Daily Fundamental Dose

Trading Discussion News and Economy
923

Daily Fundamental Dose: 04 – December – 2017

Hello Traders,

Welcome Consumer Confidence & GDP figures weren’t the only factors that helped the US Dollar to register first weekly positive closing in previous four as Senate Republicans’ ability to forward Trump’s optimistic tax-plan towards being a law propelled investor sentiment in favor of the greenback. However, fresh news concerning former national security adviser, Michael Flynn, pleading guilty to lying to the FBI in connection with his contacts with Russia and agreeing to help prosecutors capped the USD’s rally. Due to this US tax-plan driven trade-optimism and upbeat data-points, rest of the major currencies, including EUR and JPY, became less favorite of market-players but the GBP managed to extend its upside as UK PM is close to prove her Brexit in front of the EU policymakers. Further, the AUD refrained to justify strong print of China’s official Manufacturing PMI, which the NZD and CAD did, whereas CAD has additional back-up in the form of hawkish employment and GDP figures. Moving on, Gold prices declined as a result of greenback’s strength while Crude also pulled itself back from two-year high even after witnessing extended global production cuts as increased US output & rig counts continued threatening energy traders.

Having pleased investors during late last-week, the US Dollar maintained its up-moves at the start of Monday when traders almost ignored the Russian meddling news and rather concentrated on what would be the next in case of US tax-plan and the Federal Reserve. On the other hand, the EUR remained a bit weak without any major details but the GBP kept being strong ahead of the lunch-meet of UK PM and European Commission President, Jean-Claude Juncker, which may deliver some good news to the Pound hawks. In case of the JPY, four-year high consumer confidence number helped the currency to recover some of its recent losses while Gold also adhered to profit-booking at week-start. However, NZD, AUD and CAD couldn’t generate buyers’ interest while Crude also dipped on higher US supply issues.

Unlike last-week, which had comparatively smaller economic calendar at the start, Monday’s economic-line is a bit longer with UK Construction PMI & US Factory Orders likely to take the front-seat & Australia’s AIG Service Index expected to offer second-tier moves. Forecasts suggest positive numbers for UK PMI but indications for a contraction in US Factory Orders may not please USD buyers. Further, AU Services gauge recently dropped and repeat of that pattern could provide additional weakness to the AUD whereas JPY and Gold might benefit due to short-covering and political uncertainty at US & UK.

Other than economic details, political moves at US & UK might also provide active trading sessions ahead. In this case, investors might like to know more about how the Republicans and Democrats together build a plan (taking clues from House & Senate results) that would become a law after US President signs on it. Also, developments relating to investigations into Russian meddling during 2016 Presidential election and probable threat from North Korea should also play their roles from time to time. In case of the UK, today’s lunch between the UK & EU leader will be crucial as the same will determine whether the British head is ready to pay a hefty divorce payment to the region and actually has some plans which could please their European counterparts. If Theresa May fails to please hardliner Europeans, clouds of uncertainty targeting December 14 meeting can drag the GBP towards south.

Hence, with political and economical details both likely to remain active, Monday could please investors during their trading schedule.

Technical Talk

EURUSD’s repeated failures to dip below short-term ascending trend-line, at 1.1850 now, continue indicating its up-moves to 1.1930 & 1.1965 with a downside break favoring 1.1810 & 1.1750 to appear on the chart. Further, USDCAD has to clear 1.2660-70 horizontal-line to re-visit the 1.2610 else it can keep aiming the 1.2770 & 1.2815. At the end, GBPCAD’s sustained trading above short-term upward slanting TL, at 1.7040 now, signals the pair’s advances to 1.7170 & 1.7210 with 1.6990 being nearby support if the trend-line breaks.

Have a nice trading-day ……

924

Daily Fundamental Dose: 05 – December – 2017

Hello Traders,

Even if US Factory Orders dropped lesser than forecast, the greenback index couldn’t refrain from registering a daily negative closing on Monday as investors awaited further progress on the tax-plan. The Euro, on the other hand, benefited from hopes that two grand parties of the Germany will form a coalition while GBP couldn’t rally much after Brexit-talk between UK PM & European commission leader failed to overcome the Irish boarder issue. Further, the JPY and the Gold managed to capitalize weaker USD whereas AUD and CAD remained firm on commodity basket strength but the NZD couldn’t ignore 21-month low ANZ Commodity Prices index. At the end, Crude prices also declined on the speculations that US production will continue hurting the global energy desks.

During early Tuesday, comments from the RBNZ’s acting governor revealed that the central bank is getting more flexible in its inflation-targeting, which in-turn raised hopes for a rate-hike and favored the NZD. Then after, Australia’s Retail Sales quickened more than expected and the RBA said it sees rising inflation. As a result, the AUD has been strong since the morning session. Furthermore, British Retail Consortium released details which mentioned increase in UK Retail Sales and the same helped the GBP a bit but the Pound’s overall moves were confined by lack of Brexit progress. Additionally, China’s Caixin released welcome figures of Services & Composite PMIs, which then added strength into the commodity basket.

Having witnessed active start of the day, mainly due to details/events from Australian, New Zealand and China, investors might concentrate more on the UK Services PMI, Trade Balance details from US & Canada and US ISM Non-Manufacturing PMI for the rest of the day. However, that doesn’t degrade the importance of ongoing political drama at US & UK.

In case of the US political issue, the Senate and House now need to reconcile a bill which communicates issues passed at both the places and the same signals many barriers from leaders at both the decision houses. Also, fears of US government shutdown haven’t been receded yet because the Congress is still not agreed on the spending plan for which it has the last-chance till December 08. Meanwhile, UK PM may now run to solve the Irish border issue and please the EU policy members to vote in the favor of her Brexit efforts, which in-turn could trigger noticeable GBP moves.

Looking the scheduled economics, UK Services PMI is likely to flash a bit softer figure of 55.2 against 55.6 prior while Canadian Trade deficit may shrink to -2.3B from -3.2B earlier and the same for US could widen to -46.2B versus -43.5B earlier. Also, the US ISM Non-Manufacturing PMI might add weakness into the USD if meeting the 59.2 forecast compared to 60.1 previous.

Hence, while scheduled economics are indicating towards another negative daily closing of the US Dollar and a weaker GBP, developments on the tax-plan & the Brexit could become crucial to watch.

Technical Talk

GBPUSD’s inability to clear 1.3550, coupled with recent pessimism concerning the Brexit, seems dragging the pair towards 1.3380 and then to the 1.3330 with 1.3480 acting as immediate resistance. Further, AUDUSD is struggling with 0.7650-55 resistance-region, break of which can propel the pair’s latest recovery towards 0.7670 and to the 0.7700 while 0.7620 & 0.7590 might offer adjacent rest to the pair if it bounces back from present levels. Moving on, CADCHF is likely clearing the 50-day SMA obstacle of 0.7780 and may aim for 0.7835 & 0.7880 whereas 0.7725 & 0.7700 could please sellers during the quote’s pullback.

Have a nice trading-day ……

925

Daily Fundamental Dose: 06 – December – 2017

Hello Traders,

While a nine-month high US trade deficit and a sluggish ISM Non-Manufacturing PMI portrayed downside for the US Dollar, pace of tax-plan developments kept pleasing greenback buyers with the hope of getting Trump administration’s first official victory before 2017 ends. As a result, the US Dollar Index (I.USDX) managed to register a daily positive closing and hurt the safe-havens, namely the JPY and the Gold. Further, the EUR dipped on soft Services PMI figures while the GBP also weakened as Brexit talks seem stalled after Theresa May couldn’t please EU policymakers over Irish border issue. In case of commodity currencies, upbeat RBA statements and China’s Caixin Services PMI figures helped the AUD and the NZD but decline in Crude prices, due to increased distillate & gasoline stockpiles from API, did hurt the CAD prices.

During early Wednesday, slower than expected GDP growth from Australia dragged the Australian Dollar towards south while strong German Factory Orders helped EUR to recover some of its latest losses. However, the GBP is still on the downside with no major economics scheduled for release while JPY and Gold took advantage of recent pullback in USD.

Moving forward, economic-calendar for the day seems lacking any big releases, except US ADP Non-Farm Employment Change, monetary policy meeting by the BoC and the weekly figure of Crude inventories. Forecasts suggest no change in Bank of Canada monetary policy, a bit softer drawdown in energy stockpile and the 189K APD mark against 235K prior.

Although, economic platter seems less entertaining for the day, political issues at US & UK could keep pleasing momentum traders. Looking at US, even if the Republicans managed to push US tax-plan closer towards being a law, the tough final stage, wherein Republicans & Democrats will take clues from House & Senate approvals to determine final tax-proposal, is still pending. Moreover, fears emanating from Government shutdown, if the congress doesn’t agree on spending plan before December 08, become additional burden for the USD optimists. At the UK, Theresa May continues facing trouble, not only from EU policymakers but also from her own party members, and lack of Brexit developments might keep dragging the GBP due to lack of critical data-points.

Given the uncertainty concerning US tax-plan & government shutdown, coupled with Brexit woes, chances of the surge in USD & GBP are lesser while the same might help the JPY & Gold to remain strong. Additionally, EUR can take benefit from the greenback’s decline with the absence of big details curbing its own runs whereas AUD, NZD and CAD could depend upon commodity basket’s moves which also seem nearly empty ahead of Saturday’s Chinese Inflation numbers.

Technical Talk

Having repeatedly failed to clear 50-day SMA, at 112.80 now, on a daily closing basis, the USDJPY seem declining to 111.60-70 region that includes 100-day & 200-day SMA whereas NZDUSD again aims to confront the 0.6930 TL resistance, break of which can help it flash 0.6980 but a drop below 0.6870 can fetch it to 0.6840. Moving on, NZDJPY moves are confined between 77.70 & 77.15 with either side breaks likely flashing 78.00 & 76.90 on the chart.

Have a nice trading-day ……

926

Weekly Fundamental Dose: 07 – December – 2017

Hello Traders,

With the front-line economics from UK & Australia have already disappointed respective currencies’ traders, together with Theresa May’s failed attempt to please EU policymakers over Brexit deal, global investors are more likely to concentrate on the Friday’s US Jobs report and how proceedings of the Trump’s optimistic tax-plan take place. Additionally, fears emanating from US Government shutdown, China’s Inflation figures and British Manufacturing Production could offer intermediate trade opportunities to watch.

Let’s quickly determine fundamentals relating to each of the details/events.

It Was Finally A Good Week For The US Dollar

Having witnessed consecutive three negative weekly closing, the US Dollar Index (I.USDX) finally managed to please buyers with a positive close during last week as welcome data-points, including Consumer Confidence, GDP & housing market stats, gathered additional support from Senate Republicans’ ability to push Mr. President’s hawkish tax-plan a step-closer to becoming a law. Due to this, optimistic traders didn’t pay much attention to the news threatening Trump administration over its alleged role in Russian meddling during 2016 Presidential election.

On the other hand, EUR remained sluggish even with better than previous Flash CPI while JPY and AUD had to bear the burden of stronger greenback. Further, GBP maintained its upside with investors believing that UK PM will be able to deliver optimistic Brexit deal during her lunch-meet with EU policymakers whereas CAD rallied due to upbeat GDP & employment details. Moving on, NZD could enjoy China’s better than forecast Caixin Manufacturing PMI but the Crude failed to praise global producers’ accord to extend output cut deal till 2018 with the intermediate meeting in June 2018.

Greenback Sustained Its Strength But Not The GBP

If we take a look at the present week’s Forex moves, the US Dollar didn’t refrain to extend its up-moves even though early-week data-points, including trade balance, ISM Non-Manufacturing PMI & Factory Orders, flashed soft numbers as global market players remain positive for the Republican’s ability to get the tax-plan rolled before year-end. However, worries relating to the government shutdown, if congress fails to deliver spending plan before December 08, capped the US currency’s rally.

In case of the GBP, the Pound has to liquidate some of its latest gains after Theresa May failed to please European policymakers over her lunch-meet on Monday due to Irish border issue and the frontline PMIs also flashed downbeat figures. Further, the EUR remained weak due to not so positive prints of second-tier data-points whereas Gold was badly affected by the USD’s up-moves but the JPY could recover some of its losses on increased consumer confidence. Moreover, AUD became the victim of disappointing GDP & trade balance figures while the CAD had to decline on BoC’s cautious tone over future policy moves but welcome GDT Price Index & RBNZ Governor’s speech favored the NZD. At the end, Crude prices kept running down after witnessing heavy increase of Gasoline & Distillate inventories.

What’s In For The Rest Of The Week

While majority of the scheduled data-points and events have already rolled out, investors would now concentrate on the monthly release of US Employment report & how Republicans manage to prepare a formal tax-plan combining House & Senate views which will go to the President for being a law. Also, developments concerning Congress’ ability to approve spending plan, in order to avoid government shutdown, and stats from China and UK may entertain short-term traders.

Starting with the Friday’s US Jobs report, the numbers are likely to keep registering mixed signals with NFP bearing a soft consensus & the Earnings indicating an increase while Unemployment being less expected to change. Details suggest Non-farm Payrolls (NFP) might retrace a bit to 200K from its previous surge of 265K while the Average Earnings could rise from 0.0% prior towards marking 0.3% gain. However, no change in expected in the 4.1% Unemployment Rate. It should also be noted the US Prelim UoM Consumer Sentiment is also up for release on Friday and is likely to register 99.2 figure compared to 98.5 earlier-stat.

Moving on to the political front, the process of getting Mr.Trump’s Tax-Proposal towards being a law is running fast with both the Republicans & Democrats have already formed their respective committees to discuss which amendments to take from House & Senate. However, the actual work is still left, where in representatives with bargain over why & how any proposal should or shouldn’t be taken for granted. At the end of it, a final paper will roll out to get the President’s sign and then become a law. Other than tax-plan, the North Korean issues and fears relating to government shutdown are still on the card and may anytime propel the market moves in case of adverse outcome.

Hence, while US Job’s report is less likely to offer any disappointment and the tax-plan proceedings are also going well, a stumbling block from Congress’ spending plan & bargain hunting of the Democrats could lead to the greenback’s downside.

In addition to the details/events concerning US, Final version of Japan’s Q3 2017 GDP, UK Manufacturing Production & Goods Trade Balance, China’s Trade Balance and Inflation readings are some other data-points that shouldn’t be missed.

Forecasts suggest a contraction of -0.1% in the UK Manufacturing Production against +0.7% earlier and the higher deficit figure of -11.5B in the Good Trade Balance statement versus -11.3B prior. Further, Japanese GDP is likely to have grown by 0.4% compared to 0.3% earlier estimate while China’s CPI and the PPI could flash worrisome signs of 1.8% & 5.8% respectively compared to their 1.9% & 6.9% priors. Additionally, China’s Trade Balance might also book declining surplus and can threaten commodity traders.

Considering continuation of dovish details from UK & China, coupled with Brexit woes, the GBP & Commodity currencies, including AUD, NZD and CAD, might not gain Bulls’ attention but Japanese GDP & safe-haven flows could help the JPY to remain strong.

Technical Analysis

On the technical front, EURUSD is declining towards 1.1700 TL support with the 50-day SMA level of 1.1755 offering intermediate halt but an upside break of 1.1950 could propel it to 1.2100. Concerning the GBPUSD, the pair might revisit the 1.3330-40 support-zone, breaking which it can drop to 1.3280 with 1.3450 being nearby important resistance. Further, 50-day SMA level of 112.80 and the confluence of 100-day & 200-day SMAs around 111.60-70 could limit the USDJPY moves while may keep maintaining its 1.2660 & 1.2920 range. At the end, the 0.7475 & 0.7430 can restrict the AUDUSD’s south-run and may propel it to test 0.7630 again whereas NZDUSD is less likely to depict any major moves unless breaking 0.6780 & 0.6930 levels.

Have a nice trading-day ……

927

Daily Fundamental Dose: 08 – December – 2017

Hello Traders,

Thursday was another good-day for the US Dollar when Jobless Claims driven initial up-moves got a boost after US Government avoided partial shutdown by temporarily extending the funds for two-weeks. The GBP also has the same story as the currency rose in early trading sessions, backed by upbeat Halifax HPI, and was later on rallied with the news that UK PM prepared fresh plan to avoid Irish border issue and win EU assent over Brexit deal during her another meet with the policymakers on Friday. As a result, the EUR was less appreciated by the traders while Gold and JPY plunged due to optimism at UK & US cutting safe-haven demand. Further, the AUD, NZD and CAD kept declining because strong USD continued hurting the commodity basket while Crude prices managed to recover some of its losses.

During early Friday, Final reading of Japan’s Q3 2017 GDP surpassed initial forecasts and helped the JPY to witness a pullback while China’s welcome Trade Balance details supported commodity currencies. However, market focus wasn’t diverted from today’s US job market details and Theresa May’s meet to the EU policymakers where her plan to abandon strong Irish border seems praised by the regional heads. Other than the US Jobs report & Brexit developments, UK Manufacturing Production & Goods Trade Balance, coupled with US Prelim UoM Consumer Sentiment, would also offer intermediate market moves.

While today’s US employment details would be the first clear report after hurricane season, importance of the stats are also boosted by their final appearance before next week’s crucial FOMC. Forecasts suggest, Non-farm Payrolls (NFP) might retrace a bit to 200K from its previous surge of 265K while the Average Earnings could rise from 0.0% prior towards marking 0.3% gain. However, no change is expected in the 4.1% Unemployment Rate. Further, UK Manufacturing Production may contract by -0.1% from +0.7% prior and the Good Trade Balance also signal higher deficit figure of -11.5B versus -11.3B prior. At the end, Prelim UoM Consumer Sentiment is also up for release on Friday and is likely to register 99.2 figure compared to 98.5 earlier-stat.

On the political front, UK PM’s progress on Brexit proposal seem stronger than US policymakers’ run to have a compromised tax-plan by considering House & Senate issues. Though, EU policymakers always have the tendency to disappoint GBP buyers and hence until EU Commission President Jean-Claude Juncker communicates anything positive in his press conference, Pound worries are here to stay. On the other hand, US decision makers have already removed one stumbling block of government shutdown, even if only for two-week, and may now well concentrate on tax-plan, which in-turn give brighter chances of getting another good-news for the USD Bulls soon.

Hence, even if the UK economics might give a drag to the GBP, EU’s support to the initial Brexit plan of the PM may propel the GBP whereas USD is more likely to keep rising on expected upbeat economics & political outcomes.

Technical Analysis

GBPUSD again heads to the critical 1.3540-50 resistance-region, break of which can propel it to 1.3610 while 1.3430 & 1.3400 may offer immediate supports to the pair. Further, USDCHF is also running towards 1.0000 psychological magnet with 0.9940 being nearby rest to watch whereas AUDNZD could re-test the 1.0945-55 region but the same might trigger the pair’s bounce towards 1.1045 & 1.1095-1.1100 resistance with a break of 1.0945 signaling the quote’s additional downside to 1.0925 and to the 1.0900.

Have a nice trading-day ……

928

Daily Fundamental Dose: 11 – December – 2017

Hello Traders,

Other than US Republican leaders’ ability to escalate President Trump’s tax-plan closer towards being a law, upbeat Jobs report and avoidance of government shutdown were also the reasons that helped the US Dollar Index (I.USDX) to post consecutive second weekly gain. In a similar line, the GBP was also in a good shape even after witnessing disappointing PMI figures as UK PM, Theresa May, finally pleased EU authorities to support considering close of initial Brexit plan and progress to trade-talks. As a result, the EUR, which had lesser economics to track, remained weaker in front of both its major rivals, namely USD and GBP, while the JPY and the Gold declined after market sentiment favored risk-on mood. Further, the AUD, NZD and CAD couldn’t confront the greenback’s strength and commodity basket’s downturn on China’s latest efforts whereas Crude prices also dropped on higher US rig counts and increase in stockpiles of gasoline & distillate.

While optimism surrounding US & UK helped the market to remain positive during last week, latest news signaled threat to British PM’s Brexit efforts as Irish leaders seem skeptical on May’s promises, which in-turn dragged the GBP towards south as the final verdict on closure of initial talk is still pending to be conveyed. On the other hand, USD traders also remained cautious before the Federal Reserve announces much awaited rate-hike and plot what’s in for the next year while tax-plan proceedings offered little information so far.

In case of latest data-points, China’s inflation numbers remained softer and dragged commodity currencies further towards south but the NZD got a boost on Monday after New Zealand’s finance ministry named Adrian Orr as upcoming RBNZ Governor. Moving on, Japan’s of BIS sentiment of large manufacturers printed welcome figures but the Prelim Machine Tool Orders grew lesser than prior.

Going forward, Monday has very little details on economic calendar for global traders to watch but developments concerning Brexit, US Tax-plan and Fed Rate-hike could keep entertaining investors. In case of scheduled stats, US JOLTS Job Openings and Japanese PPI are both likely to flash softer numbers than prior releases.

At the political front, British Prime Minister will address parliament on Monday and by Tuesday she should be ready with the final version of her offerings to EU in order to escalate the Brexit talks towards trade-pact. In case of US, investors might remain a bit calmer to get a glimpse of what Federal Reserve thinks to do in 2018 when Janet Yellen will no longer be in the central bank while moves from US President, concerning his closing argument for the proposed tax reform on Wednesday, would also be closely observed.

To sum up, slew of important data-points and monetary policy decisions, coupled with political chaos at US & UK, are pushing global market players to remain cautious before final announcements become live.

Technical Talk

EURUSD’s latest bounce from 1.1730 seems pushing the pair in direction to 1.1800 and the 1.1830 but a break of 1.1730 could quickly fetch it to 1.1670-75 support-zone. Further, AUDUSD is confronting the 0.7530-35 resistance-area, breaking which it can escalate latest recovery towards 0.7560 & 0.7575 while a downside break of 0.7500 might not hesitate registering 0.7470 as support. At the end, NZDJPY needs to close beyond 50-day SMA level of 78.40 in order to meet the 78.80 and the 79.50 whereas 77.80 & 77.50 may offer immediate supports to the pair if it reverses from present levels.

Have a nice trading-day ……

929

Daily Fundamental Dose: 12 – December – 2017

Hello Traders,

Although lack of big releases confined forex moves on Monday, fresh record highs by leading US stock indices, coupled with optimism surrounding Fed’s rate-hike, helped the greenback buyers to ignore a non-fatal explosion in New York. As a result, the US Dollar Index (I.USDX) extended its previous north-run and the safe-havens, namely Gold and JPY, faced another negative day. The EUR, on the other hand, remained sluggish whereas GBP had to trim some of its latest gains after positivity over Brexit deal faded. Further, AUD and NZD recovered from recent lows on profit-booking but the CAD couldn’t afford to rise due to weakness in Commodity front. Moreover, Crude prices surged on the news of a hair-line crack in North Sea Forties Pipeline System, one of the most important crude pipelines in the world.

While everybody on the floor has a dull-day on Monday, Tuesday knocks the market desk with many important data-points and events. Things started turning against US President’s tax-plan during late-Monday when Treasury Secretary released one-page analysis of the economic and fiscal impact of a Republican tax overhaul plan and the same was criticized broadly. On the UK front, Theresa May would have a hard to convince UK parliament to support her promises to EU and let the trade-talk start soon in 2018.

In case of the economic calendar, Australian Housing price gauge unexpectedly dropped and the Business Confidence rallied during early-day, which in-turn helped the AUD extend its previous gains, while a six-month high of Tertiary Industry Activity gauge from Japan favored the JPY. Moving on, USD witnessed a pullback at the start of the busy-day whereas GBP and EUR managed to remain strong ahead of important data-points scheduled for release during latest part of the day.

Moving forward, headline UK CPI is less likely to deviate from its 3.0% mark but becomes crucial for GBP traders while monthly releases of EU & German ZEW Economic Sentiment figures, bearing downbeat forecasts, might again drag the EUR towards south. Further, US PPI is also expected to register same 0.4% mark but a dip in Core PPI, to 0.2% from 0.4%, might hurt the USD.

Not only does the economic calendar has important readings for EUR, USD & GBP, the political plays surrounding Brexit and US tax-plan are also crucial for traders to observe. As Republicans are running faster to get their tax-plan signed by President before 2017 end, latest rift in favor might delay the process and could equally damage the greenback’s surge. Looking into the Brexit, EU leaders seem favoring the Theresa May’s proposal, which also includes softer border norms for Ireland and a divorce payment, but she has to get it approved by the British parliament and that becomes a tough task considering her thin majority.

Technical Talk

GBPUSD’s latest U-turn from 1.3330-20 support-zone might propel the quote to 1.3400 and then to the 1.3430 but a downside break won’t hesitate in flashing 1.3265 as a level. NZDUSD recently cleared seven-week old descending TL, at 0.6930 now, and is struggling with 50-day SMA level of 0.6945 in order to aim for 0.6970 resistance-mark; though, pullback below 0.6930 can again register 0.6880 on the chart. At the end, NZDCAD’s successful break of nearly three-month old descending trend-line resistance favors it’s further upside to 0.8955 and the 0.9000 round-figure with 0.8850 & 0.8815 likely being immediate supports to watch.

Have a nice trading-day ……

930

Daily Fundamental Dose: 13 – December – 2017

Hello Traders,

With US PPI data showing signs of a rise in producer prices, the US Dollar Index (I.USDX) managed to extend its north-run on Tuesday, which in-turn caused JPY’s additional downside but could do little harm to the Gold as investors preferred covering short positions of yellow metal before the crucial Wednesday. On the other hand, the GBP couldn’t enjoy better than forecast CPI figure as UK PM faces a challenge from her colleagues & opponents over Brexit proposal while EUR also dropped because of sluggish ZEW Economic Sentiment numbers. However, the case is different with AUD and NZD as both these commodity currencies managed to stretch their latest pullback due to recent strength in the commodity basket but CAD refrained from signaling any significant moves and remained weaker on decline in Crude prices. The energy front softened after US EIA, in its monthly report, predicted higher US production while going forward.

After all the aforementioned market moves, global investors welcomed the important Wednesday by cutting their favor for greenback on the news that Democrat Doug Jones beat Republican Roy Moore in a bitter U.S. Senate race in Alabama. As a result, the EUR managed to recover some of its latest losses but the GBP remained weaker on Brexit woes ahead of UK PM’s meet with parliament members to get an assent for her proposal to EU. Further, AUD and NZD secured an extra mile after Australian Westpac Consumer Sentiment and New Zealand FPI printed upbeat figures. At the end, Crude prices also took a U-turn on declining API inventory and update that important pipeline leakage may take a bit longer to get repaired while JPY & Gold both strengthened on softer USD and political pressure at US & UK.

Moving forward, global investors eagerly await FOMC decision, scheduled to roll out during the later part of the day, not because of its much anticipated third rate-hike of 2017 but to get the hints of policy outlook for 2018. Additionally, UK Jobs report and US CPI, coupled with US’s official weekly Crude oil inventory details, are some other details/information that traders might be more interested in watching.

Given the 0.25% rate-hike is already a done deal, analysts wished to see how many such moves seem manageable by the Fed during 2018 against three instances in the present year. Observing broader consensus, two rate-hikes are likely to be offered by the FOMC for 2018 considering the Inflation lag whereas chances of a cut in Inflation forecast are also high. In case of other details, UK Jobs report might reveal higher Average Earnings, decline in Unemployment rate and increase in Claimant Count Change while US CPI is likely to please USD bulls with strong stats.

In case of politics, UK PM’s parliamentary showdown concerning Brexit and the US policymakers rush to meet their self proclaimed deadline of Wednesday to have a final tax-proposal could entertain investors. While UK policymakers seem all set to oppose the thin majority holding Theresa May by asking for a right to veto on final Brexit bill, the US leaders are less likely to disappoint Trump who will be delivering his closing argument for the legislation alongside five middle-class families and Republican tax authorities.

To sum up, FOMC’s rate-hike might not get too much attention but Fed signals for 2018, US Inflation and UK employment numbers will surely do. In case of politics, latest blow to the Republicans in Alabama, US tax-plan developments and UK Brexit news could keep making traders busy.

Technical Talk

Considering the EURUSD’s repeated bounces from 1.1730-20 support-zone, chances of the pair’s break of short-term “Falling-Wedge” resistance, at 1.1775 now, on FOMC’s disappointment are too high, which in-turn could propel it to 1.1840 & 1.1880 with 1.1720, the 1.1700 and the 1.1670 acting as nearby strong supports to watch. Further, USDJPY’s inability to sustain 113.10–113.00 region break indicates the pair’s re-test to 113.00 and then to the 50-day SMA level of 112.85 while 113.70 & 114.00 may limit its short-term advances. Moreover, AUDCAD seems finding it hard to clear the 0.9735 TL resistance and may revisit 0.9710 & 0.9690 supports.

Have a nice trading-day ……

931

Weekly Fundamental Dose: 14 – December – 2017

Hello Traders,

Having been disappointed by the Federal Reserve, even after witnessing 2017’s third Fed rate-lift and an upwardly revised growth forecast, global investors now concentrate on slew of monetary policy decisions scheduled for release today. Amongst them, ECB is likely to grab major attention with its expected details of tapering plan while BoE & SNB could offer little information. Additionally, political plays at UK & US, concerning Brexit and tax-plan respectively, might deliver intermediate market moves to entertain traders.

Let us start discussing fundamentals for some of the crucial details/events rolling out soon.

What Helped The Markets Last Week?

Last week was another good-time for the USD Bulls as Republicans’ ability to push forward the tax-plan and avoid government shutdown was backed by upbeat jobs report, which together helped posting second weekly positive closing of the US Dollar Index (I.USDX). The EUR, left with very few details, remained sluggish but the GBP surged on Brexit related optimism and avoided soft PMIs. Further, JPY and Gold remained less favorites due to rising USD & optimism at equity front cutting market’s safe-haven demand while AUD, NZD and CAD dropped because of China’s new measures to control financial markets and weaker economics at home. At the end, Crude marked a negative weekly closing for the second-time on worries concerning US production and higher inventory levels of Gasoline and Distillate.

The Tale of Present Week

Having witnessed noticeable favor for the greenback during last week, the present week has been a bit troublesome for the currency as early-week positively, built by tax-plan progress, was conquered on Wednesday after the FOMC seemed worried for inflation. Even after delivering its promise of third rate-hike of the year 2017, raising growth forecasts and praising the employment scenario, the Fed policymakers couldn’t hide their concerns for inflation while promising three more rate-lifts during 2018 against the investors’ expected four such hikes.

On the other hand, EUR managed to benefit from USD’s downturn, even if EU & German ZEW economic sentiments registered weak figures, whereas GBP struggled to justify welcome Average Earnings & Inflation figures after Theresa May’s Brexit proposal was challenged in the parliament to have an amendment concerning UK policymakers’ veto over final Brexit Bill. Moving on, AUD, CAD and NZD rallied on upbeat data-points and profit-booking while Crude couldn’t praise decline in US Crude inventories and shutdown of major pipeline due to EIA’s forecast for higher US production and increasing stockpiles of Gasoline & Distillate. Moreover, JPY and Gold also strengthened with USD’s decline and political uncertainty helping the safe-havens.

During early Thursday, Australian Jobs report flashed upbeat figures but dent in China’s Industrial Production hurt commodity basket while strong Japanese Flash Manufacturing PMI provided additional strength to the JPY.

What’s In For Now?

After all said and done, market players now eagerly wait for the ECB Governor’s speech in favor of the central bank’s tapering plan on Thursday when no rate-change is largely expected. Additionally, Mario Draghi’s comments on the 2018’s growth outlook, coupled with inflation forecasts, will also be the focus for investors. Other than ECB, monetary policy decisions by the BoE and the SNB are also up for release today with both the central banks less likely to offer any changes to present policies. Though, BoE will garner more attention than the SNB as uptick in Inflation and Brexit worries might hinder the path for the central bank’s rate-hike plan.

Hence, while ECB is more likely to help the EUR should Draghi continue remaining a policy hawk, the GBP might weaken if Carney shows his worries for the Brexit and rising inflation. Furtrher, SNB can also praise latest upswing in economics and can help the CHF to rise more.

In addition to the central bankers, EU Flash PMIs, US & UK Retail Sales and US Empire Manufacturing PMI are some of the top-tier data-points that could entertain investors. Forecasts suggest, US Retail Sales and Core Retail Sales to rise with 0.3% & 0.7% growth numbers versus 0.2% & 0.1% respective previous but the Empire State Manufacturing PMI may disappoint the USD hawks with 18.1 stat compared to 19.4 earlier. Further, UK Retail Sales, the engine to British GDP, signals a 0.4% growth compared to 0.3% earlier while EU Flash Manufacturing PMI points to a 59.8 mark versus 60.1 and the Flash Services PMI could register 56.1 mark compared to 56.2 earlier.

Economics show altogether a different story than the central bank front wherein EU details could hurt the regional currency but the UK & US stats favor strong GBP & USD going forward.

At the political front, US tax-plan is almost ready for Presidential sign if it crosses the final vote sometime during next week. However, the same is crucial as Senate is the place where Republicans can’t afford to lose more than two votes and Democrats have been opposing the tax-proposal since beginning. In case of the UK, Theresa May’s struggle to please EU policymakers went in vein on Wednesday when parliament members, including some from her own party, asked for the right to veto final Brexit Bill before supporting her to put the proposal in front of the EU leaders to escalate the deal towards trade-talks.

Unlike central bank and economics, politics has been quite worrisome for both the USD & the GBP and hence until US President gets to sign the tax-plan and the UK leader pleases EU policymakers with her proposal backed by parliament, the greenback and the Pound might keep witnessing a downside pressure.

To sum up, while central bankers and economics seems offering a healthy hand to the GBP and a bit to the USD, ECB has to convince buyers to support the EUR. On the contrary, political plays aren’t so supportive of either USD or GBP.

Technical Talk

EURUSD has to clear 1.1880 in order to meet the 1.1960 else it can re-test the 1.1715 and 1.1660 while GBPUSD is likely running to challenge the 1.3500 resistance but failing to break the same can drag it back to 1.3320 & 1.3250. Further, USDJPY isn’t expected to move much unless breaking 113.70 & 111.60 while USDCAD continue witnessing strong resistance from 1.2900 mark which in-turn could fetch the quote to 1.2710. Moreover, AUDUSD has to clear 200-day SMA level of 0.7695 in order to meet the 0.7730 else it can come-back to 0.7550 whereas NZDUSD has 0.7050 & 0.7110 as important resistances and 0.6930 as crucial support.

Have a nice trading-day ……

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932

Daily Fundamental Dose: 18 – December – 2017

Hello Traders,

Be it central-bankers or Inflation, not to forget the Jobs numbers, last week had more stormy trading sessions than any other week off-late and the outcome also had much to do with political news. Looking in detail, the US Dollar managed to remain positive for third consecutive week, not because of rate-hike but mainly due to tax-plan concerns whereas EUR couldn’t justify ECB’s upward revision to economic status as the central bank refrained to convey its QE tapering wish. The GBP dropped heavily after Theresa May faced another barrier from British parliament which seeks to have final veto over Brexit bill while JPY and Gold remained strong enough on safe-haven demand. Further, AUD and NZD welcomed upbeat data-points with strong gains while CAD remained a bit shy of communicating Crude’s strength on softer details.

Having witnessed heavy flow of information during last-week, global investors seem going through a little silence after the storm on Monday. However, upbeat Japanese exports and a cut in US rig counts helped the JPY and Crude to extend their previous north-runs while US democrats’ united wish to vote against President Trump’s tax-plan and on-going problems at UK, concerning Brexit, dragged the USD & the GBP down. Additionally, increase in Australia’s New Motor Vehicle Sales and a strong commodity front helped the AUD, NZD and CAD to post an impressive start to the week.

If we observe economics/events scheduled for release during the rest of the day, EU Final CPI becomes the only data-point which could entertain traders; though, political news from US & UK could keep offering intermediate pushed to investors. In case of the EU CPI, the headline inflation gauge isn’t expected to change from 1.5% initial estimate and may help the EUR to remain strong but the ECB sound a bit cautious for Inflation in its latest meeting and a bad reading could hurt the regional currency more.

At the political front, US policymakers are all set to put the final compiled version of tax-plan for vote during this week and let the proposal go to the President for assent, which if happens orderly could become a great victory of republicans after being in office for nearly a year. For the UK, Theresa May have to struggle a lot during this week to assure enough of power to fellow politicians in order for them to support her proposal go to EU and start second round of Brexit talk that includes trade details.

To sum up, upcoming year-end festive season and lack of big data-points, coupled with assured US tax-plan, might push global investors to remain calm for the day but political news from US & UK, in addition to GDP figures from major economics, could entertain market-players while going forward.

Technical Talk

GBPUSD again bounced-off 1.3300 and may revisit the 1.3330 & 1.3400 with 1.3260 acts as following support after 1.3300 breaks. Moving on, NZDUSD seems well in mood to conquer 0.7060 and aim for 0.7100 but a dip below 0.6970 can again fetch it to 0.6910. At the end. NZDCHF has to close beyond 200-day SMA level of 0.6950 in order to target 0.6980 & 0.7000 while 0.6900 and the 0.6880 may gain sellers’ attention if the pair reverses from present levels.

Have a nice trading-day ……

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933

Daily Fundamental Dose: 19 – December – 2017

Hello Traders,

Even with an almost empty economic calendar, global markets managed to offer intermediate trade opportunities on Monday after investors raised doubts over the impact of upcoming US tax-plan on the world’s largest economy if at all it does cross tough barriers. As a result, the US Dollar Index (I.USDX) registered negative daily closing that helped the EUR to recover some of its latest losses when CPI confirmed 1.5% initial estimate. On the other hand, GBP rallied after UK PM, Theresa May, addressed parliament with Brexit plan that may please fellow policymakers. Further, JPY & Gold continued rising on political uncertainties at US & UK while CAD benefited from third-tier economics. Moving on, AUD also stretched its recent up-moves but the NZD declined after New Zealand Westpac Consumer Sentiment flashed softer details. At the end, Crude prices softened when production at Nigeria & Libya returned to normal but the downside remained capped by on-going halt in output at a crucial pipeline & expected drop in US stockpile.

During early Tuesday, the Australian Dollar (AUD) started its day on a positive side due to optimistic RBA minutes and claim by a hedge-fund manager that the RBA may inflate benchmark interest-rate soon in 2018 while World Bank’s upward revision to China’s growth forecast for 2017 also helped overall commodity basket & commodity currencies, including AUD, NZD and CAD. Additionally, Japanese government raised growth projections for the export-driven economy and supported JPY to extend its advances whereas EUR & GBP benefited from USD’s weakness. Moreover, better than forecast print of New Zealand’s ANZ Business Confidence favored NZD buyers to maintain their upbeat outlook for the currency.

Looking forward, today’s economic calendar is a bit heavier as compared to the yesterday as it includes German Ifo Business Climate Index, US Housing market details and New Zealand’s Trade Balance figures. Consensus favors a bit healthy print of German gauge, soft US Building Permits & Housing Starts and decline in New Zealand Trade deficit.

At the political front, UK PM got another shock from EU policymakers when the region’s Brexit negotiator sounded harsh on the UK’s dream of getting a trade-deal that will maintain its entry-gate status to do business with the Europe. In case of US tax-plan, recent communication from Republican Senator Susan Collins of Maine revealed her likeliness to support the tax-proposal when it will be up for vote during the week, which in-turn eased some pains off the Republicans’ heads. However, Democrats still stand strong to vote against the matter jointy.

Hence, with economic calendar having more details and political plays continue offering active markets, Tuesday could become a bit busier day for global traders.

Technical Talk

USDJPY’s repeated failures to conquer 112.80 signals brighter chances of its drop to 112.30 and then to the 112.00 supports while an upside break of 112.80 can propel it to towards 113.10. Further, AUDUSD is also finding it hard to surpass near-term important resistance-figure of 0.7680 but its downside seems restricted around 0.7630. Furthermore, AUDJPY’s sustained trading beyond 200-day SMA isn’t a strong signal for the pair’s additional north-run as the 50-day SMA level of 86.50, the 86.65-75 horizontal-region and three-month old descending TL, at 87.00, still stand tall to challenge the quote’s strength and drag it back to 86.00 & then to the 200-day SMA level of 85.80.

Have a nice trading-day ……

934

Daily Fundamental Dose: 20 – December – 2017

Hello Traders,

Better than expected housing market numbers couldn’t help the US Dollar on Tuesday after initial voting in favor of tax-bill, at the U.S. House of Representatives, needed a re-do as three legislations were found in the draft that don’t comply the Senate rules. Due to this, there will be one more barrier for the optimistic Republican tax-plan to cross before being a law. Additionally, the Congress has to redefine its temporary funding-line by Friday in order to avoid partial shutdown of the government which in-turn added political pessimism that dragged the US Dollar Index (I.USDX) down. On the other hand, the EUR managed to register noticeable gains after central-bankers from Estonia, Slovakia and Germany discussed tools, other than bond purchases, which could best suit the improving economy while the GBP welcomed UK cabinet’s first proper discussion in favor of Brexit. Further, profit-booking ahead of festive season hurt some of the commodity currencies, namely AUD, NZD and CAD, whereas lack of big releases did trigger JPY and Gold prices’ pullback. Though, Crude prices stood tall after API inventories pleased energy traders with a surprise drop.

While political plays at US and UK continued dominating trading desks on Tuesday, early Wednesday had some economic support, in the form of higher trade deficit from New Zealand and positive All Industries Activity Index from Japan, which entertained market players. However, news concerning North Korean tests to load anthrax onto intercontinental ballistic missiles offered one more political aspect for analysts to observe.

Looking forward, BoE Governor, Mark Carney, is up for presenting testimony in front of the Treasury Select Committee and may convey his economic outlook. At the data-front, releases concerning US Existing Home Sales and New Zealand GDP, coupled with US official crude inventories, become important details/events to watch. Moreover, US Senate is scheduled to vote on tax-proposal after removing those three amendments which didn’t suit Senate rules while UK leader may confront EU leaders if she manages to garner enough support for her Brexit proposal at home.

In case of scheduled economics, US Existing Home Sales could flash another good indicator conveying the strength of housing market and Crude stockpile might release additional depletion in inventory levels whereas the New Zealand GDP bears the consensus of a softer mark.

While economics can become good for USD & Crude, New Zealand Dollar may have to extend its latest downturn if the GDP disappoints Kiwi traders. Though, political plays at US are less likely to be greenback supportive as Senate is the place where Republicans can’t afford to lose more than two votes and the House also has to re-vote on the tax-plan, if at all it clears the Senate barrier. Moreover, Brexit issues could keep directing GBP moves to north but any disappointments from EU wouldn’t be taken lightly.

To sum up, US Tax-plan, government shutdown fears and Brexit details, coupled with recently unearthed North Korean issue, are expected political threats that could determine near-term market moves when the economic calendar has lesser stats to offer.

Technical Talk

The USDCAD again failed to clear 1.2900 mark on a daily closing basis and it indicates brighter chances of its pullback to 1.2840 & 1.2800 while an upside break of 1.2900 could flash 1.2940 on the chart. Further, USDCHF struggles around 0.9840-35 support-zone, conquering which it could revisit 0.9800 & 0.9780 rest-points with 0.9870 & 0.9900 acting as nearby resistances. At the end, AUDNZD’s latest recovery might find it hard to surpass 1.1045-50 resistance-confluence, which holds the gate for the pair’s rally towards 1.1140, and may re-test the 1.0960 & 1.0900.

Have a nice trading-day ……

935

Weekly Fundamental Dose: 21 – December – 2017

Hello Traders,

With the US Tax-plan passing almost all the barriers and Theresa May’s Brexit proposal getting UK House of Commons’ assent, investors now turn their attention towards fears emanating from partial shutdown of US Government and headline GDP figures from US, UK & Canada. Additionally, US Durable Goods Orders, Philly Fed Manufacturing Index and Canadian Consumer-Centric details could offer intermediate trade opportunities to market players.

Let’s quickly go through fundamentals concerning all these details/events.

Political Plays Helped Greenback For Consecutive Third Week

Even if Fed’s upward revision to growth & employment stats, coupled with three rate-hike expectations, failed to propel greenback, progress on the Republic tax-plan helped the US Dollar Index (I.USDX) to flash another weekly positive closing. Same was the case with EUR, which couldn’t justify ECB’s hawkish mood due to Brexit worries which also dragged the GBP down. Due to such political plays, JPY and Gold remained benefited as safe-haven demand rose whereas AUD & NZD also registered noticeable gains on upbeat economics at home. However, CAD couldn’t join its commodity currency partners, namely AUD & NZD, as weaker data-points dragged the Loonie to south while Crude prices rallied on temporary closure of an important pipeline and declining inventory levels.

Shift In The Market Mood

Having witnessed successive USD gains, market mood changed during current week even if the Republicans managed to get House & Senate approval for their optimistic tax-plan and housing market details flashed impressive numbers. The underlying reason was investors’ expectations that the upcoming tax-plan might hurt world’s largest economy while fears emanating from partial government shutdown also played its role. With this, the EUR strengthened across the board as being the only currency where things are pretty good and stable whereas GBP struggled with Brexit developments although Theresa May managed to get House of Commons’ approval for her proposal to discuss trade issues with EU during early 2018.

In case of JPY, BoJ’s worries for inflation & softer than expected All Industries Activity Index dragged the currency down but Gold remained strong enough with the year-end buying. Further, AUD managed to extend its previous week gains with RBA’s upbeat remarks but the NZD couldn’t hold earlier gains on weaker GDP print. At the end, Crude prices rallied further with slump in inventory details and continuous halt in major pipe-line pleasing energy traders.

Few Crucial Days Before Christmas

While US tax-plan & Brexit related worried are taking a back-seat for now, market-players are still not happy close their desks and run for Christmas parties as US Congress still needs to avoid government shutdown and headline GDP figures from US, Britain and Canada are also in-line. Moreover, US Durable Goods Orders, Philly Fed Manufacturing Index, Canadian Retail Sales & CPI may also play their roles during the days to come.

Looking at the economic details, Thursday has a jam-packed economic calendar with US GDP & Philly Fed Manufacturing Index and Canadian Retail Sales & CPI all up for release during the day whereas Friday has UK & Canadian GDP, together with US Durable Goods Orders, to please investors.

US Q3 2017 Final GDP is less likely to deviate from its more than two-year high second estimate of 3.3%; however, expected softness in Philly Fed Manufacturing Index, up for publish on the same day, to 20.6 from 22.7, might confine the greenback’s rally. Further, Durable Goods Orders might keep portraying rosy picture of world’s largest economy with 2.0% gain against -0.8% previous contraction but the Core Durable Goods Orders aren’t expected to rise more than 0.5% from 0.9% prior.

Moving on, no change is expected to take place in Final estimate of UK Q3 2017 GDP figure of 0.4% as well as Canada’s monthly GDP figure of 0.2%. Though, Retail Sales and CPI are both likely to help the CAD recover from its lows by flashing 0.2% & 0.4% respective growth compared to 0.1% prior for each.
Other than scheduled data-points, how US Congress manages to avoid the government shutdown by agreeing on the spending bill becomes an important issue to observe.

Given the likely upbeat data-set from US & Canada, the USD & CAD may remain strong for the time-being while government shutdown fears, which is expected to fade after Thursday’s meeting of US policymakers, may dominate immediate greenback moves.

As a result, the EUR might have to liquidate some of its latest gains while GBP could recover recent losses on GDP figure. Furthermore, commodity currencies could find it hard to confront USD without any major economic back-up during the upcoming trading sessions whereas JPY and Gold may continue pleasing risk-averse traders. At the end, Crude prices could also maintain up-moves with latest supply-crunch news.

Technical Analysis

Although EURUSD has been rising off-late, the 1.1925-30 TL area might confine the pair’s advances and can fetch it to 1.1800 & 1.1760 re-test while GBPUSD’s break of 1.3330 can flash 1.3270 & 1.3200 on the chart with 1.3460 being near-term important resistance to watch. Moving on, USDJPY is about to clear the 113.45-50 trend-line resistance and may run for 114.10 & 114.50 whereas 112.90 seem nearby support for the pair but the USDCAD is likely declining towards 1.2750-45 support as it failed to cross the 1.2900 resistance-mark. Additionally, AUDUSD has to clear 200-day SMA level of 0.7695 to aim for 0.7730 else it can come-back to 0.7630 while NZDUSD’s recent U-turn from 0.7025-30 resistance-zone indicates brighter chances of its drop to 0.6955.

Have a nice trading-day ……

936

Daily Fundamental Dose: 22 – December – 2017

Hello Traders,

Thursday was another trading-day when the US Dollar Index (I.USDX) posted negative daily closing despite having reasons to shine. This time, US policymakers’ ability to avoid government shutdown by getting a bill to fund the federal government through Jan. 19 and two-year high GDP figure were the main factors that could have helped the USD Bulls to become happy but investors rather concentrated on negative impacts of upcoming tax-plan and preferred covering their gains ahead of the festive season. As a result, the EUR got one more positive closing at the day’s end without having much to please traders whereas GBP recovered a bit on Brexit progress. However, JPY was badly affected after BoJ Governor backed ultra-loose monetary policy but the Gold continued being strong. Further, AUD & NZD managed to shine after commodity front’s gain on USD weakness whereas CAD depicted upbeat impacts of CPI & Retail Sales. Moving on, Crude price kept being strong with news concerning short supply-crunch due to major pipe-line halt and depleting US stockpiles.

During early-Friday, which seems the last active trading-day before 2017 Christmas season starts, market-mood shifted in favor of the greenback after regional elections at Catalonia again favored the separatist leaders and rejuvenated chances of another spat between the Spain and the independence seekers. Additionally, news that EU leaders are still considering to offer hard Brexit to Theresa May if she fails to produce a clear proposal during her January appearance before the policymakers hurt the GBP. Moreover, Crude also got a hit after developments at Forties pipeline in the North Sea signaled production re-start during early January. Hence, overall it seems a good start to the day which might entertain investors for one last time before 2017 ends.

While political fears emanating from US & UK have officially taken a halt till January 2018, economic calendar becomes the only hope of momentum traders. Looking at the scheduled details, GDP figures from Canada and UK, coupled with US Durable Goods Orders, New Home Sales and Personal Income-Spending, are some of the important data-points that may offer intermediate market moves.

Consensus suggest no change in GDP figures from their prior levels but an improvement in US Durable Goods Orders and Personal Spending may help the USD to recover some of its latest losses. Although, an expected soft figure of the New Home Sales could restrict the greenback’s rally. In case of the EUR, recent victory of Catalan seperatists might continue hurting the regional currency but chances of its recovery on USD’s downtick can’t be denied. At the end, AUD is more likely to progress in its north-run with expectations of a rate-hike in 2018 but the NZD and CAD might not sustain their latest up-moves whereas JPY has to bear the burden of BoJ’s dovish stand.

Technical Talk

GBPUSD seems clubbed in a short-term symmetrical triangle between 1.3400 & 1.3330 with either side breaks indicating 1.3450 & 1.3300 respectively whereas USDJPY has to clear 113.65 in order to aim for 114.10 else it can revisit 113.00 and 112.70 support-levels. For EURGBP traders, pair’s recent bounce from 0.8835 TL support signals brighter chances of its pullback to 0.8870 and then to the 0.8885-90 while a downside break of 0.8835 might register 0.8800 as a quote.

Have a nice trading-day ……

937

Today look on calendar economy, we can see news high impact for usd its durable goods order, this is also important news that will measure change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items, if actual data greater than forecast, its sign good for currency.

1 Like
938

Yeah, Agree with you and the same was also mentioned… :slight_smile:

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939

Daily Fundamental Dose: 26 – December – 2017

Hello Traders,

Even if US Government managed to get its optimistic tax-plan passed through House & Senate, together with avoiding agency shutdowns till Jan.19, the US Dollar Index (I.USDX) couldn’t close apparently the last active week of 2017 on a positive side as investors feared that the tax-plan might increase budgetary deficit and could also restrict Fed rate-hikes. Those moves gained strength after US Durable Goods Orders and GDP figures missed their upbeat forecasts and further dragged the greenback gauge down towards marking first negative weekly closing in previous four. With this, the EUR managed to register a positive week even if latest regional election at Catalonia again supported the separatists. Further, the GBP also recovered some of its latest losses on Brexit progress while JPY dropped after BoJ refrained from praising incoming data-flow and rather maintained its dovish stand for monetary policy outlook. Commodity currencies, like AUD, NZD and CAD, were all in green partly due to respective economic strength and the rest because of USD’s weakness. Moreover, Crude price stretched the north-run with supply crunch due to major pipeline close & declining US inventories pleasing energy traders.

With most global markets closed due to Christmas holidays on Monday, traders had lesser things to observe and react upon. However, the same dormancy portrayed EUR plunge during early sessions, which investors termed as algo-trigger, and helped the USD to regain its charm. Though, festive-season and lack of big releases continued curbing the market-moves.

During early Tuesday, welcome Unemployment and Infation numbers from Japan pleased JPY traders but BoJ Governor, Haruhiko Kuroda, termed those details as too far from central-bank’s target and hence favored the need of ultra-loose monetary policy while looking forward. Further, Iraq’s Oil Minister, Jabbar Al-Luaibi, spread word of optimism concerning Crude’s global demand outlook and propelled Crude prices whereas North Korea’s latest rejection to tighter UN sanctions renewed Geo-political tensions.

Moving forward, trading bourses at Australia, Europe, Canada and UK are mostly shut on Tuesday and hence continuation of lesser active trading can prevail for a bit longer. Though, US markets will open after an extended weekend and may reflect latest EUR weakness with an upbeat start to the holiday-shortened week. Additionally, S&P/CS Composite HPI and Richmond Manufacturing Index are some of the stats that could add volatility into otherwise stagnant trade-times.

While scheduled US details indicate continued housing market strength and a bit softer Manufacturing mark, North Korea’s recent retaliation might direct the USD moves if Mr. Trump chooses to take a halt from his happy time and threaten the hermit-kingdom with harsh statements. Furthermore, developments relating to Brexit and Catalan politics might also help determine near-term trade sentiments.

Technical Talk

EURUSD’s sustained trading above 1.1820 keep favoring its ability to conquer 1.1900 and aim for 1.1950 but a downside break of 1.1820 can quickly drag the quote to 1.1755-60. Moving on, NZDUSD is trying to challenge the 0.7050-55 horizontal-region and target the 100-day SMA level of 0.7075 but 0.7000 and the 0.6970 shouldn’t be ignored if the pair reverses from present stage. At the end, NZDCAD moves are confined in a short-term descending triangle between 0.8970 and the 0.8895 with either-side breaks likely to flash the 0.9000 and the 0.8870 on the chart.

Have a nice trading-day ……

940

Daily Fundamental Dose: 27 – December – 2017

Hello Traders,

Even after registering another upbeat housing market indicator, the US Dollar Index (I.USDX) couldn’t recover its latest losses as lesser than expected print of Richmond Fed Manufacturing Index and the news that Democrats are preparing for another battle over Federal spending during next month kept dragging the greenback down. With this, the commodity-linked currencies, namely AUD, NZD and CAD, managed to rally when speculations grew about China’s increased demand but the USD’s downturn couldn’t please EUR buyers due to Geo-Political tensions emanating from Catalonia. Further, the JPY & Gold continued rising on softer USD-driven buying whereas GBP also strengthened a bit. Additionally, Crude prices marked fresh high of more than two-year after an explosion at a pipeline carrying crude to Libya’s biggest export terminal.

Wednesday is the day when almost all the global trading bourses are scheduled to re-open following extended weekends and hence have already started showing its impact since the early trading sessions. However, the same moves couldn’t help the US Dollar and the pre-established moves in favor of EUR, GBP, JPY and commodity-currencies, continued. It should also be noted that buyers of AUD, NZD and CAD remained so strong that they ignored a soft Industrial Profit release from China whereas Crude also witnessed pullback as Fortis pipe-line is believed to have started working normally.

Moving forward, US CB Consumer Confidence, Pending Home Sales and Japanese Prelim Industrial Production & Retail Sales are some of the important details that are ready to entertain investors during the rest of the day. While US details likely to continue disappointing greenback optimists, Japanese numbers may help the JPY to extend it north-run.

As the market is likely to portray all its strength, backed by return of global traders and a pack economic calendar, political news from US, North Korea and Catalonia may register noticeable EUR & USD moves while Brexit front isn’t expected to offer any major information and hence the GBP traders may witness another dull-day.

Given the US data-points keep flashing downbeat figures and the Democratic threat, together with North Korea’s relentless behavior, remain present, the US Dollar may continue declining and the same can help commodity currencies, JPY & Gold to remain firm. In case of the EUR, absence of any updates from Catalonia may help the regional currency to enjoy the greenback’s downturn.

Technical Talk

AUDUSD’s successful break of 0.7730 enables it to aim for the 100-day SMA level of 0.7780 while 0.7715 and the 0.7700 can offer immediate supports to the pair. Further, USDCAD is struggling to conquer the 1.2660-50 support-zone, which in-turn can fetch the quote to 100-day SMA level of 1.2600 but an upside break of 1.2700 may propel it to 1.2750-55. Moreover, GBPAUD’s break of 1.7360-50 is dragging it to test the 1.7235-30 horizontal-region but its further downside is likely to be challenged by oversold RSI and can activate the pair’s pullback to 1.7325 before reigniting the importance of 1.7350-60 area; though, break of 1.7230 can quickly drag prices to 1.7140 and the 1.7050 support-levels.

Have a nice trading-day ……

941

Weekly Fundamental Dose: 28 – December – 2017

Hello Traders,

Having witnessed all the monetary & Geo-political plays during the year, it’s time to bid adieu to the dramatic 2017 with almost empty hands when talking about economic details/events. The year has been good for the EUR, JPY and commodity currencies but the US Dollar Index (I.USDX) seems heading towards nearly 9% of annual loss even after delivering three rate-hikes and an optimistic tax-plan. However, few second-tier details/events are still left to play their roles and are worth discussing before we wrap up for New- Year!

Tax-Plan Passage Lost Its Charm

Even after completing too big a task to win over the Democrats and deliver the biggest tax overhaul in US history since last 30 years, Mr. Trump couldn’t please USD buyers when they welcomed the last week of 2017 as worries over its budget deficit impact & soft data-points dragged the US Dollar Index (I.USDX) down for the first time in four weeks. The same helped EUR to counter Catalan regional election results wherein the Separatists got another victory whereas GBP also marked a positive weekly close on Brexit progress. Further, commodity-linked currencies, like AUD, NZD and CAD kept being strong on expected hike in commodity demand during 2018, coupled with upbeat economics, but the JPY remained sluggish after BoJ Governor refrained to praise incoming data-flow and rather maintained its dovish stand for monetary policy outlook. However, the Gold prices continued rising on softer USD and the Crude rallied with depleting US inventories and closure of major pipeline.

The Holiday-Shortened Week Failed To Help The Greenback

The present week, which started with Christmas holidays on Monday and Tuesday at majority of global bourses, so far failed to help the greenback recover its latest losses due to downbeat data-points, including the recently published Richmond Manufacturing PMI & CB Consumer Confidence. However, the EUR remained a bit less strong on aftershocks of Catalan election results but the GBP maintained its strength even without any major releases. The AUD, NZD and CAD registered noticeable gains backed by strong commodity basket while Crude extended its rally when an explosion at Libyan pipeline increased supply-crunch and API marked another draw-down in energy stockpile. Moving on, JPY and Gold pleased traders with year-end buying and USD’s weakness whereas CHF also witnessed safe-haven support to stretch its north-run against the greenback.

What’s Left For The Week?

With the US housing market numbers, CB Consumer Confidence and Japanese Inflation figures already out in the news, analysts have fewer details to observe during the rest of the week. Among them, US Jobless Claims, Chicago PMI and Crude inventory, up for Thursday, followed by Friday’s German Prelim CPI, are likely to entertain investors for one last time before they prepare themselves for the New-Year eve.

While US Jobless Claims is likely to register 240K mark against 245K prior, the Chicago PMI could keep disappointing USD bulls with 62.2 figure compared to 63.9 earlier. Further, the official release of US Crude inventory may trigger the pullback of rising energy prices with a bit softer draw-down of -3.9M versus -6.5M previous. Additionally, German Prelim CPI might offer additional fuel to the EUR’s north-run with +0.5% mark against +0.3% prior.

At the political front, US Democrats seem preparing for another battle over budgetary spending when they meet in early January and the North Korea recently refrained to respect additional sanctions levied by the UN. Moving on, Catalonian leaders might start the 2018 by confronting Spanish government over the independence issue while Brexit leaders are also tightening their belts for a tough bargain concerning trade-talks at the start of next-month.

Given the mixed consensus for US data-points and lack of big events to take place before early 2018, the US Dollar may close the final week of 2017 on the negative side, except any surprises help the greenback.

As a result, the EUR and commodity-linked currencies, like AUD, NZD and CAD, might have a pleasant end to the upbeat year. In case of the GBP, muted economic calendar and absence of political plays could curb the UK currency’s moves but latest optimism is less likely to fade unless any negative news arrives.

Technical Analysis

Considering EURUSD’s latest break of nearly four-month old descending TL resistance, at 1.1910 now, the pair seems capable enough to meet the 1.1960 & 1.2000 resistances whereas 1.1910 & 1.1845 can offer immediate support to the quote. On the contrary, the GBPUSD has yet to clear the 1.3510 trend-line resistance with 1.3300 acting as adjacent rest for the pair while USDJPY’s down-tick may find it hard to clear 112.00 trend-line and can reverse to 113.50 resistance-line. Further, AUDUSD is all set to meet the 0.7820 and the 0.7845 with 0.7730 being nearby rest whereas 200-day SMA level of 0.7105 can curb the NZDUSD’s upside and may drag it back to 0.7030 support. At the end, USDCAD is taking rest on the 100-day SMA level of 1.2600, breaking which it can drop to 1.2555 and the 1.2530 while an upside D1 close above 1.2600 can again propel it towards 1.2650 and the 1.2710 resistances.

Have a nice trading-day ……

942

Daily Fundamental Dose: 29 – December – 2017

Hello Traders,

On Thursday, higher than expected US Jobless Claims, wider deficit of Goods Trade Balance & slower rise of Wholesale Inventories countered upbeat Chicago PMI to again drag the US Dollar Index (I.USDX) down on a daily closing basis. Additionally, US President, Donald Trump, caught China helping North Korea with oil supplies secretly and warned the world’s second largest economy not to help the hermit kingdom in order to avoid any future problems, which in-turn rejuvenated Geo-political tensions concerning US & North Korea. With the US Dollar’s downturn aptly being capitalized by the commodity basket, AUD, NZD and CAD kept on extending their previous up-moves while Gold and JPY also got to enjoy the greenback’s drop. Further, EUR and GBP remained mostly up even without any major details while Crude prices rallied after US stockpile figure dropped more than forecast.

During the early sessions of 2017’s last trading day, thin market moves were observed but nobody bothered to favor the USD in anticipation of tax-plan’s bad impact on US budget deficit and expected war-like situation between US & North Korea during 2018. However, improved global growth scenario and a weaker USD continued helping the commodity basket and safe-havens but the EUR & the GBP had lesser things to watch and remained sideways.

Moving forward, it’s the year’s final trading-day and majority of investors expect good closing of equity markets that rallied during 2017, which in-turn helped drive funds off from Fx to equities and favor stocks. While there is nothing more to observe in the economic calendar during the rest of the day, except Preliminary German CPI, traders might chose to stay away from availing any opportunities and result a dull-day at the end.

However, recent warning of US President can push the North Korea to retaliate and may cause additional damages to the USD. In case of the German Inflation gauge, the CPI might flash a welcome sign and can propel EUR surge, but year-end thin volume may curb the regional currency’s rally. Moreover, production halts at major oil pipe-lines of Libya & North Sea can support Oil to close the year by pleasing energy traders whereas commodity linked currencies, like AUD, NZD and CAD, may stretch their north-runs a bit longer on anticipated hike in metal demands during 2018. At the end, GBP might remain lackluster but the latest progress of Brexit can help the Cable to maintain its strength.

To sum up, lack of big releases and year-end festive mood of trader fraternity could together portray a not so active trading-day for the global financial markets; though, any surprises by the algo triggers, which generally happen during low volume days, can’t be denied.

Technical Talk

GBPUSD finally cleared 1.3455 TL resistance and may aim for 1.3480 & 1.3500 resistance while a dip below 1.3455 can again flash 1.3410 on the chart. Further, USDCHF’s break of 0.9830 seems dragging it towards 0.9735 whereas EURCAD needs to conquer 1.4995 TL support to meet 1.4950 & 1.4920 levels otherwise it can rise back to 1.5030 & 1.5080 resistances.

Have a nice trading-day ……

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