Daily Fundamental Dose

Trading Discussion News and Economy
783

[B]Daily Fundamental Dose: 19 – May – 2017[/B]

Hello Traders,

Following a four-day long south-run that dragged the US Dollar towards lowest levels since November, the greenback managed to gain on Thursday after upbeat Philly Fed Manufacturing & Jobless Claims numbers, coupled with political turmoil in Brazil, shifted traders’ attention off from USD short. The EUR became the victim of profit-booking while GBP rallied noticeably after UK Retail Sales flashed highest reading in more than year. Further, AUD and NZD shed some of their early-day gains whereas CAD remained strong on positive Crude outlook as global oil producers are favoring extended supply-cut. Additionally, Gold and JPY refrained from extending their up-moves as strong US currency hurt safe-haven demand.

During the start of Friday, safe-havens seems regaining their strength as latest news suggested US Navy is pushing another aircraft carrier near to Korean peninsula, which might not be liked by North Korea and can become a reason for heated situation. On the economic front, German PPI printed welcome number and helped EUR to restore its prior up-moves whereas commodity basket seems enjoying USD weakness.

For the rest of the day, there seem fewer stats to observe except Canadian consumer-centric data-points, including Retail Sales & CPI. Forecasts concerning the same indicates improving situation at Canada and an extended CAD. Other than the economics, geo-political concerns at US, North Korea and Brazil might take the center-stage while Trump’s scheduled arrival at G7 could also offer intermediate headlines to make traders busy.

With less economics on card and Trump’s meet at G7, chances of the USD to recover some of its latest losses are higher; however, any fierce announcements from North Korea and/or another twist in the cast against Trump campaign may not allow the US currency to remain strong.

[B]Technical Talk[/B]

USDCAD continue struggling around 1.3570, breaking which 1.3525 & 1.3500 can be expected soon while 1.3650 may keep restricting the pair’s near-term advances. Further, NZDUSD couldn’t confirm “Falling-Wedge” and might re-test 0.6850 with 0.6930 being important resistance whereas USDCHF’s bounce from 0.9760 favors its meet to 0.9855-60.

Have a nice trading-day ……

784

[B]Daily Fundamental Dose: 22 – May – 2017[/B]

Hello Traders,

While political upheaval at US raised doubts on the pro-growth promises of Trump administration and dragged the US Dollar to six-month’s low during last week, traders now seem to think that the sell-off was too harsh and the Trump will surely please global investors soon, which in-turn triggered the greenback’s short-covering on Monday. On the other hand, EUR, the biggest gainer on strong economics, shed some of its latest profits while GBP dipped as UK policymakers recently threatened EU to quit Article 50 negotiation if the region demands a high divorce payment of 100 billion Euros. Further, AUD softened after S&P downgraded most AU financial institutions on housing market threat whereas NZD and CAD weakened on commodity basket pullback. Additionally, Gold and JPY declined a bit on USD’s strength but the Crude prices remained strong as Saudi Arabia said most of the oil producers are ready to extend production-cut accord by nine-months during May 25 meeting.

On the political front, the North Korea conducted another missile-test but investors didn’t give much attention to it as US President is on trip to Middle East whereas Brazil’s President, Michel Temer, was impeached by country’s bar association over allegations of corruption.

As we come closer to the month-end, fewer economics are on card to please momentum traders but early-week releases of Japan’s trade surplus and scheduled appearances of FOMC members and UK PM become crucial for traders to watch. The Canadian markets are closed due to Victoria Day and the Crude may remain shy ahead of Thursday’s production-cut meeting.
Considering the latest market optimism in favor of the US Dollar, coupled with pre-established hawkish mood of the FOMC, chances of the greenback’s additional recovery are too high. However, any news against the Trump over Russian interference in election campaign, coupled with weaker GDP print and a bit neutral FOMC minutes, could raise bars for the US currency’s further advances.

The EU and UK have fewer details line-up for publish, except EU PMIs & UK GDP, which may shift both the currency traders’ attention to Article 50 negotiation which is going through a rough patch. Also, commodity currencies are less likely to register much of the moves before Thursday’s oil-producers’ meet and hence it becomes safe to expect the US Dollar’s across the board up-moves that may even harm safe-havens, including JPY & Gold.

[B]Technical Talk[/B]

Technically, EURUSD continue targeting 1.1230 unless breaking the 1.1150 ascending trend-line where as GBPUSD seems not that strong to sustain a 1.3000 break, which could raise hopes of 1.3120, and may revisit 1.2850 on a dip below 1.2930. Further, CADJPY might also fail to extend its latest advances as 82.55-65 resistance-confluence indicates its pullback to 82.00.

Have a nice trading-day ……

785

[B]Daily Fundamental Dose: 23 – May – 2017[/B]

Hello Traders,

In spite of having almost empty economic calendar, coupled with US President’s absence from home ground due to Middle East visit, the greenback refrained from registering heavy gains as Washington Post reported that Mr.Trump asked directors of National Intelligence & NSA in March to publicly deny his campaign’s link with Russia. Additionally, Fed governor, Lael Brainard’s, comments signaling weak inflation outlook also hurt the US Dollar. Further, EUR got a help from German Chancellor’s words that mentioned EUR was “too weak” while GBP couldn’t clear last-week’s high on concerns relating to Article 50. Moving on, commodity currencies refrained from rising in dearth of any major signals while Crude dropped on media reports of Trump administration plans to sell 50% of its emergy oil stockpile as a budget measure. Furthermore, JPY and Gold kept their north-run intact on US Dollar weakness.

On early-Tuesday, markets got a shock from England when a deadly bomb blast at an Ariana Grande concert in Manchester killed nearly 19 people & injured more than 50, making it the deadliest since 2005. As a result, safe-havens got boost and the US Dollar, which was lingering due to Trump concerns, witnessed additional selling. The commodity basket also failed to rise as market awaits Trump’s detailed budget for 2018 fiscal-year, starting from October.

While renewed geo-political pressure propelled safe-havens and the EUR got counter-strength from greenback’s weakness, today’s EU Flash PMIs, German IFO Business Climate & US New Home Sales are likely second-tier details that can help foresee upcoming market moves. Moreover, details of the Trump budget, which is likely to rely on cost-cutting to offer tax-cuts, may offer additional information for traders to observe.

With the allegations over Trump campaign getting murkier for the the future of Trump administration, a downbeat budget proposal, or the likely rejection by house of representative, could add more weakness in the US Currency. On the contrary, EUR might extend its north-run with upbeat data-points whereas GBP may become victim of latest attack. Furthermore, safe-havens can keep running high either on US or on Manchester attack but the commodity basket, together with commodity currencies, might regain their strength.

[B]Technical Talk[/B]

Renewed risk-off sentiment is likely to drag USDJPY further towards 110.80 and then to 110.00 while 111.20 & 111.80 may restrict the pair’s near-term upside. Further, NZDUSD recently confirmed the “Falling-Wedge” and is likely heading to 100-day SMA level of 0.7055 whereas 0.6990 & 0.6950 can become immediate supports. In case of GBPAUD, the pair dropped below 1.7320 horizontal-line and is aiming 1.7240 with 1.7430 acting as adjacent resistance during pullback.

Have a nice trading-day ……

786

[B]Daily Fundamental Dose: 24 – May – 2017[/B]

Hello Traders,

In absence of any fresh news concerning allegations to Trump campaign or geo-political tensions between US & North Korea, traders’ attention shifted towards safe-havens on Tuesday amidst Manchester blast. As a result, US Treasury yields manage to propel greenback prices when Trump administration’s detailed budget for 2018 was announced and Federal Reserve Bank of Philadelphia President, Patrick Harker, favored June rate-hike. The EUR and GBP remained sluggish even after witnessing upbeat data-points whereas JPY and Gold couldn’t gain buyers’ attention as greenback rise triggered market optimism. Further, commodity currencies, like AUD, NZD and CAD, also shed some of their earlier gains but the Crude continued rising ahead of the Thursday’s global oil producers’ meet which is likely to deliver extended output-cut.

On early Wednesday, greenback buyers got another boost when Moody’s investor services cut China’s debt rating which resulted into the extended drop by AUD, NZD and CAD while weaker than expected Australian Construction Work Done provided additional harm to the Aussie.

Following not so heavy economic calendar during the start of the week, upcoming releases of FOMC meeting minutes, Oil producers’ meet and GDP figures from US & UK could offer busy trading sessions to market players.

While a speech by ECB President, FOMC minutes, monetary policy meeting by the Bank of Canada and US Existing Home Sales are scheduled to release during today, investors may give high attention to Draghi’s speech and FOMC minutes as BoC is less likely to alter its present monetary policy and the US Existing Home Sales has less importance.

Given the ECB President maintain its hawkish tone about the EU economy, the EUR may regain its strength but Mr. Draghi recently didn’t avail one such opportunity and rather remained neutral about the strength of the Euro-Area economy, which in-turn signal brighter chances of Euro’s further downside. At US, Trump’s absence from mainland could continue helping the global reserve currency if FOMC minutes also favor June rate-hike. Additionally, GBP might stretch its latest pullback a bit longer as Theresa May’s party dumped election campaigns amidst Manchester blast. Some polls were showing the ruling party has minor lead over their counterparts around weekend and hence may keep troubling the Pound traders.

[B]Technical Talk[/B]

AUDUSD’s latest pullback from 0.7515 may drag the pair towards 0.7380 if short-term ascending trend line, at 0.7430, breaks while USDCAD has to clear 1.3570 in order to aim for 1.3645-50 with 1.3450 being nearby support. Further, EURJPY is expected to stretch its upside towards 125.75-80 but a dip below 124.50 immediate support can fetch the quote to 123.90.

Have a nice trading-day ……

787

[B]Daily Fundamental Dose: 25 – May – 2017[/B]

Hello Traders,

With the latest FOMC minutes signaling US policymakers’ go slow intention on rate-hike after the June promise is made, coupled with some raising doubts on US inflation, Bears continue to dominate greenback moves. However, Friday’s US GDP and Durable Goods Orders will become important for traders while forecasting near-term trend of the US currency. On the other hand, UK GDP and meeting of leading oil producers to discuss extension of OPEC-led output-cut, up for Thursday, are some additional details/events that could entertain market players.

Before we discuss upcoming market catalysts, let’s first understand what happened during the present week.

[B]Greenback’s Weakness, Manchester Blast & Economics’ Play[/B]

Even as Trump’s absence from US confined news on his alleged connection with Russia during election campaign, together with no reaction to North Korea’s second missile-test, the US Dollar continued shedding its gains as soft economics and dovish FOMC minutes raised doubts on the strength of world’s largest economy to sustain Fed’s promised rate-hikes.

The EUR, on the other hand, managed to register noticeable strength on upbeat data-points and gained counter-strength from the USD whereas GBP remained sluggish as a deadly bomb blast killed nearly 22 people in Manchester. Further, safe-havens kept being traders’ favorite whereas commodity currencies had mixed signals to follow after Moody’s cut China’s credit rating and Crude prices rose on expected production-cut extension. Additionally, Bank of Canada, even after letting the monetary policy intact, sound more hawkish on its economy than expected and help CAD to stretch its north-run a bit longer.

[B]Wait For OPEC-led Production-Cut & GDP Numbers[/B]

While ex-USD market sentiment have been ruling till now, today’s decision of the OPEC-led production cut and UK GDP, followed by tomorrow’s US GDP & Durable Goods Orders are something that traders are waiting eagerly.

Considering latest informal communications from Russia and Saudi Arabia, it’s almost certain that global oil-producers might extend the six-month long supply-cut accord for another nine months’ period. However, some of the oil giants have recently said that there could be an option of additional three-month stretch to the supply-cut agreement if producers fail to curb supply-glut during expectedly agreed nine-months.

At the economic calendar, UK GDP is likely to confirm the 0.3% initial estimate while US GDP may flash 0.9% mark versus 0.7% advance forecast and the Durable Goods Orders can register -1.4% contraction against +0.9% prior with Core reading likely printing +0.4% increase of orders compared to 0.0% earlier.

On the political front, UK policymakers have stopped all the campaigns relating to June election after Manchester blast but polls showing chances of Theresa May’s reelection have deteriorate so far. At US, once US President comeback to home, case of his links with Russia and answer to North Korea will trouble USD whereas the Trump administration recently released full budget for 2018 fiscal year and the same should be approved by House of Representative to be a law.

To sum up, US economics and politics aren’t showing a good-to-accept picture of world’s largest economy, which may hurt the greenback while GBP may gain if Theresa May wins snap election.

Further, EUR has a strong economic support this time and might continue rising unless ECB raise an obstacle whereas commodity currencies have higher chances to remain strong if Crude production-cut accord takes place.

[B]Technical Analysis[/B]

EURUSD’s sustained trading above 1.1200 continue favoring its run-up to 1.1310 and the 1.1330 while GBPUSD seems a contestant to claim 1.3170 if 1.3050 is broke with 1.2850 being near-term strong support. Additionally, USDJPY may struggle between 110.00 and 112.60 but the AUDUSD and NZDUSD are indicating 0.7555 and 0.7110 resistances to appear on the chart unless 0.7440 and 0.6980 respective supports are conquered.

Have a nice trading-day ……

788

[B]Daily Fundamental Dose: 26 – May – 2017[/B]

Hello Traders,

Even after carrying some expected upbeat news, Thursday proved to be a disappointment for global traders as OPEC-led production-cut couldn’t satisfy energy players while latest polls showing a small lead of Theresa May over her counterpart for June election and weaker than expected GDP hurt the GBP. The US Dollar, on the other hand, benefited from overall commodity basket drop and positive outcome of Jobless Claims whereas EUR had to trim some of its latest gains. Further, JPY and Gold also retraced a bit on greenback’s strength while AUD, NZD and CAD dropped heavily as a nine-month extension to production-cut accord was already priced-in and investors were hoping for more.

Coming to Friday, the early-day moves portrayed pullback in commodity and commodity currencies while the JPY got benefited from inflation numbers that rallied for consecutive fourth month. Additionally, traders maintained their support for the US Dollar ahead of the crucial GDP and Durable Goods Orders, scheduled for release during later sessions but the GBP kept plunging due to worries concerning Theresa May’s future as a UK PM.

With the US GDP likely to flash higher than initial forecast figure and the Core Durable Goods Orders are expected to please USD Bulls, traders would closely analyze the outcome and upbeat releases could help greenback to post a positive weekly closing. However, US data-points have been soft off-late and a disappointment may cause higher damage to the global reserve currency.

On the political front, news concerning US President’s alleged links with Russia during election campaign and latest polls showing chances of Theresa May’s reelection could dominate the USD and GBP moves respectively. Also, North Korea conducted two missile-tests recently and another one during the weekend may provide additional push to geo-political tensions between US and Korean peninsula. As a result, safe-havens may regain their charm and the USD could be in trouble during the next week which will start with holidays at US and UK.

[B]Technical Talk[/B]

GBPUSD is coming closer to 1.2840 support, breaking which 1.2770 can comeback on the chart while 1.2930 & 1.2970 can keep restricting the cable’s near-term advances. Moving on, NZDUSD again aims to clear 0.7055-60 resistance-region with 0.7000 acting as immediate rest but the AUDUSD already dropped below short-term ascending trend-channel support of 0.7460 and may re-test 0.7390 mark.

Have a nice trading-day ……

789

[B]Daily Fundamental Dose: 29 – May – 2017[/B]

Hello Traders,

While absence of US President from home-ground tamed political concerns on Trump administration’s link to Russia, Friday’s better than expected US GDP and Durable Goods Orders helped strengthen expectations that the world’s largest economy is capable enough to sustain another rate-hike, which in-turn propelled the US Dollar Index (I.USDX) to post weekly gains. On the other hand, EUR trimmed some of its recently built weight whereas GBP plunged as Theresa May seems having smaller lead in polls showing June election forecast for her victory. Further, commodity currencies and Crude were badly hit after OPEC-led production-cut failed to impress global energy traders whereas JPY and Gold remained sluggish with no major push.

Following a volatile closing to the week, Monday becomes a quiet day for the investors as financial markets at UK, US and China are closed and there seem less details/events scheduled from the rest of the world. However, news related to North Korea’s another missile-test during early-day, the ninth this year, rejuvenated geo-political tensions as the missile was targeted near Japan sea-area. Hence, South-Korea and Japan are trying hard to confine such actions by the isolated nation but as there are holidays at major economies, soft response was received from the trading desk. Further, San Francisco Federal Reserve President, John Williams, conveyed positive comments relating to the strength of US economy during early-hours whereas GBP and AUD are likely witnessing pullbacks.

Given the extended weekend at major economies, chances of subdued market sentiment to prevail are too high. Though, US President’s come-back to the economy after week-long trips, coupled with latest North-Korean action, could offer intermediate liquidity to traders. Additionally, ECB President is scheduled to testify about the economy and monetary developments before the Economic and Monetary Affairs Committee and may trigger some EUR moves.

Even if the latest G7 discussed ways to tame North Korea’s nuclear-test attempts, the nation didn’t care much about it and makes it a serious case with another missile-fire on Monday. If global leaders unite against the Korean superemo’s wish, which US, Japan and South Korea aims for, chances of the additional hike in safe-havens, namely JPY and Gold, together with a dip in USD can’t be denied. Though, any positive updates from allegations against Trump campaign, coupled with positive Jobs report, can help USD to extend its latest recovery. Moreover, poll results are likely to keep troubling GBP traders while EUR moves may have to find its path following ECB President’s comments and CPI data.

[B]Technical Talk[/B]

EURUSD is trading near the 1.1160-50 horizontal-support and a bit dovish comments from ECB President can fetch the pair to 1.1100 re-test while 1.1210 and the 1.1250 can act as immediate resistances. Moving on, GBPUSD’s bounce from 1.2770 can’t be considered as strong unless breaking 1.2930 with 1.2850 being nearby resistance whereas GBPAUD also witnesses pullback towards 1.7300 but the 1.7145 descending trend-channel support becomes important for the pair traders to observe.

Have a nice trading-day ……

790

[B]Daily Fundamental Dose: 30 – May – 2017[/B]

Hello Traders,

While extended weekend at US, UK and China offered fewer directional clues to investors, dovish comments from ECB President and a somewhat positive communication by FOMC members let the markets alive on Monday. The ECB President, in his testimony, said that even if the EU economy is getting stronger, Inflation still remains subdued which in-turn calls for the need of easy monetary policy. On the contrary, Fed policymakers supported the need of rate-hike and helped the US Dollar Index (I.USDX) to remain strong. The EUR got additional harm from Italy and Greece, other than ECB President’s comments, when Italian PM raised concerns for early election while Greece is struggling to get bailout tranche, failing to which can trigger another round of tensions relating to Greece exit from the EU. Further, the GBP and commodity currencies recovered some of their latest losses without any fresh updates while Crude also stretched weekend up-moves and the safe-havens remained idle with smaller losses.

After the quiet start to the week, traders are now coming back to their desks, except China wherein the markets are still closed. During early-day, Japan’s Unemployment rate remained at two-decade low and the Retail Sales climbed for fourth month. The Crude remained strong on speculations that US summer driving season and OPEC-led production cut could help reduce the present supply-glut. Moving on, worries relating to Theresa May’s reelection hurt GBP while EUR also weakened on grave issues popping out of Greece and Italy.

Looking forward, US Personal Income-Spending and the CB Consumer Confidence are the only economics that market players might be interested in looking. However, geo-political tensions emanating from North Korea, US, UK, Greece and Italy may keep propelling market moves on the expected active-day.

With the US economics expected to flash upbeat numbers, coupled with the EUR’s likely weakness, the USD might stretch its last weekly gains forward. Though, any political tensions at US, either relating to either Trump’s Russian connection or North Korea, could hurt the greenback and propel the safe-havens, like JPY and Gold. The risk-safety assets may also benefit from EU geo-politics and the uncertainty prevailing leader’s reelection at UK. Hence, it could be better to have US Dollar, Yen and Gold on the buying side while EUR and GBP are less expected to strengthen.

[B]Technical Talk[/B]

AUDUSD’s sustained trading below 0.7450 continue signaling brighter chances of its pullback to 0.7400 while NZDUSD struggles with 100-day SMA and has 0.7090 and the 0.7030 as nearby levels to watch. Further, EURNZD extended its channel break and signals 1.5740 & 1.5700 re-test with 1.5880 trend-line acting as immediate resistance.

Have a nice trading-day ……

791

[B]Daily Fundamental Dose: 31 – May – 2017[/B]

Hello Traders,

On the day when majority of global markets were fully active, except China, downbeat US consumer confidence and worried tone of Fed Governor, Lael Brainard, about the inflation outlook dragged the greenback towards south. The EUR, even after struggling with Greece and Italian risks, managed to remain strong whereas GBP plunged as latest polls concerning June 8 election shows Theresa May could struggle to get majority. Further, commodity currencies, like AUD, NZD and CAD, registered mixed results as CAD dropped on Crude weakness but the AUD and NZD strengthened after overall commodity basket enjoyed USD weakness. Additionally, JPY maintained its strength on rising geo-political tensions around the globe but the Gold seems witnessing pullback.

During early Wednesday, an explosion in the form of suicide car bombing at Kabul shocked global traders and helped safe-havens while JPY got additional support from Industrial Production details. Moving on, China’s official Manufacturing & Non-Manufacturing PMI revealed that world’s second largest economy is still out of pessimism as figures remained positive whereas German Retail Sales dropped to three month lows.

Looking forward, EU Flash CPI, Canadian GDP, US Chicago PMI and Pending Home Sales are some important data-points that traders might be interested in reading. Forecasts suggest soft EU inflation and upbeat Canadian GDP but the US Chicago PMI’s weakness might be offset by the Pending Home Sales stat.

With the economics likely favoring greenback’s recovery, geo-political tensions at EU, UK and Kabul can help the USD to rally then after. However, threats from North Korea and investigation into the Trump Administration’s alleged relationship with Russia can become a reason for greenback buyers’ worry. Also, ECB President’s dovish words can get authentication if EU inflation softens and might continue raising barriers for EUR’s north-run. Amidst all the prevailing pessimism, JPY might stretch its up-moves while AUD and NZD can keep celebrating positive Chinese data-points but the crude’s dip, amidst rising output at Libya and US, could hurt the CAD.

[B]Technical Talk[/B]

Even if the USDCAD is signaling downturn, the four-month old ascending trend-line, at 1.3390 now, may become important to observe with 1.3510-15 acting as nearby resistance to watch. Further, USDJPY’s advances are being confined by short-term descending trend-line around 111.10 with brighter chances to witness 110.00 on the chart whereas 1.7200 – 1.7180 seems critical region for the GBPCAD with 1.7370 acting as immediate resistance.

Have a nice trading-day ……

1 Like
792

Daily Fundamental Dose: 01 – June – 2017

Hello Traders,

Even if last week’s better than expected US GDP and absence of US President from home-land helped the greenback to post a weekly positive closing, the US Dollar Index (I.USDX) lost traders’ favorite status for consecutive second month by the end of May as political uncertainty at world’s largest economy and weaker data-points kept hurting the currency. However, FOMC members still haven’t lost their hawkish tone and Friday’s NFP would become a crucial detail for Federal Reserve to announce another rate-hike in the June. Let’s understand the fundamentals.

Economics Couldn’t Favor The Greenback

Although majority of the Fed policymakers are terming presently weaker US economics as temporary, short-term traders kept liquidating their USD longs and rather joined the EUR which is backed by comparatively stronger details. However, the GBP couldn’t enjoy positive numbers as polls showing cutting chances of Theresa May’s reelection during June while Manchester attack added geo-political factor to be considered. Further, commodity currencies remained weak with Crude failed to celebrate OPEC-led production-cut whereas JPY and Gold continued rising as macro pessimism favored safe-havens.

US Jobs Report Gains Highlight

While soft second-tier data-points and a bit dovish Fed Beige Book dragged the USD towards south, hawkish German figures helped EUR to avoid pessimism at Italy and Greece. The GBP remained weaker in absence of any fresh signals whereas commodity currencies also softened on China’s not-so-clear PMIs. Additionally, JPY got economic support, in addition to safe-haven backup, but the Gold refrained from registering much of the up-moves as traders are now waiting for Friday’s US details in order to determine additional need of the yellow metal.

During early Thursday, China’s Caixin Manufacturing PMI dropped below 50 for the first-time in 11 months and dragged commodity currencies to south but Japan’s calendar kept flashing welcome numbers, which in-turn offered more strength to the JPY. Crude is struggling between gains and losses as API registered larger than expected draw-down in inventories whereas GBP seems gaining a bit ahead of today’s Manufacturing PMI.

Moving forward, Thursday’s UK Manufacturing PMI, US ADP Nonfarm Employment Change and ISM Manufacturing PMI, followed by official Crude stockpile release, are likely important data-points that can entertain traders before Friday’s UK Construction PMI, US employment stats and Canadian Trade Balance gains importance.

Forecasts suggest soft UK data-points and extended weakness by the Pound while US economics are likely to please Fed members to announce a rate-hike in the present month, which can trigger USD’s up-move. Further, expected trade surplus from Canada needs to confront pessimism at Crude front whereas commodity currencies have to conquer recently downbeat figures from China.

Given the US jobs report match its upbeat consensus, with NFP likely being around 200K and a decade low Unemployment rate, Fed policymakers could go ahead with their second rate-hike of 2017 and can please greenback buyers.

At the EU, no major details are left for publishing and hence the regional currency may witness pullback on USD’s strength while GBP may have to liquidate its latest gains if PMIs flash soft numbers.

Additionally, JPY is more likely to maintain its strength while Gold could witness a pullback if greenback manages to recover its losses.

Technical Analysis

EURUSD still struggles around 1.1230 and a break of 1.1265 can quickly flash 1.1310 on the chart but GBPUSD is less likely to break the 1.2760 and the 1.3000 range. Further, 200-day SMA level of 110.10 can restrict further downside of the USDJPY and may trigger its pullback to 111.80 whereas AUDUSD signals 0.7360 re-test with 0.7520 being nearby resistance. For NZDUSD traders, a close beyond 200-day SMA level of 0.7105 can help them target 0.7160 but a dip below 100-day SMA figure of 0.7055 can drag it to 0.6985. Additionally, USDCAD’s bounce from 1.3400 favors the 1.3570 comeback.

Have a nice trading-day ……

793

Daily Fundamental Dose: 02 – June – 2017

Hello Traders,

Thursday proved to be a good-day for USD buyers as upbeat prints of ISM Manufacturing PMI & ADP Nonfarm Employment Change rejuvenated expectations of a higher NFP number during today’s scheduled release and a Fed rate-hike by the end of this month. However, President Donald Trump’s announcement to exit Paris climate accord and FBI’s call to testify Former FBI Chief, James Comey, on next Thursday relating to Trump administration’s alleged link with Russia in days of Presidential election confined heavy gains of the greenback. Further, the EUR refrained from extending its earlier gains, even with welcome PMIs, whereas GBP traders kept worrying about polls concerning the UK election outcome, up for June 08. Additionally, JPY and Gold also weakened a bit as positive sentiment at US hurt safe-havens whereas commodity currencies continued declining due to China’s latest pessimism emanating from soft Manufacturing number. Moreover, Crude couldn’t benefit from larger than expected US stockpile drawdown as a breach of Paris climate accord may enable US to increase the global supply-glut.

Following a positive end by the US Dollar on Thursday, the currency continued rising on Friday as majority of traders now expect brighter employment report and a soon to take place rate-hike by US Federal Reserve. However, AUD and NZD seem witnessing pullback after drop in commodity prices got a breathing space ahead of critical US release. Moving on, GBP remained sellers’ favorite but the EUR is again aiming for latest highs.

Looking at the remaining day, there is no doubt that US job details will rule the market; however, UK Construction PMI, Canadian Trade Balance and speeches by Federal Reserve officials Patrick Harker and Robert Kaplan could also trigger intermediate moves. The UK Construction PMI is expected to flash soft number while the US NFP may remain around 200K with Unemployment likely remaining unchanged near decade low. Further, Canadian Trade Balance could help the CAD a bit but Crude’s downturn and expected USD strength may restrict Loonie’s gains.

At the Geo-political front, FOMC members may keep repeating their words of two more rate-hike suitable for US economy while probe against Trump administration can cause tension and may drag the USD down if any surprises getting revealed by the FBI. Moreover, there are less updates from North Korea and another missile-test may trigger another rout of geo-political tensions between, US, North Korea, South Korea and Japan, which in-turn could help JPY and Gold to recover their latest losses.

Technical Talk

USDJPY is likely aiming 112.15 and the 113.00 with 110.50 being nearby support while GBPUSD may re-test 1.2790 and 1.2755 on the break of 1.2850. The GBPJPY is likely heading towards short-term descending trend-channel resistance, at 144.10, which can drag it back to 143.00, failing to which can flash 145.30 on the chart.

Have a nice trading-day ……

794

Daily Fundamental Dose: 05 – June – 2017

Hello Traders,

While disappointing US Jobs numbers and London attack recently shook the US Dollar and the GBP, the EUR got a lift as fading political risk and improving economics helped the shared currency. However, the JPY and the Gold remained strong due Geo-political uncertainty and upbeat data-points while commodity currencies struggled to enjoy greenback’s weakness after downbeat Chinese figures. Further, the Crude prices kept plunging on concerns that breach of Paris climate change accors by US would increase already prevailing supply-glut.

As it has been third terrorist attack in London in less than three months, policymakers around the globe have been on alert and are pointing some middle-east countries to be the reason. The incident took place on Saturday night and killed nearby 7 people while injuring more than 20 in a popular night club of the London. With the Britain election just being round the corner, UK PM showed sign of strength by calling the continuation of election on June 08 and the UK police also performed wonders when they gunned down all the attackers.

On the other hand, World Bank maintained its global growth forecast but showed worried on recent protectionist measures by US. The elite institute raised growth prediction for Europe and Japan while giving a small downward push to US by mentioning it as a short-term action.

Moving forward, Monday started with news from Middle-East when Saudi Arabia, Egypt, UAE and Bahrain cut their relations with Qatar by terming it the nation that funds terrorism. With this Crude prices remained a bit volatile but China’s four-month high Services PMI pleased commodity traders. For the rest of the, Manufacturing PMIs from EU and US, coupled with UK Services PMI and US Factory Orders are likely to rule the market.

Looking at the recent EU data-points, the scheduled final version of PMIs may help EUR to extend its up-moves while dips in US ISM Manufacturing PMI & Factory Orders could give additional weakness to the greenback. Moreover, UK Services PMI, the core of British GDP, is also expected to drag GBP further towards south.

Technical Talk

USDCAD presently tests short-term ascending trend-line, at 1.3470, breaking which 1.3430 & 1.3390 can comebackon the chart while 1.3545-50 can keep restricting the pair’s near-term advances. Further, AUDUSD seems heading to 0.7495 – 0.7500 resistance-line with 0.7390 acting as nearby support but the NZDJPY may find it hard to surpass 79.10 TL and can revisit 78.30.

Have a nice trading-day ……

795

Daily Fundamental Dose: 06 – June – 2017

Hello Traders,

Even if the US ISM Non-Manufacturing PMI & Factory Orders revealed weakness of the world’s largest economy, the US Dollar index (I.USDX) refrained from registering additional downside against EUR as political rift between EU & UK, coupled with growing tensions ahead of Thursday’s UK general election & ECB meeting, triggered regional currency’s pullback. However, the GBP witnessed some buying after latest polls favored Theresa May’s victory while JPY & Gold continued enjoying Geo-political uncertainty. Further, commodity currencies remained strong due to greenback’s weakness and China’s upbeat Caixin Services PMI whereas Crude couldn’t stop its downward trajectory as latest political tensions between Qatar and some Middle East countries could undermine OPEC-led production-cut accord.

During early Tuesday, markets again turned against the US Dollar and favored the EUR as French President is likely to gain clear victory in National Assembly election while uncertainty concerning testimony of former FBI Director, scheduled for Thursday, dragged USD towards south. Additionally, Crude also recovered a bit from latest lows as some investors bet Qatar issue to be too small to give huge impact on Crude prices. Moreover, the AUD gained from RBA’s inaction while JPY surged on worried relating to US and UK.

For the rest of the day, economic calendar seems almost silent with only Canadian Ivey PMI and US JOLTS Job Openings scheduled for publish. Both these numbers are showing lesser signs to help the respective currencies but the CAD is lately getting strong on commodity basket up-moves.

Unlike economics, which may take a backseat today, political woes surrounding upcoming UK election, Qatar issue, French voting and the Ex-FBI Director’s testimony may keep propelling market moves. Amongst them, USD and GBP may witness downturns on expectedly negative outcomes while EUR may have further room for upside. Hence, political news should be catalyst of the day.

Technical Talk

GBPUSD’s gradual advances seems fueling it to 1.2950 and the 1.3000 with a break of 1.2890 can again fetch it to 1.2850 while USDJPY broke 110.00 and can re-test 109.30 with 110.50 & 110.80 being nearby resistances to watch. Further, EURJPY also broke short-term symmetrical triangle support, at 123.50, and may flash 123.00 and the 122.60 but an uptick above 124.50 can again propel it to 125.20.

Have a nice trading-day ……

796

Daily Fundamental Dose: 07 – June – 2017

Hello Traders,

Despite of record high US JOLTS Job openings and weaker Canadian Ivey PMI, market sentiment on Tuesday remained broadly titled towards political risks looming over US and UK, which in-turn propelled safe-havens, like Gold and JPY, and kept hurting the greenback. The GBP, however, remained too volatile as various polls showed different results ranging from a clear majority by Conservatives to a hung parliament. Further, the EUR managed to sustain its strength while commodity currencies, including AUD, NZD and CAD, could also stretched their latest north-run as soft USD helped commodity basket. Additionally, Crude prices also witnessed a pullback after API registered larger than expected drawdown in inventories ahead of today’s official announcement by the EIA.

Moving forward, markets remained mostly inactive during early Wednesday as traders are worried for tomorrow’s highly important event and would rather like to wait for actual outcome than to take the risk. The same could also be witnessed in JPY and Gold prices as both of which are struggling to extend their up-moves while USD seems inching up a bit. Moreover, AUD stretched in advances after Australian GDP flashed better than forecast number and the EUR witnessed some profit-booking on disappointing German Factory Orders.

Alike Tuesday, the economic calendar is likely to remain silent on Wednesday with Canadian Building Permits and US Crude inventories are the only details scheduled for publish. Forecasts suggest an increased strength for CAD on three-month high housing details but Crude may have to trim its latest gains as stockpile signal smaller than previous drawdown.

On the political front, news that ex-FBI Director could reveal meaning information and ECB President could also drop “downside risk”, together with slew of poll outcomes concerning UK election, can keep generating intermediate financial market moves. For the energy traders, the EIA’s monthly report has already signaled supply glut to remain present and a higher inventory could hurt the Crude more while commodity currencies may have to stop their advances in case of any unexpected negative signals from China.

Technical Talk

With the break of short-term descending trend-line, AUDUSD becomes capable enough to aim 100-day SMA level of 0.7560 but its following upside remains doubtful while a dip below 0.7500 can drag it 0.7470. On the other hand, NZDUSD couldn’t surpass 0.7210 and may revisit 0.7150 whereas EURAUD is struggling to extend its channel-break below 1.4930-20 horizontal-line with 1.5045-50 acting as nearby resistance to watch.

Have a nice trading-day ……

797

Daily Fundamental Dose: 08 – June – 2017

Following weak US Jobs report and a terrorist attack in London, traders adopted a defensive stance since the start of the crucial week which comprises trifecta of disruptions like UK elections, ex-FBI Director’s testimony on Trump conversations with him and ECB meeting. As all of which are scheduled on the same day, i.e. Thursday, market players are tightening their belts to witness noticeable moves during the so called Super “Super Thursday”. Let’s examine the fundamentals relating to all these important events.

The Story So Far

With disappointing US employment details adding strength to pessimism concerning fractured US politics and inflation woes, the US Dollar Index (I.USDX) had to register extended declines. However, abating political risk at EU and upbeat economics made EUR a bit more favorite of markets while JPY maintained its gains on safe-haven demand. Further, commodity basket was also happy with weaker greenback, which in-turn helped AUD, NZD and CAD, whereas Crude had to bear the burden of latest rift between Qatar and some Middle-East countries. Additionally, GBP struggled with different polls showing scattered chances of Theresa May’s dream of getting clear majority in House of Parliament after Thursday’s crucial vote.

On Wednesday, the US Dollar witnessed a pullback as news revealed that ECB might cut down its inflation forecast during today’s meeting. Further, the GBP gained a bit after latest polls revealed that Conservatives are favorite amongst voters whereas JPY also trimmed some of its weight but the Crude had to drop heavily on surprise inventory pile-up from US. Moreover, AUD and NZD kept rising without many details except Chinese optimism and better than forecast AU GDP number.

Moving on, start of the Thursday proved to be a less volatile with downbeat AU Trade Balance and weak Japanese GDP but higher exports’ data from China saved commodity currencies from registering heavy decline.

All Eyes On UK, US and ECB Now

While early-day patterns revealed that traders are being reluctant to add major positions before testimony from ex-FBI Director, James Comey, the ECB’s monetary policy meeting and the UK general election, majority of them are closely watching the UK election polls to foresee GBP’s fate whereas Comey’s testimony and ECB are getting less eye-share at the moment.

To start with UK election, Britishers are scheduled to vote for choosing their ruling party at House of Parliament carrying 650 seats and the result of which will start counting from 10 PM London time. Though, majority of the exit-polls, which by-far have been influential in forecasting actual results, might declare the Conservative’s future before the formal announcement by early-Friday.

Theresa May’s Conservative party, which took the risk of snap election in order to gain house majority and smooth functioning of Brexit negotiation with EU, was on lead since the announcement of such surprise election but have lost its charm off-late due to two recent terrorist attacks at the heart of UK. On the other hand, her arch-rival, Jeremy Corbyn from Labour party, got the chance to promote his focus on inequality, high public spending and some welfare schemes. Latest polls from YouGov signals Tories (Conservatives) getting 42% votes in favor while claiming house majority while Labours have 35% supporters.

As regards the outcome, a clear majority of Conservatives, which is more likely, can help the GBP to extend its northward trajectory towards pre-Brexit levels while a small majority or a minority in House couldn’t save the Pound anymore.

Shifting to another important event of the day, monetary policy meeting by the European Central Bank (ECB) is likely to make EUR traders busy. While Mario Draghi led policymakers aren’t expected to alter their present monetary policy, forget about signaling tapering, the hawkish leader might not lose the chance of praising upbeat EU economics and optimism surrounding the region. However, the inflation has been biting the policy hawks and the same could have a downward revision during the bank’s forecasts that are to be discussed.

Given the ECB’s hawkish view on EU economy, the EUR can enjoy additional north-run but a cut in inflation outlook may damage the regional currency’s near-term gain. Hence, Draghi’s speech will be key to observe.

Last but not the least, Testimony by Ex-FBI Director, James Comey, is a wildcard that could either make or break the hopes on Trump administration. The ex-officer would appear before a Congressional panel and discuss all his conversations with Mr. Donald Trump relating to the Trump administration’s alleged role in having Russian help during presidential campaign. There are brighter chances that Comey might avoid revealing any surprises but could make his point clear that Trump did push him to tame investigations against his (Trump’s) own administration. Though, Trump being a sharp leader could use some more pushes and may avoid any more damages, not to mention chances of his resignation from highest US post.

Even if Comey’s soft nature might restrict him to blast against Trump, any strong comments (proofs) revealing Russian role in election campaign could raise more doubts on the Trump administration’s capacity to offer pro-growth policies, which in-turn could be negative for the US Dollar. Though, next week’s FOMC, which is likely announcing a rate-hike, may help greenback recover some of its latest losses.

Hence, while UK election is likely to be on the top of traders’ head, ECB and Comey’s testimony are also crucial events that could propel heavy market moves.

In addition to what is already mentioned above, Friday’s Chinese Inflation, UK Manufacturing Production & Goods Trade Balance and the Canadian Jobs report are some other details that investors may observe after the Crucial Thursday.

UK Manufacturing Production is expected to reverse the prior -0.6% contraction with +0.8% while Trade deficit may shrink to -12.0B from -13.4B. Further, Chinese CPI is also likely to be a welcome figure with 1.5% gain compared to 1.2%; though, expected dip in PPI, to +5.7% from +6.4%, could disappoint commodity traders a bit. Additionally, increase in Canadian Employment Change, to 11.5K from 3.2K, needs to confront with a higher Unemployment rate of 6.6% from 6.5% to direct CAD moves.

Technical Talk

The EURUSD is struggling to maintain its upward trajectory beyond 1.1285, which in-turn could open doors for 1.1330 and the 1.1410 while a daily closing below 1.1160 might open doors for 1.1080 important support. In case of GBPUSD, 1.3050 and the 1.2760 continue being crucial levels whereas 108.00 and the 110.80 are expected strong numbers for USDJPY. Moreover, AUDUSD’s break above 100-day SMA level of 0.7560 could help it confront 0.7610 with 0.7500 acting as nearby support but NZDUSD still has some room till 0.7250 with weakness being less expected until a closing break below 200-day SMA level around 0.7100.

Have a nice trading-day ……

798

Daily Fundamental Dose: 09 – June – 2017

Be it an ex-FBI Director’s testimony, UK election outcome or the ECB, traders got one thing in common, i.e. Disappointment. All those expecting a clear majority by Theresa May led Conservative party in UK election seem badly hit as latest exit-polls show a hung parliament in Britain with neither party getting the 326 seats required for majority. As a result, the Pound plunged heavily and is still on its downturn. On the other hand, the ECB also didn’t praise its economic improvement and rather cut inflation forecast, which hurt the EUR, while US Dollar was a clear winner as Comey failed to provide any strong statements that could raise doubts on Trump administration’s alleged relations with Russia. Further, JPY, Gold and commodity currencies flashed losses on greenback’s strength but Crude kept declining on news concerning higher output from US to Nigeria and increased US stockpile.

During early Friday, traders kept punishing the GBP and helped USD while EUR also remained under pressure without any major data-points. Additionally, China’s more than forecast CPI and a soft PPI triggered commodity currencies’ pullback whereas Crude stopped its drop for a while on weekend short-covering. Furthermore, Japanese Industry Activity index strengthened and German Trade Balance registered lesser than expected surplus which helped JPY and damaged EUR respectively.

Moving forward, official announcement of UK election result could keep directing GBP moves while UK Manufacturing Production and Goods Trade Balance may act as second-tier details to portray Pound’s trend. Also, Canadian Jobs report, up for release during later part of the day, might help forecast CAD trades with an increase in Employment Change favoring a Loonie’s strength.

As the market turned positive towards the US Dollar, even without its own positive catalysts, drop in GBP and EUR could keep helping the USD to close the week with gains whereas JPY and Gold may have to take losses. Moreover, AUD, NZD and CAD are likely restoring their strength but have to confront with strong greenback to justify their pullbacks.

Technical Talk

While a break of 1.2760 and hung parliament signals GBPUSD’s downturn, 100-day SMA level of 1.2620 may try to limit the pair’s near-term decline. The USDJPY again struggles with 200-day SMA level of 110.40 and a break can propel it to 111.00 & 111.70 but a downside break of 109.80 can again fetch it to 109.00. Further, GBPCAD is struggling with 1.7160-70 horizontal-line, clear break of which can flash 1.7000 on the chart with 1.7320 being nearby resistance to watch during its U-turn.

Have a nice trading-day ……

799

Daily Fundamental Dose: 12 – June – 2017

Following a wild-week comprising UK election, ECB meeting and testimony by Ex-FBI Director against US President, the Monday seems having a silent start to another crucial week which comprises monetary policy meetings from Federal Reserve, BoJ, SNB and BoE. The past week provided noticeable damages to the GBP after Theresa May’s party failed to acquire majority in snap election while ECB also refrained from praising upbeat economics and rather cut its inflation forecast, which in-turn dragged the EUR as well. As a result, the US Dollar managed to remain strong when the FBI official couldn’t offer strong statements which can create any big problems for Mr. Donald Trump. On the other hand, AUD, NZD and CAD remained strong enough to beat the Crude’s downturn due to increased US stockpile and news concerning Qatar’s isolation by five middle-east nations. Moreover, JPY also enjoyed rising safe-haven demands while Gold had to trim some of its latest gains with greenback taking the command.

During the start of the day, Japanese Machine Orders and PPI flashed soft numbers and warned JPY Bulls while there isn’t any major events scheduled for publish during the rest of the day. However, latest threat from North Korea, start of Brexit Talks and scheduled address of Theresa May to the 1922 Committee of rank-and-file Tory lawmakers will grab investors’ attention for the rest of the day. Additionally, news concerning the Federal Reserve’s rate-hike graph and updates on allegations relating to Trump administration’s help from Russia during election campaign could also offer intermediate market moves.

For the energy traders, the Crude prices started the day with a bit of pullback as a pipeline leak at Nigeria, coupled with Russia and Saudi Arabia’s efforts to assure investors that supply-glut will stabilize soon and their latest efforts were worth, triggered the profit-booking in the commodity. Further, news that US Attorney General Jeff Sessions offered to face questions about alleged Russian hands in Presidential election in front of Senate also raised another problem for USD.

While Fed’s rate-hike expectations seem already priced-in, any positives from geo-political front, coupled with FOMC’s forward guidance could help the greenback regain its strength. For the GBP, the Theresa May Government is struggling to get 10 seats to form the government and if got, can again be in power to help Cable recover some of its latest losses. Hence, politics could generate headlines of the expectedly dull-start to the crucial week.

Technical Talk

NZDUSD’s inability to surpass 0.7220 can fetch the pair to 0.7180 and 0.7145 while GBPNZD is struggling to clear 200-day SMA figure around 1.7720 with 1.7530 being nearby support. In case of EURNZD, the pair’s latest pullback can help it print 1.5635-40 but might not surpass the 1.5670 resistance-confluence including 50-day SMA & month-old trend-line. On the downside, the pair might witness heavy selling pressure if 1.5480-75 horizontal-line is broke on a daily closing basis.

Have a nice trading-day ……

800

Daily Fundamental Dose: 13 – June – 2017

Hello Traders

Even without any major economics up for release, global markets remained active during the first-day of the crucial week as disappointments from UK election and doubts over Trump administration’s ability to offer promised growth-plans weakened the GBP and USD respectively. At UK, Theresa May took the responsibility of last week’s election result and fought to acquire remaining 10 seats to gain majority in House of commons while there was no progress on the first meet of EU-UK Brexit talks and both the parties adjourned without signifying second date to meet. With this, the Pound extended its last-week’s losses while EUR remained a bit stronger. The US politics were also worrisome as Trump’s revised Travel Ban got a block from second federal appeals court. The Canadian Dollar was a clear winner of the day as one of the BoC official praised Canada’s economic recovery and signaled chances to revise presently lose monetary policy. Further, AUD and NZD were also enjoying commodity basket strength with the Crude prices rallied on Saudi Arabia’s firm statement to support supply-cut while JPY kept its strength intact on safe-haven support.

Moving forward, Tuesday has comparatively heavy economic calendar from Monday with UK CPI, US PPI and EU-German ZEW Economic Sentiment scheduled for publish. During the early-day, Crude prices stretched its latest recovery while GBP couldn’t stop the south-run but the USD seems witnessing pullback ahead of the scheduled testimony from Attorney General Jeff Sessions before the Senate Intelligence Committee.

While the UK inflation number isn’t likely to change from 2.7% prior and can become a non-event if the same number flashes again on the chart, a weak print might add fuel to the GBP’s downturn. In case of the USD, PPI could reveal weakness in inflation pressure and might keep the greenback under check; however, any positive remarks from Attorney General could help the US currency to recover some of its latest losses. Further, EU economics are expected to keep portraying rosy picture of regional economy and can help the EUR to stretch it’s gains a bit longer.

On the political front, Theresa May’s capacity to acquire the much needed 10 seats could boost the GBP traders’ confidence while any more allegations of Trump administration or news from North Korea could hurt the USD. In case of commodity currencies, US Dollar’s weakness and profit-booking in Crude can make traders busy while JPY is still not expected to lose its charm unless any BoJ policymakers come forward in support of lose monetary policy by revealing economic weakness, which is less likely.

Technical Talks

With a short-term ascending trend-line, at 1.1175, still remaining intact, the EURUSD is expected to bounce-off to 1.1230 while USDCAD’s break of 200-day SMA, around 1.3330 now, makes it vulnerable to revisit 1.3260 & 1.3220 supports. Further, GBPAUD might also witness pullback towards 1.6800 & 1.6870-75 as the 1.6710–1.6700 support-confluence, including 100-day & 200-day SMA, together with oversold RSI, could limit the pair’s further downside.

Have a nice trading-day ……

801

Daily Fundamental Dose: 14 – June – 2017

Hello Traders,

With the US PPI’s mixed outcome and Attorney General Jeff Sessions’ testimony providing no clear direction to the US Dollar, Tuesday proved to be another disappointing day for global markets as traders remained cautious ahead of today’s much awaited FOMC rate-hike. The EUR, on the contrary, managed to carry its strength on upbeat ZEW economic sentiment and concerns favoring a soft Brexit demand by UK policymaker after British election result while the GBP rallied on four-year high CPI data. Further, the AUD had to bear the cost of soft NAB Business confidence but the NZD and CAD continued rising on strong commodity basket whereas Crude again dipped on higher API stockpile and increased output by Libya and Nigeria. Additionally, JPY and Gold also failed to register any noticeable moves, even after being positive at the end of the day, due to investors’ calm before the storm attitude.

During early Wednesday, Chinese Industrial Production and Retail Sales faded worries about the strength of industrial player but news that regulators might take hard steps to avoid investors’ harm didn’t let commodity trader enjoy economic numbers. Also, forecast from a leading investment bank indicating no rate-hike by the Federal Reserve in today’s meet suddenly dragged the greenback towards south.

Moving forward, today’s economic calendar is the heaviest one compared to other weekdays with UK Job numbers and US consumer-centric details likely to offer intermediate moves before the market goes wild around FOMC. Moreover, US Crude Oil inventory data and New Zealand GDP are some other numbers that can offer a busy day to traders.

While UK job numbers are expected to provide good news to the GBP, mixed figures of US CPI & Retail Sales could keep troubling market players ahead of the Federal Reserve’s rate-hike announcement. Further, the expected draw-down in US Crude stockpile may help energy prices to recover some of its latest losses while New Zealand GDP could become additional reason for NZD hawks to remain optimistic.

Looking at the much anticipated FOMC meeting, the US policymakers are widely expected to announce 0.25% rate-hike but that’s not the concern for traders as they are looking for directions to upcoming rate-lifts and how the US balance-sheet will be curtailed considering the recently sluggish economics. Hence, Fed Chair’s press conference might act as a trigger for market moves and a bit soft tone by the superemo can hurt the greenback even after a rate-hike.

At geo-political from UK-EU news and the latest fire in London, coupled with hanging threat from North Korea and allegations against Trump Administration, can keep giving background music to the expectedly wild markets during the rest of the day. Hence, it is in the best interest of the market players to remain cautious while taking any big trades ahead of the FOMC.

Technical Talk

GBPUSD confronts the 1.2800 resistance, breaking which 1.2855-60 can comeback on the chart while 1.2730 and the 1.2670 can keep offering nearby support to the pair. On the other hand, GBPCAD successfully trades around 1.6900 which in-turn signals the pair’s extended recovery towards 1.6980 and the 1.7040 while 1.6800 and the 200-day SMA level of 1.6755 are expected immediate supports to watch. Further, AUDCAD struggles with nineteen-week long TL around 0.9980 with 0.9930 being adjacent support and 1.0035 seems nearby resistance.

Have a nice trading-day ……

802

Daily Fundamental Dose: 15 – June – 2017

Hello Traders,

Despite of the Federal Reserve’s bold rate-hike by brushing-off recently sluggish data-points, plunge in Retail Sales & CPI, coupled with political uncertainty hanging over US President, didn’t let the greenback enjoy upbeat FOMC outcome. While the central bank managed to make its rate-lift promise true, traders’ aren’t spared from observing global economics as there are many important events still lined-up for publish during the rest of the week. Let’s analyze them.

The Scene So Far

With slew of downbeat details indicating not so good days for US, global financial markets continued being worried about the future of world’s largest economy during the early-days of the week, which in-turn dragged the US Dollar towards south. However, the Federal Reserve proved its words on Wednesday’s meeting by announcing second in a year rate-hike by signaling one more to come and a soon to start balance-sheet curtailing. Though, greenback Bulls weren’t pleased as news that US President is being investigated by special counsel Robert Mueller for his alleged relations with Russia at the time of 2016 Presidential election continued raising doubts on Trump administration’s ability to prove its upbeat promises.

On the other hand, EUR continued enjoying upbeat data-points and the GBP remained volatile with initial gains on CPI data being reversed after soft jobs report and concern that Theresa May might not get required 10 seats from other party to form majority in parliament. Further, the Australian and New Zealand Dollars also remained strong till now wherein the AUD got additional boost after strong Employment details while NZD shed some of its gains due to GDP missing expectations. Additionally, CAD kept rallying with BoC member praising economic strength and requires change of policy whereas JPY & Gold reaped the fruits of safe-haven demand. Furthermore, Crude prices couldn’t stop its south-run as higher stockpile indicates failure of OPEC-led production cut to tame global supply-glut.

What To Look Next?

Having witnessed quite an exciting start of the week, market players still have some of the crucial details/events on hand to observe which can continue making them busy during the days to come. Among them, monetary policy meetings of the Bank of England (BoE) and Bank of Japan (BOJ), together with UK Retail Sales, could take the lead to entertain active traders while manufacturing & housing numbers from US and EU Final CPI, followed by US Prelim UoM Consumer Sentiment, could become second-tier details to maintain market momentum.

To start with Thursday’s UK Retail Sales, the leading indicator to judge British GDP, forecasts favor a -0.9% contraction against the previously registered +2.3% advance. This being said, the BoE, also up for today, could maintain its monetary policy intact but may reveal its thinking on recently mixed data-points and whether they can affect the central bank’s policy guidance.

Hence, while BoE has a tough job to assure Pound traders that they’re safe, an unexpected increase in UK Retail Sales, coupled with Theresa May’s ability to secure much needed 10 seats, could help the GBP recover some of its latest losses.

Moving on, US Empire State Manufacturing Index might reverse its prior -1.0 contraction with +5.2 mark but the Philly Fed Manufacturing Index could remain soft with 25.5 number compared to 38.8 earlier during Thursday’s scheduled release. Further, Friday’s US Housing market figures can try pleasing USD traders with 1.25M likely Building Permits mark being ahead of its 1.23M earlier and the Housing Starts also expected to rise to 1.21M compared to 1.17M prior. Additionally, Prelim UoM Consumer Sentiment is expected to remain near downwardly revised 97.1 previous with 97.2 stat revealing the current month’s status.

Given the continuation of mixed data-points from US, political trauma relating to Trump’s relation with Russia and aftershocks of FOMC might direct near-term moves of the US Dollar. However, overall pessimism concerning the economy at the moment can keep making the greenback under pressure.

The BoJ, in its monetary policy meeting on Friday, is likely to follow BoE’s footsteps but latest improvement in Japanese stats might help the Governor to utter some hawkish words which, together with overall safe-haven support, could help the JPY to extend its upward trajectory.
In case of Friday’s EU Final CPI, the reading isn’t expected to change from 1.4% initial estimation and might offer little moves to already strong EUR. However, the regional currency could benefit from the weakness of GBP & USD as the EU economy seems comparatively strong at the moment.

To sum up, FOMC’s much anticipated action failed to counter the political pessimism prevailing at US but the game is yet not over as there are many important events still lined-up, in addition to unscheduled news from UK & US politics, to please investors with active sessions.

Technical Analysis

At the technical front, EURUSD again aims for 1.1160 re-test, breaking which 1.1080 can come-back on the chart while a close beyond 1.1285 becomes necessary for the pair to aim for 1.1310 & the 1.1330 resistances. Further, GBPUSD struggles with 1.2775-80 and the 100-day SMA level around 1.2625 whereas may again challenge 108.30 to meet 107.50 but a closing break above 110.55, comprising 200-day SMA, might propel it to 111.30. Additionally, AUDUSD continue being strong and can aim for 0.7670 with 0.7530 acting as nearby support but the NZDUSD failed to surpass medium-term TL level of 0.7280 and can revisit 0.7170 rest-point. Moreover, USDCAD seems bouncing-off from 1.3220-10 horizontal-support but a close above 200-day SMA figure of 1.3335 seems required for it to claim 1.3400 resistance-mark.

Have a nice trading-day ……