Daily Fundamental Dose

FxAnil · January 31, 2018, 6:26am

Daily Fundamental Dose: 31 – January – 2018

Hello Traders,

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

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

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

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

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

Technical Analysis

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

Have a nice trading-day ……

FxAnil · February 1, 2018, 8:27am

Weekly Fundamental Dose: 01 – February – 2018

Hello Traders,

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

Let’s understand these economic plays in detail.

Too Many Draw-downs For The Greenback

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

Buyers Keep Avoiding The USD

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

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

All Eyes On NFP & PMIs For Now

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

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

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

Technical Analysis

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

Have a nice trading-day ……

FxAnil · February 2, 2018, 8:23am

Daily Fundamental Dose: 02 – February – 2018

Hello Traders,

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

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 5, 2018, 8:10am

Daily Fundamental Dose: 05 – February – 2018

Hello Traders,

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 6, 2018, 8:17am

Daily Fundamental Dose: 06 – February – 2018

Hello Traders,

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 7, 2018, 7:48am

Daily Fundamental Dose: 07 – February – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 8, 2018, 8:02am

Weekly Fundamental Dose: 08 – February – 2018

Hello Traders,

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

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

Employment Details Proved To Be Savior For The USD

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

Wild Market Moves & Greenback’s Sustained Strength

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

BoE Takes The Center-Stage Of Attention For Now

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

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

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

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

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

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

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

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

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

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

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

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

Technical Analysis

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

Have a nice trading-day ……

FxAnil · February 9, 2018, 7:49am

Daily Fundamental Dose: 09 – February – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 12, 2018, 8:16am

Daily Fundamental Dose: 12 – February – 2018

Hello Traders,

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

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 13, 2018, 8:04am

Daily Fundamental Dose: 13 – February – 2018

Hello Traders,

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

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

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

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

Technical Talk

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

Have a nice trading-day ……

FxAnil · February 14, 2018, 8:19am

Daily Fundamental Dose: 14 – February – 2018

Hello Traders,

Even if influential Fed members, namely New Chairman Jerome Powell & Cleveland Fed President Loretta Mester, favored further rate-hikes by the U.S. Federal Reserve, the US Dollar Index (I.USDX) marked consecutive second daily loss on Tuesday as improvements in broader risk-sentiment, coupled with absence of top-tier data before today’s crucial CPI, dragged the greenback towards south. As a result, the EUR continued extending its north-run whereas better than forecast CPI number propelled BoE’s rate-lift concerns and propelled the GBP. Further, AUD and NZD kept being strong as weaker USD favored commodity prices but the CAD had to bear the burden of declining Crude prices, on the back of better than expected API stockpile & higher supply forecast from the EIA. Moving on, JPY tested the strongest level in fifteen months as investor ascertained BoJ’s silence during the currency’s rally as a hint for monetary policy tightening whereas Gold benefited from the US currency’s decline due to its safe-haven status.

During early-Wednesday investors remained busy assessing the U.S. inflation outlook and how could the upcoming number affect Fed’s monetary policy as rising wage gains was the main reason that triggered global market sell-off in recent times. Additionally, Japan’s Q4 2017 GDP figure missed the mark and posted the slowest growth in nearly two-years even after registering a positive number for consecutive eighth quarter. In case of the EUR, the regional currency remained strong irrespective of the soft German GDP as regional growth figure might please buyers with either no change or a hike in economic output. Moreover, the GBP remained supported by the concerns relating to smooth Brexit and BoE’s rate-hike while commodity-linked currencies, namely AUD, NZD and CAD, flashed volatile moves.

With the US CPI & Retail Sales on card to release, global market-players are likely to give least importance to any other details than the Inflation given the fact that it was fear of rising inflation and increased pace of Fed rate-hike that activated global market rout. Forecasts suggest, moderate pace of MoM CPI, to 0.3% from 0.1%, and a dip in Core CPI to 0.2% from 0.3%, but the yearly figures might disappoint the Bulls with 1.9% of CPI against 2.1% prior and 1.7% of Core CPI versus 1.8% earlier. For Retail Sales & Core Retail Sales, the earlier MoM stats 0.4% for each can witness 0.2% and 0.5% marks for this time. Other than this top-tier details, weekly release of US crude inventories may add weakness into the Crude prices with +2.8M increase in stockpile compared to +1.9M prior.

Given the upbeat expectations from US Inflation figures, chances of the USD to regain its strength and affect the global equity markets in an adverse way are too high. However, any surprise miss by the headline price-gauge may result in larger losses to the greenback. Hence, it would be better for the global investors to remain on sidelines ahead of the actual details’ release rather than jumping on false conclusion and bear the losses.

Technical Talk

Unless clearing the 0.7900–0.7910 multiple resistance region, chances of the AUDUSD’s pullback to 0.7830 seem brighter; however, an upside break of 0.7910 can quickly fuel the pair’s rally to 0.7955-60 area. Alike AUDUSD, the NZDUSD moves are also confined by the 0.7340-45 immediate resistance-zone, which if broken could propel the quote to 0.7380 & 0.7410, while 0.7270 & 0.7230 could act as immediate downside supports for the pair traders to watch. Additionally, EURCAD’s present up-moves may only have 1.5600 resistance-mark to be happy with before confronting the 1.5655-60 resistance-confluence whereas 1.5490 and the 1.5450 may act as nearby rests for the pair during its U-turn.

Have a nice trading-day ……

FxAnil · February 15, 2018, 8:42am

Weekly Fundamental Dose: 15 – February – 2018

Hello Traders,

While much awaited US consumer-centric details disappointed global investors and rather pushed them to concentrate on the twin deficits, likely emanating from Fiscal & Current accounts due to US Government measures, the US Dollar declined heavily on Wednesday even after registering the strong reading of monthly CPI. With this, the safe-havens and commodity basket rallied considerably again before the Chinese markets go off for a week-long spring festivals starting from Feb 15. However, some US & UK details are still there to keep markets alive during the rest of the week.

Let’s discuss the market fundamentals now.

Speculation Is A Powerful Weapon

With the welcome wage growth figures activating speculations concerning Federal Reserve’s accelerated rate-hikes, global equity market corrected during last week. As a result, the US Dollar and safe-havens managed to register noticeable upswings while commodity basket, together with EUR & GBP, dropped. Further, disappointing Canadian employment report and dovish comments from RBA & RBNZ provided additional weakness to the CAD, AUD and NZD respectively. Additionally, Gold couldn’t confront stronger USD whereas higher US production and the news that Iran might also raise its output dragged Crude towards south. Hence, last-week’s market moves based on Fed’s rate-hike expectations were stronger enough to conclude that speculation is a powerful weapon.

What Goes Down Has To Come Up & Vice Versa

If we observe this week’s global equity market performance, it can be safely said that what goes down, has to come up and the same can be reversed in the case of US Dollar which plunged even after registering upbeat inflation mark. Recently rejuvenated US Dollar Bulls had little comfort in accepting the strong monthly reading of US CPI when yearly inflation figures remained unchanged and Retail Sales dropped the most in a year. With this, investors’ attention drew to the twin deficits, which in-turn triggered heavy selling of the greenback.

On the other hand, the EUR benefited from no significant data-release whereas GBP praised upbeat inflation mark. Further, commodity-linked currencies also rallied as weaker USD propelled demand for dollar denominated assets whereas JPY and Gold surged as market volatility favored safe-havens when the BoJ refrains to consider latest JPY run as abrupt and rather chose not to signal any steps to confine the currency’s up-moves.

After the release of much awaited US consumer-centric details, markets turned against the USD and the same also helped Crude, which initially dropped during early-week. Moreover, comments from Saudi Arabia that it is likely seeing undersupplied markets and lower than expected US stockpiled further propelled the energy prices.

On the data front, Australian employment report pleased Aussie Bulls at the start of Thursday with higher employment change and weaker Unemployment rate while plunge in the full-time jobs seem ignored.

What’s Next?

Even if majority of the important details/events are already being published, some US & UK data-points are still there to entertain short-term traders. Amongst them, US PPI, Preliminary UoM Consumer Sentiment and UK Retail Sales are likely to gain higher attention while monthly readings of Empire State Manufacturing & Philly Fed Manufacturing Indices, followed by Housing market numbers, could become second-tier numbers to observe.

Starting with the Thursday’s details, the YoY mark of PPI may entertain the USD bears as it is likely to flash 2.5% mark against 2.6% prior but the MoM number is expected to reverse its earlier contraction of -0.1% with +0.4% mark. Further, Empire State Manufacturing Index could register 18.2 mark against 17.7 prior while Philly Fed Manufacturing Index may tick a little down to 22.1 from 22.2 prior.

On Friday, UK Retail Sales, core to British GDP, might reverse its previous contraction of -1.5% with +0.6% figure and may please GBP Bulls while US Building Permits and Housing Starts are likely to strengthen a bit by posting 1.31M and 1.23M figures compared to 1.30 and 1.19M respective earlier outcomes.

Given the recent disappointment from US details, the USD is less likely to regain its strength during the rest of the week unless scheduled data-points post extremely strong numbers. As a result, latest communication from Japan, which favors the JPY’s up-moves, could provide support to the safe-havens in maintaining their strength while commodity currencies may move little softer considering China’s close for a week.

Moving on, EUR could gain the counter-strength from the USD’s decline unless political problems at Germany and Italy pops out to drag the regional currency whereas GBP may also enjoy upbeat Retail Sales after CPI raised the case for BoE’s rate-hike.

Technical Analysis

EURUSD seems all set to challenge the 1.2540-60 region, breaking which it can rise to 1.2650 and then to the 1.2710 while 1.2360 an upward slanting TL support of 1.2250 could confine the pair’s near-term declines. For GBPUSD, 1.4100 and 1.4160 may act as nearby resistances if the pair continue trading up whereas dip below 1.3810 can fetch it to 1.3700 mark, comprising 50-day SMA. Further, USDJPY’s break of 106.70 drags it to 105.50 and then to 104.60 with 107.30 & 108.50 being important upside resistances to observe. Moreover, AUDUSD has to surpass 0.8000 if it is to aim for 0.8070 otherwise it can come-back to 0.7830 while NZDUSD has 0.7420 & 0.7460 resistances to clear with 0.7280 & 0.7220 being adjacent supports. At the end, USDCAD’s failure to surpass 100-day SMA level of 1.2620 on a daily closing basis reignites the importance of 1.2370 and 1.2330 supports whereas 1.2550 may act as nearby resistance if the quote reverses from present levels.

Have a nice trading-day ……

FxAnil · February 19, 2018, 8:14am

Daily Fundamental Dose: 19 – February – 2018

Hello Traders,

Irrespective of upbeat CPI and Consumer Sentiment releases, the US Dollar Index (I.USDX) couldn’t sustain its previous week’s rally as growing concerns about the U.S. deficit dragged the greenback gauge towards registering heavy losses on the weekly basis. The same helped EUR to rise even without any major economic accomplishments whereas GBP benefited from higher Inflation outcome. Commodity basket enjoyed USD’s weakness while welcome stats from Australia, New Zealand & Canada provided additional strength to the AUD, NZD and CAD. Further, JPY and Gold were clear winners of the week after decline in USD and hawkish comments from BoJ whereas Crude also rose on Saudi Arabia’s comments favoring global production-cut accord and softer than expected US inventory number.

While decline in the USD staged global equities’ rally during last week, start of the present week witnessed some Geo-political pressures that propelled early-day moves. Among them, news that investigation of Russian meddling in 2016 US election got severe with indictment of 13 Russians and Israel’s readiness to confront Iran after recent border incidents in Syria got the higher attention. Moreover, Saudi Arabia’s latest comments to support the production-cut even during supply shortage and speculations based on Shinzo Abe’s re-election of Hruhiko Kuroda as BoJ Governor offered some extra push to markets.

With this, JPY, Gold and Crude kept extending their north-runs whereas USD remained stubborn due to Presidents’ Day holiday. Commodity basket also witnessed some positive moves due to latest geo-political tensions but week-long Spring holidays at China confined major activities.

Moving on, UK Prime Minister will set aside the Brexit issue and speak in favor for her proposal to increase government spending on education, the reason which left her bitterly defeated during recent election. Should she manage to please the British student fraternity, her Brexit plan might be welcome as well and the same could help GBP to extend its advances.

In case of economic-calendar, holidays at China and US, coupled with lack of big releases from elsewhere, except New Zealand PPI, might confine global market moves during Monday. For NZD traders, softer PPI may trigger the Kiwi’s pullback but overall strength of commodity front can help the currency to remain strong.

Hence, while absence of US & Chinese players could become a reason for global investors to remain on sidelines after witnessing heavy volatility during last week, Geo-political plays could keep offering intermediate trade opportunities to short-term traders.

Technical Talk

Having bounced off the 1.2450 support, the USDCAD still has to conquer the 1.2570 in order to aim for 1.2610 otherwise chances of its pullback to 1.2500 and then to 1.2450 can’t be denied. Further, USDJPY’s U-turn from 105.50 needs to surpass 106.80 to flash 107.40 on the chart otherwise it can come back to 106.00 and then to the 105.50. Additionally, NZDCHF’s up-moves have to clear the 0.6885 resistance-confluence to justify its strength in targeting 0.6920-25 area, else it can re-test 0.6835 and the 0.6800 support-levels.

Have a nice trading-day ……

FxAnil · February 20, 2018, 8:13am

Daily Fundamental Dose: 20 – February – 2018

Hello Traders,

On Monday, profit-booking moves helped the US Dollar Index (I.USDX) to recover from its lowest levels since December 2014 even without any major fundamental updates and during the closure of US & Chinese markets. However, the EUR and the AUD refrained to bend down against such pullback of the greenback while rest of the major currencies registered losses when compared to the USD. The GBP dipped after the news that UK’s Brexit officer has a plan B to trigger if EU officials step back from their future commitment to a free-trade deal. The JPY and Gold trimmed some of their latest gains on the back US Dollar’s recovery while the NZD refrained to portray upbeat PPI release as the same was still lagging behind prior levels. Further, the CAD became the victim of worries over NAFTA and leakage of its Keystone pipeline that helped Crude to extend its north-run.

During early-Tuesday, when majority of global markets re-opened after an extended weekend, except China that is off till Thursday, investors piled on some more of the USD longs ahead of the government’s scheduled auction of $151 billion of short-term bills. With this, the commodity basket stretched their downside and hurt the AUD, NZD and CAD whereas EUR declined before monthly release of ZEW Economic Sentiment. Further, the GBP also kept being down as Mr. David Davis, key Brexit officer from UK, is up for releasing details of his Plan B during later part of the day while JPY dropped after former BoJ member said more easing on the part of the central-bank may continue to prevail as Hruhiko is re-elected as the Governor.

At the economic side, release of RBA monetary policy meeting reiterated the gradual growth of inflation and strong economy but chose to remain on sidelines until the price-rise reaches between 2-3% target. As a result, the AUD also lost some of its charm. Moving on, lesser than forecast Swiss Trade Surplus dragged the CHF further towards south while upbeat German PPI couldn’t confine the EUR’s dip.

Looking at the rest of the day’s forecast, return of global players could offer an active session especially when heavy amount of the US bills are scheduled for an auction while ZEW numbers for EU & Germany may entertain EUR traders. Moreover, political plays at UK and US might keep offering intermediate trade opportunities to investors.

While higher yields could help the USD to extend its recent recovery, which is very much likely, a surprise dip in the same, coupled with upbeat figures from EU & Germany, may trigger the greenback’s renewed selling, which in-turn could help the commodity currencies, JPY, Gold and Crude oil. In case of the GBP, British politician’s stunt to please domestic companies with plan B might hurt the recently improved relations between EU & UK and the same could fetch the GBP to south if the plan seems too tough for the Euro region economy.

Technical Talk

Sustained trading below 1.4015 resistance-mark seems dragging the GBPUSD towards 1.3900 and 1.3870 but an upside break of 1.4015 might have to confront 1.4055 in order to meet the 1.4100 round-figure. Further, USDCHF has to surpass the 0.9325 and the 0.9360 trend-line resistances to aim for 0.9400 otherwise chances of its pullback to 0.9250 and 0.9210 can’t be denied. At the end, short-term rectangle formation support, around 1.5610–1.5600, could confine the EURAUD’s downturn and may activate it’s U-turn to 1.5700 and then to the 1.5730 whereas a downside break of 1.5600 can flash 1.5570, the 1.5530 and the 1.5515-10 horizontal-line as quotes.

Have a nice trading-day ……

FxAnil · February 21, 2018, 7:41am

Daily Fundamental Dose: 21 – February – 2018

Hello Traders,

In addition to majority of global investors’ come-back after Monday’s holiday, upbeat response to the U.S. Treasury Department’s short-term bill auction propelled the US Dollar Index (I.USDX) towards third consecutive positive daily closing on Tuesday. As a result, the EUR couldn’t enjoy better than forecast ZEW economic sentiment while weaker CBI Industrial Order Expectations from UK dragged the GBP to south. Further, JPY and Gold failed to confront the stronger USD whereas Crude also reversed from nearly fortnight high due to the same reason and marked the loss on D1 basis. Additionally, commodity basket was badly hit by strong greenback and caused declines of AUD, NZD and CAD.

On early-Tuesday, the US Dollar extended its latest recovery as investors await minutes of the last FOMC meeting in order to evaluate the chances of more Fed rate-hikes than the previously promised three. Moreover, dovish expectations concerning the EU Flash PMIs offered extra-strength to the US currency during the day’s start, which in-turn continued hurting commodity basket and the safe-havens, namely JPY & Gold.

While FOMC minutes and EU Flash PMI are likely to grab major market attention during the rest of the day, monthly releases of UK employment details and US Existing Home Sales are some other data-points that can keep entertaining traders.

If we observe Fed’s January-month statement, the last from Janet Yellen, it added the word “further” into its benchmark line of “gradual adjustments” while referring to the need of further monetary tightening. With this, global analysts are eager to get details of using such phrase by the U.S. central-bank.

In case of the EU & German Flash PMIs, forecast concerning weaker than prior levels might push the ECB’s Draghi to relinquish his hawkish bias. The German Flash Manufacturing PMI might weaken to 60.7 from 61.1 and the Services PMI is also expected to rest around 57.2 versus 57.3 prior whereas EU Flash Manufacturing PMI is also to soften to 59.4 from 59.6 and the Flash Services PMI could test 57.7 mark compared to 58.0 earlier.

Moving on, UK employment stats are likely to help the GBP recover some of its latest losses as Claimant Count Change might register a reduction to 2.3K from 8.6K previous data when the Average Earnings & Unemployment Rate are expected to remain unchanged at 2.5% and 4.3% respectively. At last, the US Existing Home Sales may please the USD buyers with 5.63M mark against 5.57M prior.

While expected weakness in EU details and upbeat US housing market data could help the USD to maintain its latest strength, hawkish signals from the FOMC minutes relating to the need of increased pace of rate-hike may propel the greenback further towards north. However, any disappointment from the minute statement could have its higher repercussions and may fetch the US Dollar again to its lower area market recently.

Technical Talk

While EURUSD’s latest pullback has to conquer two-month old ascending TL figure of 1.2300 in order to test the 1.2220, an upswing beyond 1.2370 can again fuel the pair to 1.2415. In case of the AUDUSD, the 0.7830 & the 0.7790 are likely consecutive supports to please the sellers with 0.7900 and the 0.7935 being adjacent resistances to limit the pair’s nearby upside. Furthermore, GBPCHF again aims to confront the 1.3130-35 area, breaking which 1.3190 & 1.3240 can appear on the chart whereas 1.3080 and 1.3035 could offer rest to the quote in case of its pullback.

Have a nice trading-day ……

FxAnil · February 22, 2018, 9:01am

Weekly Fundamental Dose: 22 – February – 2018

Hello Traders,

While rising treasury yields and hawkish FOMC minutes have already played their role in fueling US Dollar Index (I.USDX), return of Chinese market-players after a week-long holiday period, coupled with few consumer-centric details from New Zealand & Canada, are still left to propel global market moves during the rest of the week.

Before we start discussing fundamentals for upcoming trading sessions, let’s discuss what happened till now.

Shift In Investor Focus Dragged The USD Down

Last week’s upbeat US CPI & UoM Consumer Sentiment couldn’t help the US Dollar to extend its previous advances as investors shifted their attention towards widening U.S. deficit and disappointing Retail Sales, which in-turn caused a negative weekly closing by the greenback. The EUR took advantage of the USD’s downside whereas GBP rallied on inflation marks. Further, the JPY justified BoJ’s comments that mentioned no need for central-bank’s intervention even if the currency is high while Gold surged due to weaker USD. Additionally, relief rally in equities helped the commodity basket, including Crude, to register noticeable gains whereas strong fundamentals at home propelled AUD, NZD and CAD.

So Far So Good For the Greenback

Even after witnessing a holiday on Monday, greenback buyers refrained to end their quest and helped the USD to recover majority of its last-week’s losses. Also, upbeat FOMC minutes and hawkish statements from some of the FOMC members, during their public appearances, favored the optimism to counter weaker Existing Home Sales. The EUR became the victim of softer PMIs whereas GBP couldn’t enjoy negative Claimant Count Change as surprise increase in Unemployment Rate weakened the Pound. Moving on, prospect of accelerating U.S. rate hikes dragged the JPY and Gold to south whereas absence of strong positive comments in RBA minutes did hurt the AUD. Moreover, Crude prices traded lower on worries emanating from higher US production while CAD and NZD had to bear the burden of overall selling in commodity and commodity-linked currencies.

It Isn’t The End of Volatile Sessions

Although majority of influential economic details/events have already being announced, return of Chinese players to the market and front-tier stats from New Zealand & Canada are there to keep making investors busy. Furthermore, market is behaving a bit differently during early-Thursday as hopes for rate-hikes seems triggering the risk-off mood and helped the JPY and to recover some of their latest losses. Moreover, commodities have also kind of showing a bit resilience off-late as Chinese players flashed their favors. However, the EUR and the GBP are still trading southwards due to absence of new catalysts.

Moving on, Thursday carries the second estimate of UK GDP, monthly Retail Sales from Canada and Quarterly Retail Sales from New Zealand whereas Friday’s EU Final CPI & Canadian CPI could entertain market players then after. Also, there are some speeches from FOMC members on late-Friday which seem important to observe.

Looking at the forecasts, expected rise in the New Zealand Retail Sales, to 1.4% from 0.2% earlier, could help the NZD regain its strength while a softer Canadian Retail Sales growth, to 0.0% from 0.2% prior, may hurt the CAD but reversal of -0.4% contraction of Canadian CPI with +0.4% mark could support the Loonie then after. In case of UK GDP, the second estimate is likely confirming the initial forecast of 0.5% growth and may help the GBP to recover a bit whereas no chance of EU Final CPI, which is at 1.3%, could hurt the EUR more.

For FOMC members, slew of policymakers are there to communicate their views on upcoming policy moves of the Fed and majority of them are likely to confirm the presently prevailing bullish bias towards gradual rate-hikes.

Considering the return of Chinese players, coupled with absence of big data-points/events, investors are likely to continue extending their support in favor of Fed rate-hike and result in rising USD. However, any downbeat comments from the FOMC members could hurt the sentiment.

In case of commodity-linked currencies, like AUD, NZD and CAD, renewed buying from China and expected positive consumer-centric details may help the NZD & CAD to recover its losses while AUD could remain more or less positive due to improvement in broader commodity basket.

At last, the GBP may have to post strong GDP mark in order to please buyers as latest pessimism from Brexit may hurt the UK currency whereas EUR Bulls may still have to wait for their turn unless CPI flashes upbeat number.

Technical Analysis

EURUSD broke the 1.2310 TL support and is declining towards 1.2200, breaking which 50-day SMA level of 1.2165 can please the pair sellers while an upside break of 1.2310 can trigger the pair’s pullback towards 1.2360 and 1.2410. GBPUSD is yet to close below 1.3880 trend-line in order to meet the 1.3755 support-mark otherwise chances of its U-turn to 1.4030 can’t be denied. Further, USDJPY has 108.30 as resistance and 106.70 as support with either-side breaks likely registering 109.00 and the 106.00 respectively while USDCAD has to conquer 200-day SMA level of 1.2720 on a daily closing basis to meet the 1.2810 else it can come-back to 1.2620-30 support-zone, comprising 100-day SMA. At the end, AUDUSD may bounce off the 100-day & 200-day SMA confluence region of 0.7770 towards 0.7870 re-test while the 0.7260 TL seem important for NZDUSD sellers with 0.7365-70 being immediate resistance to watch.

Have a nice trading-day ……

FxAnil · February 23, 2018, 8:20am

Daily Fundamental Dose: 23 – February – 2018

Hello Traders,

Return of China’s traders after a week-long holidays and comments from an FOMC member warning against increasing Fed rates too quickly was all enough to drag the US Dollar down during Thursday and propelled the commodity basket, which in-turn helped the AUD and NZD; however, the CAD had to bear the burden of disappointing Canadian Retail Sales figures. Further, USD’s decline favored EUR and GBP even if the UK Second estimate of GDP weakened from initial forecast while JPY and Gold took advantage of the greenback’s drop by shining for the first time in a week’s time. Additionally, Crude benefited from surprise drop in US stockpiles.

During early Friday, the US Dollar regained it’s strength as treasury yields acquired investors’ attention when the debate for central bank policy normalization troubled market players. As a result, rest of the major currencies rejoined their south-run whereas commodity basket and JPY failed to confront the greenback’s strength. Moreover, news that Brexit issue is likely to heat again as EU officials might turn down Theresa May’s previous pledge concerning Irish border dragged the GBP down whereas no change in Japanese Inflation continued favoring BoJ’s sustained monetary stimulus and provided weakness to the JPY.

For the rest of the day, Final version of EU CPI and monthly reading of Canadian CPI are likely to offer intermediate trade opportunities while speeches by some of the FOMC members could direct the USD moves then after. Furthermore, political plays concerning the Brexit might keep troubling the GBP and EU traders.

If we look at the forecasts, EU CPI is less likely to change from its Flash version of 1.3% mark but the Canadian CPI might reverse it prior -0.4% contraction with +0.4%. In case of the FOMC members, few of the scheduled speakers, like Federal Reserve Bank of New York President William Dudley and Federal Reserve Bank of San Francisco President John Williams, are policy hawks and may speak in favor of Fed’s rate-hikes.

Given the EU inflation mark manage to please the regional currency Bulls by surpassing 1.3% mark, chances of the EUR’s rally to recover some of its recent losses can’t be denied whereas expected strength in Canadian CPI needs to confront with pullback in Crude prices to help the CAD. Further, comments favoring increased pace of Fed rate-hike and strength of the U.S. economy could continue supporting the USD.

Technical Talk

Looking at the NZDUSD’s recent dip below 0.7300, the pair is likely declining towards 0.7250 TL support while 0.7355 and the 0.7370 seem nearby resistances if the pair reverse from present levels. For USDCAD traders, the 1.2720 and the 1.2755 are likely immediate resistances to watch with 1.2670 & 1.2630 could act as adjacent rests for the pair. At last, EURJPY needs to conquer the 131.20 TL support and the 200-day SMA level of 131.00 if it is to decline further otherwise it can come back to 132.30 and the 132.50 resistances.

Have a nice trading-day ……

FxAnil · February 26, 2018, 8:07am

Daily Fundamental Dose: 26 – February – 2018

Hello Traders,

During last-week, upbeat FOMC minutes and hawkish statements favoring gradual rate-hikes from some of the Fed policymakers helped the US Dollar Index (I.USDX) to mark a positive weekly closing. As a result, the EUR had to bear the burden of softer PMI figures whereas GBP couldn’t enjoy welcome Claimant Count Change as uptick in Unemployment rate and Brexit noise dragged the currency southwards. Further, the JPY also had to register losses due to USD’s gain and the same hurt Gold prices while commodity currencies, such as AUD, NZD and CAD, remained badly hit due to China’s absence from trading for most part of the week and stronger greenback affecting commodity basket. The Crude, however, rallied sharply as depleting US stockpiles and positive comments from Saudi Arabia pleased energy Bulls.

While return of Chinese players during late last-week helped a bit to commodity basket, the early-Monday moves were quite in favor of the AUD, NZD and CAD after comments by U.S. Treasury Secretary Steven Mnuchin, around weekend, negated signs of rising inflation from President Donald Trump’s policies and triggered the USD’s pullback. With this, the EUR and GBP also recovered some of their latest losses while nearness to ECB President Draghi’s testimony and speech by UK opposition leader, Jeremy Corbyn, concerning his party’s Brexit position, provided additional strength to these currencies.

The Crude extended its north-run on the news that Libya’s crude exports from a key terminal were disrupted whereas JPY and Gold benefited from fresh risk-off market sentiment due to slew of important details/events scheduled for the rest of the week.

Moving on, testimony by the ECB President, Mario Draghi, will gain higher market attention for the rest of the day while US New Home Sales, New Zealand Trade Balance and speech from UK political could serve as second-tier details/events to entertain traders.

Even if upbeat housing market number is likely to support the USD and the expected deficit indicates weakness of the NZD, recent change in investor outlook concerning the greenback and commodity-linked currencies might play a role in dragging the US currency south and propelling NZD.

In case of the ECB President’s testimony, the leader might not refrain to praise the EU economy but any signals that the much awaited monetary policy tightening is still a far away dream could hurt the EUR. For GBP traders, Jeremy Corbyn may avail this opportunity to communicate his party’s dissent in May’s proposal, even if she managed to get cabinet approval for the same. As a result, the chances of the Pound to decline a bit are high but any welcome notes by the opposition leader to UK PM’s proposal could boost the GBP.

Technical Talk

GBPUSD seems all set to confront the 1.4070 TL resistance, breaking which it can rise to 1.4110 but a reversal can flash 1.4000 and the 1.3950 as quotes. Further, USDJPY is also likely to revisit the 106 & the 105.50 supports with 107.15 & 107.60 acting as nearby important upside levels to watch. At last, EURGBP is testing the 0.8780 TL support which may trigger its pullback to 0.8800 and the 0.8840 while a downside break of 0.8780 might not hesitate in fetching the quote to 0.8755 and the 0.8730.

Have a nice trading-day ……

FxAnil · February 27, 2018, 8:21am

Daily Fundamental Dose: 27 – February – 2018

Hello Traders,

A day before newly appointed Fed Chair’s first testimony, global investors chose to drag the USD down as comments from Fed Governor Randal Quarles safeguarded the central-bank’s idea of three rate-hikes a year by warning against the side effects of higher interest rates. On the other hand, European Central Bank President Mario Draghi also sound a bit dovish in his testimony when asking for a need of sustained stimulus considering recent volatility in global markets, particularly in currency markets. However, traders gave more emphasis to Quarles’ comments than the Draghi’s speech, which was also backed by fewer than expected New Home Sales, and ultimately printed a positive EUR closing contrast to marking the loss bearing day for greenback.

In case of the GBP, comments from opposition leader, Jeremy Corbyn, revealed his party’s dissent in Theresa May’s proposal to leave the single market and customs union with EU after Brexit. As a result, the Pound had to bear the burden of Brexit uncertainty and go negative at the end of the day. Due to all these factors, JPY and Gold managed to regain market attention and commodities were also in green region, which in-turn helped the AUD and NZD. Here in, the NZD additional benefit from lesser than forecast trade deficit figure but the CAD couldn’t stop declining because of uncertainty future of NAFTA deal.

Moving towards the important day of the week, i.e. Tuesday, which comprises Jerome “Jay” Powell’s first testimony, monthly figures of US Durable Goods Orders and CB Consumer Confidence, early-day moves were against the USD as majority of analysts predict Fed Chair to remain calm and offer nothing more to communicate future monetary policy action of the Federal Reserve.

Mr. Powell has to strike a good balance between hawks and doves while communicating Semi-Annual Monetary Policy Report and the state of the economy in front of the House Financial Services Committee. Considering his off-late behavior while being in Fed, he is less likely to go against his predecessor and may call for a requirement to remain calm and let the policy work for aimed result even of Inflation creates a noise. Though, he may not risk disappointing market players who eagerly wait to hear good news of the U.S. economy and tighter monetary policy going forward.

Hence, today’s testimony by the Fed Chair will be crucial to determine near-term moves of the USD as an upbeat tone of Mr. Powell could help greenback bulls to remain positive for the central-bank’s future policy moves but the same might cross the Fed’s agenda of offering three rate-hikes a year that the central-banker couldn’t risk. If everything goes against the plan and hurt the US Dollar, investors might have to wait for Thursday’s second testimony by the central-banker before Senate Banking Committee.

In case of the scheduled details, Durable Goods Orders could be a disappointment for greenback buyers as they are expected to reverse previous gains of +2.8% with -2.4% contraction with Core Durable Goods Order likely being grown +0.4% from +0.7% previous. Though, CB Consumer Confidence may cover those down-points with 126.2 mark versus 125.4 released last-month.

Other than the slew of U.S. details/events, political plays at EU & UK, concerning Brexit and elections at Italy, may entertain global investors while latest news that US will surpass Russia as world’s largest oil producer in 2019 may hurt the Crude prices. In all the chaos, traders may portray risk-off sentiment by supporting the JPY and Gold while commodity linked currencies, such as AUD, NZD and CAD could benefit from USD’s weakness if Fed Chair disappoints the greenback buyers.

Technical Talk

EURUSD’s successful reversal from 1.2300 TL support favors the pair’s recovery to 1.2370 and then to the 1.2410 but a downside break of 1.2300 might not hesitate dragging the quote to 1.2260 and then ot the 1.2200. Further, USDCHF seems capped by short-term descending trend-line resistance, around 0.9390 now, but its downside is also limited by the 0.9325-20 area with either side breaks indicating 0.9430 & 0.9285 as follow-on levels to watch. Additionally, GBPAUD strictly observes six-week old ascending trend-line, at 1.7765 now, that signals the pair’s up-moves to 1.7850, the 1.7880 and then to the 1.7910 consecutive resistances while its dip beneath the 1.7765 may fetch the prices to 1.7680 and the 1.7600 supports.

Have a nice trading-day ……

FxAnil · February 28, 2018, 8:00am

Daily Fundamental Dose: 28 – February – 2018

Hello Traders,

On Tuesday, Fed Chair’s acknowledgement that stronger economic growth may prompt policymakers to rethink their plan for three hikes, coupled with upbeat Consumer Confidence, rejuvenated the USD Bulls while fewer details/events from rest of the world again dragged the other majors towards south. The EUR struggled to due to aftershocks of Draghi’s testimony whereas GBP had to bear the burden of opposition leader’s comments regarding post-Brexit relationship with EU. Further, the AUD, NZD and CAD dropped heavily after rising U.S. treasury yields challenged global equities and commodity basket whereas Crude also declined on industry report showing higher stockpile figures. Moreover, JPY and Gold couldn’t confront the stronger USD and registered losses.

Having witnessed considerable USD support during yesterday, the market players seems kind of taking rest around early-Wednesday. However, disappointing PMI numbers from China and contraction in Japanese Industrial Production played its role to hurt the commodity basket and the JPY. Though, Japanese Yen rallied after BoJ announced that it would cut the amount of super long Japanese government bonds at its regular debt-buying operation.

In case of the EUR & GBP, both the currencies remained a bit weaker as EU is prepared to release its draft Brexit treaty and Flash CPI releases whereas USD also softened ahead of second version of Q4 2017 GDP. Additionally, US Chicago PMI, Pending Home Sales and weekly Crude inventories are some other details that may gain traders’ attention for the day.

While EU CPI might disappoint the EUR Bulls by printing 1.2% mark against 1.3% prior, the U.S. GDP could also be a spoiler if it meets the 2.5% forecast versus 2.6% initial estimation. Moving on, Chicago PMI and Pending Home Sales are also likely to add weakness into the greenback by flashing 64.2 and the 0.4% respective marks compared to 65.7 & 0.5% earlier whereas Crude stockpile data could hurt the upbeat sentiment of energy traders by reversing earlier draw-down of -1.6M with +2.4M number.

Given the downbeat expectations from scheduled data-points, the USD & EUR are less likely to benefit from them; however, recent optimism concerning the Fed’s four rate-hike could help the US Dollar to maintain its strength. Also, EU’s first Brexit treaty, a 120-page draft, is likely to discuss the Irish border issue which has also troubled Theresa May multiple times recently. Hence, if the treaty seems a bit hard on Irish border or the trade union agreement, chances of the GBP’s decline can’t be denied.

Technical Talk

AUDUSD’s bounce off the 100-day & 200-day SMA confluence region of 0.7780-75 favors the pair’s recovery to 0.7820 and then to the 0.7860 TL resistance but a downside break of 0.7775 may avail 0.7760-55 as intermediate rest before testing the 0.7720 & 0.7700 supports. Further, USDCAD’s sustained break of 200-day SMA level, at 1.2700 now, seems finding it hard to surpass the 1.2780, which in-turn could propel the quote to 1.2820. At last, GBPNZD has to conquer the three-month old descending TL, at 1.9340, followed by the 1.9420-30 horizontal-region, in order to justify its strength in targeting the 1.9540 and the 1.9655 resistances whereas 1.9140 and the 50-day SMA level of 1.9065 could act as nearby supports.

Have a nice trading-day ……