Daily Fundamental Dose

FxAnil · January 2, 2018, 8:02am

Daily Fundamental Dose: 02 – January – 2018

Hello Traders,

Irrespective of thin economic calendar and US Republicans’ ability to get their optimistic tax-plan passed, the US Dollar Index (I.USDX) couldn’t post a positive weekly closing as sluggish data-points and less active trading sessions dragged the greenback gauge towards marking second consecutive negative week. With this, the US Dollar registered worst year in nearly a decade and the EUR, which benefited from the USD’s pain, posted the best annual gains since last 14 years against the US currency. The GBP strengthened a bit with optimism surrounding Brexit whereas commodity-linked currencies, namely AUD, NZD and CAD, proved to be the winners as commodity prices rallied. Further, the JPY and the Gold capitalized USD’s downturn while Crude prices registered heavy rise after stockpile drawdown and supply-crunch at Libya pleased energy traders.

Having closed the year 2017, investors were busy celebrating the New Year eve on Monday; however, upbeat print of China’s official Manufacturing PMI favored commodity basket whereas political unrest at Iran paved the way for a good year-start of the Crude.

During Tuesday, when majority of global markets are scheduled to open except New Zealand and Japan, China’s Caixin Manufacturing PMI surprisingly flashed better than forecast number but the Australian Home Prices dropped. As a result, AUD, NZD and CAD carried their last-years’ gains to the first trading-day of 2018 while political unrest at Iran extended the Crude’s march. The US Dollar kept trading down awaiting fresh triggers from the economic calendar which has plethora of PMIs standing ready to propel global trade sentiments.

While China’s Caixin Manufacturing PMI has already posted a good number to welcome the New Year, Final Manufacturing PMIs from EU, Germany and US are likely not to change from their initial predictions. Though, UK Manufacturing PMI is expected to soften a bit by marking 58.00 figure against 58.2 prior and may hurt the GBP.

In case of Geo-Political front, Iran continued struggling to please the anti-government demonstrators while North Korea took a sudden U-turn by declaring its readiness to have a talk with South Korea to restore the peace between two neighbors. Moving on, US Democrats seem preparing for another battle to threaten Republican leaders with their questions on budget deficit whereas EU & UK policymakers might come at loggerheads when they meet to discuss post-Brexit trade-deal during this week.

Hence, the year-start trading moves have many factors to confront that together could determine near-term market sentiment but the PMIs are among the front-liners to entertain investors.

Technical Talk

Considering AUDUSD’s successful trading beyond 0.7810, the pair is likely to target 0.7870 & 0.7900 during its additional upside with 0.7810 & 0.7775 acting as nearby supports to watch. The NZDUSD is also likely to extend its north-run towards 0.7170 & 0.7200 with 0.7100 & 0.7065 being adjacent rests whereas NZDCHF has to clear 0.6950 to aim for 0.6975 else it can revisit 0.6895 & 0.6870 supports.

Have a nice trading-day ……

FxAnil · January 3, 2018, 8:28am

Daily Fundamental Dose: 03 – January – 2018

Hello Traders,

If we observe Tuesday’s market moves, one thing is sure that the USD didn’t have a good start to the year even after registering upbeat Manufacturing PMI and the main reason was global investors’ rush for commodities. Additionally, US President’s threat to North Korea and Iran provided extra weakness to the greenback. With this, the EUR extended its upbeat PMI backed rally while the GBP remained sluggish due to softer than expected Manufacturing gauge number. Further, AUD, NZD and CAD kept rising but the NZD had smaller gains due to holidays at New Zealand whereas Crude prices ignored restoration of major pipelines as Iranian unrest continued threatening global supply outlook. At the end, JPY and Gold also managed to please buyers due to their safe-haven appeal amid declining US currency.

Although market players didn’t favor the greenback gauge on Tuesday, it seems that Wednesday had a good beginning for the USD as it recovered some of its latest losses during early-day trading. As a result, commodity-linked currencies, namely AUD, NZD and CAD, witnessed pullback while recent news expecting protests to fade in Iran dragged the Crude a bit towards south. The EUR also dropped with no major releases to watch whereas GBP declined before Construction PMI.

Moving forward, UK Construction PMI, ISM Manufacturing PMI & Swiss Manufacturing PMI are likely second-tier details that could entertain traders before minutes of the latest FOMC meeting gets published. Looking at the consensus it can be ascertained that all of the PMIs might disappoint the respective currency traders and hence investors may watch FOMC minutes to get more trading clues.

The U.S. central bank, Federal Reserve, did offer its third and final rate-hike for the year 2017 during that meeting and two of the policymakers were against the move. Hence, investors will closely examine whether the entire board is strong enough to offer the promised three rate-hikes during 2018 or there are some doubts which weren’t revealed.

Other than the FOMC minutes, Geo-political plays at Iran and North Korea could also provide intermediate trading opportunities. Iran recently announced that it expects the public protests to fade any time soon as policymakers are ready to discuss issues with the protest supporters. On the other hand, North Korea’s readiness to have peace talks with the South Korea, first after 2015, might give rise to restoring investor confidence back to USD but the hermit kingdom hasn’t dropped its attitude to threaten the US leader and the same might keep pushing traders to JPY and Gold.

Technical Talk

USDJPY’s latest bounce from 112.00 may help it revisit the 112.50 & 112.80 resistances whereas a dip beneath 112.00 can quickly fetch the quote to 111.65. Further, the 1.2500 played its role to trigger the USDCAD’s U-turn and may propel the pair towards 1.2580 with downside break of 1.2500 likely flashing 1.2475 & 1.2430 on the chart. Moreover, GBPNZD’s has to surpass the 50-day SMA level of 1.9215 and the 1.9250-70 horizontal-region in order to jusifty its latest recovery else it can re-test 1.9070 and the 1.8930 support-levels.

Have a nice trading-day ……

FxAnil · January 4, 2018, 8:53am

Weekly Fundamental Dose: 04 – January – 2018

Hello Traders,

While Wednesday’s FOMC minutes and solid second-tier economics from US helped the greenback broke its recent losing streak, investors now await Friday’s headline employment details in order to determine near-term market moves. Additionally, UK Services PMI, EU Flash CPI & Canadian job numbers are also on the card and become important to analyze.

Let’s start discussing the tales of recent past prior to analyzing fundamental aspects concerning each of the upcoming crucial details/events.

A Second Negative Weekly Closing of The USD

Even with least updates on the U.S. economic calendar, the US Dollar Index (I.USDX) couldn’t reverse its previous weekly losses as some of the scheduled details flashed softer outcomes and investors remained afraid of Trump’s tax-plan effect on the economy. As a result, the greenback marked its worst year in nearly a decade while the EUR benefited from the same and flashed heavy gains. Moving on, the GBP also stretched its up-moves due to positive developments on Brexit front by the UK policymakers while commodity-linked currencies, namely AUD, NZD and CAD, rallied as upbeat global economic outlook and weaker US Dollar fueled commodity demand. Further, JPY and Gold also advantage of the USD’s decline whereas Crude prices surged as depleting inventories and supply crunch at major pipelines pleased energy traders.

It Wasn’t A Good Start For The Greenback Until Wednesday

With the early-week trading sessions witnessing dearth of investors’ interest due to New-Year holiday mood, the US Dollar continued facing downside pressure as market sentiment remained strongly tilted towards commodity basket. Moreover, US President’s threats to Iran and North Korea provided additional reason to the greenback sellers. Though, everything reversed on Wednesday when ISM Manufacturing posted three-month high and FOMC minutes reassured investors of gradual interest rate-hikes from the Federal Reserve.

On the other hand, the EUR managed to entertain buyers with positive data-points but the GBP couldn’t sustain its latest up-moves due to weaker prints of Manufacturing & Construction PMIs. However, AUD, NZD and CAD didn’t lose their charm while Crude prices also extended north-run on the news of political unrest at Iran. Furthermore, JPY and Gold remained not too active as Japanese markets were close till Thursday and USD’s decline offered intermediate strength to both these safe-havens.

During early Thursday, market sentiment remained quite in favor of the US Dollar after FOMC minutes reignited buying interest, which in-turn negatively affected rest of the major currencies, including EUR, JPY and commodity-linked currencies. With this, the JPY traders couldn’t welcome the Japanese PM’s upbeat comments when their started after a long year-end break while GBP traders remained worried for the dip in UK Services PMI.

What’s Next?

Having gone through FOMC minutes, global data highlight set on the Friday’s EU Flash CPI, US & Canadian Jobs report and US factory Orders while Thursday’s UK Services PMI may become of immediate importance.

Starting with the UK Services PMI, core to the British GDP, the headline gauge might reverse the GBP’s recent losses by flashing 54.1 mark against 53.8; however, latest updates on the Brexit hasn’t been good and may cap the Pound’s advances. Other than the UK stat, the U.S. ADP Non-Farm Employment Change, early signal for Friday’s NFP, could please greenback buyers with 192K compared to 190K previous reading.

Moving on to Friday, the early-day moves might be directed by the Australian Trade Balance and EU Flash CPI. While AU Trade Balance can further propel the AUD’s rally by registering 0.55B surplus against 0.11B prior, the EU Flash CPI can disappoint the regional currency traders with 1.4% mark versus 1.5% earlier.

Following the intermediate moves triggered by AU & EU details, market players will then jump on to the crucial US jobs report which encompasses, Non-farm Payrolls (NFP), Average Earnings and Unemployment Rate. Looking at the consensus, the Non-farm Payrolls (NFP) might become a disappointment for USD buyers if it matches the 189K prediction against 228K prior; however, expected increase in Average Earnings, to 0.3% from 0.2%, coupled with no change in Unemployment Rate from its 4.1% status, could please the optimists.

It’s time to shift to the rest of Friday’s economic calendar, namely US & Canadian Trade Balance, Canada’s employment stats and US Factory Orders. The U.S. Trade Balance might register lesser deficit figure of -48.1B against -48.7 earlier but the same from Canada, with its -1.3B deficit against -1.5B earlier, can please the CAD. Further, expected dip in Canadian Employment Change, by -2.5K against +79.5K prior, together with increase in Unemployment Rate to 6.0% from 5.9%, might hurt the CAD. At the end, US Factory Orders growth is expected to mark 1.5% figure against -0.1% earlier contraction.

Considering the upbeat expectations from US data-calendar, chances of the USD’s further advances are much brighter but Geo-political worries emanating from North Korea and Iran might confine the greenback’s up-moves.

In case of the EUR, softer inflation can trigger pullback of the regional currency while any more disappointments from UK stats would increase the strength of Brexit pessimism and drag the GBP towards south. Moreover, CAD has already rallied much and downbeat numbers might activate the much required pullback of the Loonie.

Furthermore, JPY and Gold can benefit from present worries at Iran but USD’s strength can limit their advances whereas Crude could witness profit-booking as pipe-line stops have faded and Iran is eager to take control of public unrest.

Technical Analysis

EURUSD has to clear the 1.2090 – 1.2100 region in order to claim the 1.2250 mark else it can revisit the 1.1960 & 1.1900 rest-points. For the GBPUSD traders, the 1.3620-25 and the 1.3450 become important to watch while USDJPY has to clear 113.20 should it wish to meet 114.00 otherwise chances of its drop back to 112.00 – 111.95 can’t be denied. Further, AUDUSD has 0.7890 – 0.7900 strong resistance with 0.7780 acting as crucial support while USDCAD may find it hard to break the 1.2410-15 and may bounce-back to 1.2760 if it breaks the 1.2600 mark. At the end, NZDUSD must surpass 0.7130 to target 0.7200 but a downside close below 0.7060 can reprint 0.7000 on the chart.

Have a nice trading-day ……

FxAnil · January 5, 2018, 8:06am

Daily Fundamental Dose: 05 – January – 2018

Hello Traders,

Even after witnessing the highest US ADP gain since March, the US Dollar Index (I.USDX) couldn’t sustain its previous-day’s gains as global investors doubted the Fed’s rate-hike plan ahead of today’s slew of top-tier releases. As a result, commodity basket got additional strength, which was well depicted by AUD, NZD and CAD’s rally, whereas EUR & GBP also extended their north-runs. However, JPY failed to portray the USD’s weakness as early-day comments from BoJ Governor favored the central-bank’s monetary easing. Further, Gold managed to shine again while Crude marked softer rise irrespective of heavy depletion in US stockpile after traders considered the recent energy rally too fast.

While doubts over the Fed’s future policy moves and US tax-plan’s impact on world’s largest economy kept hurting the US Dollar off-late, Friday offered a good start to the greenback. The reason being upbeat forecast concerning today’s Employment details, which in-turn might propel the inflation and help the Federal Reserve deliver its gradual rate-hike promise. On the economic front, Australia registered the largest trade deficit figure in over a year and dragged the AUD towards south whereas hike in German Retail Sales helped EUR to remain a bit strong.

Moving forward, the EU Flash CPI will become the first of crucial data-points to shake market moves with its expected 1.4% mark against 1.5% prior; though, some analysts believe strong German CPI could defy the consensus of weaker regional inflation mark. After the EU CPI, slew of US & Canadian Employment Details and Trade Balance could gain market attention. Here in, the Canadian Trade Balance is expected to please the Loonie buyers with its -1.3B deficit against -1.5B earlier but expected dip in Employment Change, by -2.5K against +79.5K prior, together with increase in Unemployment Rate to 6.0% from 5.9%, might hurt the CAD.

In case of US stats, Non-farm Payrolls (NFP) might become a disappointment for USD buyers if it matches the 190K prediction against 228K prior; however, expected increase in Average Earnings, to 0.3% from 0.2%, coupled with no change in Unemployment Rate from its 4.1% status, could favor the optimists. Additionally, US Trade Balance might register lesser deficit figure of -48.1B against -48.7 earlier.

Given the mixed readings for US, chances of the USD to flash another negative weekly closing are brighter while an upbeat EU CPI can help escalate the EUR’s rise but the CAD may have to confront disappointment on sluggish job figures.

Technical Talk

Irrespective of likely fundamental support for the EURUSD’s rally, the pair has to surpass 1.2090 – 1.2100 region in order to claim the 1.2250 mark else it can revisit the 1.1990 & 1.1960 rest-points. On the other hand, the GBPUSD is likely to surpass the 1.3620-25 and may revisit the 1.3490 & 1.3450 support-levels. At the end, NZDJPY’s break of onre than four-month old descending TL indicates its further advances to 81.00 and then to the 81.35 whereas a downside break of 80.55 can reprint 80.15 on the chart.

Have a nice trading-day ……

FxAnil · January 8, 2018, 7:57am

Daily Fundamental Dose: 08 – January – 2018

Hello Traders,

In spite of registering upbeat Factory Orders & ISM Manufacturing PMI, coupled with hawkish FOMC minutes, the US Dollar Index (I.USDX) couldn’t withstand the NFP’s disappointment and ended up closing the week at the same level where it started the 2018. However, noticeable up-moves were witnessed from commodity basket which in-turn propelled the AUD, NZD and CAD wherein CAD had additional support of strong Jobs report. Further, the EUR managed to take benefit of the weaker USD and upbeat Final PMI figures whereas GBP also registered gains after Services PMI surpassed welcome forecasts. Though, the JPY wasn’t able to capitalize the greenback’s downturn as BoJ policymakers kept praising their loose monetary policy but the Gold portrayed the U.S. Dollar’s downturn with weekly positive closing. At the end, Crude prices rallied on political unrest at Iran, depleting inventory levels and a cut in US rig counts.

While risk assets kept enjoying a strong start to the 2018 during last week, weekend comments from UK Prime Minister, Theresa May, favored the cabinet reshuffle to promote fresher faces from a younger and more diverse generation of Conservatives. As a result, the GBP started declining against majority of its counterpart during early Monday whereas a contraction in German Factory Orders did hurt the EUR. Moreover, Crude and commodity-linked currencies, namely AUD, NZD and CAD, witnessed profit-booking moves during early trading hours while JPY and Gold became a bit less favored due to USD’s advances ahead of FOMC members’ speech scheduled for the later part of the day.

Looking for the rest of the day’s economic calendar, Swiss CPI and EU Retail Sales are the only releases up for publishing and are less likely to generate any big market moves when the Japanese markets are shut due to holiday. Though, on-going political unrest at Iran and upcoming speeches from two of the FOMC members, coupled with bitter weather conditions at US & Australia, might keep entertaining global investors. Moreover, Saudi Arabian authorities have re-started arresting members of royal families on the name of corruption whereas South Korea and North Korea are ready for peace-talks during Tuesday and the U.S. also welcomed the hermit kingdom’s gesture.

Hence, while fewer economic data-points might not please momentum traders, Geo-political plays at US, UK and middle-east can keep entertaining the market players. As a result, JPY and Gold are likely to regain their strength while commodity-linked currencies could take a halt from their latest north-runs. Further, FOMC members are expected to speak in support of the Fed’s three rate-hikes and the same could rejuvenate the US Dollar’s strength.

Technical Talk

AUDUSD’s inability to surpass 0.7870 and a subsequent break of immediate TL support indicates brighter chances of the pair’s drop to 0.7800 and then to the 0.7775 while an upside break of 0.7845 may again propel the quote towards 0.7870. In case of the NZDUSD, the 0.7145 and the 0.7120 are likely immediate supports for the pair to test as it couldn’t rise beyond 0.7180 which might have flashed 0.7210 on the chart. Moreover, EURCHF moves are confined in a short-term ascending triangle formation between 1.1715-10 and 1.1775-80.

Have a nice trading-day ……

FxAnil · January 9, 2018, 8:03am

Daily Fundamental Dose: 09 – January – 2018

Hello Traders,

Irrespective of thin economic calendar and dovish comments from Atlanta Fed President, Raphael Bostic, the US Dollar Index (I.USDX) managed to register noticeable gains on Monday as global investors reassessed Friday’s job report and praised the Average Earning’s rise. While USD had a good start to the week, the EUR witnessed some profit-booking after its more than a month-long rally even if the region’s investor confidence gauge surged. Further, the GBP justified the slump of Halifax HPI while JPY also reversed from TL resistance. Moving on, AUD and CAD slipped a bit on USD’s strength but the NZD maintained its up-moves. At the end, Crude prices kept rising as political concerns in some OPEC nations pleased energy traders whereas Gold remained somewhat weaker due to greenback’s advances.

While Monday has already offered an appreciable boost to the global market moves, early Tuesday was also interesting after BoJ’s announcement to cut its monthly purchase of government bond propelled the JPY. Even if investors considered the central bank’s bond purchase cut as a sign of upcoming monetary policy tightening, it must not be missed that the same decision is only a short-term one and has less to do with the central-bank’s monetary policy outlook.

Moving forward, Today’s economic calendar is a bit busier compared to the yesterday as Swiss Retail Sales, EU Unemployment Rate, Canadian Housing Starts and US JOLTS Job Openings are some of the data-points that are scheduled for release. Among them, Swiss Retail Sales might help the CHF to extend its latest rise while an expected drop in EU unemployment can rejuvenate the EUR’s strength. Moreover, Canadian Housing Starts could drag the CAD towards south if matched the disappointing forecasts while US JOLTS Job Openings may help the greenback to sustain recent up-moves.

Other than economics, the meeting between North & South Korea, their first formal contact in two years, will be closely observed to analyze the Geo-political threats emanating from North Korea. Additionally, any comments from the U.S. President concerning the hermit kingdom’s expected behavior might also entertain market players. Furthermore, crisis at Iran and Saudi Arabia are still playing their background noise and may keep favoring safe-havens like JPY and Gold whereas German political play could keep making EUR traders on the edge.

Hence, while a bit busier economic calendar is there to offer more active trading day, Geo-political events could also add strength into the market volatility, which in-turn require investors to trade safe and observe these details/events closely.

Technical Talk

USDCAD’s inability to sustain its 1.2400 break has to clear the 1.2450 TL resistance in order to aim for 1.2500 and the 1.2560 while a dip beneath 1.2400 can fetch it to 1.2330. Further, USDCHF seems heading towards 0.9800 and the 0.9830 with 0.9745 & 0.9725 acting as nearby supports for the pair. At last, EURCAD is less likely to extend its south-run unless clearing the 200-day SMA level of 1.4830 and the 1.4800 TL on a daily closing basis, which in-turn signal brighter chances of its pullback to 1.4880 & 1.4920.

Have a nice trading-day ……

FxAnil · January 10, 2018, 8:05am

Daily Fundamental Dose: 10 – January – 2018

Hello Traders,

While US economic calendar failed to print upbeat JOLTS Jobs Report on Tuesday, the US Dollar Bulls concentrated more on the rallying equity benchmarks and rather piled greenback during risk-on market sessions. The same had an adverse impact on the EUR, which couldn’t rise even after registering welcome unemployment figures, while GBP dropped after UK PM reshuffled her cabinet. Moving on, the JPY remained strong on the expectations that BoJ could begin tapering its ultra-easy monetary stimulus after the central bank cut monthly bond purchases but the gold declined as macro optimism hurt safe-haven demand of the yellow metal. Further, AUD, NZD and CAD all had to bear the burden of strong USD whereas Crude prices kept rising after API stockpile slumped more than expected.

As the market risk appetite improved towards the greenback, investors now wait for Friday’s consumer-centric details to provide a boost to the US Dollar buying. However, Thursday’s PPI and today’s Crude inventory levels might also offer intermediate trading moves. On the other hand, the early-day moves were governed by China’s lowest PPI figures since November 2016 that offered additional weakness to the commodity-linked currencies, like AUD, NZD and CAD.

Looking forward, UK Manufacturing Production, Goods Trade Balance and Canadian Building Permits are some other economics that may entertain traders. Herein, rise in Manufacturing Production could help the GBP recover of its latest losses but higher deficit of Goods Trade Balance might confine the Pound’s up-moves. Additionally, Canadian details could hurt the CAD more as Building Permit growth is likely to shrink while US inventory details may trigger Crude’s pullback if it registers lower than previous drawdown.

Other than rising equity indices, depleting Geo-political tension also seem a strong reason for market’s run for riskier assets. The latest talks between North & South Korea concluded well and both the parties are ready to meet again in future to develop good relations; however, the North Korea is still not ready to accept US as a friend and that might generate any future problems. Also, the German Chancellor is struggling to maintain her power with larger coalition and the UK PM’s reshuffle might hurt the Brexit, which both seem negatives for the EUR & GBP respectively.

To sum up, recent boost to investor optimism, coupled with absence of Geo-political crisis, is likely favoring the USD’s further upside while problems at EU & UK could hurt their respective currencies.

Technical Talk

GBPUSD seems coming back to 1.3490 & 1.3455 with 1.3540 & 1.3585 being nearby important resistance while USDJPY has to clear 111.65 in order to meet the 111.00 else it can revisit the 112.45 & 113.40 north-side numbers. Further, CHFJPY has to close below the 50-day & 200-day SMA confluence region of 114.20 to flash 113.45 & 112.90 on the chart while 114.70 & 115.20 can limit the pair’s immediate upside.

Have a nice trading-day ……

FxAnil · January 11, 2018, 8:17am

Weekly Fundamental Dose: 11 – January – 2018

Hello Traders,

Even as global economic calendar has mostly been quiet since the week-start, except few downbeat readings from US and China, improvements in macro risk-appetite, coupled with speculations concerning BoJ’s next policy moves and China’s readiness to slow/halt U.S. treasury purchase, entertained the market players. However, volatility is likely to gain a boost while going forward as some important US stats are scheduled to rule the rest of the week’s trade sentiment. So, it’s better to discuss all the upcoming data-points and events that might entertain trader fraternity. Though, it would be nice to first understand what has happened in the economy till now and then progress towards forecasts.

No Change In The USD

Irrespective of upbeat ISM Manufacturing PMI & hawkish FOMC minutes, the US Dollar Index (I.USDX) couldn’t please the buyers after registering two consecutive weekly declines as NFP number dropped more than expected. As a result, the greenback gauge concluded the last week mostly at the same level where it started. The case was much different at commodity basket wherein optimism surrounding increase in future demands, coupled with positive data-points, propelled the AUD, NZD and CAD. Further, EUR and GBP benefited from the USD’s downturn while JPY remained weaker on BoJ Governor’s favor of loose monetary policy. Moreover, Crude prices kept its north-run intact due to Geo-political tensions at middle-east and depleting US stockpiles whereas Gold also surged with greenback’s weakness pushing investors to the safe-haven.

A Positive Week Till Now

Unlike last week, the present week has been an upbeat one since its start as receding Korean tensions and impressive equity market gains boosted investor confidence in support of riskier assets. However, the commodity-linked currencies, mainly the CAD, liquidated their recent gains on disappointing data-points and on fears that US may withdraw from NAFTA. The JPY was a clear winner as a cut in monthly government bond purchases by the BoJ was considered as a beginning of monetary policy tightening by the central-bank. Moving on, EUR had fewer releases to observe and hence remained sluggish but the GBP dropped on higher trade deficit and UK PM’s latest reshuffle to her cabinet. At the end, Gold kept being traders’ favorite while Crude continued surging on declining US inventories.

It’s All About US Now

While dearth of major releases drew market-players’ attention towards Geo-political issues and central-bank news till now, upcoming releases from US, namely PPI, Jobless Claims, FOMC member’s speech, CPI & Retail Sales, could keep analysts stick to the U.S. economic calendar. Other than these details/events, China’s Trade Balance and quarterly earnings report from headline US organizations might offer intermediate trade opportunities.

Starting with Thursday’s PPI & Jobless Claims, the PPI is likely to print 0.2% mark versus 0.4% prior and the Core PPI is also expected to register 0.2% figure compared to its earlier release of 0.3% whereas the Jobless Claims might flash 246K against 250K prior. Additionally, Federal Reserve Bank of New York President, William Dudley, who is also an FOMC voting member, is scheduled to speak during the later part of the day and might speak in favor of the central-bank’s three rate-hike a year promise.

Moving on to Friday, the early-day moves could be driven by China’s Trade Balance data that is likely to depict commodity front’s weakness with 245B stat compared to 264B previous. Looking at the U.S. Consumer-Centric data-points, the CPI and Core CPI releases aren’t expected to please Fed hawks as the CPI could retrace a bit from its last-month’s welcome numbers while the Core CPI isn’t likely to change much. In its last release, CPI grew 2.2% YoY & 0.4% on a monthly basis but the Core CPI proved to be a spoiler as it dipped to 1.7% on a yearly format while testing a 0.1% on MoM. Consensus relating to tomorrow’s CPI signals a 0.2% read for MoM release and 2.1% for YoY mark. However, the Core CPI is likely to remain unchanged on YoY basis at 1.7% but may improve a bit on MoM with 0.2% figure. Furthermore, Retail Sales could also add weakness into the greenback if matching the 0.5% growth forecasts against 0.8% prior and the Core Retail Sales may also become a drag with its likely softer print of 0.4% compared to 1.0% earlier.

In addition to the economic details/events, the US equity report for major companies could also become crucial for the USD and can make or break investor sentiment while mild political moves at UK & Germany may entertain GBP & EUR traders.

To sum up, the USD has a bigger threat in the form of consumer-centric numbers that might reverse the greenback’s early-week gains but optimism by the FOMC member could try providing less harm to the currency.

The JPY is more likely to maintain its robust gains till weekend with present optimism surrounding the BoJ’s next move, even if its likely to fade soon, whereas EUR and GBP could continue to be sluggish and take their clues from the US Dollar.

In case of the commodity front, disappointing trade balance figure might trigger the NZD, AUD and CAD’s downturn if the China’s Trade Balance joins the line of weak PPI.

Technical Analysis

Inability to surpass the 1.2080-90 region seems dragging the EURUSD towards 1.1830 whereas GBPUSD may bounce off to 1.3580 from 1.3450 TL. Further, the USDJPY has to clear 110.80 in order to revisit the 110.00 support else it can comeback to 112.00 & 112.80 while USDCAD needs to surpass 100-day SMA level of 1.2590 if it is to challenge the 1.2660 otherwise chances of its drop to 1.2380 can’t be denied. Moreover, AUDUSD again rises to 0.7880-90 area, breaking which it can target 0.7950 with 0.7770 being near-term important support whereas NZDUSD must close beyond 0.7210 to confront the 0.7250 & 0.7300 else it may re-test 0.7130 and 0.7100 supports.

Have a nice trading-day ……

FxAnil · January 12, 2018, 7:57am

Daily Fundamental Dose: 12 – January – 2018

Hello Traders,

In addition to New York Fed President William Dudley’s speech describing longer-term negative impacts of US Government’s tax-plan, disappointing print of the PPI flashed another daily loss of the US Dollar Index (I.USDX) on Thursday. With this, market players are now eagerly waiting for today’s consumer-centric details in order to determine immediate USD moves. On the other hand, minutes of recent ECB meeting signaled that the present economic strength favors the central bank to stand ready for trimming its massive monetary stimulus, which in-turn propelled EUR across the board. Further, the GBP, JPY and the Gold also benefited from the USD’s decline whereas commodity-linked currencies, namely AUD, NZD and CAD, reversed their earlier losses on macro optimism concerning future demand. Additionally, Crude prices witnessed profit-booking after marking new three-year high.

Moving on to the busy Friday, when US CPI & Retail Sales are up for release, early-day moves remained against the US Dollar as recently disappointing PPI threatened traders for the weaker price pressure into the world’s largest economy. The Crude, however, stretched its downside while NZD rallied more after New Zealand altered components that are monitored to measure its CPI. Moving on, the CAD weakened a bit on the threats that US may walk away from the NAFTA while the AUD and the JPY couldn’t sustain their advances. On the economic front, China’s Trade Balance registered welcome surplus figure.

Looking at the forecasts for scheduled data-points, the CPI is likely to register a 0.1% read for MoM release and 2.1% for YoY mark against 0.4% monthly and 2.2% yearly respective figures posted last-month. Further, the Core CPI might remain unchanged at 1.7% YoY but may strengthen to 0.2% from 0.1% earlier. In case of Retail Sales the growth figure might weaken to 0.5% from 0.8% whereas Core Retail Sales may soften to 0.3% from 1.0% prior.

Given the pessimistic forecast concerning US data-points, the US Dollar is less likely to witness any U-turns from its present declines; however, Mr. Donald Trump recently sound a bit softer towards North Korea and hence chances of reduced Geo-political tensions between the two economies might help the greenback.

In case of the UK & German politics, the Theresa May government is still struggling to have a plan that can please EU policymakers while discussing trade talks soon but the German Chancellor’s bet on grand coalition could well hurt the EUR if it fails again. In all these Geo-political scenario, JPY and Gold are likely to benefit more and there could be a pullback in commodity currencies.

Technical Talk

EURUSD is again heading towards 1.2080-90 resistance-region,breaking of which can quickly propel it to 1.2150 and the 1.2180 while a dip below 1.2000 can quickly fetch the quote to 1.1960. Further, USDCAD’s latest U-turn from 1.2500 could help it challenge the 1.2590 and the 1.2630 but a downside break of 1.2500 can drag it to 1.2470. At the end, EURGBP struggles with 100-day SMA level of 0.8905 in order to extend its upside towards 0.8960 with 0.8845 and the 0.8820 likely being immediate supports to watch.

Have a nice trading-day ……

FxAnil · January 15, 2018, 8:24am

Daily Fundamental Dose: 15 – January – 2018

Hello Traders,

With the optimism concerning global growth has recently been fueling commodity basket, risk of tighter monetary policies at ECB & BoJ, coupled with sluggish US economics, portrayed volatile trading sessions during last week. As a result, the U.S. Dollar Index (I.USDX) closed beneath three-year low on a weekly basis while EUR and JPY rallied considerably. Further, the AUD, NZD and CAD kept extending their respective north-runs whereas GBP also strengthened around late weekdays when news broke out that Netherlands and Spain favored a good Brexit deal to the UK. Additionally, Gold managed to benefit from the USD’s weakness but the Crude surged on inventory draw-down.

While global financial moves were mostly against the USD during last week, Monday’s U.S. holiday and lack of big releases on economic calendar could limit the market volatility while going forward. However, early-day trading patterns further favored the rise of JPY after BoJ Governor praised Japan’s economic strength and recent improvement in core CPI whereas Iraq’s support to extend global production cuts stretched the Crude’s advances. Moving on, commodity-linked currencies, namely AUD, NZD and CAD, continued their upside march while EUR also gained on positive developments relating to Germany’s grand coalition. Moreover, Moody’s latest positive comments on the EU’s economic outlook offered additional strength to the regional currency.

Looking towards the rest of the day, political plays at UK and Germany, concerning Brexit and Chancellor’s coalition respectively, might entertain global investors when there are effectively no important details from economic calendar to observe. Though, EU Trade Balance and Japanese PPI might grab traders’ attention. While EU Trade Balance’s larger surplus may become an additional positive for the EUR, a bit softer PPI from Japan could help trigger the JPY’s profit-booking. In case of Crude, latest surge in US & Canadian rig counts over weekend curbed the energy prices to rush further towards north but optimism concerning global production cut may support the broader strength.

At the political front, given the brighter chances of UK PM’s inability to win over Brexit opponents, be it from rival parties or from within, the upcoming two-day debate, namely on Tuesday and Wednesday, on the European Union Withdrawal Bill at House of Commons will be crucial for GBP traders. For Germany, Chancellor Angela Merkel is likely to find fewer hurdles in forming a grand coalition in order to maintain her power to rule the EU’s largest economy.

Hence, with less or no big economic releases and U.S. holiday, global financial markets are likely to witness soft trading moves but political plays at UK & EU, coupled with some second-tier details from EU & Japan, might entertain traders.

Technical Talk

AUDUSD has to clear the 0.7960 resistance-mark in order to aim for 0.8000 round-figure, else the overbought RSI might drag it back to 0.7900 and the 0.7870 supports. For NZDUSD, the 0.7280 and the 0.7310 are likely nearby resistances that can restrict the pair’s upside whereas 0.7230 & 0.7200 may offer immediate supports during the pair’s U-turn. At the end, EURNZD needs to surpass the 1.6855 and the 1.6915 resistances if it is to justify its up-moves otherwise it can revisit the 1.6700 and the 1.6620 rest-points.

Have a nice trading-day ……

FxAnil · January 16, 2018, 8:02am

Daily Fundamental Dose: 16 – January – 2018

Hello Traders,

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 17, 2018, 7:48am

Daily Fundamental Dose: 17 – January – 2018

Hello Traders,

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

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 18, 2018, 8:57am

Weekly Fundamental Dose: 18 – January – 2018

Hello Traders,

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

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

Another Disappointing Week For The USD Bulls

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

Greenback Still Needs Some Boost To Please Buyers

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

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

All Eyes On US & UK Details For Now

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

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

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

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

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

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

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

Technical Analysis

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

Have a nice trading-day ……

FxAnil · January 19, 2018, 8:26am

Daily Fundamental Dose: 19 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 22, 2018, 8:05am

Daily Fundamental Dose: 22 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 23, 2018, 7:19am

Daily Fundamental Dose: 23 – January – 2018

Hello Traders,

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 24, 2018, 7:40am

Daily Fundamental Dose: 24 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 25, 2018, 8:39am

Weekly Fundamental Dose: 25 – January – 2018

Hello Traders,

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

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

Tale of Last Week: Additional Downturn of The US Dollar

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

No Mercy For the Greenback

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

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

It’s High Time To Rethink About Market Behavior

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

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

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

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

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

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

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

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

Technical Analysis

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

Have a nice trading-day ……

FxAnil · January 29, 2018, 8:30am

Daily Fundamental Dose: 29 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · January 30, 2018, 7:46am

Daily Fundamental Dose: 30 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……