Daily Fundamental Dose

[FxAnil]

Weekly Fundamental Dose: 03 – May – 2018

Hello Traders,

While Federal Reserve repeated its commitment for gradual rate-hikes & praised inflation outlook, the US-China trade talks in Beijing & monthly releases of US NFP, EU Flash CPI & UK Services PMI are still there to observe for global investor fraternity going forward.

Before we start discussing fundamentals concerning each one of the upcoming details/events, let’s first flash some light on what’s happened in global Forex markets off-late.

Another Positive Week For The USD

During last week, the U.S. Dollar consolidated its previous bumper gains as not only US economics were good but receding tensions at US-China front & North Korea’s welcome behavior lured traders towards the greenback. The EUR failed to please the buyers after ECB President showed concerns for recently soft data-points & the GBP plunged with disappointing GDP negating chances of the BoE’s rate-hike. Further, the AUD, NZD & CAD were dragged from both the front, namely softer stats & stronger USD hurting commodity basket, while the Crude declined on increasing US production & stockpile details. With the broader market rush being in favor of the USD, safe-havens like JPY & Gold became despicable & registered losses.

Greenback Keep Gaining From Weakness Elsewhere

Although US data-points have been a bit softer since the week-start & US-China trade-talks are likely to travel through rough roads, the US Dollar Index (I.USDX) continued extending its north-run during the present week. The reason being sluggish economic outlook elsewhere at the developed world economies, notably EU, UK, Australia & Japan, contrast to the hawkish FOMC. Also, upbeat earning reports from major US companies, including the Facebook, boosted investor sentiment for the USD.

On the other hand, majority of the EU bourses were closed on Tuesday but sluggish data-points released during Monday & Wednesday performed their roles in fetching the regional currency down. Same is the case with the GBP that continued declining on not so strong PMIs while NZD & CAD couldn’t portray strength of top-tier New Zealand & Canadian details due to USD’s sustained attack on commodity-basket. Moving on, the AUD lost with RBA’s dovish remarks while JPY & Gold kept being out of traders’ favorite list on greenback’s dominance. Additionally, the Crude prices maintained latest weakness with higher US inventories overshadowing fears about U.S. sanctions on Iran.

Too Many Catalysts To Follow

Coming to Thursday, US delegates reached China to discuss over the crucial trade-disputes when UK Services PMI and EU Flash CPI, coupled with US & Canadian Trade Balance and US Factory Orders, are up for release before the Friday’s important US employment details, including NFP, comes into play. Hence, overall there are too many catalysts to follow during the rest of the week.

Starting with the Geo-politics, Chinese authorities have already showed disinterest in the Sino-US talks by signaling to retaliate if US government continue pushing the nation for unaccepted demands. On the other hand, the U.S. policymakers have also said to quit the talks mid-way in case of less fruitful start. Moreover, the Robert Mueller’s investigation of Trump administration in 2016 Presidential election case also hardened after the investigator said to be ready with subpoena to avail President’s testimony if Mr. Trump turns down interview request. Furthermore, it’s nearly a week left when US has to decide whether it’s going to stretch the deal with Iran or to cancel it and levy sanctions on Middle-East country on the basis of its nuclear use.

Moving to the economic calendar, UK Services PMI, core to the British GDP, seems the first to arrive and bears consensus of 53.5 against 51.7 earlier. Following that, the EU Flash CPI might match the revised down 1.3% print while US & Canadian Trade Balances are expected to show lesser deficits with Canada’s deficit likely registering -2.3B versus -2.7B and the US counterpart marking -50.0B compared to -57.6B earlier. Moving on, US Factory Orders may please the USD Bulls with increase in growth from +1.2% to +1.3%.

On Friday, early-day release of RBA’s quarterly economic outlook can affect the AUD, which is likely to depict the recent weakness in Australian data-points ahead of the US Job numbers. Looking at the US employment stats, the Non-farm Payrolls (NFP) is expected to post 189K mark against 103K earlier while the Unemployment Rate is likely declining to 4.0% from 4.1% but the Average Hourly Earnings could soften a bit to 0.2% growth against 0.3% prior. At the end, monthly release of Canada’s Ivey PMI may help the CAD recover some of its latest lose if matching the 60.2 forecast against 59.8 prior.

While economics are likely to continue favoring the USD’s surge, Geo-political tensions and expected recovery in UK & Canadian stats may trigger the greenback’s pullback. Though, the EUR is less likely to benefit from the same unless the CPI marks extreme positive outcome.

Technical Analysis

The EURUSD can avail 1.1920-10 horizontal-support as immediate rest before declining to the 1.1880 & the 1.1845 while 200-day SMA level of 1.2015, followed by 1.2100, can keep limiting the pair’s near-term upside. On the contrary, the GBPUSD is yet to break the 1.3530 rest-point, including 200-day SMA, if it is to meet the 1.3480, else chances of its pullback to 1.3700 can’t be denied. Further, the USDJPY has to surpass the 200-day SMA level of 110.20 in order to meet the 110.80 & 111.30 but its downside can be challenged by the 109.40 & the 100-day SMA level of 108.70. In case of the USDCAD, the 1.2800 and the 1.2920 can continue restricting the pair’s immediate moves which if broken could give rise to printing 1.2730 & 1.2950 on the chart. Moreover, the AUDUSD has 0.7545 & 0.7600 as resistances with 0.7470 & 0.7430 being adjacent supports whereas the NZDUSD must clear 0.7035-40 area to justify its strength in targeting the 0.7055 & 0.7100 otherwise it can come down to re-test 0.6975 & the 0.6955-45 support-zone.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 04 – May – 2018

Hello Traders,

In spite of registering upbeat Factory Orders & Trade Balance number, the US Dollar Index (I.USDX) had to decline on Thursday as early-day pessimism concerning the US-China trade talks & disappointing earnings reports weighed down the greenback. The EUR & GBP took benefit of the USD’s first drop in nearly a week even if EU Flash CPI & UK Services PMI flashed unwelcomed stats while JPY & Gold recovered some of their latest losses on renewed safe-haven demand. Further, the AUD and the NZD aptly portrayed positive data-points from respective economies whereas CAD benefited by the Crude’s up-moves. Moreover, the Crude prices surged on comments made by Iranian foreign minister that indicated the nation’s readiness to turn down US demands in exchange of extending the 2015 nuclear agreement.

During early-Friday, tensions emanating from the Sino-US trade discussions got a sigh of relief after US Treasury Secretary, Steve Mnuchin, said that the first-day of talks was very positive and he is looking forward to get good results by the end of second-day. Though, Chinese diplomats refrained to comment on the same. Additionally, the AUD witnessed some buying after RBA raised its Inflation & employment forecasts in a quarterly statement but couldn’t hold it for long as greenback’s recovery started hurting the commodity basket.

Global market attention now turns to the monthly release of US employment details that could help determine chances of the Fed’s rate-hike during June and then after. Consensus signals a 190K print of the headline NFP, against 103K, with the Unemployment Rate likely dipping to 4.0% from 4.1%. Though, the Average Hourly Earnings may soften to 0.2% from 0.3%.

At the Geo-political front, risk concerning renewed sanctions on the Iran & Robert Mueller’s pressure on Trump administration can keep entertaining safe-haven buyers and negatively affect the USD but positive details from US job numbers & progress on US-China talks could help the currency to close the week on a positive for one more time.

Technical Talk

Even after reversing from 110.00, the USDJPY may find it hard to clear 108.50 support-level and may take a U-turn towards 109.50 but a break of 108.50 might not hesitate fetching the quote to 107.80. Further, the AUDUSD failed to extend its recovery beyond 0.7560 and may revisit the 0.7500 & 0.7470 with 0.7590 being follow-on resistance after 0.7590 break. At last, EURGBP must surpass the 0.8840-45 region to aim for 0.8865 & 0.8880 else chances of its come-back to 0.8800 & 0.8770 can’t be denied.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 07 – May – 2018

Hello Traders,

With the acceptable wage growth fueling Fed’s rate-hike concerns & Jobless rate hitting 18-year low, coupled with FOMC’s readiness to gradually move forward in its rate-lift plan, the US Dollar Index (I.USDX) registered third consecutive weekly gains by the end of last-week. Not only upbeat fundamentals at the U.S. but pessimism at EU & UK also helped the USD to ignore failed US-China trade talks. On the other hand, sluggish data-points faded speculations relating to monetary policy tightening by the ECB & the BoE, which in-turn dragged the EUR & GBP southwards. Further, the JPY remained mostly unchanged due to week-long holidays but the Gold dropped on USD’s strength negatively affecting the safe-haven. Moving on, the AUD, NZD and CAD couldn’t portray recovery in their respective economics as stronger greenback hurt the commodity basket. However, worries relating to US’s ability to scrap Iran nuclear deal and levy fresh sanctions propelled the Crude prices.

Having witnessed robust strength of the U.S. currency, market players weighed high on Geo-political issues during early-Monday and favored the JPY when it came back from a week-long holidays. Amongst them, threats by Iranian President to the U.S. & North Korean comments that US sanctions aren’t a reason for the nation’s readiness for denuclearization rated as top. With this, the Crude extended its north-run to fresh highs since November 2014 whereas NZD recovered some of its recent losses but the AUD couldn’t justify the Australian Prime Minister’s promise to offer tax cuts for lower income earners and multibillion dollar infrastructure spending.

Looking forward, Geo-political plays relating to the speculations that the U.S. may levy sanctions on Iran, renewed Sino-US trade-tensions and developments at the final phase of NAFTA talks, starting today, could keep entertaining momentum traders when the economic calendar lacks any major details/events.

While US aggression is likely being a barrier for the USD’s advances going forward, the nation’s strong fundamentals compared to EU, UK & some other major economies could keep supporting the greenback’s north-run. Though, it should be noted that any big announcements, like failure of NAFTA talks or US readiness to levy additional sanctions on the Iran or China’s retaliation to US trade protectionism may offer near-term weakness to the US Dollar.

Given the absence of major data-points and active Geo-politics, the JPY buyers may play their roles after a week-long pause but BoJ’s repeated dovish statements & not so strong fundamentals can confine the Japanese currency’s rise. Moreover, the AUD, NZD & CAD may have to decline against the USD on weaker commodity basket while the EUR & GBP has lesser chances of recovery unless any strong positive pops out from their respective economies.

Technical Talk

GBPUSD seems bouncing off from the 200-day SMA level of 1.3535 towards 1.3600 and the 1.3660 while break of 1.3535 can flash 1.3500 & 1.3480 as quotes. Further, the USDCHF’s sustained trading above 1.0000 enables it to aim for 1.0040 and the 1.0100 with downside break of 1.000 indicating 0.9965 & 0.9920 as supports. At the end, the AUDCHF is likely finding it hard to surpass the 200-day SMA level of 0.7540 for one more time and may revisit the 0.7500 & 0.7480 but clearance of 0.7540 could fuel prices to the 0.7570 & 0.7590 resistances.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 08 – May – 2018

Hello Traders,

While economic divergence between EU and U.S. was on control of the traders’ mindset, disappointing German Factory Orders provided additional strength to the USD Bulls in providing daily positive closing of the US Dollar Index (I.USDX) and dragging the EUR further towards south. The GBP witnessed some profit-booking as UK markets were closed due to May-day while the JPY also registered gains after Japanese players came back from a week-long holidays. However, the commodity-linked currencies, namely AUD, NZD & CAD continued declining as uncertainty over NAFTA talks & US protectionism, coupled with stronger USD, played their roles in fetching the commodity basket down except the Crude which was rallying on concerns that US will back out of the Iran nuclear deal and levy fresh sanctions on the Middle-East nation.

During late-Monday, the Atlanta Federal Reserve Bank President Raphael Bostic and Dallas Federal Reserve Bank President Robert Kaplan reiterated their view to stand pat on present promise to deliver two more rate-hikes and no more. Additionally, the U.S. President Donald Trump tweeted that he would announce Iran nuclear deal’s decision on Tuesday, four days earlier than the planned May 12, which added worries on to the risk-averse investors.

With the FOMC members’ statements favoring lesser chances of increased rate-hike pace, coupled with Mr. Trump’s readiness to announce Iran nuclear deal decision before the deadline, global markets stretched their supports for safe-havens, like Gold & JPY. Moreover, early-day release of China’s upbeat Trade Balance & weaker than expected print of AU Retail Sales offered extra burden to the analyst fraternity. Though, the USD maintained its strength ahead of the scheduled announcements by the Fed Chair, at a conference jointly hosted by the SNB & the IMF, and Mr. Trump’s announcement to either support the nuclear deal concerning Iran or scrap it. Further, the Crude prices trimmed some of its latest gains while the EUR & GBP couldn’t stop the Bears.

Moving forward, the economic calendar has the monthly print of JOLTS Job Openings as scheduled update that might weaken the USD if matching 6.02M forecast against 6.05M prior. However, major focus of the market will be on speeches by the Fed Chair & Donald Trump to determine near-term trade-sentiment.

Given the Fed Chair maintains his hawkish tone and shows readiness to increase the pace of rate-lift, due to recently strong price-pressures, the US Dollar may rise further to north while Trump’s deal decision to the Iran can affect more to the Crude & commodity basket. Moving on, should the U.S. President refrain to extend nuclear deal and chose to levy fresh sanctions on the Iran, the Crude prices may rally sharply but rest of the commodities and commodity-linked currencies, like AUD, NZD & CAD, might have additional negative to counter. However, the U.S. can’t immediately levy harsh sanctions on the Iran, if at all it chooses to, as US law allows 180 day of grace period to impose the farthest-reaching measure. As a result, barring an immediate run in safe-havens & Crude, coupled with decline in commodity-linked currencies & a bit weakness in the USD, the moves can settle afterwards.

Technical Talk

Considering the recent rise in risk-safety, the USDJPY may chose to revisit the 100-day SMA level of 108.60, breaking which 107.90 can come-back as a quote while 109.55 & 110.00 can keep limiting the pair’s immediate upside. Further, the USDCAD’s break of 1.2920 indicates its further rise to 1.3000 & 1.3045 with 1.2840 acting as follow-on support after 1.2920 break. Additionally, EURNZD is likely declining towards 1.6950 & 1.6925 but break of immediate TL resistance, at 1.7020, can print 1.7050 & 1.7090 as levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 09 – May – 2018

Hello Traders,

Tuesday proved to be a volatile day for global financial markets as the U.S. President Donald Trump dumped the deal concerning Iran and pledged to levy harsh sanctions on the Middle-East nation for its alleged role in secretly conducting nuclear tests. Not only this, Mr. Trump also threatened rest of the global counterparts to bear US sanctions if they help Iran. As a result, the Crude prices reversed early-day decline and marked a positive daily closing while Gold also benefited from such Geo-political event. The USD maintained its north-run after Mr. Trump showed US power whereas record high print of JOLTS Job Openings offered additional strength to the greenback.

While upbeat economics & Trump’s show were already in place to favor the USD, Fed Chair Jerome Powell managed to slip from investor’s eyes when talking at a conference jointly hosted by the SNB & IMF. Mr. Powell favored the gradual rate-hike path and said to properly communicate expected change in monetary policy, if need be. On the other hand, the EUR had to drop as stronger USD & political deadlock at Italy suppressed the regional currencies’ demand while the GBP couldn’t ignore disappointing Halifax HPI & pessimism at Brexit. Further, the JPY also weakened against the USD and commodity-linked currencies, namely AUD, NZD & CAD, obeyed the market-momentum by kneeling down in-front of the US Dollar. The AUD had additional reason to be weak as recently proposed AU budget sound too optimistic to rely on its forecasts whereas sluggish progress at NAFTA curbed the CAD’s advances even if Crude surged.

Having witnessed an active trading-day, market-players continued their support for the USD in anticipation of stronger political & economic stand compared to rest of its major counterparts. The early-day release of Japanese Leading Indicators, which dropped beneath the consensus & prior, provided extra weakness to the JPY while Gold also failed to hold its previous upside as the U.S. sanctions still need to wait for 180 days, as per law, and can be nullified if any other deal is signed during such period.

For the rest of the day, monthly release of US PPI, followed by monetary policy decision by the RBNZ (Reserve Bank of New Zealand), are likely to entertain traders while present Geo-political issues surrounding Iran’s reaction to US sanctions & Italy’s readiness to conduct another election may keep playing background music.

Even if the US PPI & Core PPI are both likely to print 0.2% mark that is lower that earlier release, the USD isn’t expected to lose its charm as broader market sentiment continue to be on the greenbacks’ side. However, extremely negative number can hint a weaker CPI & may hurt the US Dollar.

In case of the RBNZ, the central-bank isn’t expected to alter its monetary policy but the meeting will be first under the newly appointed Governor, Adrian Orr, and the foremost after the RBNZ was given additional charge to promote full employment in addition to price stability. Hence, while the OCR isn’t likely to be altered, Governor’s speech & quarterly economic forecasts could help the NZD to recover some of its latest losses if inflation & employment predictions get a boost.

Technical Talk

EURUSD’s break of ten-month long ascending TL, at 1.1895, can further fetch the pair to 1.1800 & 1.1715 but it has to offer a daily close beyond 1.1895, also surpass the 1.1900 round-figure in order to aim for 1.1945 & 200-day SMA level of 1.2020. The NZDUSD smashed the 0.6975-80 support-zone, which in-turn signal its drop to 0.6920 & 0.6890 while an upside clearance of 0.6980 can help the quote aim for 0.7050-55. At last, CADJPY’s reversal from seven-week old trend-line support, at 83.95 now, may help it revisit the 84.70 TL resistance before targeting 85.00 & 85.25 whereas break of 83.95 can flash 83.50 & 83.35-30 on the chart.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 10 – May – 2018

Hello Traders,

Even if US decision to back out of the nuclear deal with Iran & RBNZ’s surprisingly dovish message have already played their roles, not to forget about mixed economic releases from major developed countries, the present week still has some crucial events to propel global market moves, namely the BoE & US CPI. Additionally, Geo-political factors concerning Iran’s reaction to the latest blow and political deadlock in Italy, together with sluggish NAFTA talks, could keep entertaining momentum traders.

While important details/events are lying ahead for global investors to observe, it’s better to discuss what’s happened recently before jumping on the fundamental forecasts.

Optimism Favored The Greenback For One More Time

Expected monetary policy divergence between the Fed & rest of the major central-bankers have again started fueling the US Dollar when sluggish data-points have tamed down the talks of ECB & BoE’s monetary policy tightening. As a result, the US Dollar Index (I.USDX) managed to post third consecutive weekly advance while EUR & GBP had to bear the burden of pessimism. On the other hand, rise in USD served as a negative point for the commodity basket, including Gold, that dragged the AUD, NZD & CAD towards south. Further, the JPY remained mostly unchanged during Golden week holidays while the Crude surged before the scheduled announcement of US decision on whether it will respect the present accord to leave Iran sanction-free in exchange of no nuclear test from the Middle East nation or not.

Announcements & Statements Recently Ruled Trading Desks

Having witnessed sustained market support for the USD, greenback buyers faced a bit negative news at the start of the week when US-China talks failed to bridge the gap between world’s two largest economies. However, U.S. President Donald Trump’s announcement to levy fresh sanctions on the Iran & dump the 2015 deal, coupled with Fed Chair’s firm commitment to gradual rate-hikes, continued showing the political & economical strength of the U.S. that has been helping the greenback to extend it rise so far in the present week.

The EUR continued trading on the weaker side due to Germany’s disappointing details & Italy’s political deadlock but the GBP recovered some of its latest loses after coming back from the May-day holiday & witnessing upbeat Halifax HPI. The JPY & Gold couldn’t confront the USD’s strength but the CAD took benefit of the Crude’s rally on Iranian sanctions. However, there was no relief for the AUD due to RBA’s softer stance while the NZD plunged on RBNZ’s surprise dovish message indicating uncertainty on its next rate-change & cut to the economic forecasts.

Super Thursday & Active Friday Ahead

Notwithstanding the USD’s considerable rally, the GBP has already started showing its dissent to bend down but has yet to receive strong messages from the Bank of England (BoE) in Thursday’s monetary policy, which also included quarterly inflation report, to justify latest pullback. In case of US, the CPI is likely to gain heavy market attention on Thursday as well because the inflation gauge is already near the central-bank’s target and further rise may warrant increased pace of rate-hikes from the Fed. Moving on, Friday’s Canadian Employment details & US Prelim UoM Consumer Sentiment are some other data-points to entertain market-players.

Starting with the BoE, the central bank did reveal its favor for monetary policy tightening in its February QIR release and also revised the GDP forecasts upwards while letting the Inflation & Employment predictions broadly unchanged. However, the economic scenario has changed since then and now warrants the team Carney to stand pat in search of greater strength before signaling any further monetary policy moves.

For US Inflation readings, monthly figures for both the CPI & Core CPI haven’t been good as the former dropped to -0.1% & the latest remained unchanged at 0.2% during its latest release. Though, YoY figures have been welcome sign that the Fed may have to increase its rate-hike pace with the CPI rallying to 2.4% & Core CPI marking 2.1% stat. Forecasts suggest, the CPI to reverse its -0.1% MoM loss with +0.3% gain & rise to 2.5% on yearly basis with the Core CPI likely remain static at 0.2% on MoM & expected to increase to 2.2% on YoY.

Shifting to the Friday, Canadian Employment details may hurt the CAD’s recent recovery if matching the 17.8K forecast against 32.3K prior for Employment Change & reprint the 5.8% Unemployment Rate. Moreover, US Prelim UoM Consumer Sentiment may show weakness in consumer confidence by posting 98.4 stat against 98.8 prior.

At the Geo-Political front, US still has 180 days as per law before it can actually levy sanctions on the Iran and if any intermediate deal is signed during that time then the present upheavel may soothe. Also, Robert Mueller’s investigation of Trump administration has been itching Mr. Trump and may offer something negative for the USD while political deadlock in Italy, which may require another general election, coupled with sluggish NAFTA & Brexit talks, could keep making analysts busy.

Although the BoE isn’t expected to alter its present monetary policy, disagreements among the policymakers & upward revision to forecast may signal the central-bank’s readiness to offer another rate-hike during this year and can fuel the GBP.

For the USD, rallying inflation can push the Fed towards increasing rate-hike pace, whcih in-turn may strengthen the greenback, but Geo-political problems may keep prices under check. Further, the CAD could witness profit-booking on weaker job results; though, rising crude prices might confine the Loonie’s larger drawdown.

Technical Talk

EURUSD’s break of ten-month old ascending TL, at 1.1900 now, signals the pair’s plunge to the 1.1770, the 1.1725 and then to the 1.1780-90 support-area whereas an upside break of 1.1900 can help it revisit the 200-day SMA level of 1.2020. The GBPUSD is struggling around the 200-day SMA level of 1.3540 within a range between the 1.3480 and 1.3620 while USDJPY again aims to confront the 110.20 & 110.80 with 109.00 TL & 100-day SMA level of 108.55 being adjacent supports to watch during its pullback. Further, the USDCAD has 1.2685, including 100-day SMA as important near-term support whereas 1.2950 & 1.3010 can confine the pair’s immediate advances. At last, AUDUSD’s bounce off the 0.7400 had to surpass the 0.7500 mark in order to aim for 0.7550 otherwise it can come down to 0.7400 & 0.7370-65 but the NZDUSD’s drop beneath the 0.6955-45 support-zone indicates the pair’s south-run to 0.6870 & 0.6870.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 14 – May – 2018

Hello Traders,

Notwithstanding the early week optimism, mainly due to downbeat trade-sentiment concerning ECB & BoE, the US Dollar Index (I.USDX) had to post negative weekly closing at the end of last-week as softer inflation numbers raised doubts over the Fed’s rate-hike pace. While a bit cool CPI & PPI stats gave an opportunity to recover some of its losses to the AUD, the CAD rallied on the Crude’s surge based on US sanctions over the Iran; however, the NZD couldn’t much benefit from the same pullback as RBNZ’s dovish sound kept dragging the Kiwi southwards. Further, the EUR also failed to fully reimburse the declines as political deadlock in Italy and sluggish EU fundamentals continued hurting the regional currency whereas the GBP managed to end the week on positive side after MPC Official Bank Rate Votes showed two policymakers still favoring the rate-change. Moving on, the JPY couldn’t please the buyers on BoJ’s dovish stand & weaker economics but the Gold posted gains on USD’s recent weakness.

While late-week change in market sentiment favoring the US Dollar was a key reason for the rest of the major’s recovery during last-week, the weekend news from EU suggesting that two of the political rival winners at Italy are ready to form a government offered a sigh of relief to the EUR buyers at the start of present week. In addition to this, the US Dollar had another blow to handle as global economies from Europe to Asia have started showing their resistance for US sanctions over Iran. Though, the same couldn’t further propel the Crude prices as rapid increase in US rig counts & likeliness that the Iranian sanctions may be wiped out even before coming into action triggered the energy’s pullback.

With the recent change in trade set-ups concerning the USD aptly entertaining momentum traders at the start of the week, US President Donald Trump’s latest threat to levy sanctions on the EU & Asian companies doing business with Iran helped fueling safe-havens, like Gold & JPY, further towards north. Though, Mr. Trump’s readiness to help the Chinese tech-firm ZTE and discuss trade-issues with China during the present week act as a cap for such risk-safety.

Looking forward, the economic calendar is almost empty with no major detail/events scheduled for release after the Japanese Preliminary Machine Tool Orders flashed disappointing numbers. As a result, there may be a lack of market momentum for the rest of the day but Geo-political events concerning the Italy’s optimism, Iranian sanctions & US-China trade developments might keep making the market alive.

If we observe the Geo-political factors, majority of them are against the USD, except likely positive changes in the US-China, which in-turn signals extension of the greenback’s recent downtick & recovery of other majors. However, the plus signs are less stronger at NZD & JPY due to their own economic weakness.

Technical Talk

USDJPY again aims to confront the 110.00 resistance-mark, break of which can fuel the pair to 110.50 & 111.30 while 109.00 & 108.80 can act as immediate supports for the pair. Further, the USDCAD also signals the 1.2750-45 re-test that holds the gate for the quote’s dip to 1.2700 with 1.2840 & 1.2890 being nearby resistances to watch. At last, AUDNZD has to surpass the 1.0855-60 horizontal-region & 1.0880 number, including 200-day SMA, in order to target 1.0920 otherwise it can come-back to 1.0800 & 100-day SMA level of 1.0765.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 15 – May – 2018

Hello Traders,

On Monday, U.S. President Donald Trump’s conciliatory remarks on China’s ZTE Corp and Cleveland Fed President Loretta Mester’s comments favoring her support to the Fed’s gradual interest rate increases helped the US Dollar Index (I.USDX) to recover some of its late last-week losses and mark positive daily closing. The EUR, on the other hand, initially enjoyed a good start to the week when one ECB policymaker, Francois Villeroy de Galhau, signaled the central-bank’s readiness to offer fresh policy guidance when the exceptional bond-purchases end but the regional currency couldn’t stay happy for long after the greenback’s recovery. However, the case is a bit different for the GBP that managed to extend its recent pullback on technical support ahead of today’s UK employment stats. Further, the commodity-currencies, namely AUD, NZD & CAD, also bend down in front of the USD, which in-turn dragged the JPY & Gold towards south. At the end, the Crude extended its north-run as rising tensions between US-Iran continued pleasing the energy Bulls.

During early Tuesday, market sentiment was largely driven by slew of Chinese headline data-points, including Industrial Production, Retail Sales & Fixed-asset investment. Among them, the Industrial Production showed optimism for the commodity basket by rallying heavily but softer than expected Retail Sales & Fixed Asset Investment couldn’t offer strength to the AUD, NZD & the CAD. Additionally, statements from U.S. Ambassador to China, Terry Branstad, mentioning that two of the world’s largest economies are “very far apart” on resolving trade frictions entertained the political readers.

Moving forward, the economic calendar has some crucial data-points from UK, EU & US to please the momentum traders for the rest of the day. It includes the front-line Employment details from UK, ZEW Economic Sentiment numbers for the EU and US Retail Sales & Empire State Manufacturing Index.

Forecasts suggest the UK Average Earnings to rise by 2.7% from 2.8% prior and the Claimant Count Change to flash 13.3 mark against 11.6K earlier; though, the Unemployment Rate isn’t expected to alter from 4.2%. Further, the EU ZEW Economic Sentiment might please the EUR buyers with 2.0 number compared to 1.9 previous post while softness in US Retail Sales, to 0.4% from 0.6%, may have to be offset by the Core Retail Sales’ anticipated growth of 0.5% versus 0.2% to keep the USD strong. Additionally, the US Empire State Manufacturing Index is also indicating pullback in the US currency with 15.1 forecast compared to 15.8.

Given the downbeat expectations from the U.S. & the UK data-points, chances of both the currencies witnessing profit-booking can’t be denied; however, the EUR can benefit from this together with having welcome ZEW figures. It should be borne in mind that any major positives from US-China trade talks or from US-North Korea meet, not to forget US-Iran issue, might ignore the soft economic print and can fuel the greenback further towards north.

Technical Talk

Considering the importance of today’s UK Job numbers, GBPUSD’s 185 pip range between 1.3480 & 1.3665 is less likely to prevail for long while downbeat expectations from the reading signal the pair’s decline to 1.3450 with 1.3710-15 acting as follow-on resistances on the upside. In case of the USDCHF, the 0.9950 & 0.9920 can offer immediate supports to the pair during its drop whereas 1.0035 & 1.0055 may restrict the quote’s nearby advances. Moreover, the AUDCHF is presently struggling with the 0.7510 horizontal-support, breaking which it can dip to 0.7465 & 0.7440 but the reversal, which is more likely, can again flash 0.7545 & 0.7565-70 on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 16 – May – 2018

Hello Traders,

While disappointing stats from Germany, EU & UK strengthened the US Dollar during early-Tuesday, upbeat Retail Sales & Empire State Manufacturing Index helped the greenback gauge (I.USDX) to test the highest level of 2018. With this, the EUR & GBP plunged whereas JPY & Gold had to bear the burden of rising USD cutting safe-haven allure. In case of commodity currencies, namely AUD, NZD & CAD, China’s Industrial Production couldn’t please the buyers when stronger US counterpart continued hammering the commodity demand. Further, the Crude prices also declined after API registered a hike in inventory levels but the drop wasn’t too strong as global output cuts & US sanctions on Iran, coupled with Geo-political tensions at Turkey, kept playing their roles to please the energy traders.

During early-Wednesday, political news concerning the Chinese delegates arriving Washington for US-China trade talks & North Korea’s cancellation of the meeting with South Korean leaders entertained the market-players. Also, news that Trump’s recent favor to the China’s ZTE might not be acceptable to the House Armed Services and the Fed policymakers signal to witness slower growth going forward curbed the greenback’s further rise.

At the data-front, Japan’s Preliminary GDP showed the national economy’s contraction for the first time in nine quarters whereas Australian Wage Price Index also registered softer mark and pushed back speculations concerning the RBA’s tightening during the year.

Looking forward, Final reading of EU CPI, US Building Permits, Housing Starts & Industrial Production, followed by weekly release of US official crude stockpile details, could make economy-watchers busy while developments at US-China meet, together with news about Iran sanctions, North Korea’s latest U-turn and Trump’s say on ZTE, might please the politics readers.

In case of the economics, the EU Final CPI is likely to confirm the weaker Flash number of 1.2% whereas the US Housing Starts & Building Permits are both expected to remain unchanged at 1.32M & 1.35M respectively but the Industrial Production can please buyers with +0.6% growth against +0.5% earlier. Moreover, the Crude stockpiles could register slower than previous contraction in inventory figure.

Given the economic strength of the U.S. continue favoring Fed’s rate-hike chances, Trump’s efforts to soothe the US-China trade-war concerns could help the USD to remain stronger for a while, which in-turn could hurt commodity-currencies, EUR & GBP. The safe-havens, on the other hand, might witness lesser selling pressure due to Geo-political tensions at Middle-East & North Korea’s recent behavioral change.

Technical Talk

AUDUSD’s U-turn from the 0.7445 has to conquer the 0.7530 resistance in order to meet the 0.7565 otherwise can come down to re-test the 0.7400 mark. Further, the NZDUSD also has to clear the 0.6955 TL barrier if it wish to reach the 0.7000 number again else 0.6850 & 0.6820 may please the sellers. At the end, EURAUD is indicating 1.5775-70 horizontal-support, breaking which it can drop to 1.5735 while 1.5880 & 1.5910 can keep restricting the pair’s near-term upside.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 17 – May – 2018

Hello Traders,

UK Employment figures became another disappointment for the GBP while EU & German data-points didn’t lag in pleasing the Bears; however, improvements in US Manufacturing PMIs, Industrial Production & Retail Sales welcomed the greenback Bulls. At the political front, Trump’s surprise favor to the ZTE Corp. may offer good results from Sino-US trade-talks but recent U-turn from North Korea & Geo-political tensions at Middle-East seem a drag for the USD.

While majority of the aforementioned details/events have already played their role and there are very few economics left for release during the week, namely US Philly Fed Manufacturing Index and Canada’s Retail Sales & CPI, investors might focus more on the Geo-political developments concerning US relations with China, North Korea & Middle East. Though, it doesn’t mean that scheduled stats may lose their importance.

Let’s understand the fundamental aspects which can be helpful for rest of the week.

Inflation Hurt The USD

Downbeat inflation readings wiped off the early-week gains of the US Dollar during last-week and made it test the negative territory for the first time in previous four weeks. As a result, the EUR & GBP managed to recover some of their latest losses occurred due to disappointing ECB & BOE announcements but the EUR couldn’t rise much as political uncertainty at the Italy kept being a drag for the regional currency. Further, the AUD & CAD portrayed gains of commodity basket because of decline in the USD while Crude & Gold surged on Trump’s sanctions over the Iran. Moving on, the NZD & JPY couldn’t benefit as RBNZ seemed more dovish and there were not much to be happy about from the Japan.

Eco-Politico Rejuvenated Greenback Strength

Having marked a negative weekly closing, the US Dollar regained its strength so far during the present week as President Donald Trump’s favor to China’s ZTE Corp. increased chances of receding Sino-US trade-war when the Chinese policymakers are in the U.S. Additionally, Retail Sales, Housing numbers & Manufacturing PMIs were also in their good shape and provided extra strength to the greenback.

On the other hand, the EUR couldn’t enjoy much from the news that political rivals in Italy are likely to form coalition as latest news suggested that they are planning to ask ECB to waive 250 billion Euros Italian loans. Also, sluggish data-points from EU & Germany continued pushing back chances of the ECB’s monetary policy tightening. Further, the GBP had to plunge initially on bad employment stats but recovered on Thursday when news spread that the British policymakers are ready to remain in EU customs region post-Brexit. In all this, JPY & Gold were bitterly hit due to cut in their safe-haven allure while the Crude maintained its north-run on decline in stockpile & Iranian sanctions.

In case of commodity currencies, the CAD continue flashing gains on upbeat economics & Crude’s rise while the AUD, which was down since early-week, regained its strength on upbeat employment details. Further, new Government’s first budget at New Zealand recently helped NZD but the weakness at commodity basket seems continue dominating the Kiwi trades.

What To Look Now?

Given the major chunk of economics have already being published, traders are left with only few releases to observe. Amongst them, Thursday’s US Philly Fed Manufacturing Index will be the first. The manufacturing gauge is likely to register a soft number of 21.1 against 23.2 prior and may trigger the USD’s pullback.

Moving on, Friday becomes an important day for the CAD traders as headline Canadian Retail Sales & CPI are up for release on the same day. The CPI is expected to remain unchanged at 0.3% mark but the Retail Sales could dip to 0.3% from 0.4% earlier whereas Core Retail Sales could please the Loonie Bulls with 0.5% growth versus 0.0% prior.

At the political front, China’s top economic envoy, Vice Premier Liu He, will meet with top U.S. policymakers during Thursday & Friday in order to discuss the ways in which both the economies can avoid risk of trade-war. Latest news suggests that China has welcomed Trump’s action with ZTE and said it is not interested in risking a trade-war with US.

North Korea has recently been a trouble-maker again. The Asian nation that was initially ready to denuclearize for the U.S. is now stepping backwards by cancelling its summit with South Korea and challenging US by saying it will not be the next Libya.

Furthermore, Geo-political crisis at Turkey has been worrisome as many people died since the start of the week against agitation over US embassy in the nation while Iran is also finding ways to retaliate for the U.S. sanctions and has gained informal supports from EU & some developed countries.

Hence, while there are fewer economics left for release, which in-turn are less likely to help the USD but may keep fueling the CAD, the political framework may threaten the greenback Bulls.

At the political front, North Korea’s continuous restrain may make Mr. Trump angry and cancel his next month meeting with the nation while positive developments from the US-China ties could help propelling the USD & commodity-linked currencies as well. Moreover, Middle-East tensions are good for the Crude but not so welcome for the Gold & JPY unless USD declines.

Technical Analysis

EURUSD’s sustained trading below the 1.1840-35 indicates the pair’s further downside to 1.1720-15 & 1.1660 while an upside break of 1.1840 can flash 1.1910 & 1.1960 as quotes. For the GBPUSD traders, the 1.3450-45 & the 1.3630 is an important region to watch with either-side breaks offering 1.3330 & 1.3710. Further, the USDJPY is expected to meet the 111.00 til it trades above 110.000 while USDCAD can avail 100-day SMA level of 1.2685 if it remains below the 1.2900. Additionally, AUDUSD has to clear 0.7580 in order to aim for 0.7610 with 0.7400 being strong downside support whereas NZDUSD has 0.6815 & 0.6945 as crucial levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 18 – May – 2018

Hello Traders,

Positive developments at US-China trade-talks and a years’ high Philly Fed Manufacturing gauge helped the US Dollar Index (I.USDX) to extend its gain series for consecutive fourth day on Thursday while rumors about the Italy’s coalition leaders filling plans for Euro exit & a request to the ECB to waive 250 billion Euro loan dragged the EUR towards south. Further, the GBP had a good-day after speculations spread that the Britain will remain in customs region post-Brexit while JPY marked losses on disappointing Japanese releases paring back the bets favoring BoJ’s monetary tightening. Moving on, the AUD, NZD & CAD all reversed their prior gains and declined as stronger USD’s negative impact on the commodity basket joined hands with sluggish data-points at respective home-land. Additionally, Crude prices continued rising on US sanctions over Iran, declining inventory & OPEC-led production cut whereas Gold also witnessed pullback because of on-going Sino-US meet & Geo-political problems at Middle-East.

During early Friday political front provided good news to the USD & the EUR. From the U.S. side, an anonymous White House representative said that China offered to a $200 billion cut in its trade surplus with US while also promised to drop the dumping probe on US sorghum. In case of the EU, Italian policymakers declined to the speculations that new government has plans to leave the Euro. Also, US President Donald Trump talked down the North Korea’s expectations that the former is expecting a Libyan style nuclear crackdown when they meet in June.

While optimism at political front was weighing heavily on the Gold, the Japanese Yen dropped after Japan’s National Core CPI marked disappointing figure. It should also be noted that receding trade-war concerns between US & China helped the AUD & NZD to recover their yesterday’s losses while there was less movement from the GBP.

Friday becomes the second & final discussion-day for US-China trade representatives to conclude the meet either with a welcome accord or no solution, as they did during earlier this month. Meanwhile, Chinese premier met North Korean delegates on Thursday that Mr. Trump didn’t like and termed the dragon nation as someone egging the hermit kingdom’s latest insults. Furthermore, Italy is still in the highlight to formally start the coalition government. Hence, political news from US, China, North Korea & Italy are likely to take the center-stage of market attention for the day.

On the economic front, monthly releases of Canada’s CPI & Retail Sales are the only readings left to please market-players. Herein, the CPI is expected to remain unchanged at 0.3% mark but the Retail Sales could dip to 0.3% from 0.4% earlier whereas Core Retail Sales could please the Loonie Bulls with 0.5% growth versus 0.0% prior.

Given the mixed expectations from Canadian data-points, the CAD might have to rely more on Crude’s rise & USD’s advances to determine its moves during the rest of the day. In case of the politics, chances of Mr. Trump to gain the Chinese trade-deal & regain North Korean confidence are too high and the same could help the USD to remain strong for the time being. However, any negative surprise might not hesitate dragging the greenback to south.

Technical Talk

USDCAD’s U-turn from 1.2750-45 support-area still needs to clear the 1.2850 & 1.2885 resistances in order to aim for 1.2940 otherwise chances of its 1.2790 & 1.2745 re-tests can’t be denied. Further, the EURUSD’s sustained trading below 1.1840-35 indicates the pair’s downside to 1.1720-15 with 1.1760 being intermediate halt while break of 1.1840 may re-print 1.1910 as a quote. Moreover, the EURNZD moves are likely confined in a short-term Rising Wedge technical formation but its latest pullback from 1.7050 may help the pair visit 1.7200 & 1.7250 but a downside break of 1.7050 could drag prices to 100-day SMA level of 1.6935 and then to the 1.6810 rest-points.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 21 – May – 2018

Hello Traders,

In addition to receiving slew of welcome economics, progress on US-China trade-talks strengthened the US Dollar Index (I.USDX) towards posting fourth positive weekly closing during last five-weeks. While upbeat data-points rejuvenated Fed’s aggressive rate-hike calls, receding fears of global trade-war increased market optimism that in-turn the JPY & the Gold to south. In case of the EUR, the regional currency had to suffer due to Italy’s new government’s pledge to increase spending while the GBP couldn’t properly mark the impact of the news mentioning that the UK will remain in customs region after Brexit as disappointing Job numbers kept raising worries for the BoE’s future actions. Further, the AUD, NZD & CAD all couldn’t confront stronger USD’s negative effect on the commodity basket but the Crude rallied as Geo-political problems at Middle-East & OPEC-led production-cut, coupled with US sanctions on Iran, pleased the energy Bulls.

When positive developments at US-China trade-talks were already entertaining the investors, weekend news that world’s top two economies have agreed to dump recently announced tariffs fueled trade sentiments around early-Monday. The release came from US Treasury Secretary Steven Mnuchin on Sunday night when he said “Right now, we have agreed to put the tariffs on hold while we execute the framework.” Hence, the strong signal that trade-war concerns are off for now helped the global market optimists at the week-start and portrayed some welcome moves when most of the EU, Switzerland and Canadian markets are closed.

Even if major economies were off, the Japanese Trade Balance flashed upbeat sign with higher than expected exports gain. However, the same couldn’t strengthen the JPY as overall market sentiment remained in favor of the risk-bearing assets and the USD than the safe-havens. It should also be noted that breaking protectionism also fueled the Crude prices further towards north on the hope of increasing future demand.

Moving forward, economic calendar isn’t having anything noticeable but news from China & US relating to the latest assent could support the US Dollar to maintain its north-run while helping the Crude prices at the same time. Moreover, Geo-political tensions at Middle-East are gaining momentum after fresh election results at Venezuela again pushed the President Nicolas Maduro forward as the troubled country’s leader and reignited fears of extended US sanctions. Additionally, the Iran & North Korea might as well communicate their feelings for the U.S. sanctions & Trump’s scheduled visit respectively and could trigger pullbacks in the JPY & Gold in case of negative announcements.

Hence, while the economic calendar is almost silent for the day, Geo-political concerns & recent Sino-US accord could keep entertaining the momentum traders.

Technical Talks

Break of 1.3455-50 support signals the GBPUSD’s additional south-run to 1.3390 & 1.3330 while an upside break of 1.3455 may reprint 1.3500 as a quote. Further, the USDJPY seems all set to challenge the 111.50 and the 112.00 resistances with 110.60 & 110.00 likely acting as immediate supports during the pair’s U-turn. Moreover, the AUDCAD’s latest recovery has to clear the 0.9705-10 horizontal-region in order to aim for the 0.9730-35 otherwise it can come down to re-test the 0.9660 & 0.9640 rest-points.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 22 – May – 2018

Hello Traders,

Even if US-China trade optimism helped greenback to start the week on a positive note during early-Monday, Geo-political problems at Venezuela & Iran fueled the Crude prices and dragged the US Dollar Index (I.USDX) down by the day-end. At Venezuela, re-election of controversial leader Nicolas Maduro received widespread condemnation from global leaders wherein US government signaled its readiness to levy harsh oil sanctions on the country where Crude output has already dropped to its lowest in decades. Also, news that US is in the process to raise it demands from the Iran, including denuclearization & exit from Syria, in order to let the country without harsh sanctions propelled the energy prices further towards north. With the rallying Crude prices and improvements in US-China trade relations, commodity currencies like AUD, NZD and CAD were biggest gainers of the day while Gold also recovered on declining USD & rising Geo-political tensions. However, the GBP & JPY couldn’t stop their south-runs against the USD as worries concerning their respective central-banks’ dovish stand kept dragging those currencies downwards but the EUR could enjoy the USD’s dip.

While investors were busy welcoming the Crude’s surge in spite of market close at EU, Switzerland & Canada, some USD optimists considered this energy rally as a positive sign for the Inflation hike, which in-turn could force the Fed to accelerate its pace of rate-lifts. As a result, the greenback recovered some of its Monday losses during early Tuesday when majority of global traders returned to their desks.

Having witnessed active start to the day, mainly in support of the USD & Crude, the US Dollar witnessed a bit of pullback when sustained rise of the energy cut the greenback’s investment demand. With this, the US Dollar re-joined its drop and rest of the Forex majors, including the GBP & JPY as well, benefitted from the same.

If we look at the rest of the day, the economic calendar doesn’t have anything to impress the market players but Geo-political tensions at Middle-East, together with developments at US-China trade relations, could keep entertaining momentum traders.

As we already know about the situation at Venezuela & Iran fueling Crude prices, it’s time to discuss advancements at US-China trade front. Herein, the U.S. authorities are preparing to lift their seven year ban on China’s ZTE and the China is also planning to call back their tariffs on US agro products and increase imports of the same. Hence, the trade situation between world’s two biggest economies are pretty welcome and may help the USD as well as commodity front to remain optimistic for quite some time. As we’re already discussing politics, it should also be noted that Italy’s coalition government has finally agreed on a candidate to lead the troubled nation and introduce multiple plans which some perceive as a threat to the country’s debt.

Hence, rising Geo-political tensions at Middle-East and EU might act as a force for the JPY & Gold to extend their recent recoveries while improvements at US-China can become a plus point for the USD & commodity basket.

Technical Talk

NZDUSD is gradually recovering towards 0.7000 resistance-mark, breaking which it can rise to 0.7055 while 0.6930 & 0.6900 may offer immediate supports to the pair during its pullback. Further, the AUDUSD is also struggling with 0.7600 round-figure to claim the 0.7620 & 0.7655 land-marks but a downside break of 0.7560 may drag the pair back to 0.7525. Additionally, the GBPAUD dropped below seven-month old ascending TL, at 1.7755 now, and signals its drop to 1.7660 & 1.7570-60 support-zone whereas upside clearance of 1.7755 on a D1 basis may recall 1.7840 and the 100-day SMA level of 1.7885.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 23 – May – 2018

Hello Traders,

On Tuesday, statements from the U.S. President Donald Trump revealing his less likeliness for the US-China trade-talks and failure to assure North Korean visit due to Kim Jong Un’s latest refrain to give up on nuclear arms propelled the JPY. However, the House’s ability to get favorable vote results for sweeping changes into the Dodd-Frank Act proved that Mr. Trump has the capacity to make all his promises right and fueled the US Dollar Index (I.USDX) towards posting a positive daily closing, which in-turn couldn’t allow Gold to enjoy the risk-aversion. The EUR, on the other hand dropped as traders continued weighing down the chances of ECB’s monetary policy tightening while the GBP gained after one of the BoE policymakers supported rate-hikes from the UK central-bank in his appearance before Treasury Committee of parliament. Further, AUD, NZD & CAD all declined as receding optimist over the US-China trade-relations dragged the commodity currencies down whereas the Crude failed to hold early-day rise on profit-booking.

Having witnessed rejuvenated strength of the safe-havens during previous day, investors maintained their longs for the JPY on early-Wednesday as not only US President’s statements but slump in Turkish Lira & tensions at Middle-East continued warming risk-off market mood. Additionally, comments from RBNZ policymakers that the central-bank stand ready to adhere to QE if needed dragged the NZD further towards south whereas AUD dropped on China’s plans to cut imports from Australia. Moreover, the Crude also stretched its recent pullback ahead of US Crude inventory details’ announcement.

While the JPY and the USD were both in limelight till now, USD grabbed higher attention ahead of the FOMC minutes release which will show the central-bank’s stand on market expectations concerning four rate-hikes. Additionally, EUR & GBP were also trading a bit nervously before monthly publication of EU Flash PMIs & UK CPI, up in few minutes.

Forecasts suggest the EU Flash Manufacturing PMI to mark 56.1 figure against 56.2 with the Non-Manufacturing PMI expected to remain unchanged at 54.7. Further, the UK CPI is also likely to maintain its 2.5% stand while the U.S. Crude inventory number could please the energy Bulls with -2.5M versus -1.4M earlier.

In case of the FOMC minutes, investors may closely observe what’s there in the central-bank’s mind after it praised recent improvements in the Inflation. Analysts would also look for the clues relating to til what inflation level the Fed could keep its 3 rate-hikes a year promise true.

Given the hint of increased optimism for the U.S. economy and readiness to inflate the number of rate-hikes in the FOMC minutes, the USD may continue trading up but a slight disappointment may highlight recent pessimistic statements from the President and can trigger the greenback’s pullback. On the other hand, EUR is less likely to benefit from the PMIs while any increase in UK CPI could propel the GBP to extend its recovery. In all these, the JPY is likely to benefit from the present risk-off market mood but political problems at the Japan, relating to Abe’s cronyism, might confine the JPY’s gains. All in all, today being the day of more details/events and Geo-political pressure, market-players might witness increased volatility.

Technical Talk

EURUSD aims to revisit the 1.1710-15 horizontal-support, breaking which it can drop to 1.1660 & 1.1600 while the 1.1800 and the 1.1840 trend-line seem nearby important resistances for the pair traders to watch. Other than EURUSD, the USDCHF is also likely to extend its south-run towards 0.9870 & 0.9845 as it broke the 0.9955 level that has 1.0000 as follow-on resistance to observe. Moreover, the GBPCAD might find it hard to extend its latest recovery as 1.7300 and the 1.7340 TL still remains unbroken with 1.7155 & 1.7070 being immediate crucial supports for the pair.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 24 – May – 2018

Hello Traders,

While twists & turns of US-China trade relations, Donald Trump’s worrisome statements and political problems at Italy & Japan triggered global risk-off, disappointing stats from the EU & UK, contrast to not so dovish FOMC minutes, helped the US Dollar Index (I.USDX) to maintain its strength so far during the present week.

However, the week is still not over and we are left with UK Retail Sales, GDP and US Durable Goods Orders to watch. Also, political plays surrounding US, China, North Korea & Japan could keep entertaining momentum traders.

Let’s discuss fundamentals concerning each one of them.

Eco-Politico Optimism Favored USD To Regain Its Strength

Improvements at US-China trade-talks during the Chinese policymakers’ US visit and mostly welcome US data-points helped the greenback to reverse previous week’s decline & mark a positive weekly closing at the end of Friday. Market favor for the USD was strong enough to drag the EUR towards south when the regional currency was already struggling to handle Italy’s new government’s heavy spending plans & tax cut proposals. U.S. Dollar’s rise was equally negative for the GBP, which couldn’t portray the news that Britain now aims to remain in customs region after Brexit, whereas commodity-linked currencies, namely AUD, NZD & CAD, kept witnessing downsides as rising greenback is negative for the commodity basket. However, the Crude prices couldn’t stop their north-run as Geo-political concerns at Middle-East, receding trade-war concerns & depleting inventories were all the positive that energy front enjoyed during last-week. As everything was in favor of the US Dollar and risk-on momentum was strong, the JPY & Gold couldn’t deny dropping due to slump in safe-haven demand.

The Tale of Present Risk-Off But Upbeat Greenback

Even after confirming that world’s two largest economies have put a halt to their tariff-plans on each other, coupled with closure of EU, Canada & Switzerland markets on Monday, global risk sentiment got a boost when US President communicated through his twitter handle. Donald Trump showed his dissatisfaction from the recent US-China trade-talks & demanded different structure to avoid future uncertainty on trade disputes between both the economies, which in-turn raised worries for investors. He also showed his inability to confirm North Korean visit citing change in Kim Jong Un’s latest behavior. Additionally, Mr. Trump demanded national security probe on the auto sector that pushed some risk-averse traders to expect steel like tariffs on the auto sector.

Not only US President’s statements but the political problems at Italy and Japan also fueled risk-safety demand. As a result, JPY, CHF & Gold rallied considerably while EUR and GBP couldn’t refrain from further downside on disappointing data-points. Further, the AUD benefited from the profit-booking whereas CAD depicted the Crude’s rise but the US Dollar didn’t lose its strength amid FOMC minutes conveying policymakers’ readiness to announce another rate-hike soon.

What Next?

With the risk-aversion driving market crazy and the FOMC minutes’ failure to give direction for future rate-hike plan, investors covered some of their recent profits off the US Dollar whereas surprise increase in US stockpile activated the Crude’s profit-booking. Hence, the EUR & GBP finally got a chance to mark some upside while the CAD dipped on the energy front’s pullback. It all these, JPY, Gold and CHF maintained their favorite status in the minds of Bulls.

Looking forward, Thursday’s UK Retail Sales & US Existing Home Sales are likely to offer intermediate trade moves to the traders’ fraternity before pushing them towards crucial Friday when Second Estimate of UK GDP & monthly release of US Durable Goods Orders are up for publish. The UK Retail Sales is expected to reverse previous -1.2% contraction with +0.8% and can help the GBP to extend its recovery but the US Existing Home Sales might not please the USD buyers with 5.56M figure compared to 5.60M prior-mark. Moving on, UK GDP is likely confirming the initial estimate of 0.1% growth and the U.S. Durable Goods Orders could disappoint the optimists with -1.3% contraction against +2.6% earlier growth; though, improvements in Core Durable Goods Orders, to +0.5% from +0.1%, may cut the pessimism concerning the greenback.

At the Geo-political front, the Japan’s Ministry of Finance is due to release documents related to land deal that erupted probes for Mr. Abe’s cronyism on Thursday. Also, the Italian leaders might reach the EU policymakers soon to confirm their demands that could hurt the EUR. China has also taken a U-turn on early-Thursday by saying no deficit-cut agreements took place during US visit and the dragon nation stand still to counter US protectionism, which in-turn raised another obstacle in the US-China relation when the US commerce minister is about to visit China for further trade-talks. Mr. Trump has already conveyed his wish to curb auto sector mishaps by some importers to the U.S. and the same could keep signaling another wave of market uncertainty. It should also be noted that re-election of controversial Venezuelan leader means harsh US sanctions on the nation while the Iran is also finding ways to respond US levies. At the end, North Korea hasn’t yet responded to the Trump’s latest tweet and may blast, out of its nature, to ruin the recent improvements in US-North Korea relations.

To sum up, economic calendar is likely to offer GBP recovery and a bit more disappointment to the USD, which in-turn can be capitalized by commodity-linked currencies and the EUR. Though, Italian problems could curb the Euro gains and help the JPY, CHF & Gold to extend their latest rally as Geo-political problems at Middle-East, Japan, EU, US & China continue being front-runners from the market catalysts.

Technical Analysis

EURUSD’s refrain to visit 1.1660 could trigger its pullback to 1.1820 trend-line, breaking which it can drop to 1.1910 but a downside break of 1.1660 can reprint 1.1600 & 1.1550 as quotes. In case of the GBPUSD, the 1.3300 & 1.3180 are likely immediate supports to watch during the pair’s further declines while 1.3450 & 200-day SMA level of 1.3565 could limit the pair’s nearby advances. Further, the USDJPY has broken 110.15 trend-line support and may revisit the 108.80 mark with recovery beyond 110.15 signaling 111.40. Moving on, AUDUSD has to clear the 50-day SMA level of 0.7630 in order to aim for 0.7640 & 0.7680 else it can come down to 0.7500 whereas NZDUSD need to clear 0.6850 - 0.6980 range to mark noticeable moves. Additionally, USDCHF seems coming down towards 0.9870 & 0.9815 with 1.0000 & 1.0020 acting as adjacent upside barriers while USDCAD could keep struggling in the 200-pip range between the 1.2740 & 1.2940.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 25 – May – 2018

Hello Traders,

Thursday proved to be a dramatic day for global investors due to multiple factors ranging from Trump’s cancellation of North Korean summit to Russia’s hint for scaling back production-cut accord agreed with the OPEC. The U.S. President Donald Trump has been fueling market moves since a week with his tweets showing less likeliness for US-China trade-talks, calling the probe on auto sector and the latest communicating rejection of the much awaited Singapore summit that was to be held with North Korea in order to recede Geo-political tensions between two nations & spread global denuclearization. Trump’s tweets weren’t the only reasons that dragged the US Dollar Index (I.USDX) south as seven-week high Jobless Claims & lesser than expected Existing Home Sales also played their negative roles.

While US Dollar was losing its strength across the board, JPY & Gold kept stretching their latest recovery on fears emanating from Geo-political tensions. Further, EUR & GBP benefited from the greenback’s dip with no major positives of their own but AUD and NZD gained commodity basket’s support to register positive daily closing; though, CAD couldn’t enjoy the USD’s decline as Crude prices also dropped on speculations that Russia might push OPEC & other global producers to roll-back the supply-cut agreement when they meet next-month.

During early Friday, North Korea responded to Trump’s rejection with a surprise conciliatory remarks by saying they are still open to talk, which in-turn helped the US Dollar to recover some of its yesterday’s losses. As a result, JPY & Gold also had to respect the market’s risk-on mood but the Crude couldn’t strengthen as pessimism also erupted from Iran & Venezuela that both the nations might increase their supply to ward-off US sanctions.

Looking forward, Second estimation of UK Q1 2018 GDP and the monthly release of US Durable Goods Orders are likely important data-points to observe while personal appearances of BoE & Fed Chiefs might offer some monetary policy hints and can propel the market moves. Additionally, the Geo-political concerns might perform their last shot before the extended weekend at US & UK on Monday. Amongst them, US Commerce Secretary is going to meet China during next week for the extended trade-talks and concerns that Italy’s new economic minister will be a Euro-skeptic could grab the highlight.

In case of the scheduled data-points, UK GDP is likely confirming the initial estimate of 0.1% growth and the U.S. Durable Goods Orders could disappoint the optimists with -1.3% contraction against +2.6% earlier growth; though, improvements in Core Durable Goods Orders, to +0.5% from +0.1%, may cut the pessimism concerning the greenback.

As the economics are less likely to offer any noticeable moves, any sign of receding Geo-political tensions could further fetch the JPY & Gold towards south and help the USD to rise while commodity-linked currencies, namely AUD, NZD & CAD might not be able to regain their strength due to pessimism about Crude & stronger greenback negatively affecting the commodity basket. Also, the EUR can keep declining on the political problems at Italy & weaker economic outlook whereas the GBP has to print upbeat GDP figure to please the buyers.

Technical Talk

GBPUSD’s U-turn from 1.3420 again signals the 1.3300 & 1.3270 to appear on the chart with an upside break of 1.3420 indicating 1.3460 & 1.3500 as following resistances to watch. For USDCAD traders, the pair is heading towards 1.2920 & 1.2945 upside barriers, breaking which 1.3000 can mark its presence on the chart while 1.2880 & 1.2830 can offer immediate supports to the pair during its pullback. At the end, EURJPY might witness profit-booking towards 128.60 & 129.00 but its break beneath the 127.45 could make it vulnerable to plunge towards 126.45.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 28 – May – 2018

Hello Traders,

During last-week, the U.S. President’s twitter attacks on China, North Korea & auto imports couldn’t stop the US Dollar Index (I.USDX) from posting consecutive second weekly positive closing as pessimism at rest of the major developed economies favored the greenback demand. On the other hand, the EUR had to bear the burden of sluggish data-points & political problems at Italy & Spain whereas GBP couldn’t really enjoy upbeat Retail Sales as softer CPI kept pushing BoE’s rate-hike concerns away. Further, JPY, CHF & Gold managed to please risk-averse traders due to worries emanating from Trump’s changed mood towards North Korea & China, together with Geo-political tensions at EU, Japan & Middle-East. Moving on, the AUD & NZD could also witness pullbacks but the CAD dropped on Crude’s plunge. Moreover, the Crude prices declined heavily as signals from Russia & Saudi Arabia to propose rollback of global production-cut accord in their upcoming meeting, coupled with increasing output from US, disappointed the energy Bulls.

Not only weekdays, but the weekend was equally entertaining for global market players as Trump administration took a U-turn and showed readiness to attend the Singapore summit to discuss issues with North Korean leaders. Also, Italian President Sergio Mattarella rejected the coalition government’s please to appoint euro-skeptic Paolo Savona as finance minister.

With all these political changes, Forex market remained active at the start of the week even if the U.S. & UK bourses are off for the day. Additionally, latest prints on US rig counts added extra-burden on the Crude prices and make them trade downwards while EUR recovered some of its latest losses on the news of from Italy. While receding political pressure from US, North Korea & EU did dragged the safe-havens back during early trading sessions, the JPY maintained its strength as Japanese PMs readiness to discuss trade issues with US pleased the Yen buyers. In all these, commodity currencies, namely AUD, NZD & CAD, marked gains as absence of UK & US traders, coupled with renews political optimism, strengthened investors’ appetite for commodities.

Given the closure of UK & US markets restricting major economics to track for the day, momentum traders may have to satisfy themselves with smaller bounces on political news. Amongst them, developments on the US-North Korea and US-China relations and political situation at Italy, Spain & Japan could offer intermediate trade opportunities. Also, EU foreign ministers are scheduled to meet today to discuss various topics ranging from North Korea to Iran’s nuclear deal.

Absence of major economics & gradual Geo-Political moves might result in subdued trading for the day but chances of USD’s extended strength, coupled with recovery in commodity currencies, can’t be denied.

Technical Talk

USDJPY’s failure to surpass the 110.00 resistance indicates the pair’s re-test to 109.00 and the 108.60 while an upside clearance of 110.00 likely offering 110.40. Further, the EURUSD has to conquer the 1.1730 in order to meet the 1.1770 otherwise chances of its drop to 1.1640 & 1.1600 can’t be denied. Additionally, NZDCAD is struggling with 200-day SMA level of 0.9025 in order to aim for 0.9060 & 0.9110 whereas 0.8990 & 0.8930 can act as immediate supports for the pair.

Have a nice trading-day ……

[Wonel]

I would like to say here that the basic knowledge of the market is necessary to initialize your trading career. You are advised to stay as simple as poasible and stick to the basics as most of the successful traders do. Best of luck!

[FxAnil]

Daily Fundamental Dose: 29 – May – 2018

Hello Traders,

Be it unpredictable turn of US-North Korea summit or the clash between President & coalition parties at Italy signaling another election, not to forget about Russia & Saudi Arabia’s proposal to ease production-cut accord, Geo-politics was all in limelight during Monday. Amongst them, aggression of Italy’s populist parties was strong enough to gain highest market attention and drag the Euro down, which in-turn helped the USD to post another positive daily closing even if US & UK bourses were shut. With the Geo-politics smashing investor confidence, risk-off ruled trade sentiments and fueled JPY but Gold & CHF had to respect the greenback’s strength by declining. On the other hand, the AUD also witnessed downside due to stronger US Dollar’s negative impact on commodity basket but the NZD remained positive. Additionally, the CAD dropped as speculations favoring increased crude supply dragged the Crude downwards.

While absence of US & UK traders couldn’t confine market moves on Monday, return of those players result into a good start of Tuesday. During early trading sessions, Italian woes kept dominating the EUR while news that Japan wants to meet the U.S. President before Singapore summit to discuss issues relating to trade & matters to put forward when Mr. Trump meet North Korean leader accelerated the JPY’s north-run. Moreover, South Korea seems also interested in join the Singapore summit to make sure that US & North Korea manage to deliver the expected result, which in-turn increases the complexity of the point as now it would be tri-party meet, if Japan safely moves away from its desire to control the decision, rather than the bi-party summit.

Not only Geo-political issues but the economic calendar will also be a bit active today as monthly release of US CB Consumer Confidence and a bi-annual RBNZ Financial Stability Report could entertain market-players. Consensus suggest a bit softer print of US consumer sentiment gauge to 128.2 from 128.7 while RBNZ is less likely to praise its financial sector amid sluggish data-points.

Even if the US detail isn’t signaling the greenback’s further upside, Italian President’s readiness to propose his own candidate as a PM, together with recent interest of Japan & South Korea to control the Singapore summit, could keep favoring the US Dollar’s demand. Moreover, Russia & Saudi Arabia’s proposal to trim production cuts in order to compensate Venezuela & Iran from US sanctions and the developments on NAFTA & US-China trade-talks are some other catalysts to watch for the day.

As pessimism surrounding the EU & increased importance of the U.S. could help the USD to remain stronger for some more time, Crude & commodity currencies might have to bear the burden of supply-glut situation & trade protectionism. In all these, the JPY is likely to be benefited but the Gold may not enjoy the upswing because of the greenback strength.

Technical Talk

GBPUSD just broke the 1.3300-1.3290 support-zone and is aiming the 1.3200 and the 1.3130 rest-points while an upside break of 1.3300 can reprint 1.3370 on the chart. The NZDUSD is following a short-term symmetrical triangle between 0.6960 & 0.6900 with either side breaks offering 0.6980 & 0.6870 respectively. Further, the AUDCHF might find it hard to extend its latest pullback below 0.7455 and may revisit the 0.7500 & 0.7515 resistances but the dip below 0.7455 might not hesitate dragging it to 0.7415.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 30 – May – 2018

Hello Traders,

With the Italian President’s nominee for Prime Minister failing to get required support, political crisis at EU’s third largest economy shook global financial markets on Tuesday. Not only this, latest exchange of trade-related threats between US & Chinese representatives, together with sluggish developments at NAFTA talks, also increased Geo-political pressure on investors, which in-turn fueled safe-havens like JPY, CHF & Gold. However, positive news from US-North Korea’s expected summit in mid-June, better than previous CB Consumer Confidence and hawkish Fed helped the US Dollar to remain strong for one more day. While USD & safe-havens were progressing on their north-runs, the EUR slumped heavily on expectations of another election at Italy whereas GBP also stretched its downturn with no major updates except Brexit uncertainty. Further, AUD, NZD & CAD all declined as macro pessimism & stronger greenback negatively affected the commodity basket while Crude prices witnessed short-covering pullback.

Even if looming concerns over Italy continue posing as a biggest threat for the EUR at present, traders booked some of their profits off the regional currency’s short & USD’s long at early Wednesday. Probable reason for the same can be slew of US economic-readings and monetary policy meeting by the BoC. It should also be noted that the Japanese Retail Sales surpassed expectations and the Australian Building Permits plunged during early-day release.

Moving forward, US ADP Non-Farm Employment Change and Preliminary reading of Q1 2018 GDP are less likely to trigger the USD’s U-turn from current pullback as the ADP Non-Farm Employment Change, an early signal for the NFP, might flash 191K mark against 204K earlier, whereas the GDP is expected to confirm initial estimation of 2.3% growth. Additionally, the Bank of Canada could remain on hold with its present monetary policy but sluggish economics and uncertainty concerning NAFTA may push the Canadian central-bank to sound a bit nervous.

Given the downbeat expectations from scheduled data-points, coupled with recent profit-booking waves, chances of the USD to trim some of its latest gains are much brighter while CAD may also weaken if BoC chooses to remain dovish.

As rise in economics join hands with on-going Geo-political pressure, market momentum is likely to be magnified, which in-turn could keep supporting the safe-havens unless any surprise. Hence, market-players are advised to trade cautiously.

Technical Talk

Failure to surpass the 1.3045-50 resistance-zone seems dragging the USDCAD towards 1.2975 & 1.2920 while an upside break of 1.3050 can quickly flash 1.3120 as a quote. Further, AUDUSD needs to conquer 0.7540 in order to aim for the 0.7600 otherwise chances of its pullback to 0.7470 & 0.7445 can’t be denied. Additionally, AUDJPY is struggling with an intermediate TL support of 81.30 that can trigger the pair’s U-turn to 82.00 & 82.40, if not then 80.50 & 80.00 can mark their presence on the chart.

Have a nice trading-day ……