Daily Fundamental Dose

[FxAnil]

Weekly Fundamental Dose: 01 – March – 2018

Hello Traders,

While first round of Fed Chair’s testimony propelled USD strength, political turmoil at EU & UK, coupled with downbeat data-points elsewhere, played their roles in dragging rest of the majors down against the greenback. However, second dose of Mr. Powell’s testimony and slew of economics from US, UK, Canada and Japan are still there to entertain momentum traders. Additionally, Italy’s national election, Germany’s political drama and Theresa May’s speech are likely extra boost to upcoming volatility wave. Hence, market players shouldn’t be disappointed with what’s already out & loud because there will be many more catalysts to observe going forward.

Let’s discuss fundamentals concerning these details/events after taking a view on what’s happened.

FOMC Minutes Played Magic Last-Week

Even without any major economic releases, the US Dollar Index (I.USDX) managed to post a weekly positive closing and hawkish tone of FOMC meeting minutes, together with upbeat statements from some Fed policymakers, were all to thank for. With this, the EUR had to bear the burden of softer PMIs while GBP couldn’t enjoy dip in Claimant Count due to increased Unemployment Rate. Further, AUD, NZD and CAD remained as less preferred for buying, despite having some welcome stats, when Chinese players were off for a week whereas JPY and Gold declined on stronger USD. In case of the Crude, depleting stockpiles and optimism surrounding global production-cut accord please energy traders.

Rate-Hike Speculation Is In The Air

Following a bit softer-start to the week, due to return of Chinese players favoring the commodity basket, the USD regained its strength since Tuesday when the newly appointed Fed Chair Jerome “Jay” Powell’s first testimony rekindled investor speculations for more than three rate-hike by the U.S. central-bank. However, the JPY didn’t loose its allure this time as the BoJ cut the amount of super-long government bonds offered at regular interval but Gold had to maintain its downside.

Moving on, nearly 14 month low EU Flash CPI & absence of comments favoring central-bank’s much expected policy change by the ECB President, in his testimony, dragged the EUR down whereas Brexit pessimism kept hurting the GBP. Additionally, commodity-liked currencies, namely AUD, NZD and CAD, dropped heavily on upbeat greenback while Crude also rushed to south as increase in U.S. stockpile and shale output defeated optimism concerning Saudi Arabia’s thought on global output-cut agreement and supply disruption at Libya.

Crucial Catalysts Lies Ahead

Having observed what happened in the market so far, it’s time for us to look at what can happen due to scheduled details/events.

During early Thursday, investors awaited second appearance of Federal Reserve Chairman who is up for confronting Senate Banking Committee later today. Profit-booking moves were seen in the EUR and NZD but not in the rest of the major currencies as traders expected another boost to the USD after Mr. Powell’s testimony, as it happened on Tuesday. In case of economic releases, China’s Caixin Manufacturing PMI surprisingly diverted from official release but couldn’t please the commodity buyers.

Looking forward, UK Manufacturing PMI, US ISM Manufacturing PMI & Japan’s Tokyo Core CPI are likely data-points that could keep market-players busy on Thursday while British Construction PMI Canadian GDP & UK PM’s speech on EU-UK relations after Brexit might please momentum traders on Friday.

UK Manufacturing PMI & ISM Manufacturing PMI are both expected to print softer marks of 55.1 and the 58.7 then they did during last-month by flashing 55.3 & 59.1 respectively. Though, Tokyo Core CPI is likely to surpass 0.7% prior with 0.8% and could rejuvenate concerns for BoJ’s policy tightening.
On Friday, UK Construction PMI could help the GBP with 50.5 number against 50.2 earlier but Canadian GDP might not support the CAD to regain its strength as forecasts suggest 0.1% growth versus 0.4% previous expansion.

At the political front, EU’s first Brexit treaty, the 120-page recommendations that it released recently, in addition to UK opposition leaders’ demand for trade-union, have already created problems for Theresa May in conveying cozy relations with the EU after Britain departs from the region.

Furthermore, Sunday’s national election at Italy and outcome of Germany’s grand coalition votes could offer additional political news to keep making traders busy around early next-week.

Given the fair chances of Mr. Powell’s another hawkish testimony, any disappointment might not be taken lightly and could drag the USD towards reversing its earlier gains but reaffirmation of positive talk could boost the greenback further to north.

For the EUR & GBP, Brexit talks and soft economics could keep dragging these currencies to south whereas latest improvement in Chinese PMI might help the CAD if GDP figures surpass consensus and Crude recovers the losses.

At last, JPY might become a pure beneficiary due to BoJ’s hawkish stunt but the Gold couldn’t get a chance for pullback if the USD continue rising.

Technical Analysis

With the EURUSD’s sustained trading below 50-day SMA level of 1.2215, chances of its dip to 1.2090 and then to the 1.2060 are much brighter while an upside closing break of 1.2215 could help it revisit 1.2280 & 1.2330 resistances. For GBPUSD, the 1.3720 and the 1.3610 are likely nearby supports to watch if the pair keeps declining with 1.3820, comprising 50-day SMA, and 1.3860, seem immediate resistances to observe. Further, USDJPY has to break the 106.00 and the 107.90 range in order to mark either 105.50 or 108.50 while USDCAD’s successful break of 200-day SMA level of 1.2700 enables it to confront the 1.2880 and the 1.2915-20 resistances whereas break of 1.2700 can fetch the pair back to 1.2630, encompassing 100-day SMA. Moreover, AUDUSD may bounce of the 0.7710 towards 0.7780, if not then it can drop to 0.7650 while 200-day SMA level of 0.7170 and the 0.7140 are likely adjacent rests for the NZDUSD with 0.7240 & 0.7260 acting as nearby resistances.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 05 – March – 2018

Hello Traders,

Even after registering heavy gains during early days of the last-week, mainly due to hawkish testimony of the Fed Chair, the US Dollar Index (I.USDX) had to settle around no change place by the weekend as President Trump’s threat to levy tariffs on steel and aluminum imports hurt the optimism concerning the world’s largest economy going forward. Also, German Chancellor’s ability to forge a grand coalition and retain her power after months of political drama further weakened the greenback and helped the EUR. In case of the GBP, the British currency failed to take advantage of upbeat PMIs as Brexit worries continued dragging the Pound towards south. Further, JPY was all in green after BoJ’s cut to longer-term government bond purchase at regular auction and optimistic comments from Governor propelled investors to bet on the upcoming monetary tightening from Japanese central-bank. Moving on, AUD, NZD and CAD had to bear the burden of weaker Commodity prices whereas Crude dropped after increase in US stockpile and expected boost to shale output disappointed energy traders.

While positive trade sentiment at Germany and Japan pushed market-players to rethink for their USD bets at last weekend, Italy’s election results and fears of a global trade war entertained them around early-Monday. The early outcome of Italian results signaled a hung parliament in and months of political-drama, as happened in the Germany, which in-turn dragged the EUR whereas trade-war concerns hurt the USD. As a result, the JPY, Gold and commodity-linked currencies, namely the AUD, NZD and CAD, had a good start to the week whereas Crude benefited from the news of supply outage at Libya.

At the data front, upbeat Building Approvals and Company Operating Profit releases from Australia strengthened the AUD but softer than expected Caixin Services PMI confined the Aussie’s rally.

Moving on, UK Services PMI & US ISM Non-Manufacturing PMI are likely data-points that can please momentum traders for the rest of the day while political plays at Italy, UK and US could command the broader trading sentiment.

Given the upbeat expectations from the UK Services PMIs, the GBP may recover some of its latest losses but may not rally too much as uncertainty surrounding the EU’s response to Theresa May’s Brexit proposal still becomes a negative factor for the currency. For USD traders, Trump’s protectionist outlook and expected weakness in the PMI figure may keep hurting the greenback but intact optimism of the Fed might restrict the currency’s plunge. Additionally, Italy’s vote results are another shock to the EU and may give rise to months of political deadlock at one of the region’s important economies, which in-turn may fetch the EUR a bit forwards profit-booking.

Technical Talk

GBPUSD’s break of 1.3855 couldn’t clear the 1.3700 mark and hence a range between 1.3700 to 1.3855 seems crucial for the Pound traders while NZDUSD seems coming back to 0.7180 and 0.7140 supports with 0.7240 and 0.7280 being nearby resistances to watch in case of its U-turn. Further, EURNZD again confronts the 1.7090–1.7115 horizontal-region and indicates pullback to 1.7000, the 1.6960 and then to the 100-day SMA level of 1.6915.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 06 – March – 2018

Hello Traders,

Notwithstanding global markets’ earlier response to President Donald Trump’s proposed tariffs, the US Dollar Index (I.USDX) managed to recover some if its losses and closed in the positive territory after growing pressure from political and diplomatic allies gave rise to expectations that Mr. Trump might soften his protectionism. However, the Republican leader refrained to lose his stance on twitter but was taken lightly as such tariffs are hard to implement in today’s global world. On the other hand, the EUR managed to recover on Germany’s soothing political crisis while Italy’s election results kept the regional currency under check. Moving on, the GBP strengthened after UK Services PMI rallied to the highest levels in four months whereas JPY and Gold lost their charms due to improvement in USD. Further, the CAD was bitterly hit as recently struggling economy may not be able to handle the U.S. threat of tariffs because it is one of the largest steel exporters to US. However, the AUD managed to extend its earlier gains on upbeat data-points while NZD soften a bit but the Crude prices rose on the news of halt at Libya’s biggest crude field.

During early Tuesday, Australian data-points, such as Current Account & Retail Sales disappointed Aussie buyers while RBA’s statement revealing record high household debt & weak wage growth requiring sustained policy provided additional weakness to the AUD. Additionally, comments from BoJ Governor, Hruhiko Kuroda, which mentioned need of ultra-loose monetary policy until inflation target is met tames speculations of the Japanese central-bank’s exit from mammoth monetary easing.

Having received economic dossier from AU, there are very few data-points left for publishing during the rest of the day. Amongst them, Canadian Ivey PMI, U.S. Factory Orders and New Zealand GDT Price Index may entertain short-term buyers. Though, active political plays surrounding Brexit and US trade war concerns may keep pleasing the momentum traders.

Observing the scheduled stats, Canadian Ivey PMI may help the CAD to witness short-covering if matches the 56.3 forecast against 55.2 prior. For the USD, Factory Orders are expected to hurt the greenback by registering a contraction of -0.4% in orders compared to +1.7% earlier growth. At the end, New Zealand GDT Price Index did drop to -0.5% during its previous release and a bit of improvement can trigger the NZD’s pullback.

At the political front, U.S. President has been finding it hard to sustain the pressure built by global policymakers, including some of his own party members, which in-turn may push him to soften his tand on protectionism. Though, we all know Mr. Trump and hence the uncertainties are bound to hurt global trade supporters and their currencies as well.

In case of Brexit, the EU is scheduled to release draft guidelines for a post-Brexit trade deal with the UK. The same should communicate how well it wants the UK to oblige by its rules in order to access the single market as Theresa May has already spoke for such options which were largely talked down by EU authorities in their public appearances. The said draft from EU is likely to be in vague form as regional policymakers want UK leader to clarify on her wish to join the trade union and justify her stand on Irish border. Given the latest harsh stand of the EU leaders on May’s public speech, chances of tough talks on Brexit are gaining momentum, which in-turn could damage the GBP’s latest recovery.

Hence, even if there are few economics on today’s list, political plays at EU, UK & US might keep fueling market volatility.

Technical Talk

Failure to surpass 1.2360-70 horizontal-region might drag the EURUSD towards 1.2280 & 1.2250 whereas USDJPY has to surpass 106.55 in order to aim for 106.80 & 107.10 otherwise it can re-test 105.75 & 105.20. Further, EURGBP struggles in a range between 200-day SMA level of 0.8880 & resistance-line of six-month old descending trend-channel, at 0.8955, with either side break indicating 0.8840 or 0.8980 levels to appear on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 07 – March – 2018

Hello Traders,

Few hours after speculations suggesting that the U.S. President may be forced to hold off his latest protectionist stunt, resignation by a chief White House member, Mr. Trump’s top economic adviser Gary Cohn, fanned worries that President Donald Trump will now proceed with tariff hikes and may risk activating a trade war with global peers. Together with this, disappointing Factory Orders dragged the US Dollar Index (I.USDX) towards south while helping the EUR without any major releases from the EU. On the other hand, concerns that EU policymakers may keep pressing UK to release its control over Irish border in order to have soft Brexit hurt the GBP whereas softer USD propelled the commodity currencies, such as AUD, NZD and CAD, to register noticeable gains. Further, JPY & Gold also benefited from declining greenback and global worries but the Crude dropped as tensions mounted on the reason that trade barriers could damp macro economic growth and cut energy demand.

While global investors were trying to overcome yesterday’s political drama over Cohn’s resignation due to Trump’s persistent denial of his economic adviser’s urge to drop trade protectionism, White House came forward to propel macro worries by indicating readiness to clamp down Chinese investments and imposing tariffs on few of its imports. As a result, USD bears got a boost to sell the currency against stronger counterparts like JPY, NZD, EUR & GBP while CAD declined ahead of Bank of Canada’s monetary policy meeting. Additionally, Crude extended its south-run due to previously mentioned factors relating to demand outlook whereas Gold witnessed pullback after yesterday’s rally.

During early Wednesday, Australian GDP figures came in softer than expected and raised doubts on the RBA’s future monetary tightening whereas downbeat Leading Indicators’ index from Japan couldn’t damage the JPY.

Moving on, Brexit concerns and recently spreading worries for US-led trade-war are likely to become main catalysts for determining rest of the day’s market moves while US ADP Employment Change & Trade Balance figures from US & Canada, coupled with monetary policy announcements from the BoC, could entertain momentum traders.

If we observe US numbers, expected increase in Trade deficit & a drop in ADP mark could keep raising bars for the USD’s recovery whereas tariff-related news may add weakness into the US currency. For the CAD, trade deficit is likely to be softened and the Crude stockpile might flash lower levels than prior but the BoC might not refrain from communicating latest draw-down in economics and may keep Loonie under check. Moreover, Brexit developments may offer downside to the GBP but the EUR could benefit from the USD’s decline. In all these, JPY and Gold can become traders’ best choices whereas AUD and NZD could take advantage of a pullback in commodity basket.

Technical Talk

AUDUSD is being helped by an immediate ascending trend-line, at 0.7785, that can direct it to 0.7830 and then to the 0.7855 but a break of 0.7785 can fetch the pair 0.7750. USDCAD bounced off the 1.2870 and may challenge the 1.2960 and the 1.3000 while a dip beneath 1.2870 can flash 1.2820 as a quote. At the end, AUDCHF’s up-moves have again being confined by a month-old descending TL, at 0.7360, which in-turn indicate brighter chances of its drop to 0.7270 & 0.7230 with an 0.7400 acting as follow-on figure to watch after 0.7360’s break.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 08 – March – 2018

Hello Traders,

While political plays at EU, UK & US have been testing traders’ nerves since late last-week, now is the time when economic calendar, which comprises some top-tier catalysts like ECB & NFP, to regain market attention. In addition to ECB & NFP, monetary policy meeting by the BoJ, UK Manufacturing Production & Canadian Employment stats are some other details/events that could entertain investors.

Before discussing aforementioned factors, it would be better to go through what’s happened in global markets off-late.

Trump’s Protectionism Hurt The USD

It only took a single threat from the U.S. President Donald Trump mentioning his idea of imposing higher tariffs on steel and aluminum imports to reverse early-week gains of the USD, gain through hawkish testimony by the Fed Chair, and drag the greenback gauge (I.USDX) towards posting a weekly negative closing. As a result, the US Dollar dropped against majority of its counterparts on trade-war concerns whereas EUR benefited from Germany’s hard-earned grand coalition after months of efforts but the GBP couldn’t justify upbeat PMIs after UK PM Theresa May’s Brexit related speech failed to please the Pound buyers and the EU policymakers.

Further, the Gold and JPY were clear winners of the week as safe-haven demand and upbeat tone of the BoJ, favoring policy normalization, propelled both these avenues but the commodity-linked currencies, namely AUD, NZD and CAD, couldn’t take advantage of weaker USD due to risk-off market sentiment. Moreover, Crude also had to register a plunge as news of expectedly higher U.S. production & increased stockpile disappointed energy traders.

Political Plays Rule Trade Sentiment

Having witnessed a boost to trade-war concerns during last week, the present week momentum has largely been directed by political plays at EU, UK & US. At US, resignation of Trump’s top economic adviser, Gary Cohn, over his disagreement with Mr. President’s tariff idea, followed by White House announcement mentioning tariff plan to spare select countries, entertained momentum traders while Italy’s hung parliament and EU policymakers draft guidelines on EU-UK relations after Brexit fueled market moves.

In case of economics, strong reading of UK Services PMI helped GBP to recover some of its latest losses while softer AU GDP & dovish tone of the RBA weakened Australian Dollar. Moving on, better than forecast US ADP Employment Change recently started soothing USD’s pain whereas not so welcomed announcements from the BoC kept hurting the CAD. Additionally, China’s rising trade surplus and an increase in exports favored commodity basket during early Thursday.

Economic Calendar To Regain Its Importance

With the Trump administration’s latest report favoring a measured tariff plan for various countries and a 30-day grace period for Canada & Mexico, global investors seemed relieved of trade-war speculations for now. With this, analysts fraternity may now concentrate on upcoming important details/events to better gauge the market moves.

Among them, monetary policy meeting by the European Central Bank (ECB) is likely to rule Thursday’s trade sentiment whereas China’s inflation numbers, BoJ, UK Manufacturing Production & Jobs report from US & Canada could offer liquid sessions during Friday.

Starting with today’s ECB, the central-bank isn’t expected to alter its current monetary policy but might give hints for further plan of actions that is highly awaited by EUR Bulls. Though, there are many challenges for the ECB at present to consider before indicating policy normalization. This includes soft inflation, Trump’s tariff-plan and Italy’s political deadlock. Hence, it is likely that Mr. President, Mario Draghi, could wisely use words in order not to be too hawkish in favoring the rate-hike concerns while communicating challenges to the economy.

Moving on to Friday, early-day release of Chinese inflation, namely CPI & PPI, may confuse commodity traders as CPI bears the consensus of printing 2.5% mark versus 1.5% prior but the PPI is likely declining to 3.8% from 4.3%. Further, BoJ is also likely to follow ECB’s foot-steps and isn’t expected to offer any change to its present monetary policy as testimony from the Japanese central-bank have recently showed that policymakers prefer waiting for further signs of improvement in inflation before announcing any alteration in its mammoth bond-buying and ultra-low interest-rates. Looking at the UK details, Manufacturing Production to be slowed down to 0.2% from 0.3% prior while Goods Trade Balance likely flashing welcome figure of -12.0B compared to -13.6B earlier.

If we observe scheduled Job reports from US & Canada, the Canadian Unemployment Rate isn’t expected to change from 5.9% but likely increase in Employment Change, to 17.5K from -88K, could help the CAD while US NFP is likely to rise a bit to 201K from 200K, the Unemployment Rate may take a dip to 4.0% from 4.1% and the Average Hourly Earnings might soften to 0.2% against 0.3% prior.

Given the news of measured tariff plan from US, an increase in NFP, coupled with decline in Unemployment Rate, can further strengthen the rate-hike concerns and may support the USD. Though, any disappointments may have higher repercussions for the greenback as Trump’s trade-war threats have already making the US currency less appreciable by global peers.

In case of the EUR, ECB President might not chose to maintain his hawkish stand and can hurt the regional currency which is also likely to be compressed by political uncertainty at Italy. Further, the GBP has to keep receiving the boost from economic calendar in order to avoid downbeat Brexit progress whereas CAD has a scope to recover some of its latest losses if employment stat pleases the Loonie traders.

Moreover, improvements in Chinese CPI can help the commodity basket as recent Trade Balance numbers have given a hope to the AUD, the NZD and the CAD.

At last, JPY can maintain its strength but BoJ’s comments will be closely examined and any negative statements might not hesitate dragging the currency to south.

Technical Analysis

EURUSD’s sustained trading beyond 1.2360-70 needs to surpass the 1.2445-50 in order to challenge the 1.2530 otherwise it can come-back to 1.2360 & 50-day SMA level of 1.2265. For GBPUSD, the 1.3960 and the 1.4000 are likely nearby resistances to watch with 1.3865 & 1.3750 TL being important supports to observe. Further, USDJPY has 106.40 & 105.30 range while USDCAD seems confined between 1.2860 & 1.3000. Additionally, AUDUSD needs to clear 0.7840 TL resistance to meet the 50-day SMA level of 0.7895 otherwise it can re-test 0.770 & 0.7725 supports while NZDUSD has to break the 0.7215–0.7315 area to register momentum.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 09 – March – 2018

Hello Traders,

Thursday’s ECB meeting couldn’t help the EUR even after the central-bank dropped a pledge to increase bond-buiying if needed as Mr. President, Mario Draghi, seemed not in a hurry to dial back stimulus considering present macro-economic scenario. At US, White House announcement to exclude Canada & Mexico from steel & aluminium tariff for the time being and offer for exemptions to some others who can apply raised the hope that a full-fledged trade-war can be avoided. As a result, the US Dollar Index (I.USDX) registered a daily positive closing and let other currencies decline while compared to the greenback, except the CAD that benefited form Trump’s favor. Due to immediate relief from trade-war concerns, investors adhered to risk-on sentiment and damped the JPY & Gold whereas AUD and NZD had to bear the burden of weaker commodity prices because of strong USD. Further, the Crude also had to bend down to the rising US Dollar and increased pace of US output whereas GBP became the victim of pessimistic Brexit developments.

White yesterday’s tariff related announcement from the U.S. was a boost to the USD, early-Friday provided another good-news for the greenback Bulls. This time it was from the relationship between US & North Korea. The U.S. President has accepted North Korean invitation to meet its leader Kim Jong Un, around May, and praised the hermit kingdom’s recent behavior. With this, safe-havens got another attack due to quickly spreading risk-on mood and dragged the JPY & Gold further towards south.

Other than the latest Geo-political developments, monetary policy meeting announcement from the Bank of Japan (BoJ) also hurt the JPY as the central-bank refrained to alter its present stimulus unless the inflation reaches the desirable point of 2.0%. Moving on, China’s inflation numbers revealed that CPI rallied to the highest pace in four-years but the PPI weakened for consecutive fourth-month. Though, optimism spread through CPI was highly welcomed and was portrayed by an uptick in the CAD, AUD and NZD.

For the rest of the day, UK Manufacturing Production & Goods Trade Balance are likely to offer intermediate liquidity to the global Forex market ahead of monthly employment releases from US & Canada comes into play.

Forecasts suggests, UK Manufacturing Production to be slowed down to 0.2% from 0.3% prior while Goods Trade Balance may flash welcome figure of -12.0B compared to -13.6B earlier. Further, Canadian Unemployment Rate isn’t expected to change from 5.9% but likely increase in Employment Change, to 21.3K from -88K, could help the CAD to extend its latest pullback. In case of the US Jobs report, NFP is likely to rise a bit to 201K from 200K, the Unemployment Rate may take a dip to 4.0% from 4.1% and the Average Hourly Earnings might soften to 0.2% against 0.3% prior.

Given the upbeat expectations from the U.S. Employment details, coupled with present Geo-political optimism, chances of the USD to recover its recent losses and mark a weekly positive close are high. However, any disappointment from the same details and/or political challenges surrounding Trump’s tariff-plan could confine the greenback’s rally. On the other hand, mixed outcome and present Brexit worries are likely negative factor for the UK currency whereas Canadian data-points could support the CAD to take a halt from its plunge.

Technical Talk

Given the EURUSD’s U-turn from 1.2445-50, chances of its drop to 1.2260 & 1.2200 become brighter if US stats please pair sellers otherwise 1.2360 & 1.2450 can again be flashed on the chart. Further, USDCHF just reversed from 0.9530-35 and may re-test the 0.9490 & 0.9465 supports while an upside breaks of 0.9535 might not hesitate propelling the pair to 0.9570 & 0.9600. At the end, NZDCHF’s sustained trading beyond 0.6890 enables it to confront the 200-day SMA level of 0.6940 and then rush towards 0.6960 whereas dip below 0.6890 may reprint 0.6880 & 0.6860 as quotes.

Have a nice trading-day ……

[Stratanu]

Global financial markets will focus on inflation data in the US this week to assess how this will affect the Federal Reserve’s decision on monetary policy in the coming months.

In the US, also released data on retail sales for February. The report will provide additional information on the strength of the economy on the eve of the Fed meeting on March 20-21.

In the Eurozone, investors are also waiting for the publication of monthly inflation data to understand how quickly the European Central Bank will complete its large-scale program of economic incentives.

An announcement of monetary policy from the Swiss National Bank will also be in the spotlight, although it is unlikely that it will change anything.

Market participants will also be interested in the data of Chinese industrial production in connection with the recent signs that the momentum in the world’s second largest economy remains strong.

[FxAnil]

Daily Fundamental Dose: 12 – March – 2018

Hello Traders,

Following a boost to the risk-appetite during middle of last-week, mainly due to narrower-than-expected tariff plan from the U.S. White House & President Donald Trump’s readiness to meet the North Korean leader Kim Jong Un, the US Dollar Index (I.USDX) got another good news on Friday, in the form of highest NFP since late-2014 & softer wage growth, to manage a weekly positive closing. As a result, safe-havens like JPY & Gold became less acceptable while EUR had to bear the burden of looming political uncertainty at Italy and rising USD. Further, the GBP managed to register gains on upbeat economics whereas CAD strengthened after US temporarily exempted Canada & Mexico from the tariff hike. Moving on, the AUD & NZD also became traders’ favorites with China’s Inflation & Trade Balance favoring commodity basket while Crude recovered some of its latest losses on the news of supply outages at Libya.

During early Monday, the risk-on sentiment got challenged by global political plays. Notable among them was from Japan where Finance Minister is under the threat to resign and the PM might also be questioned for his alleged part in land document alterations by the Finance ministry. Additionally, the Germany, Japan & China have recently became loudmouthed to denounce Mr. Trump’s tariff plan while UK PM is facing another barrier, this time from Scotland & Wales, to conquer for getting a smooth Brexit proceedings. With this, the JPY and Gold witnessed a pullback but the USD had to trim of its gains.

Looking forward, today’s economic calendar is a bit shorter one that offers Japanese PPI & a speech from RBNZ Governor to observe. Herein, the Japanese PPI are likely to be soften to 2.5% from 2.7% prior whereas RBNZ Governor, Mr. Grant Spencer, may avail the opportunity to convey improvements in New Zealand economics but may refrain to send signals for policy change.

While Japanese PPI might not matter much to the JPY buyers who are currently concentrating on political plays, RBNZ Governor’s tone might be important to determine near-term NZD moves. Should Mr. Spencer maintain his outlook to deny requirement of any policy change, chances of the NZD to witness a pullback can’t be denied.

At the political front, strong resistance from global trade supporters to the Trump’s tariff plan may curtail USD’s upside while GBP had to bear the burden of Brexit uncertainty. However, recent cut in US oil-rigs count may help the Crude to extend its recovery while Gold can benefit from the greenback’s weakness.

Technical Talk

NZDUSD’s sustained trading beyond 0.7310 enables it to challenge the 0.7335 and the 0.7365 while a downside break of 0.7310 may not hesitate dragging the pair back to 0.7280. Further, the USDJPY seems capped between the 107.00 and the 106.30 with 107.30 & 105.80 being follow-on levels to watch after either-side break. At the end, oversold RSI might trigger the EURAUD’s pullback to 1.5690 & 1.5730 with 1.5625 & 1.5600 being nearby supports to observe if the pair declines.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 13 – March – 2018

Hello Traders,

Even if Friday’s upbeat NFP helped easing concerns for US President Donald Trump’s trade protectionism, Monday’s executive order from the Republican leader to block the Broadcom Ltd. from acquiring Qualcomm Inc., citing national security issues, rejuvenated fears of upcoming trade-war. Additionally, the U.S. President mentioned on twitter that the EU’s request to be exempt from tariff hikes can be accepted if the region cuts some of the tough tariffs it has been levying on US farmers. As a result, the US Dollar Index (I.USDX) again dropped at the start of the week and propelled the safe-havens, namely the JPY & the Gold. Other than the U.S. protectionism, political woes at Japan, relating to the Finance ministry’s confession of altering documents for discounted sale of state-owned land to a school operator that has link to PM Abe’s wife, offered additional strength to the risk-off sentiment.

While USD was bearing the burden of Trump’s tough stand against global trade, the EUR benefited from soothing political drama at Germany whereas GBP struggled due to Brexit worries. Moving on, AUD managed to gain from greenback weakness supporting the commodity basket while hawkish statements from the RBNZ’s outgoing Governor supported the NZD. However, the CAD trimmed some of its latest gains as EIA’s forecast of higher US production dragged the Crude prices down and ultimately affected one major producer of the energy.

During early Tuesday, global market sentiment tilted in favor of the USD ahead of the crucial CPI release, which could give clues for the pace of Fed’s rate-hikes going forward, but the NZD refrained from bending down against the US Dollar while other major currencies weakened a bit. Among them, the GBP traders showed cautions before Britain’s finance minister present annual budget while AUD couldn’t confront softer than expected NAB Business Confidence.

In case of the US inflation figures, CPI & Core CPI are both expected to soften to 0.2% on monthly basis compared to their previous releases of 0.5% & 0.3% respectively while YoY figures could mark 2.2% of CPI versus 2.1% prior but the Core CPI might not deviate from 1.8% previous announcement. For the UK Budget, Mr. Phillip Hammond may try to please the GBP buyers with a rosy forecast of economic growth and loosen grip over public spending after some time.

Should the headline inflation figures continue marking a north-run, chances favoring more than three rate-hikes from the Fed could propel the USD strength while an otherwise case may push analysts to forecast a neutral tone of FOMC when it meet next week and can drag the greenback to south. For the GBP, unless the Finance Minister give any strong hints to support the business houses after Brexit, investor confidence may continue finding it hard to buy the Pound. In all these, JPY is likely to remain strong due to recent global political problems but the USD’s gain may trigger its pullback.

Technical Talk

While more than six-week long descending trend-line, at 1.3930 now, could keep challenging the GBPUSD’s upside, the 1.3840 & 1.3790 may entertain short-term sellers; though, break of 1.3930 might not hesitate in flashing 1.3975 & 1.4010 on the chart. Further, the USDCAD again aims to confront the 1.2870-75 resistance-region, breaking which it can rise to 1.2915-20 while 1.2800 & 1.2770 can offer nearby support to the pair during its pullback. At the end, AUDJPY’s sustained break above a month-old descending trend-line favors its upside to 84.15 & 84.50 with 83.60 & 83.25 being immediate rest to observe if the quote takes a U-turn.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 14 – March – 2018

Hello Traders,

With more than thirty departures of high profile White House officials, coupled with multiple reshuffle of the team, since Mr. Trump became the President, Tuesday’s news that the U.S. Secretary of State Rex Tillerson was fired shifted market attention off from the not so disappointing CPI & dragged the US Dollar Index (I.USDX) down for the day on concerns of further protectionism, national security and foreign affairs. As a result, safe-havens like JPY & Gold got a boost whereas AUD & CAD became the victim of softer data-points & declining Crude prices respectively but the NZD managed to benefit from the USD’s decline. Further, the EUR couldn’t deny political pessimism at US helping the regional currency after it successfully countered the German deadlock while GBP took advantage of budget release. However, Crude prices extended the latest downturn due to EIA’s forecast of higher US production but there were some relief at the day-end when API registered lesser than expected stockpile details.

During early Wednesday, JPY witnessed pullback on BoJ meeting minutes that kept favoring loose monetary policy whereas strong Industrial Production figures from China pleased the commodity traders and favored AUD, NZD and CAD. Though, overall market sentiment still sound pessimistic as latest changes in the U.S. policymakers’ list and continuous protectionism from the world’s largest economy threatened global investors.

If we take a look at the rest of the day’s economic calendar, monthly release of US Retail Sales & PPI, followed by weekly Crude oil inventory & quarterly GDP figures from New Zealand, could entertain market players while political plays relating to Brexit & US trade protectionism might govern the traders’ mood.

Forecasts suggests a +0.3% rise in Retail Sales growth compared to -0.3% prior contraction & a +0.4% increase of Core Retail Sales against 0.0% earlier. Further, the PPI could soften to 0.1% from 0.4% whereas Crude inventory stat might follow the API number and mark 2.2M increase against 2.4M previous. Moreover, New Zealand GDP could please the NZD traders with +0.8% number versus +0.6% prior.

While headline CPI numbers have already maintained the investor expectations of more than three rate-hikes from the Fed, upbeat releases from the Retail Sales & PPI may strengthen the case for increased pace of rate-changes by the U.S. Federal Reserve, which in-turn could help the USD to shrug off some of its latest pessimism and flash gains. However, any strong announcement from the U.S. against its global trade partners may keep being a threat to the greenback. On the other hand, the EUR & GBP have nothing more to observe than the continuous downplay of Brexit and Italy’s hung parliament that may not be a bigger threats to these currencies unless any harsh announcements. Moreover, the NZD & some other commodity currencies, like AUD & CAD, may benefit from the USD’s decline and welcome economics.

Technical Talk

EURUSD is near to month-old TL resistance-mark of 1.2415, breaking which it can rally to 1.2445 & 1.2510 while 1.2350 & 1.2270 act as nearby support for the pair. AUDUSD is again rising towards 0.7900, which if broken could help it escalate the recovery to 0.7935 but a downside break of 0.7840 might not hesitate dragging it to 0.7800. Moving on, EURNZD’s bounce off the two-month old ascending trend-line during Tuesday, the pair seems capable enough to revisit the 1.6930 and the 1.6970 immediate resistances with the 1.6870 offering adjacent support to the pair before fetching it back to the TL support of 1.6820.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 15 – March – 2018

Hello Traders,

While political plays concerning U.S. protectionism & Brexit continue to hurt global investor sentiment since more than a week, not so welcome consumer-centric releases from US have offered additional strength to market’s risk-off mood before the next week’s much anticipated rate-hike from the Federal Reserve. However, second-tier data-points from US, like manufacturing indices, housing market details and preliminary consumer sentiment gauge are still left for publishing and can entertain market-players ahead of the upcoming week’s crucial event.

Let’s start understanding market moves and discuss some fundamentals.

Risk-On Pleased The USD Bulls

With the soft wage gains, strong NFP and narrower than expected US tariff plan, the US Dollar Index (I.USDX) managed to post a weekly positive closing during last week. At the same time, improvements in relations between the U.S. & North Korea, coupled with easing trade-war concerns, triggered risk-on mood and hurt the JPY & Gold prices. Further, the EUR had to become the victim of downbeat ECB tone & political deadlock at Italy while GBP managed to recover on positive data-points. Moving on, China’s upbeat stats & Canada’s ability to secure exemption from US tariff helped the AUD, NZD and CAD whereas supply outage at Libya supported the Crude prices.

Not Only Politics, Economics Were Also Against The Greenback During Present Week

Having witnessed a bit of relief during last-week, the USD buyers were again troubled with political problems during the present week when resignation of Trump’s top economic adviser, followed by firing of Secretary of State by Mr. President, unearthed the market uncertainty and damaged the greenback’s gains. Additionally, soft CPI, PPI & Retail Sales figures further weakened the investor confidence in world’s largest economy.

On the other hand, EUR managed to benefit from the greenback’s weakness even if ECB President recently sound in a wait & watch mood before announcing the central-bank’s intention for dialing back its monetary policy stimulus. The same happened with the GBP that couldn’t deny gains irrespective of having no major economic releases/events to observe other than the Brexit front that’s also not going in favor of the UK PM.

Moreover, AUD and NZD took advantage of declining USD supporting the commodity basket and strong Chinese Industrial Production but the CAD had to register losses on Crude downturn, which is mainly due to worries concerning higher US production. It should also be noted that the NZD recently started declining after New Zealand GDP registered weaker outcome and indicated no change in RBNZ’s present monetary easing when the central-bank meets next week.

In case of the safe-havens, JPY and Gold became market favorites not only because of the U.S. but also because of latest political crisis at Japan that might force the Japanese PM to justify his cleanliness from corruption scandal.

What Next?

Even if majority of the economic & political plays are already out & loud, monthly releases of Empire State & Philly Fed Manufacturing Indices, Building Permits & Housing Starts, followed by Prelim UoM Consumer Sentiment, are still there to play their roles ahead of welcoming the upcoming week which comprises the Fed’s rate-hike. Moreover, UK CPI & Job figures, together with EU & German ZEW Economic Sentiment, are some other data-points that may please momentum traders ahead of Wednesday’s FOMC.

Starting with Thursday’s US Empire State & Philly Fed Manufacturing Indices, the Empire State Manufacturing Index may register a 14.9 mark against 13.1 earlier; though, Philly Fed Manufacturing gauge could wipe-out the Empire State release’s optimism if it matches the 23.1 forecast against 25.8 earlier. On Friday, EU Final CPI, which is likely to remain unchanged at 1.2%, could offer intermediate market moves before the US housing & consumer sentiment numbers gain attention. In case of the Housing market numbers, Building Permits & Housing Starts are both likely to soften to 1.33M and 1.30M respectively from 1.38M and 1.33M priors. Moving on to the last important detail of the week, i.e. Prelim UoM Consumer Sentiment, the consumer confidence gauge is likely not to deviate much from its 99.7 prior by flashing 99.6 mark.

Looking forward to the next week, Tuesday’s UK CPI might soften a bit to 2.9% from 3.0% and the ZEW Economic Sentiment indices aren’t also likely to deviate much from their prior releases of 17.8 & 29.3 respectively for Germany & EU. On Wednesday, UK Unemployment Rate could decline to 4.3% from 4.4% but the Claimant Count Change may cause a problem if it rises back from -7.2K.

At the political front, another shuffle of the White House policymakers now give US President Donald Trump an upper hand while putting his America First agenda ahead. With this, global leaders may find it hard to confront the US protectionism and could take some steps that in-turn may trigger geo-political crisis.

Hence, while rest of the scheduled data-points aren’t likely to offer much insight into the upcoming market moves, investors could keep following US political plays to determine near-term moves of the USD. As a result, recent changes in US policymakers’ list could make Mr. Trump stronger in pushing his strategies forward and might hurt the greenback. However, investor mood in the next week can be upbeat ahead of the Fed’s rate-hike in expectation of receiving clues for increased pace of rate-lifts from the Federal Reserve.

Having said that, the EUR, JPY & Gold could keep being strong on the US protectionism whereas commodity-linked currencies, like AUD, CAD & NZD can enjoy upbeat sentiment at China but the CAD had to bear the burden of weaken Crude prices. At last, the GBP trend might have to receive some positive news from Brexit in order to sustain its gain.

Technical Analysis

EURUSD again respected the month-old TL, at 1.2405 now, and may re-test the 50-day SMA level of 1.2295 but the overall view seems strong and favoring 1.2450 to appear on chart unless the pair drops beneath the 1.2165-50 area. On the contrary, the GBPUSD recently surpassed six-week long TL resistance and may rise to 1.4100, if fundamentals support, while D1 close below 1.3920 can drag it back to 1.3780. Further, USDJPY indicates the revisit of 105.00 with 107.30 acting as nearby strong resistance while USDCAD again aims to confront the 1.3000–1.3010 horizontal-region, breaking which it can rally to 1.3150 but 1.2800 seems a strong support on the downside. Furthermore, AUDUSD failed to surpass the 50-day SMA level of 0.7900 on a daily closing basis and reignites the importance of 0.7820 & 0.7800 while NZDUSD has 0.7370 & 0.7240 as a strong range to conquer in order to flash either the 0.7420 or the 0.7180.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 16 – March – 2018

Hello Traders,

Hawkish comments from new White House appointee Larry Kudlow, coupled with declining Jobless Claims and improvements in Empire State Manufacturing Index, helped trigger the US Dollar’s pullback during Thursday while slower growth of Brexit developments and absence of any major releases following ECB President’s dovish remarks dragged the GBP & EUR to south. Further, the equity markets regained some of its charm and shifted investor attention off from safe-havens and commodity which in-turn hurt JPY, Gold, AUD, CAD and NZD. Among them, CAD was bitterly hit on worries that US President may leave the NAFTA talks and scrap the exemptions given to Canada & Mexico from his tariff-plan. Additionally, Crude prices recovered after EIA forecast higher US consumption.

While Thursday offered short-term relief to global investors who have been struggling since more than a week with US politics going heywire, early Friday again challenged the US optimists as fresh news suggested Mr. President is planning to remove his national security adviser and U.S. Special Counsel Robert Mueller issued a subpoena for documents of the U.S. President Donald Trump’s businesses. Moreover, pressure mounted on Japanese PM to act upon latest allegations against the Ministry of Finance’s intentional alteration of documents while prosecuting a land-deal in favor of an education institute. Not only the U.S. & Japan but the EU & UK politicians are also creating some noises off-late as hung parliament in Italy & stalled Brexit negotiations due to Irish border issue continued entertaining political watchers. As a result, safe-havens, namely JPY & Gold, regained their strength while the USD declined.

With political plays kept ruling the global investor sentiment, data-points from US, EU & Canada are also there to offer liquid market sessions going forward. Among them, EU Final CPI will be the first to direct EUR moves, which is likely to remain unchanged at its low level of 1.2%, whereas Canadian Manufacturing Sales, US Building Permits, Housing Starts, Industrial Production & Prelim UoM Consumer Sentiment to roll on then after.

Forecasts suggest an extended decline of the Canadian Manufacturing Sales to -0.8% from -0.2% while US Housing numbers are also likely to flash downbeat figures wherein Building Permits may dip to 1.32M from 1.38M & Housing Starts can soften to 1.29M from 1.33M. Further, US Indsutrial Produciton might recover its prior -0.1% contraction with +0.3% growth but the Prelim UoM Consumer Sentiment could disturb the buyers with 99.2 mark against 99.7 earlier.

Given the repeated shuffle of US White House officials, together with absence of any strong positives, the USD is likely to remain on negative side before next week’s FOMC unless scheduled details register extremely positive outcome. With this, the JPY & Gold may keep being strong whereas EUR could take advantage of greenback’s decline but the GBP could have Brexit as a barrier during its north-run.

Technical Talk

USDJPY’s dip beneath an immediate ascending TL signals its further downside to 105.20 & 104.80 whereas 106.40 & 107.00 can act as nearby resistance for the pair. Moving on, USDCHF couldn’t break 0.9535 resistance-mark and may witness pullback towards 0.9480 & 0.9440 supports while NZDCHF is struggling with 0.6885-80 horizontal-support in order to meet the 0.6860 & 0.6830 with 0.6925 & 0.6940 being adjacent resistances to watch in case of the pair’s recovery.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 19 – March – 2018

Hello Traders,

Although headline US data-points, namely CPI, PPI & Retail Sales, registered dismal readings, more than a year’s low of EU Final CPI, coupled with upbeat Consumer Sentiment & Industrial Production from the U.S., helped US Dollar Index (I.USDX) to stay on the course of positive weekly closing even after gloomy political environment at the world’s largest economy. On the contrary, downbeat inflation figures strengthened speculations that ECB won’t give rate-hike clues anytime during this year as the central-bank’s President recently talked down the need of such action at present. However, the GBP managed to sustain its latest recovery on positive developments at Brexit front while the JPY kept being strong due to political pessimism at US & Japan. Further, AUD, NZD and CAD had to bear the burden of declining commodity prices and fears that US may not refrain to end NAFTA talks but the Crude prices could flash weekly gains after IEA’s upbeat demand forecast. At the end, Gold declined because of the USD’s strength but the CHF remained mostly unchanged on positive Swiss PPI & neutral SNB comments.

While Friday’s welcome numbers from the U.S. favored greenback Bulls ahead of this week’s crucial FOMC, political plays concerning Trump’s trade protectionism & alleged role in availing Russian help during 2016 election continued playing their tunes during early Monday. On the data front, Japan’s export rallied and the nationwide survey showed lesser support for Japanese Prime Minister Shinzo Abe’s cabinet after recent allegations of corruption, which in-turn offered additional strength to the JPY. Moving on, the Crude prices witnessed pullback after higher US rig counts whereas EUR extended its latest decline together with the GBP. Additionally, commodity-linked currencies, namely AUD, NZD and CAD, failed to please the buyers as rising bets in the favor of Fed’s increased rate-hike pace dragged the commodity basket down.

Moving on, today’s economic calendar is likely to offer any critical information due to absence of top-tier data-points but start of G20 meeting, New Zealand’s Westpac Consumer Sentiment may offer intermediate market moves. Moreover, US President’s recent tweets against the investigation of probable Russian intervention in 2016 election and global peer’s’ retaliation to Mr. Trump’s trade protectionism are likely hot topic to acquire investor attention during the day.

If we look at the scheduled stats, New Zealand consumer sentiment is already at the lowest levels since mid-2016 and a further decline might hurt the NZD more whereas G20 could offer a platform to angry global leaders who aren’t happy with US tariff-hike and may communicate their discomfort, which in-turn may drag the USD down at the start of the crucial week. Though, overall sentiment may remain in favor of the greenback due to expectations of an upbeat FOMC statement. As a result, JPY and USD may keep holding their strength but the commodity basket and commodity currencies might register further downside. Moreover, EUR could also flash losses as absence of major data-points and on-going pessimism at ECB points to the regional currency’s south-run while GBP may follow sideways trading because of USD’s strength & Brexit news.

Technical Talk

NZDUSD’s break of short-term support-line signals its further downside to 200-day SMA level of 0.7180 and then to the 0.7140 while 0.7230 & 0.7270 may entertain counter-trend traders. Further, GBPUSD is struggling with 50-day SMA level of 1.3920 in order to justify its U-turn from 1.3970 TL and revisit 1.3860 but an upside break of 1.3970 still needs to surpass the 1.4000 round-figure to please the buyers. At the end, EURGBP’s dips below more than seven-week old ascending trend-line indicates its drop to 0.8780-75 & then to the 0.8730 while 0.8830 & 0.8845 may keep restrict the pair’s near-term upside.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 20 – March – 2018

Hello Traders,

Monday wasn’t a good start for the USD as slump in technology shares, led by reports that Facebook allowed improper access to user data, coupled with start of G20 that reflected global policymakers’ ire over US trade protectionism, dragged the greenback to south. On the contrary, the GBP managed to shine on news that EU & UK policymakers agreed over the 21-month post-Brexit transition period and a potential solution to avoid border issue concerning Northern Ireland. Further, the EUR & Gold benefited from the US Dollar’s decline whereas JPY witnessed profit-booking. Moving on, the CAD and NZD took advantage of recovery in commodity basket and upbeat print of New Zealand Westpac Consumer Sentiment whereas Crude prices dipped due to increasing US rig counts.

Unlike yesterday, when there were little or no major economics scheduled and political news dominated the trade sentiment, global investors have top-tier details from UK & EU to observe during today. As a result, early-day moves have been in support of the EUR & GBP but the release of RBA’s monetary policy meeting minutes hurt AUD. Additionally, the JPY & Gold also declined after traders rushed to GBP & EUR due to risk-on mood.

Looking at the rest of the day’s scheduled data-points, the UK CPI will be the first one to observe. The headline British inflation gauge is likely to post 2.8% mark against 3.0% prior and may tame the speculations of BoE’s earliest rate-hikes. However, an otherwise case, which is very much likely, could propel the GBP’s north-run. Further, ZEW Economic Sentiment releases for Germany & EU would follow the UK CPI and may not please the EUR if matching the forecast that suggest the German figure could mark 13.1 versus 17.8 whereas EU number might post 28.1 compared to 29.3 earlier.

Other than the economic data-points, on-going G20 and political problems at US, concerning data-breach from Facebook & Robert Mueller’s investigation for Trump administration’s alleged role to avail Russian help in 2016 presidential election could keep offering intermediate market moves.

Given the slew of UK & EU details to kick-start the crucial week’s economic details, chances of both the stats to have higher market attention and will be rewarded by increased participation can’t be denied. Also, political plays concerning the Brexit seemed silent for the time being with yesterday’s good news and upbeat release of the CPI could fuel the Pound while ZEW numbers may gain little importance as the
FOMC is still left for playing its role. Though, strong economic sentiment outcome could highlight the case of ECB’s monetary policy tightening going forward & in-turn might fuel the EUR. In all these, the JPY may regain its strength and continue trading north while the USD could remain under pressure before the Fed’s much awaited meeting.

Technical Talk

The EURUSD has to clear 1.2375 TL resistance in order to aim for 1.2415 & 1.2450 while 1.2320 & 1.2255 may act as nearby supports for the pair. In case of the USDJPY, the pair is yet to clear the 106.60 to be able to confront the 107.00 with 105.85 & 105.50 being immediate rests to avail in case of its pullback. Moreover, EURJPY might find it hard to extend its latest recovery beyond 131.65 TL, which in-turn could open the door for its rally towards 132.50, but a downside break of 130.50 can reprint 130.00 on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 21 – March – 2018

Hello Traders,

While there was nothing major from the U.S. to direct greenback moves except G20 discussions where global trade peers conveyed their ire over Mr. Trump’s latest tariff hike, disappointing ZEW Economic Sentiment figures for EU & Germany, coupled with softer than expected UK CPI, helped the US Dollar Index (I.USDX) to post gains on Tuesday ahead of today’s FOMC. With this, the EUR & GBP dropped while currencies of export-oriented nations, namely AUD, NZD and CAD, continued declining due to worries concerning trade-war. However, the CAD managed to remain strong after the Crude prices surged on expectations of extended production-cut by the OPEC-led alliance. Further, the JPY & Gold couldn’t stand tall in front of the stronger USD as it does hurt safe-haven demands.

During early Wednesday, global investors remained cautious before the Fed announces its much anticipated rate-hike and give clues of whether it is sticking to three rate-lifts a year promise or alters rate-change projections to please the greenback Bulls. Additionally, political front also offered some news relating to tripartite talks between the U.S., North Korea & South Korea coupled with US policymakers’ hush discussion to avoid another Government shutdown by passing spending bill before Friday mid-night. As a result, the USD witnessed some profit-booking which was aptly enjoyed by the rest of the major currencies; though, JPY gains were not much due to the Japanese markets close.

Looking forward, monetary policy meeting by the U.S. Federal Reserve is undoubtedly the major event of the day but British employment details, US Existing Home Sales, Crude Oil Inventories and RBNZ’s monetary policy meeting might also try to keep investors busy.

Starting with the FOMC, the US central-bank is almost certain to offer a 0.25% increase in its Fed Funds Rate but that’s not what market is waiting for. What really important is how Mr. Jerome Powell sees the recent welcome changes in US employment & inflation compared to probable impacts of tax-cuts & government spending when he addresses the press as the Fed Chair for the first time. The central-bank did inflate its growth & inflation forecasts during December month’s economic projections while cutting down the expected Unemployment rate and favoring three rate-lifts during the year 2018.

Moving on, the UK employment details may recover the GBP’s recent losses as the Average Earnings are likely to improve a bit to 2.6% from 2.5% while Claimant Count Change could increase to -3.1K from -7.2K but there was no change expected out of the 4.4% Unemployment Rate. Further, US Existing Home Sales may also print welcome housing figure of 5.41M against 5.38M earlier whereas Crude stockpile numbers could escalate the energy’s latest recovery by flashing 2.6M versus 5.0M earlier. At the end, RBNZ is less likely to mark any changes to its present monetary policy and may continue avoiding rate-hike measures until 2019 but the present acting Governor, Grant Spencer, will have his last monetary policy before Mr. Adrian Orr takes charge of the central-bank. As a result, Spencer may have a chance to convey recent worries for the export-oriented economies & weaker data-points while pushing back the rate-hike concerns.

Hence, while an upbeat economic projection and a rate-hike might become strong positives for the USD, absence of clues mentioning increased rate-hike pace could repeat the pattern of greenback’s decline on a rate-lift day. Further, the GBP and Crude prices can enjoy expected positive details whereas NZD may have another factor that could drag it further towards south.

Technical Talk

AUDUSD’s sustained trading beneath the 0.7725-35 region continue indicating its further downside to 0.7675 and then to the 0.7640-35 while an upside break of 0.7735 can help the pair visit 0.7760. Further, USDCAD needs to drop beneath the 1.3000 in order to meet the 1.2960 with 1.3060 & 1.3090 can offer nearby resistances to the pair. Moreover, the AUDCAD is declining towards 1.0005–1.0000 support-zone, breaking which it can drop to 50-day SMA level of 0.9960 whereas 1.0060 & 1.0095 – 1.0100 seem immediate barriers to limit the quote’s immediate advances.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 22 – March – 2018

Hello Traders,

Notwithstanding a quarter percentage hike in Fed Funds Rate & upwardly revised growth forecasts, the US Dollar Index (I.USDX) repeated its latest pattern of declining on the rate-lift day as the Federal Reserve policymakers refrained to suggest that leaning towards four rate-hikes during 2018 is a good idea considering recent economic improvement.

As a result, the greenback adhered to south and the same was well capitalized by the EUR & GBP that have comparatively longer economic list to observe going forward. Among them, EU PMI, UK Retail Sales & monetary policy meeting by the Bank of England (BoE) could gain higher market attention.

Additionally, Canadian Inflation & Retail Sales numbers, coupled with US Durable Goods Orders & New Home Sales, might offer busy trading schedules to global investors for the rest of the week.

Before we jump on to these details/events, let’s quickly understand how global Forex market moved recently.

It Was Another Positive Week For The Greenback Before Rate-Hike

While changes in US White House policymakers & President Donald Trump’s trade protectionism, coupled with disappointing Retail Sales & CPI, dragged the USD down during early last-week, upbeat performance of late-week US economics and disappointing EU Final CPI helped the greenback gauge (I.USDX) to post another weekly positive closing. The GBP, however, managed to post gains on Brexit developments while currencies of export-oriented economies, namely AUD, NZD & CAD, were badly hit due to speculations that US may end-up sparking a trade-war. Further, Gold couldn’t confront the stronger USD but the JPY remained buyers’ favorite on political pessimism at US & Japan. Moving on, Crude prices recovered its early-week losses after IEA’s forecast of higher energy demand.

Not So Good Week For The Market Till Now

Having witnessed positive weekly closing, the greenback failed to sustain its earlier gains during the present week as harsh comments by global trade supporters from G20, coupled with Fed’s inability to convey the much expected four rate-hike plan, dragged the US Dollar towards south. As a result, the EUR reversed its prior losses, piled due to weaker ZEW economic sentiment, but the GBP rallied on strong employment details favoring the BoE’s May rate-hike consensus. The AUD, NZD and CAD could benefit from the greenback’s decline being positive for commodity basket but US trade protectionism & pessimistic AU jobs report confined their upsides. In all these, JPY & Gold have been clear winners till now whereas Crude surged after US stockpile registered surprise drop and OPEC-led alliance showing better compliance to production-cut agreement.

It’s Not The End of The Week

Although FOMC was the headline of the week, slew of upcoming releases from EU & UK, namely EU Flash PMIs, UK Retail Sales & BoE, are still there to entertain global investors during Thursday while Friday’s Canadian Retail Sales & CPI, followed by US Durable Goods Orders & New Home Sales, can keep making market players busy for the rest of the week.

Starting with EU Flash PMIs, Flash Manufacturing PMI might soften to 58.1 from 58.6 whereas the Flash Non-Manufacturing PMI could test 56.0 compared to 56.2 earlier. Moving on, UK Retail Sales can please the GBP optimists with +0.4% growth compared to +0.1% prior but the BoE has to convey its economic optimism and readiness to offer another rate-hike in order to fuel the British currency further in direction to north. In case of the BoE, it should be noted that Mr. Governor has been tight-lipped while answering the central-bank’s next policy moves but recent headline stats might push him to be hawk and give a smile on the face of Cable buyers.

Looking at Friday, Canadian CPI may soften to 0.4% from 0.7% prior but the Retail Sales may reverse its prior contraction of -0.8% with +1.1% growth and the Core Retail Sales can also add strength into the CAD if matching +0.9% consensus versus -1.8% prior. Further, US Durable Goods Orders are also expected to flash +1.6% mark against -3.6% earlier and the Core Durable Goods Orders likely rising by +0.5% compared to -0.3% previous decline. Moreover, US New Home Sales may follow the foot-steps of strong housing market details with 621K figure versus 593K earlier.

At the political front, US Democrats & Republicans unveiled a $1.3 trillion spending bill to counter government shutdown which has to pass through House of Representatives & the Senate before going live to safeguard the government offices that will be shut after Friday night if the policymakers fail to agree on the bill. Additionally, US President Donald Trump is up for levying around $60 billion of tariffs against China over intellectual-property violations on Thursday and may risk inflation trade war fears. Moving on, the Japan’s political health is also unwell after recent allegations of cronyism while Brexit developments have been so far good after EU leaders granted a transition period and progressed in discussing Irish border issue with their UK counterparts.

While yesterday’s rate-hike couldn’t please the USD Bulls, upbeat assessment of the world’s largest economy continue supporting the chances of extra pace of rate-lifts during the rest of the day. Hence, strong economic numbers could have higher positive response than the otherwise case but the looming political crisis can keep the greenback gains under check.

In case of the EUR, PMIs have to mark strong numbers in order to negate chances of continued loose monetary policy by the ECB else the regional currency might end-up losing its latest gains.

Further, BoE becomes crucial for the GBP as recent speculations suggest the central-bank is more likely to hike its benchmark interest-rate as soon as next month. If Mr. Carney fails to convey such optimism the Pound may have to bear the losses.

With all these JPY and Gold could keep being traders’ favorite while AUD, NZD and CAD can enjoy recent USD weakness but trade protectionism may become a tough barrier for them.

Technical Analysis

EURUSD again confronts the 1.2365-70 TL resistance, breaking which it can rise to 1.2440 & 1.2520 with 1.2230 & 1.2160 being immediate supports to watch. GBPUSD has to surpass 1.4275-85 area in order to revisit the 1.4345 but 1.4080 & 50-day SMA level of 1.3960 can become strong supports for the pair in case of its U-turn. Further, USDJPY is again indicating 105.00 and the 104.30 supports while 106.60 & 107.10 may offer nearby resistances to the pair. For AUDUSD traders, 200-day SMA level of 0.7800, followed by 0.7840, can keep limiting the pair’s latest recovery with 0.7670 & 0.7635 acting as adjacent rests. Additionally, NZDUSD has to clear the 0.7150 & 0.7290 range if it need to meet either 0.7100 or 0.7330 whereas USDCAD is likely coming down towards 1.2770 but an upside closing break of 1.3000 can again fuel the pair towards 1.3120.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 23 – March – 2018

Hello Traders,

Despite having some top-line economic details/events scheduled, global markets were largely driven by political news from the U.S. on Thursday as Mr. President, Donald Trump, heightened concern for a trade war with China by slapping nearly $60 billion of tariffs on Chinese imports which the later retaliated by levying around $3 billion tariffs on US products. Additionally, the republican leader portrayed another change in administration’s top-ranks by replacing White House National Security Adviser H.R. McMaster with John Bolton. Due to this, fears of increased pressure on export-oriented economies and strong hold of the U.S. on Geo-political front fueled the safe-havens like JPY but the Gold, Crude and rest of the major currencies had to bear the losses as USD lured buyers after its urge to put “America First”.

At the economic front, EU PMIs flashed sluggish numbers whereas UK Retail Sales rallied more than forecast & two of the BoE’s MPC members voted in favor of the central-bank’s rate-hike. Moreover, US Jobless Claims grew higher as compared to prior & consensus.

During early Friday, political front orchestrated some positive developments after the U.S. Congress agreed for a $130 billion Spending Bill to avoid government shutdown and the White House announced exemption of six economies, namely Argentina, Australia, Brazil, South Korea, Canada, Mexico and the European Union, from its tariff hike till May 01. Further, Saudi Arabian policymakers spotted favoring the global production-cut accord’s extension to 2019 in order to tighten the market.

Given the latest welcome changes in broader political framework, currencies that dropped on Thursday regained their strength and the USD again adhered to its south-run but the JPY kept being strong by trading near the highest levels since November 2016 when compared to the greenback.

Looking forward, Canadian Retail Sales & CPI, followed by US Durable Goods Orders & New Home Sales, are the scheduled data-points that could keep entertaining market-players whereas broader political framework relating to the Trade War & frequent changes at US White House can please momentum traders.

In case of economics, Canadian CPI may soften to 0.4% from 0.7% prior but the Retail Sales may reverse its earlier contraction of -0.8% with +1.1% growth and the Core Retail Sales can also add strength into the CAD if matching +0.9% consensus versus -1.8% prior. Further, US Durable Goods Orders are also expected to flash +1.6% mark against -3.6% previous and the Core Durable Goods Orders likely rising by +0.5% compared to -0.3% previous decline. Moreover, US New Home Sales may follow the foot-steps of strong housing market details with 621K figure versus 593K earlier.

Considering expectations from data-points, the Canadian numbers might help the CAD to extend its up-moves while the USD may recover some of its losses if the Durable Goods Orders grow as per forecast. However, political pessimism for the full-fledged trade-war and Geo-political issues relating to the U.S. might keep the USD’s gains under check.

Technical Talk

USDCAD’s sustained trading below 1.2950 signals its downside to 1.2800 & 1.2765-55 while an upside beak of 1.2950 needs to confront the 1.3000 – 1.3010 to justify its strength. Further, USDCHF is likely to revisit the 0.9420 and the 0.9400 supports unless it trades beneath the 0.9500, which if broken could trigger the quote’s recovery to 0.9520 & 0.9535. At the end, GBPCHF’s failure to surpass the 1.3460-70 resistance-area can keep dragging the pair in direction to 1.3325 and the 1.3300 while 1.3410 can act as immediate resistance during the price pullback.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 26 – March – 2018

Hello Traders,

While observing recent patterns of the USD’s decline after Fed rate-hikes, one thing is certain that market players aren’t so fancy about the Fed’s rate-lifts any more. During last-week, the U.S. Federal Reserve announced a quarter percentage hike to its benchmark Fed Funds Rate but refrained to offer clues concerning increased pace of rate alterations than already promised. Additionally, US President, Donald Trump, tightened his grip on trade protection measures against China by slapping nearly $50-60 billion of tariffs on Chinese imports. As a result, the US Dollar had to mark first negative weekly closing in previous five while the JPY & Gold got a boost due to fears emanating from Geo-political tensions & trade protectionism. Further, the EUR ignored softer than expected PMIs whereas the GBP got an extra support to rise via upbeat employment details & Retail Sales. Moving on, CAD & NZD benefited from the USD’s decline helping commodity currencies but the AUD dropped after disappointing Unemployment rate. At the end, Crude prices surged as Saudi Arabia’s strong favor of production-cut extension & expected increase in US sanctions against Iran pleased the energy traders.

With the U.S. trade protectionism getting retaliation from China, both the strong economies decided to hold bilateral talks and the weekend releases suggest positive developments. The news signaled that policymakers of the China & the U.S. are likely to agree on mutual terms, which in-turn may help China to keep out of steel & aluminum tariffs in addition to avoid the recently levied $50-60 billion burden on its goods.

After such a welcome change in global trade environment, investors covered some of their Gold & JPY longs during early Monday. However, they didn’t put their money back into the greenback as awaiting final response from leaders of both the crucial economies. Moreover, Crude prices also witnessed pullback on worries of global trade protectionism hurting growth & energy demand. Though, AUD, NZD and CAD kept being stronger against the greenback.

Moving on, the economic calendar is almost silent on Monday with no major detail/events scheduled for release except speeches from two of FOMC members but political developments relating to US-China trade discussions & Japan’s cronyism could keep entertaining the momentum traders.

Given the recent positive outcomes from the US-China discussion go far towards achieving the aim of China, global trade fears may soothe and could hurt the JPY & Gold further while helping the USD to recover a bit. Though, commodity-linked currencies, namely AUD, NZD and CAD, are less likely to lose their strength while GBP could have a silent-day. Furthermore, two FOMC members, namely Federal Reserve Bank of New York President William Dudley & Federal Reserve Bank of Cleveland President Loretta Mester, might speak in favor of the Fed’s latest upward revision to the growth forecast and could support increased pace of rate-hikes, which in-turn can help the greenback to mark some gains by the day-end if all goes well.

Technical Talks

USDJPY seems bouncing off the 104.60 and may revisit the 105.30 & 105.65 resistances while a downside break of 104.60 could quickly fetch the quote 104.10. Further, NZDUSD is struggling with 0.7290 resistance in order to challenge the 0.7320 TL resistance whereas 0.7240 & 0.7195 can offer immediate supports during the pair’s pullback. Moreover, AUDCAD took a U-turn from 0.9920 TL & may aim for 0.9945 & 0.9965 resistances but break of 0.9920 might not hesitate dragging it to 200-day SMA level of 0.9875.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 27 – March – 2018

Hello Traders,

With the news that U.S. & China are progressing in trade-talks, which would help the later to avoid mammoth tariffs & favor US to secure beneficial terms, worries concerning global trade-war have started fading on Monday and drew investors’ attention off from USD & JPY by highlighting export-oriented currencies, like AUD, NZD & CAD. Further, hawkish comments from FOMC members, during personal appearances, reignited the speculations for increased pace of Fed rate-hike going forward but couldn’t help the USD as broader market sentiment was against the greenback. Additionally, the EUR, GBP & Gold registered gains on greenback’s weakness whereas Crude declined from two-month highs due to profit-booking.

During early Tuesday, optimistic traders got one more good news from political front as North Korean leader, Kim Jong Un, took a surprise visit to China for the first-time after being in power during 2011. As a result, receding tensions concerning the U.S. trade protectionism & North Korea’s recently welcome attitude pleased commodity buyers. However, drop in China’s Industrial Profit, to 16.1 from 31.5 YoY, confined the gains of AUD & NZD while CAD extended its north-run on Crude’s rise after escalating Geo-political fears from middle-east & comments favoring global production-cut accord from Iraq & Saudi Arabia pleased the energy traders.

Looking forward, monthly release of US CB Consumer Confidence & speech by Federal Reserve Bank of Atlanta President Raphael Bostic could entertain the short-term traders. The US CB Consumer Confidence index may please the greenback buyers with 131.2 mark against 130.80 earlier whereas Mr. Raphael Bostic is a hawk and generally favors the increased rate-hike pace from the Fed.

Given the recent improvement in global investor sentiment, coupled with likely upbeat data-point from US & hawkish comments from FOMC members, investor confidence might strengthen after many days of fearful trading. As a result, the JPY & Gold may find it hard to extend their north-run whereas commodity-linked currencies, like AUD, NZD and CAD, may continue rising for the time being. Further, the EUR needs to bear the burden of weaker data-points and ECB’s refrain to speak of monetary tightening while GBP can have a bit longer good time unless GDP disappoints the Pound Bulls.

In case of Crude prices, strong support for global production-cut accords by Iraq & Saudi Arabia, together with Geo-political tensions, may help the energy traders be happy but the U.S. output hasn’t yet started declining and the same could challenge the Crude Bulls’ strength.

To sum up, recent political developments might cut short the fearful trading days and improve trade sentiment but the economic-details, together with central-bankers, still has a major role to play and may entertain the momentum traders.

Technical Talk

GBPUSD seems reversing from 1.4240 towards re-resting 1.4170, breaking which 1.4080 may get sellers’ attention while an upside break of 1.4240 can flash 1.4310 as a quote. Further, EURUSD aims for 1.2515 and then to the 1.2555 while 1.2430 & 1.2380 can serve as immediate support for the pair. Moreover, EURJPY’s capacity to surpass 131.00 still needs to clear the 131.95 barrier in order to aim for 132.40 otherwise 130.50 & 130.00 may become Bears’ favorites.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 28 – March – 2018

Hello Traders,

Although U.S. CB Consumer Confidence & Richmond Fed Manufacturing Index registered downbeat prints on Tuesday, dovish comments from ECB policymakers & soft EU Economic Sentiment figures, contrast to optimistic statements from Reserve Bank of Atlanta President Raphael Bostic, helped the US Dollar Index (I.USDX) to remain positive at the end of the day. As a result, the EUR and the GBP had to liquidate its recent gains whereas currencies of export-oriented economies, like AUD, CAD & NZD, again declined on speculations that US-China trade-talk isn’t a sure solution to global trade-war concerns. Further, the JPY recovered a bit but the Gold had to bear the losses due to stronger USD while Crude prices dropped after API registered surprise hike in inventory data, indicating such moves by today’s US stockpile release.

At the start of Wednesday, Asian equities fell after the western indices’ south-run during previous-day due to speculations of tighter controls on the tech industry but news that North Korean leader conveyed his openness to U.S. talks during his China visit calmed down worried traders. With this, the USD regained its strength and the JPY again adhered to south whereas GBP marked recovery on news suggesting UK’s plans to avoid a hard border with Ireland after Brexit. Though, there was no mercy for the Crude, EUR & Commodity currencies.

Looking forward, Wednesday is an important day of week when US economic calendar is likely to dominate market moves as it offers the Final reading of Q4 2017 GDP, Pending Home Sales & Crude Oil Inventories. While GDP figure is likely to increase from 2.5% second estimate to 2.7%, the Pending Home Sales may also please the greenback buyers with 2.1% growth against -4.7% prior contraction. However, Crude Oil inventories may keep hurting the energy prices with +0.5M increase versus earlier dip of -2.6M.

At the political front, receding fears from North Korea and on-going US-China trade talks could keep entertaining investors and may hurt the JPY by giving intermediate strength to the USD. Though, Robert Mueller’s investigation on Trump administration is a hidden threat to the US Dollar. Additionally, developments on the Brexit talks between the EU & UK, together with Geo-political problems at Middle East, are some extra factors that can keep offering busy trading schedule to market players.

Hence, while lack of economic details till now kept highlighting the Geo-political factors, increased load of data-points, mainly from US, may add volatility into the global financial markets.

Technical Talk

AUDUSD’s break of 0.7680 seems dragging the pair 0.7640 & 0.7610 with an upside break of 0.7680 likely fueling the quote’s recovery towards 0.7720. Further, USDCAD is struggling around 1.2900 mark, breaking which it can rise to 1.2945 & 1.2965 while 1.2860 & 1.2820 can keep limiting the pair’s immediate downside. At the end, NZDCAD’s inability to surpass immediate TL resistance, at 0.9380, signals the pair’s pullback to 0.9335 and the 0.9305 but break of 0.9380 can trigger the pair’s rise to 0.9405 & 0.9435-40.

Have a nice trading-day ……