 billion Euros to 60 billion but later on felt disappointed as Mr. Draghi accepted that the regional economy shouldn’t be given another shock, after Brexit and Italian referendums, in terms of QE-end and said that the present scale-back may also be reversed if need arises. The EUR had to bear this burden and plunged heavily while the US Dollar enjoyed such a move with noticeable rally. Further, the CAD also managed to register a positive-day after Crude prices advanced but rising Nikkie kept hurting JPY’s safe-haven demand and a strong USD also provided additional weakness to the Japanese currency and Gold. Additionally, GBP, AUD and NZD were on their downturn with the greenback strength dragging investors out of other currencies.

Moving forward, the US Dollar maintained its prior strength on early Friday while commodity currencies, namely AUD, NZD and CAD, got a reason to advance from Chinese CPI and PPI details. Chinese PPI rallied to the strongest level since ealy last year while CPI also beat consensus. For the rest of the day, traders are likely to concentrate more of UK trade balance and US Prelim UoM Consumer Sentiment releases. The UK Trade figures is less likely to help the GBP but the US details may keep pleasing greenback traders as weekly release of Bloomberg Consumer Comfort Index showed an upbeat picture of US consumer sentiment on Thursday.

As the week is coming to an end with fewer releases on hand, chances of less volatility to be seen are higher as investors may now shift their focus to next week’s FOMC wherein the US Federal Reserve is likely fueling their benchmark interest-rate again after a year-long wait. Additionally, US inflation figures and UK CPI and Job numbers may also push traders to hold-on their excessive trading ahead of the upcoming crucial week.

[B]Technical Stats[/B]

Failure to sustain the bounce from 1.2560-55 support signals another round of GBPUSD downturn with UK details be in focus while GBPAUD may keep extending its recent downturn if it breaks 1.6825 horizontal support. Further, USDJPY is again confronting with 114.40-50 horizontal resistance and a break of which could trigger fresh north-run by the pair.

Have a nice trading-day …………

666

AUD/USD and EUR/USD Short ( on retrace), EUR/NZD short, GBP/CAD short and USD/JPY long…

Trading USD long into FOMC. CAD long vs GBP after Opec agreement…

667

Oil up substantially on Non-Opec deal over the weekend, if Opec / Non-Opec put their money where their mouth is; serious implications for inflation and the FED hike path.

668

Agree with you :slight_smile:

669

[B]Daily Fundamental Dose: 12 – December – 2016[/B]

Hello Traders,

Having witnessed all the glory of Brexit, US Election, Italian Referendum and OPEC Deal, market players are on the edge of experiencing another round of volatility during the FOMC meet which is almost certain to deliver much awaited second in a decade rate-hike from the US Federal Reserve. In addition to the FOMC there are many important events that could continue making investors busy throughout the week. Let’s quickly analyze them.

[B]ECB Grabbed Lime-Light Last Week[/B]

While Italian referendum failed to provide much damage to the regional currency during previous week, dovish comments from the European Central Bank President, Mario Draghi, provided much needed drag to the EUR. The regional currency plunged after central banker inflated the QE timeline and signaled economic uncertainty for the region. The US Dollar Index (I.USDX) took advantage of such a move and rallied across the board while upbeat Factory Orders, ISM Non-Manufacturing PMI & Consumer Sentiment gauge provided additional strength to the greenback index. Further, the GBP had to liquidate its previous gains even with welcome Services PMI as a dip in Manufacturing Production, coupled with uncertainty over the Article 50 discussion and offers from UK, kep fetching the British currency to south. Moving on, the AUD and NZD managed to remain strong with better Chinese PMI prints while CAD rallied on Crude price-moves. Furthermore, the JPY and the Gold couldn’t resist from declining as investors now turn to greenback and avoid anything else.

[B]What’s Now?[/B]

On Monday, Saudi Arabia pleased global energy traders with its late-weekend announcement of surpassing OPEC deal output cut to balance global Oil market. The same propelled Crude prices to test July 2015 highs while helping CAD to extend its north-run. Further, the increase in Japanese Core Machinery Orders provided a bit pullback to JPY while bad news from Chinese property markets curbed gains on AUD and NZD. However, the greenback continued being traders’ favorite as majority of them are certain that the US central bank will deliver its promised rate-hike during Wednesday’s meet.

[B]Looking Forwards[/B]

Although, FOMC becomes a hot-topic for this week, monetary policy meeting by the BoE and SNB, coupled with UK & AU job figures, EU Flash PMIs and Inflation readings from UK and US, are likely additional data-points/events that could help forecasters busy during the week.

As mentioned above, the week already started its volatility in early trading hours but there are fewer releases to track during the rest of the day. However, Tuesday’s UK CPI and Chinese Industrial Production, followed by Wednesday’s UK Job figures and US Retail Sales-PPI, may offer noticeable moves to market players ahead of the FOMC outcome. While UK details are more likely to help GBP and the greenback may also witness continue buying, Chinese Industrial Production is also expected to help AUD and NZD prices which in-turn signals another round of downward trajectory by JPY and Gold prices.

Moving on, FOMC’s rate-hike, even if being almost certain, will be closely observed as the meeting is scheduled to announce quarterly economic outlook and will be the first after Trump won US Presidential election. Investors would analyze whether the Trump administration may push the Fed towards additional rate-hikes in 2017, which the bank may convey, or not. Also, Fed Chair’s press conference will be a key reason for USD traders to be Bull as she has already signaled her likeliness towards rate-hike and a strong greenback going forward.

Following FOMC, AU Job figures may help AUD to extend its up-move on Thursday while SNB is less likely to help CHF prices. Further, EU Flash PMIs could provide additional reason for EUR sellers to exit the regional currency longs while BoE is likely to utter some dovish remarks and drag the GBP to south. After then, the US Inflation figures and Manufacturing readings could give another signal for the Fed’s forward parth while weekend releases of US Housing sector may help the USD to end in positive.

Hence, fundamentally the USD is likely to extend its north-run, which could negatively affect JPY and Gold prices, while EUR isn’t expected to reverse from its present downturn and the GBP may again please sellers. However, the CAD could keep rising on Crude prices but stronger greenback could restrict its excessive rally. However, given the Fed disappoints global traders with wait and watch release, the USD plunge become imminent.

[B]Technical Talk[/B]

With ECB’s dovish message and almost certain Fed rate-hike, the EURUSD is likely to delve deeper towards parity while GBPUSD can also dip to south towards 1.2300 re-test. Further, the USDJPY already broke 114.80 and is indicating 116.00 mark but the AUDUSD and NZDUSD are less likely to dip below 0.7030 and 0.6970 supports respectively. On the upside, 1.0800 and 1.2780 continue being strong resistances for EURUSD and GBPUSD while 0.7550 and 0.7220 may please AUDUSD and NZDUSD buyers. Further, USDJPY pullback below 114.80 can reprint 113.30 on the chart.

Have a nice trading-day …………

670

[B]Daily Fundamental Dose: 13 – December – 2016[/B]

Hello Traders,

Saudi Arabia’s weekend comments about the readiness to obey OPEC deal, and may surpass the promised cut, received magnified response from energy traders on Monday. The Crude prices rallied to nearly 18 month’s high and helped CAD to extend its recent north-run. The EUR also got a pullback, together with GBP and JPY, while USD had to pay for this by registering first daily negative closing in three. Further, the AUD and NZD remained upbeat with overall improvement in commodity basket whereas Gold and CHF also remained strong.

Moving forward, Tuesday started with an active economic calendar wherein Chinese Industrial Production surpassed forecasts and Retail Sales also flashed upbeat figures while home sales grew at the slowest pace this year. The same helped AUD, NZD and CAD to extend their prior advances; however, GBP, JPY and EUR couldn’t counter with US Dollar as traders brace for an interest-rate hike and strong greenback in future.

For the rest of the ZEW Economic Sentiment readings from EU & Germany, coupled with UK CPI, are some of the data-points left for publishing. Looking at the forecasts, these details are expected to help EUR and GBP prices expect further upside; though, present upbeat sentiment for USD isn’t likely to vanish and can keep these currencies’ north-run controlled.

[B]At the Technical Desk[/B]

Even after bouncing from 1.0520 support, EURUSD has limited upside expected, till 1.0720, while chances of its U-turn to 1.0580 & 1.0520 are higher. For GBPUSD, 1.2700 can keep restricting the pair’s immediate advances while 200-day SMA level of 1.3070 becomes important for USDCAD traders to watch. Overall, the EURUSD and GBPUSD may witness a bit pullback if scheduled data-points please counter-trend traders but broader view continue to remain bearish for these pairs. Additionally, USDCAD has been enjoying Crude prices rally but is less likely to extend its downturn below 1.3070 and can witness another upward trajectory anytime soon after US economic calendar becomes active.

Have a nice trading-day …………

671

[B]Daily Fundamental Dose: 14 – December – 2016[/B]

Hello Traders,

At last, markets are close to the much awaited December FOMC meeting when US Federal Reserve is almost certain to announce its first rate-hike of 2016, against four promised a year back, and would also issue fresh economic projections considering new US Presidency. The traders’ fraternity is less interested in reflecting surprise USD up-moves on rate-hike but would closely examine Fed Chair’s speech and economic forecasts to determine near-term greenback trend. Let’s first look at Tuesday’s market behavior.

Even with no major US releases, the greenback gauge (I.USDX) manage to close the day in a positive territory while weaker ZEW figures dragged EUR to south. Further, the GBP rallied across the board on two-year high inflation and the AUD-NZD couldn’t reflect their strength while CAD had to trim some of its recent gains as Crude prices witnessed profit-booking on expectations concerning higher US stockpile release. Additionally, the JPY and Gold kept trading down with little or no change in outlook concerning their safe-haven demand but the CHF remained strong on expectations of hawkish SNB outcome during Thursday’s meeting.

During early Wednesday, investors remained silent ahead of the busy economic calendar which started with improving Japanese Tankan Manufacturing Index. Moving forward, Swiss PPI, UK Job releases, US Retail Sales & PPI and the Crude oil inventories can provide intermediate market moves ahead of the crucial FOMC. While the UK details are more likely to keep helping GBP, USD isn’t expected to lose its charm ahead of the Fed announcement.

As the rate-hike is almost certain, Fed Chair’s speech and the economic forecast will act as a trigger for market players. The Federal Reserve is already lagging behind in terms of interest-rate hikes offered and any cautious signal and/or absence of hawkish statement from Janet Yellen may hurt the US Dollar. Moreover, a surprise disappointment of no rate-hike, which is least likely, could become detrimental for greenback traders. Hence, it would be in the best interest of traders to remain on sidelines before actual FOMC outcome and the Fed Chair’s press conference while pushing their greenback longs after then, provided bullish outcomes are gifted by US central bank.

[B]Technical Talk[/B]

Considering the presence of FOMC-led optimism, EURUSD is more likely to revisit its 1.0580 and 1.0520 supports while disappointments can fuel the pair towards 1.0700 & 1.0770 in a swift move. USDJPY and AUDUSD are some other pairs which are more likely to be affected by today’s Fed outcome. While sustained trading above 114.80 keep indicating USDJPY’s rally to 116.50, AUDUSD’s failure to surpass 200-day SMA can again drag it to 0.7430.

Have a nice trading-day …………

673

Now post FOMC with faster rate of hikes expected by US, I am short EUR/USD and long USD/CAD…see here for more info…

674

The Federal Reserve after all accompanied bulls on dollar, having realized the scenario of “aggressive toughening”. The regulator not only raised a rate on 25 basis points that was quite expected, but also raised the forecasts for a rate to three increases in 2017. Economic forecasts of members of Federal committee on the public markets also improved, having added an overall picture with a touch-up in light tones. In other words at the market now sufficient motivation for purchase of dollar from here to eternity, well or, at least, about New year.

675

[B]Daily Fundamental Dose: 15 – December – 2016[/B]

Hello Traders,

After a year-long wait and an adventurous journey through Brexit, US Election and Italian Referendum, the US Federal Reserve finally managed to please global traders with widely anticipated 0.25% rate-hike, the first in 2016, on Wednesday night. The central bank not only delivered the much expected rate-hike but also signaled three such moves during 2017 against two seen during September meet. Moreover, the quarterly economic projections also signaled stronger economic growth and inflation figures going forward.

As a result, global investors shrugged prior losses of the greenback, caused due to soft Retail Sales and Industrial Production figures, and propelled their buying bets for the US Dollar. The same damaged EUR, together with some of the safe-havens, like JPY and Gold. Further, the GBP also had to trim its prior gains earned through upbeat job figures while CAD and Crude prices dropped with stronger USD hurting commodity demand.

Moving on to Thursday, market seemed digesting yesterday’s decision and witnessed a bit pullback wherein AUD was a clear winner as AU Job gains rallied to year’s high. Monetary policy meetings of SNB & BoE, coupled with UK Retail Sales, EU Flash PMIs, US CPI and Manufacturing indices, are some of the data-points/events that offers busy trading-day.

Given the FOMC fueled market optimism, BoE & SNB are less likely to provide any noticeable moves; however, UK Retail Sales and US figures are more likely to gift further strength to the GBP and USD respectively. Moreover, the SNB Chair’s hawkish comments could help the CHF recover its recent losses.

[B]Technical Desk[/B]

With forecast signaling soft EU PMI figures and strong UK Retail Sales, EURGBP is more likely to witness further downside while SNB meet can help USDCHF confirm its bearish divergence, indicated through RSI performance on D1 chart. Further, AUDUSD is also expected to trim its latest gains and may keep trading to south as it broke 0.7430 support.

Have a nice trading-day …………

676

[B]Daily Fundamental Dose: 16 – December – 2016[/B]

Hello Traders,

During its first full trading-day after US Federal Reserve pleased global investors with much awaited rate-hike, together with hints of more such actions in 2017, the US Dollar managed to register across the board strength. The greenback started Thursday with small pullback but upbeat releases of Inflation and Manufacturing indices around US open triggered the currency’s fresh north-run. Further, the EUR also shed its gains earned through improvement in Manufacturing PMIs while GBP had to dip on BoE’s dovish comments. Additionally, the AUD and NZD declined with stronger USD hurting commodity prices but Crude managed to shine on Kuwait’s signal to follow OPEC-led supply-cut with more force. Furthermore, Gold plunged to the lowest since early February while the JPY dropped heavily on crashing safe-haven demand.

Moving forward, Friday followed the suit of early-day profit-booking in USD by helping AUD, NZD, CAD and Crude prices on the news that China’s new road-map for growth policies, coupled with recently released strong economics, may help witness revival in world’s largest industrial player.

Unlike earlier days of the week, Friday has fewer economics on card to provide further volatility to markets. However, this doesn’t mean the traders would cash-out of their USD longs as the world’s largest economy is now in the best stage to lure many investors with Trump policies signaling further improvement in stats. From what is scheduled to release, EU’s Final CPI may help EUR to recover from its latest plunge but the USD may get a boost from housing figures and could complete the week with strong gains.

[B]Technical Talk[/B]

Given the NZDUSD’s another break below 200-day SMA, chances of its further downside can’t be denied while rising Crude prices, coupled with weaker GBP, can provide additional weakness to the GBPCAD. Further, EUR’s comparative strength against JPY can keep fueling the EURJPY towards 124.70.

Have a nice trading-day …………

677

For the week I am Short AUD/USD, NZD/USD, EUR/JPY. Long GBP/AUD.
Looking to long USD/CAD for a daily trade - aiming for 70% of 100 ADR…