Daily Fundamental Dose

[FxAnil]

Weekly Fundamental Dose: 25 – October– 2018

Hello Traders,

Fears of market meltdown, trade-war and Geo-political concerns are already out & loud to challenge investor sentiment but events like ECB & Advance release of Q3 2018 US GDP are still left to acquire front-seat. Not only this, monthly readings of US Durable Goods Orders, Pending Home Sales and Japanese Tokyo Core CPI are some other catalysts that will also gain market attention during rest of the week.

Let’s start discussing fundamentals for each of these crucial details/events.

Greenback Regained Its Strength On Pessimism Surrounding EU, UK & China

Despite witnessing not so upbeat stats from home, the US Dollar Index (I.USDX) managed to reverse its previous week’s decline with a positive weekly closing as eco-political pessimism around EU, UK & China highlighted the importance of greenback. The EUR had to bear the burden of Italy’s refrain to respect regional budget terms while GBP failed to justify less harmful outcomes of EU summit due to disappointing headline figures. At the commodity front, mixed results were witnessed as Crude couldn’t ignore Saudi Arabia’s readiness to pump more oil if required, which together with disappointments from China dragged the CAD downwards, but AUD & NZD registered gains on welcome jobs & inflation numbers. The JPY also had to respect the greenback’s weakness but market worries helped Gold to maintain its strength.

Market Worries Continue Fueling the Safe-Havens, Including USD

With the global ire against Saudi Arabia for the death of American journalist and Sino-US trade-war continue threatening markets sentiment, investors rushed to safe-havens during the present week. Adding to this were the fears of bomb mailing to few top-notch US personalities and doubts over the strength of macro equity front. As a result, USD kept being market favorite despite Mr. Trump’s repeated attacks on the Fed’s rate-hike, which in-turn proved to be negative for commodity-linked currencies like AUD & NZD. However, the CAD managed to benefit from the BoC’s rate-lift and hawkish statement that helped it ignore Crude’s slide based on increasing US stockpiles and expected rise in output from leading producers.

The EUR couldn’t confront spreading worries through Italy and the GBP also failed to please buyers even if UK PM Theresa May successfully secured her position in the parliament meeting. Due to macro uncertainties mentioned above, the JPY & Gold have been holding their top spot in the Bulls’ list.

ECB & US GDP Are On The Radar

UK PM’s ability to please parliament members and absence of fresh differences between EU-Italy leaders, not to forget Saudi Arabia’s readiness to prove no intention behind American journalist’s death, may now shift market attention to the Thursday’s ECB meeting and the Friday’s US GDP figure.

The European Central Bank (ECB) is expected to repeat its statement favoring gradual end to monetary stimulus till the year-end together with start of interest-rate hike by the summer of 2019. However, recent stats from the region hasn’t been so promising and could push Mr. Draghi to be a bit dovish while facing press. In case of the Advance reading of US Q3 2018 GDP, the growth figure may soften to 3.3% from 4.2% but may hold the best pace since mid-2015.

Other than ECB & US GDP, Thursday’s US Durable Goods Orders may disappoint greenback Bulls if matching -1.3% forecast against +4.4% prior with Core Durable Goods Orders likely registering +0.5% growth versus 0.0% earlier. Also on Thursday, the U.S. Pending Home Sales could mark -0.1% figure compared to -1.8% earlier. Moreover, Friday’s Tokyo Core CPI may remain unchanged at 1.0% and might continue favoring BoJ’s loose monetary policy.

At the political front, recent bomb threats could push US President Donald Trump to lose his temper and might add fuel into his tussle with middle-east nations but Saudi Arabia’s ability to please Mr. Trump could ease some pressure off the traders. However, US-China differences might continue entertaining political watchers as news of Trump-Xi meet during G20 in late November failed to offer any relief to business houses facing difficulties because of higher tariffs. For the EU & UK watchers, the EU & Italy politicians may keep attacking each others’ viewpoints and raise worries for EUR but recent positive news from UK parliament can help the GBP to recover some of its latest losses if there are any welcome updates from Brexit front.

Hence, while ECB has to avoid being bearish in order to please EUR buyers, the USD may continue being market favorite not only because of its risk-safety status but also based on lack of harsh negatives from economic front.

There seems little help for commodity-linked currencies while JPY & Gold can keep their gains intact considering present Geo-Political turmoil but supply-side concerns might continue hurting energy traders.

Technical Analysis

Having dropped beneath the 1.1430 horizontal-line, the EURUSD seems all set to revisit the 1.1350-45 support-zone, breaking which 1.1300 could gain investor attention; however, an uptick beyond 1.1430 might fuel the pair towards 1.1515 TL and then to the 1.1610 resistance. On the other hand, GBPUSD is also likely to extend its recent declines in direction to 1.2860 & the 1.2800 horizontal-support unless it trades beneath the 1.3010 resistance-line, which if broken could escalate the pair’s recovery to 1.3070 & 1.3130 levels. Moving on, the USDJPY has to close below medium-term ascending TL, at 112.00, in order to test the 100-day SMA level of 111.50 and the 111.00 supports otherwise its pullback to 112.80-85 & 113.60 can’t be denied.

Further, the USDCAD also has 1.2985 support-line as a hurdle to conquer before visiting the 200-day SMA level of 1.2910, failure to do the same could propel the quote to 1.3130 & 1.3180 resistances. Additionally, AUDUSD & NZDUSD are both indicating extra south-run to 0.7000 & 0.6420 with 0.7160 & 0.6610 acting as respective nearby upside barriers to watch.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 26 – October– 2018

Hello Traders,

Not only better than forecast Durable Goods Orders and Pending Home Sales but hawkish comments from Fed policymakers, including vice Chair, also helped the US Dollar Index (I.USDX) to extend its north-run during Thursday. While welcome US stats and FOMC members’ comments fueled the USD, ECB’s President Mario Draghi couldn’t please EUR buyers even with his attempt to portray rosy picture of the regional economy. Further, the GBP also weighed down on the greenback’s strength and absence of fresh news concerning UK whereas JPY & Gold declined after US stocks recovered on positive results from Twitter, Microsoft & Tesla. Moving on, the AUD & the NZD managed to stop their plunge for the time being on expectations that China will be able to tackle the negative impacts of trade-war but CAD had to respect the US Dollar’s advances. At the end, improvements in risk sentiment also supported the Crude to post a daily positive closing.

Yesterday’s market optimism couldn’t last long and investors turned skeptic at the start of Friday when updates from Amazon & Alphabet rejuvenated fears for health of global tech giants. As a result, the JPY & Gold recovered some of their earlier losses and the USD held captive around recent highs. As a result, Australian Dollar, often considered as a barometer for risk, slide beneath important support and also fetched other commodity-linked currencies like NZD & CAD southwards.

Looking forward, Advance release of Q3 2018 US GDP is likely to grab market attention for rest of the day when there are no other major economics scheduled. The growth figure is likely to soften to 3.3% from 4.2% earlier but is still expected to register best number since mid-2015 and can continue signaling strength of world’s largest economy. Additionally, Revised print of UoM Consumer Sentiment, up after the GDP, may print a bit lesser figure of 98.9 compared to 99.0 prior.

At the political front, bombs sent to Trump critics are circling Mr. President to take a strong action against the sender. However, Mr. Trump chose not to emphasize on it and raise fingers on mainstream media, which in-turn may cause worries for the White House representatives to gather public support. On the other hand, China-Japan meeting is going smooth and both the leaders are likely to pave way for a big trade-deal soon to help Asia ward off American protectionism. Additionally, Saudi Arabia is still under pressure to justify the death of US journalist and can continue highlighting Geo-Political catalysts for market watchers.

Given the expected upbeat prints of US GDP continue supporting monetary policy divergence between the Fed and rest of the global central-bankers, the USD is likely to post another weekly positive closing. However, political pessimism might confine the greenback’s rally and help traditional safe-havens, like JPY & Gold, to remain in demand.

Technical Talk

With the 1.2800 horizontal-support still left to conquer, together with oversold RSI on H4 chart, the GBPUSD may witness pullback moves to 1.2865 & 1.2900 on the break of 1.2830 but its dip beneath 1.2800 might not hesitate recalling the 1.2730, the 1.2680 & the 1.2660 as quotes. On the contrary, AUDUSD has already dropped below 0.7030 mark, which in-turn opens the gate for its plunge to 0.7000 & 0.6960; though, an upside clearance of 0.7030 can reprint 0.7060 and 0.7100 as pair prices. Moreover, the NZDCAD seems clubbed between the 0.8535 TL resistance & 0.8465-55 horizontal-support with either side breaks indicating 0.8565 & 0.8400 to flash on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 29 – October– 2018

Hello Traders,

Steep declines in global equities on worries over sluggish earnings, trade-war and Geo-Political concerns fueled safe-haven demand of the US Dollar during last-week and helped the US Dollar Index (I.USDX) to post consecutive second weekly rise. Not only USD, the JPY and the Gold also benefited from risk-off moves while commodity-linked currencies, like AUD, NZD & CAD, had to bear the burden of stronger USD & fears of weak future demand due to Sino-US trade-tussle. Moving on, the EUR couldn’t take advantage of ECB President’s hawkish tone as downbeat PMIs & political pessimism at Italy hurt the regional currency whereas GBP plunged because of Brexit uncertainties despite Theresa May’s ability to please her party-members at parliament appearance. It should also be noted that Saudi Arabia’s readiness to pump more output if Iran sanctions hurt demand-supply balance joined hands with increasing US stockpiles in resulting back to back third weekly loss of the Crude.

Having witnessed tumultuous week at equities, investors remained a bit cautious at the start of week. The reason being early-day flight crash at Indonesia and threat to German Chancellor Angela Merkel after her ruling party failed to lure voters of Frankfurt’s home state, Hesse, during state elections. Additionally, comments from UK’s Chancellor of the Exchequer Philip Hammond before budget representation and disappointing numbers from China added hardships for market optimists. At the data front, Japan’s Retail Sales surged for eleventh month in a row and the AU HIA New Home Sales marked better than forecast growth.

Looking forward, Fed’s preferred measure of Inflation, namely Core PCE Price Index, together with monthly prints of US Personal Income & Spending and Japanese Unemployment Rate are likely to entertain traders for rest of the day together with on-going political plays at EU, UK, US & Middle East.

The Core PCE Price Index is likely to improve to 0.1% from 0.0% earlier while the Personal Income & Spending are both expected to post 0.4% growth against 0.3% prior for each. Though, the Japanese Unemployment might not change from its 2.4% figure flashed last-month.

In case of Geo-politics, EUR may find it hard to retain its recent pullback considering political challenges at Italy & Germany whereas GBP might also struggle due to upcoming Budget announcement. For the commodity-linked currencies, profit-booking in greenback could help recover some losses of the AUD & NZD but weak Crude prices could keep threatening the CAD’s advances.

To sum up, while scheduled data-points from the U.S. are likely to continue favoring Fed’s rate-hikes, political problems at EU & UK, coupled with US-China trade-war and negativity at equities, could add strength into the safe-havens like USD, JPY & Gold.

Technical Talk

Even after declining below two-month old ascending trend-line, USDJPY’s bounce off the 111.65-60 questions the sellers, which if broken might not hesitate flashing 111.00 on the chart. However, an upside clearance of 112.85 can escalate the pair’s recovery to 113.30 resistance. Further, USDCHF has to dip beneath the 0.9960-55 support-zone in order to revisit 0.9920 otherwise its rise in direction to 1.0000 & 1.0025 can’t be denied. At the end, GBPAUD’s sustained trading past-immediate support-line signals brighter chances of its extended south-run to 1.8000 & 1.7925-20 with the 1.8190, the 1.8230 & the 1.8350 being nearby resistances to watch during the pair’s pullback.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 30 – October– 2018

Hello Traders,

Welcome figures of Fed’s preferred inflation measure & Personal Spending weren’t the only forces behind US Dollar’s another positive closing on Monday as news from US to levy tariffs on all Chinese goods if Trump-Xi meeting fail also propelled the greenback’s safe-haven appeal. Even if Mr. Trump tried to soothe the uncertainty by saying in an interview that he’s ready to talk trade with China, investors focused more on the earlier updates of levying fresh tariffs on all Chinese imports and damaged commodity-currencies like AUD & NZD. Another reason for the USD’s strength was political turmoil at EU wherein German Chancellor Angela Merkel said she wouldn’t seek another term as a head of Christian Democrats (CDU) party that dragged EUR down. Moreover, GBP was also bearing the burden of Chancellor Philip Hammond’s budget that relied on assumption that UK will be able to get good Brexit agreement from EU leaders.

On the other hand, the JPY & the Gold were witnessing pullbacks as USD strength hurt traditional safe-havens while CAD couldn’t avoid Crude’s plunge based on expectations of higher supply from US, Saudi Arabia & Russia and a bitter Sino-US trade-war. In all this, global equities remained negative as macro-economic uncertainties & likely weaker results from global giants, mainly due to US protectionism & lesser demand from Asia, threatened traders.

During early Tuesday, investor confidence at Asian bourses seemed on recovery after China pledged to take additional measures to help equities and US President Donald Trump likely proposing a deal with the dragon nation in order to avoid much harm to global economy & their own. As a result, AUD, NZD & CAD trimmed some of their previous losses whereas Crude also marked pullback. Though, EUR & GBP were in no mood to stop their running declines due to their political problems while JPY & Gold kept being in red as USD maintained its favorite spot in the minds of buyers.

In addition to the on-going trade-war concerns and political plays at EU & UK, Prelim Flash EU GDP figures of Q3 2018 and US CB Consumer Confidence are likely extra catalysts that may increase market volatility. The EU Prelim Flash GDP might please the EUR traders if matching the 0.4% forecast versus 0.3% earlier but the USD could dip in case US CB Consumer Confidence meets 136.3 consensus against 138.4 prior.

Even if weak Consumer Confidence could hurt the USD’s strength for the time being, the greenback is less likely to lose its allure as overall trade-war concerns and political problems at EU & UK could continue making it a good buying bet.

Technical Talk

EURUSD’s U-turn from 1.1350-45 support-zone couldn’t surpass the 1.1430 upside barrier, which in-turn signal brighter chances for the pair’s dip to 1.1345 re-test, breaking which 1.1300 could regain market attention. Though, an upside clearance of 1.1430 might not hesitate visiting the 1.1465 and the 1.1500 resistances. In the same way, the NZDUSD also has to surpass the 0.6575-80 resistance-confluence, including 50-day SMA & immediate descending TL, in order to aim for 0.6610 otherwise it’s drop to 0.6500 & 0.6470 can’t be denied. Furthermore, GBPNZD has multiple supports, namely the 100-day SMA level of 1.9545, the 1.9420-10 support-zone including 200-day SMA & five-month old ascending TL around 1.9300, which can trigger the pair’s pullback towards the 1.9640, the 1.9700 & the 1.9830 consecutive resistances.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 31 – October– 2018

Hello Traders,

On Tuesday, 18-year high U.S. Consumer Confidence & American allegations that China stole details of jet engine technology from their private companies portrayed robust strength of world’s largest economy & bitter Sino-US tussle going forward. As a result, the US Dollar Index (I.USDX) extended its north-run towards four-month high but this time JPY & Gold couldn’t benefit from market risk-off as nearness to BoJ & expected decline in yellow metal demand from its largest consumers, namely India & China, played their roles. Moving on, EUR became victim of slower than expected EU GDP & on-going political pessimism at Italy & Germany whereas GBP also dropped after Standard & Poor’s said Britain may witness recession in case of ‘no-deal’ Brexit.

While US-China trade-war was kept playing background music and threatening future commodity demand, AUD, NZD & CAD surprisingly reversed some of their latest losses after China pledged to take more steps to curb Yuan drop & BoC Governor favored further rate-hikes. Additionally, Crude prices couldn’t avoid higher API inventories and declined to the August lows.

Even if commodity-linked currencies like AUD, NZD & CAD benefited during yesterday, the early-Wednesday releases of sluggish AU CPI & Chinese PMIs dragged them back to south. On the other hand, Bank of Japan (BoJ) kept its monetary policy unchanged with downward revision to its inflation forecast and disappointing print of Prelim Industrial Production providing extra weakness to the JPY.

In spite of witnessing slew of top-tier releases since morning, today’s economic calendar still has some frontline numbers to flash that could keep markets active for rest of the day. Among them, EU Flash CPI will be first to arrive followed by US ADP Non-Farm Employment Change, Canadian monthly GDP & US Chicago PMI.

Forecasts suggest a 2.2% outcome of the EU Flash CPI against 2.1% earlier with Canadian GDP growth likely declining to 0.0% from 0.2% prior. In case of U.S. stats, the ADP Non-Farm Employment Change, earlier signal for Friday’s NFP, could weaken to 188K from 230K registered last-month while Chicago PMI might also soften to 60.1 from 60.4 marked previously.

At the political front, EU leaders are finding it hard to cope-up with announcement from German Chancellor that she’d bid adieu politics in 2021 together with Italian policymakers refrain to respect the regional budget norms. For US-China watchers, recent allegations from the U.S. will be second so far in the current month and if proven legitimate could raise bars for a smooth trade-talk between Donald Trump & Xi Jinping when they meet on the sidelines of G20 at December start. It should also be noticed that Theresa May government is still not able to match EU demands and await good Brexit deal without which not only rest of the world & opposition parties but their own colleagues might be in trouble to safeguard Mrs. May’s leadership.

Hence, while global data-flow is likely to keep market players on their toes, on-going political pessimism at EU, UK & China can help the USD to stretch its up-moves a bit farther.

Technical Talk

USDJPY’s successful closing beyond 112.80-85 region opens the gate for the pair’s rally to 113.55-60 and then to the 114.00; however, a D1 close beneath 112.80 might not hesitate fetching the quote to 112.00, comprising immediate support-line. Further, USDCAD seems also portraying Breakout-Pullback-Continuation (BPC) formation, which in-turn signal brighter chances of its rise to 1.3160 & 1.3210 resistances with 1.3100 & 100-day SMA level of 1.3075 acting as nearby supports to watch during the pair’s decline. Moreover, the NZDCHF is likely finding hard to surpass 100-day SMA level of 0.6590, needless to mention above 0.6660 resistance-line as a barrier, that can trigger the pair’s pullback to 0.6540 and then to the 0.6490 rest-points.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 01 – November – 2018

Hello Traders,

Be it robust stats from the U.S. or safe-haven push from Sino-US tussle & political pessimism at EU, UK & China, the US Dollar Index (I.USDX) managed to pass October month with good marks. However, the greenback gauge is still left to cross the week with two crucial events lined for release, namely BoE’s Quarterly Inflation Report & monthly employment stats. Also, result announcements from companies like Apple & second-tier numbers like UK PMIs & AU Retail Sales might offer intermediate trade opportunities going forward.

Let’s start discussing each one of these catalysts in detail.

Bulls Kept Supporting USD In Search Of Risk-Safety

While better than expected prints of US Durable Goods Orders & GDP can be considered as extra help for the greenback’s second weekly surge, increased political worries at Italy, Germany & UK, not to forget US-China trade-war, proved to be main sources of power for the rise of US Dollar Index (I.USDX). Not only USD, the JPY & Gold also benefited from the market’s rush towards risk-safety but comparative strength of the yellow metal was restricted by speculations that India & China, largest bullion buyers, might not be able to offer the same precious-metal demand as they have been due to recent economic challenges faced by Asian nations.

Alternatively, ECB President Mario Draghi’s hawkish comments couldn’t please the EUR buyers when EU-Italy were at war of words & regional PMIs were declining whereas GBP had to bear the burden of Brexit uncertainties. In case of commodity-linked currencies, like AUD, NZD & CAD, problems at the world’s largest commodity buyers, China, continued marking hurting its trade-partners’ currencies. It should also be noted that Crude prices slumped for third consecutive week as US inventories kept rising and Saudi Arabia showed readiness to pump more output in case Iranian sanction hurt market demand-supply balance.

Markets Extend Favor For The Greenback On Eco-Politico Factors

Present week hasn’t been different for the USD as upbeat prints of economics so far published, coupled with political problems at China, EU & UK, continued pushing traders to greenback. However, there was a change of sentiment for JPY & Gold as both of them declined after BoJ conveyed steady support for loose monetary policy and downgraded inflation forecast while worries for Asian markets grew stronger, which in-turn raised question for the Bullion’s future demand.

The EUR got another blow, in addition to problems at Italy, when German Chancellor Angela Merkel’s party got bitter results at state elections in Frankfurt’s home state, Hesse, followed by the Chancellor’s announcement that she’ll bid adieu to politics after her term expires in 2021. On the other hand, GBP was quite sluggish before rallying on the news that the UK PM has signed an informal Brexit deal with EU for British services to operate regional markets as they have been after their departure.

Meanwhile, Chinese authorities became active after headline stats, including PMIs, spread disappointment, which in-turn helped the AUD and NZD to recover some losses on the hopes of additional demand backed by extra stimulus from the dragon nation. Though, CAD could take advantage of the same even after BoC Governor favored further rate-hikes as Crude prices stretched south-run farther on old concerns affecting energy demand when US stockpiles as steadily rising.

UK & US Calendars Are In Limelight

Even if majority of the headline details/events are already out & loud, two top-not catalysts are still there in pipeline to play their moves, namely Thursday’s monetary policy meeting by the Bank of England (BoE) wherein it’ll release Quarterly Inflation Report (QIR) followed by the Friday’s U.S. employment report including NFP. Additionally, Thursday’s UK Manufacturing PMI & US ISM Manufacturing PMI before the Friday’s AU Retail Sales, UK Construction PMI & US Factory Orders are some other stats that are worth observing.

First thing first, the monthly release of UK Manufacturing PMI might join the global manufacturing indices in printing softer figure of 53.0 against 53.8 earlier and the US ISM Manufacturing PMI is also expected to follow the suit by marking 59.0 number compared to 59.8 prior.

As far as the BoE’s monetary policy meeting is concerned, the central-bank isn’t expected to alter its present policy moves after announcing a rate-hike in at earlier meet. However, the focus will be on its concern for Brexit and QIR. While uncertainty emanating from the British departure off the EU region can stop policymakers from favoring another rate-hike so soon, recent recovery in UK economics and Carney’s support to monetary policy tightening can help them upwardly revise the quarterly economic forecasts. In doing so, the BoE leader might not risk ignoring Brexit and the same is less likely to support the central-bank go ahead as Bullish as it was. Hence, how the British banker juggles with Brexit and economic optimism will be a good show to watch.

Turning to Friday, the early-day AU Retail Sales isn’t likely to change from its 0.3% mark whereas UK Construction PMI may soften to 52.0 from 52.1 and the US Factory Orders can register slower growth figure of 0.5% compared to 2.3% earlier. Also, Canadian job numbers, up for Friday, might add worries for CAD traders if matching 12.7K consensus for Employment Change vis-a-vis 63.3K prior when the Unemployment Rate isn’t expected to change from 5.9%.

In case of US Employment stats, the headline Non-farm Payrolls (NFP) may rally to 193K from 134K prior but the Average Hourly Earnings could dip to 0.2% from 0.3% while Unemployment Rate might not deviate from nearly five decade low of 3.7%.

Other than economics, political plays are also likely to keep playing background music for traders. Herein, how China retaliates to the new allegation of copyright stealing from the U.S. and how EU can handle pressure from Italy & Germany’s coalition members will be closely observed. Moreover, recent news from Brexit was considered very good but the same needs to be actual and backed by the UK parliament in order to help the GBP regain its previous strength else it’s downturn can’t be denied.

To sum up, present political pessimism at EU & UK, together with Sino-US tussles, can continue highlighting safe-haven appeal of the USD and fuel it towards another weekly positive; though, any disappointment from the final jobs report before November’s mid-term election at US could derail the greenback’s strength.

Moreover, BoE’s might play safe to communicate its hawkish view at the time when Brexit uncertainty is looming, which in-turn couldn’t offer additional strength to the GBP unless PMIs & fresh news for the deal sound positive.

Technical Analysis

EURUSD’s needs to offer a close beneath 1.1300-1.1285 horizontal-support in order to extend its south-run towards 1.1210 & 1.1180 otherwise its pullback to 1.1430 & 1.1500 can’t be denied. On the same line, the GBPUSD also has to dip below 1.2660 on a daily closing basis to please the Bears with 1.2580 & 1.2470 else 1.2920 & 1.3000 can keep entertaining short-term buyers. Further, the USDJPY could continue signaling 113.50-55 and the 114.00 till it trades beyond 112.80, breaking which immediate support-line, at 112.00, & 100-day SMA level of 111.60 should be observed for supports. Moving on, the USDCAD has justified its strength to target 1.3220 & 1.3260 resistances with the break of 1.3110, which now acts as nearby supports for the pair together with 100-day SMA level of 1.3075. Moreover, AUDUSD has 0.7165, comprising 50-day SMA, and the 0.7200 as adjacent resistances with 0.7040, 0.7020 & 0.7000 likely close supports whereas NZDUSD can aim for 0.6610 & 0.6655 until it drops below the 0.6500, which in-turn could open the gate for the quote’s slide to 0.6470 if conquered.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 02 – November – 2018

Hello Traders,

On Thursday, news signaling a conciliatory phone call between Presidents of US & China, together with Mr. Trump’s push to draft proposal for Sino-US trade-terms, rejuvenated global risk-on sentiments and dragged the US Dollar Index (I.USDX) down for the first time in a week. While US Dollar lost its key benefit, namely safe-haven demand, commodity-linked currencies like AUD, NZD & CAD took advantage of the upbeat trade news and registered rallies whereas JPY & Gold also shined due to greenback’s decline. Further, the EUR managed to ignore political problems emanating from Italy & Germany while GBP surged after BoE Governor suggested increased pace of rate-hikes and brighter chances of a soft Brexit. However, the Crude couldn’t avoid higher supplies from OPEC-led alliances during October and ended up going ahead for biggest weekly loss since February.

With the fresh hopes favoring US-China trade-talks & stimulus from the dragon nation offering a good start to November, investors remained upbeat during early-Friday and maintained their buying bets for riskier assets, excluding the US Dollar. On the top of that, strong outcome of Australian PPI helped the Aussie to stretched its recent rise forward. Though, the moves against USD were softer compared to yesterday before monthly release of American Employment numbers.

Not only US jobs report but Canadian employment stats, UK Construction PMI & US Factory Orders are some other data-points that could entertain market players during rest of the day. Additionally, doubts over the Xi-Trump meet to go successful have also gained attention as US marked another accuse on China for conspiring to steal trade secrets of their company Micron Technology Inc.

Turning to scheduled economics, the UK Construction PMI may soften to 52.0 from 52.1 whereas the US Factory Orders could also weaken to 0.5% from 2.3% earlier. Moving on, US Non-Farm Payrolls (NFP) might flash strong outcome with 194K forecast against 134K prior and the Unemployment Rate could remain unchanged at five decade low of 3.7% but the Average Hourly Earnings bears the expectations of 0.2% growth compared to last-month’s 0.3%. In case of Canadian figures, the Employment Change may weaken to 12.7K from 63.3K with no alterations likely in 5.9% Unemployment Rate.

Even if US wage growth is likely to soften, the outcomes will still be highest in more than nine years if observed annually, which together with upbeat NFP, could keep highlighting Fed’s rate-hike and stronger USD.

It should also be noticed that mere speculations of good trade-deal between US-China can’t fuel risk-on sentiments for long as American accusations and past incidents of talks between world’s two largest economies haven’t been positive to the expected outcome.

Moreover, details up from Canada & UK, coupled with political pessimism at EU & Britain, are also not favoring extension to present rise of ex-USD majors and may trigger their pullback if traders turn back to greenback after jobs report.

Technical Talk

GBPUSD is yet to surpass 100-day SMA level of 1.3045 on a daily closing basis in order to justify its strength in targeting the 1.3085 and the 1.3130 resistances, failure to do the same might not hesitate fetching the quote back to 1.2920 & 1.2850-40 supports. On the other hand, the AUDUSD is struggling with 0.7235-40 resistance-zone to visit the 0.7260 & the 0.7300 numbers to north but pullback from current levels may recall the 0.7200 & 0.7140 on the chart. Further, the EURGBP is likely to extend its downturn in direction to the 0.8735 TL support-mark and then to the 0.8690-85 rest-zone unless it trades beneath the 200-day SMA level of 0.8835 and the 0.8885 comprising 50-day SMA.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 05 – November – 2018

Hello Traders,

Although early-November optimism concerning US-China trade-deal cut some of the greenback gains, upbeat jobs report and doubts over whether both the economies can actually reach trade concessions pushed the US Dollar Index (I.USDX) up for third consecutive week. While USD maintained its strength, the EUR couldn’t avoid sluggish GDP & political problems at Italy & Germany but GBP surged on news that EU-UK policymakers are near to soft Brexit. Moving on, the AUD & the NZD took advantage of positive tweets from US President Donald Trump favoring a trade-deal with China whereas CAD had to decline on Crude’s plunge and not so welcome Canadian economics. Additionally, JPY became victim of BoJ’s dovish forecasts and the Gold failed to confront stronger USD even at the time of festive season at its one of the largest consumers, namely India, while Crude turned bearish as worries for trade-tensions negatively hurting future energy demand, steady increase in US stockpiles and major producers’ readiness to pump more output, if needed due to Iran sanctions, disappointed the traders.

At the start of week, follow-on impacts of robust US employment report favoring sustained rate-hikes from the Fed and doubts on the successful meeting between Xi Jinping & Donald Trump pushed investors to remain cautious. The moves gained support from statements by White House economic adviser Larry Kudlow that downplayed chances of a Sino-US trade deal. However, comments from Chinese premier, Xi Jinping, at China International Import Expo helped commodity-linked currencies, like AUD, NZD & CAD, to benefit on expectations of higher future demand from the dragon nation.

On the other hand, BoJ Governor showed readiness to normalize monetary policy but warned of the present scenario of soft inflation, which in-turn continued hurting the JPY, whereas China posted another downbeat PMI, this time its Caixin Services PMI. Moreover, Brexit optimists couldn’t hold their smile for long after UK PM’s office denied Sunday Times report claiming EU-Britain have signed all-UK customs deal and absence of hard border at Northern Ireland.

While slew of eco-political catalysts have restricted early-day market moves, monthly outcome of British Services PMI and US ISM Non-Manufacturing PMI, not to forget progress on US-China trade-deal and Brexit, are likely to continue playing their roles during rest of the day. It should also be noted that tomorrow’s US mid-term election continue being a big topic whereas in both the major parties are likely to mark their presence and challenge each others’ authority.

The UK Services PMI, critical to GDP, may soften to 53.4 from 54.9 and the U.S. ISM Non-Manufacturing PMI may also weaken to 59.3 from 61.6. As a result, both the scheduled economics are indicating negative impacts for respective currencies. Though, USD might be able to carry its strength forward based on safe-haven demand unless any strong comments from US-China policymakers favors a deal between both the nations. Also, Brexit uncertainties could keep challenging Pound Bulls unless official announcement from UK confirms media reports on a good deal between the Britain and the EU leaders.

Hence, while Services PMIs are there to rule economic calendar, Brexit, Sino-US trade worries and US election speculations may dominate political front.

Technical Talk

Irrespective of its failure to surpass 100-day SMA level of 0.6665, the NZDUSD still refrains to dip beneath the 0.6630 immediate support that portrays the pair’s strength in targeting 0.6700 & 0.6730 once the 0.6665 breaks. However, drop below 0.6630 might not hesitate fetching the quote 0.6600. Further, the USDCAD also has to surpass 1.3120 & 1.3150 in order to challenge the 1.3185 resistance-line else its another dip to 1.3050 & 1.3000 can’t be denied. In the same way, the GBPJPY also needs to conquer the 200-day SMA level of 147.45 & the seven-month old descending resistance-line, at 148.65, to justify its strength otherwise the 146.85 and the 100-day SMA level of 145.65 may come back on the chart.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 06 – November – 2018

Hello Traders,

In spite of receiving upbeat prints of ISM Non-Manufacturing PMI, the US Dollar Index (I.USDX) declined on Monday as global investors preferred discretion before the U.S. midterm congressional elections that’s likely challenging the Republicans majority in both the houses of law. With the USD trimming some of its gains, the EUR took advantage of the dip even if Italian policymakers turned down EU’s push for change in much debated budget. Not only EUR, the commodity-linked currencies, like AUD and NZD, also rose ignoring disappointing Chinese Caixin Services PMI whereas the GBP gave little importance to weaker Services PMI and surged on speculations that UK & EU leaders are close to Brexit deal which solves Irish border issue & allows all-UK customs region. However, the JPY & the Gold failed to please buyers as lack of volatility prior to today’s crucial election and challenges faced by Asian economies hurt traditional safe-havens. Furthermore, crude prices continued trading southwards, which in-turn extended CAD’s drop, despite fresh US sanctions on Iran due to news that eight major oil importers of the Middle-East nation have been given exemptions from this limit.

At the start of Tuesday, the crucial day when Americans will vote for 35/100 seats of Senate, all 435 seats of House of Representatives and 36 state governors, markets stretched yesterday’s moves forwards but overall sentiment remained calm. Though, AUD, NZD & CAD benefited from Chinese Vice President’s comments that the nation stand ready for a trade-talk with the U.S.

In case of economic calendar releases, the Reserve Bank of Australia (RBA) left their monetary policy unchanged but praised growth and offered additional strength to the Aussie. In the same line, German Factory Orders flashed better than forecast numbers and fueled EUR further to north.

Other than US election results, which is likely to grab limelight, UK PM Theresa May’s cabinet meet to discuss her Brexit proposal and New Zealand’s quarterly employment figures might also contribute towards making the day busier for analysts.

The U.S. elections are largely expected to cut Donald Trump’s Republican party’s majority in both the houses of law, namely House of Representatives & Senate, with Democrats likely gaining command at House of Representatives and the Republicans may either maintain or expand their hold in the Senate. In case of Brexit discussions, chances are higher that some of Mrs. May’s proposals can be challenged by fellow politicians and create troubles for the Brexit discussions going smooth off-late. Moreover, the New Zealand jobs numbers might offer additional positive for the NZD if matching 4.4% consensus for the Unemployment Rate compared to 4.5% earlier and no change in Employment Change figure of 0.5%.

With the Republican victory in both the houses less likely, the USD might register losses for near-term if the Democrats gain control of any houses, which in-turn could become positive for EUR, JPY, Gold & commodity-linked currencies in case speculations turn right. It should also be noted that Brexit worries may keep GBP under check but not for long if greenback slides and British leaders support Mrs. May.

Technical Talk

EURUSD moves seem confined in a short-term “Falling Wedge” formation with 1.1435 acting as resistance & 1.1260 being support; however, the 1.1360 & 1.1300 could offer intermediate halts to the pair in case of any positives from the U.S. election fuel greenback. Alternatively, disappointing outcome of midterm voting may propel the quote towards surpassing the 1.1435 barrier and aim for 1.1460 & 1.1530 resistances. Moving on, the USDJPY is again trying to conquer the 113.50-55 resistance-region, which in-turn can open the gate for the pair’s rally to 114.00 & 114.55. If the pair fail to clear 113.55 hurdle, the 113.20, the 113.00 and the 112.60 could become sellers’ favorites. At the end, the EURCHF needs to clear the four-month old resistance-line of 1.1470 and the 1.1490-1.1500 resistance-region in order to justify its strength towards targeting 1.1550 otherwise its pullback to 100-day SMA level of 1.1440, the 1.1415 & an ascending TL, at 1.1370, can be ascertained.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 12 – November – 2018

Hello Traders,

Even if Donald Trump’s Republican party failed to hold their grip over House of Representatives in midterm elections, the US Dollar Index (I.USDX) posted fourth consecutive weekly gain as Sino-US tensions & political problems at EU & UK joined FOMC’s sustained support for gradual rate-hikes to offer greenback strength. With this, the EUR couldn’t deny pessimists expecting bitter EU-Italy fight while GBP had to bear the burden of disappointing data-points and Brexit related worries. Further, the JPY & the Gold also respected the USD’s rise with declines but AUD & NZD managed to extend their previous rise based on welcome economics & central-bank statements. Moving on, CAD kept observing Crude’s south-run as pessimism at Asian markets & increasing US stockpiles threatened energy traders.

At the start of present-week, holidays at US & Canada confined global market sentiments but Crude recovered some of its latest losses on Saudi Arabian comments to cut its oil output from next month. Though, there was no change in mood of EUR & GBP sellers after EU leaders threatened to take measures against Italy if it fails to alter its budget before Tuesday’s deadline and four of Theresa May’s party-members warned to resign if Mrs. May keep going on with her Brexit proposal without providing clarity.

Meanwhile, US President Donald Trump turned down his expected visit at this week’s ASEAN summit and added fuel to speculations that US-China will never be able to return old roads of friendship. As a result, the AUD & NZD also drifted lower but CAD benefited from Crude’s pullback.

Looking forward, lack of economics could curb trade moves for rest of the day; though, political problems between EU & Italy, together with Brexit uncertainties, might continue marking markets active. Additionally, US President’s refrain to meet Chinese authorities before month-end gathering can highlight fears emanating from the US-China trade-tussle.

Hence, while US & Canadian holidays are likely to challenge market activity on Monday, political catalysts at EU, UK & China could play their roles in offering another active trading-day.

Technical Talk

Having failed to hold its 100-day SMA break, the AUDUSD is likely declining towards 0.7160-55 support-confluence, comprising 50-day SMA & immediate ascending TL, clearing which 0.7100 may comeback on the chart. Alternatively, 0.7250 & 0.7300 can keep limiting the pair’s immediate upside. On the other hand, sustained trading below 50-day & 100-day SMA indicates brighter chances of the GBPUSD’s extended downturn to 1.2850-40 support-zone and then to the 1.2790 rest-point while 1.2950-55 & 1.3000 could threaten short-term buyers. Moreover, the AUDJPY struggles between the 200-day SMA level of 82.05 and the nine-month old descending TL around 83.10 with either side breaks favoring 81.60 or 83.70 to appear as quotes.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 13 – November – 2018

Hello Traders,

Holidays at US & Canada failed to confine the US Dollar’s surge on Monday as disappointing news concerning Apple products’ demand, FOMC member’s hawkish comments & speculations that White House is preparing for auto tariffs propelled the greenback. While USD was rising across the board, the EUR couldn’t avoid declining due to political rift between EU & Italian policymakers ahead of Tuesday’s deadline for Rome to submit revised budget proposal. In the same line, the GBP also plunged as Theresa May seems struggling to protect her Brexit proposal prior to appearing for a deal at this month’s special EU summit. Moving on, the AUD & the NZD lost their early-day gains based on US-China trade-tussles whereas CAD dropped further after U.S. President Donald Trump exerted pressure on Saudi Arabia for the cartel’s plan to cut future production. Moreover, JPY registered some profits because of its risk-safety nature but Gold kept on declining as rising USD negatively affects traditional safe-havens.

At the start of Tuesday, selling at the tech-front kept highlighting market risk sentiment but positive developments relating to Sino-US trade-war pushed investors to riskier assets like commodities, AUD, NZD & CAD. Earlier during the day, Chinese Premier Li Keqiang said US & China will find a solution to their differences whereas Vice Premier Liu He is also likely to visit Washington to pave the ground for positive trade-talks before Xi-Trump meet. The news spread optimism among global trade-watchers and stopped the USD’s north-run. However, not all is positive on the trade front as U.S. Vice President Mike Pence is pushing Japan for a bilateral trade agreement and may witness damage to recent US-Japan harmony if White House announces auto-tariffs.

Looking forward, today is the last-day for Italy to submit revised budget in order to please EU leaders else scrutiny of Roman finances and possible penalty in case of found guilty breaching regional norms can’t be denied. Additionally, UK PM also has to stand ready with her proposal by Wednesday-end if she wishes to get the plan discussed, probably approved, during this month’s special EU-summit.

At the economic front, monthly release of British employment numbers, EU ZEW Economic Sentiment & Japan’s Prelim GDP are likely to gain major market attention. Among them, the UK Average Earnings Index may shoot up to 3.0% from 2.7% and the Claimant Count Change is likely to dip to 4.3K against 18.5K while Unemployment Rate can remain at 4.0%. On the other hand, the EU ZEW Economic Sentiment bears the forecast of registering -17.3 mark compared to -19.4 earlier whereas Japanese Prelim GDP could drag the JPY southwards if matching -0.3% forecast against +0.7% prior.

While progress at US-China trade relations and likely upbeat prints of EU & UK details may help build market confidence and can negatively affect the safe-havens, including USD & JPY, sluggish forecast for Japanese GDP, hovering US auto-tariffs & political problems at EU & UK could hurt investor optimism.

Technical Talk

EURUSD’s sustained trading beneath 1.1285 indicates brighter chances of the pair’s additional south-run to 1.1180 & 1.1120 while an upside clearance of 1.1285 needs to conquer 1.1300 if the quote is to justify its strength in targeting 1.1360. Further, the NZDUSD’s bounce off the 0.6700 has to conquer the 0.6770 to aim for 0.6800 round-figure otherwise its pullback to 0.6680 & 0.6630 can’t be denied. At the end, oversold RSI & nearness to 1.0660-55 support-zone may trigger AUDNZD’s recovery to 1.0710 & 1.0760 if not then 1.0600 & 1.0580 could become Bears’ favorites.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 14 – November – 2018

Hello Traders,

On Tuesday, sluggish economics from EU & UK, Crude’s plunge and Italy’s political tussle with European leaders failed to suppress upbeat market sentiments based on positive developments at Sino-US trade front and Brexit, which in-turn dragged the US Dollar Index (I.USDX) down for the first time in a week. With US & Chinese policymakers talking trade on all levels of government, commodity-linked currencies like AUD & NZD surged heavily but CAD’s gains were limited by Crude Oil’s heaviest drop in three-years due to OPEC’s supply glut outlook at the time when US inventories are rising. Further, the EUR and the GBP benefited from the news that EU-UK agreed on draft Brexit proposal that will go to UK lawmaking bodies for vote whereas JPY & Gold also took advantage of the USD’s slid; though, overall optimism confined safe-haven advances.

At the start of Wednesday, investors focused their attention back to economic calendar and challenges for EU & UK leaders that rejuvenated the greenback during early trading sessions. In case of data-points, China flashed mixed numbers whereas Retail Sales dropped but Industrial Production & Fixed Asset Investment grew. Alternatively, Japan registered second contraction of GDP growth in the year that witnessed earthquake, typhoons and torrential rains.

Political framework again turned worrisome after Italy failed to respect EU demands by letting its spending plans intact and the British PM is likely finding it hard to convince pro-Brexit colleagues at the Cabinet, which if passed can raise another obstacle in the form of House of Commons where her party lacks clear majority. Not only this, investor confidence was also challenged at the beginning of 33rd ASEAN summit in Singapore as global leaders criticized trade protectionism and felt absence of various influential leaders, including Donald Trump.

While political catalysts at EU & UK are expected to question recent market optimism, top-tier economic stats like British & US CPI numbers could also play their roles to trouble traders. Moreover, Fed Chair’s speech at an event hosted by the Dallas Fed President will also be closely observed.

Consensus support a 2.5% mark of UK CPI against 2.4% prior while the US CPI may rise to 0.3% from 0.1% MoM & to 2.5% from 2.3% on a yearly basis. Additionally US Core CPI is expected to remain unchanged at 2.2% on YoY but can grow to 0.2% from 0.1% on monthly comparison. Moving on, Fed Chair may try to calm investors fearing the central-bank’s long rate-hike cycle but can’t ignore strong US fundamentals.

As headline data-points are bearing upbeat forecasts and Fed Chair isn’t likely to cause much problems for the USD buyers, not to forget expected hardships for UK PM in gaining support for her proposal & EU leaders worry about Italy’s tough stand, the greenback may recover some or majority of its latest losses.

However, strong commitments from US & China concerning upcoming meet of Xi Jinping & Donald Trump, coupled with Theresa May’s ability to garner enough votes for raw Brexit proposal, can extend the prevailing positivity & affect the risk-safe assets, like USD, negatively.

Technical Talk

With its refrain to dip beneath 113.55-50 support-zone, the USDJPY continue signaling its rise to 114.40-50 resistance-region and then to 114.75 mark. Though, pair’s decline below 113.50 can highlight the importance of 113.10 and an upward slanting TL, at 112.55. In the same way, the USDCAD also remains well above 1.3210-1.3200 rest-area, which in-turn continue favoring brighter chances for the pair’s rally to 1.3260-70 & 1.3330 north-side numbers while 1.3170 & 1.3130 can entertain sellers past-1.3200. On the contrary, the NZDCAD is likely finding it hard to justify its strength as overbought RSI & 0.8970-80 horizontal-barrier challenges the buyers and indicate 0.8915 and the 0.8850 to reappear on the chart. In case prices surpass 0.8980 hurdle on a daily closing basis, the 0.9000 and the 0.9030 could become Bulls favorites.

Have a nice trading-day ……

[KTAknight23]

i see you position and i agree with your analysis. I want to know what is your position on the efficient market hypothesis, isn’t all this information already priced in the market especial the political situations?

[FxAnil]

Weekly Fundamental Dose: 15 – November – 2018

Hello Traders,

While optimism surrounding US-China trade-deal & Theresa May’s ability to gain senate support for her Brexit proposal seem playing their roles now, few consumer-centric details from US & UK, coupled with scheduled speeches by ECB & FOMC leaders, to offer a busy week ahead. It should also be noted that EU-Italy political standoff is still looming and there are few Manufacturing PMIs from the U.S. left for release that could add volatility into the market.

Before discussing fundamentals concerning these details/events, we’ll first know what has recently happened in the market.

Republicans’ Defeat Couldn’t Confine USD’s Fourth Consecutive Weekly Rally

US midterm elections snatched Republicans’ control off from House of Representatives and raised bars for the Trump administration’s policies but Fed’s sustained hawkish outlook, political pessimism at EU & UK and the Sino-US trade-tussles helped the greenback gauge (I.USDX) to register fourth consecutive weekly gain. As a result, the EUR & the GBP registered declines but the AUD & the NZD managed to extend previous advances on upbeat data-points and positive comments from respective central-bankers. Further, the JPY & the Gold fall short of confronting the US Dollar rise while CAD had to bear the burden of Crude’s plunge based on expectation of weak future demand and higher US stockpiles.

Market Optimism Cut The USD Demand

Although early week news of US planning to announce auto tariff & challenges for Theresa May to get parliament approvals for proposed Brexit plan, not to forget Crude’s extended slide, favored the USD, the greenback failed to hold its strength after US & Chinese policymakers communicated hopes of a trade deal between world’s two largest economies. Moreover, Mrs. May’s success in getting the cabinet support and mixed bag of economics added burden of the US Dollar which is now trading in a negative territory on weekly basis.

On the contrary, the EUR could reverse its earlier losses even if Italy refrained to respect regional leader’s demand for budget while GBP surged despite Mrs. May’s expected struggle in the parliament to get her plan forward. Moving on, the AUD & the NZD took advantage of the US-China news and few good stats of their own economies but the CAD couldn’t surge more as Crude kept being weaker ignoring OPEC-led alliance’s readiness to cut output next year due to rallying US stockpiles and uncertainty concerning future oil demand. In all these, JPY & Gold pleased buyers as dip in the USD increases the demand of traditional safe-havens.

What Next?

While political plays have superseded economics since the week start, US & UK Retail Sales, Empire State Manufacturing Index & Philly Fed Manufacturing Index from the U.S., Canadian Manufacturing Sales and the EU Final CPI are some other stats that still can challenge present trade sentiment. Additionally, Mr. Trump is yet to drop his threats of levying tariffs on all Chinese imports should upcoming talks with Chinese President fail while EU seems all set to proceed with regulatory measures to challenge Italy’s budget proposal that falls out of the regional norms. Moreover, Theresa May has to get parliamentary approval for her proposal, even after getting senate support, in order to approach EU for a final Brexit plan, which in-turn will be debated at home ahead of being considered as a deal. Hence, all these catalysts are lying in the bag to entertain momentum traders.

Starting with the data-points, the UK Retail Sales, on Thursday, will be the first and is likely to flash +0.2% growth against -0.8% earlier contraction while US Retail Sales, on the same day, may also follow the suit with +0.6% expansion compared to +0.1% prior and the Core Retail Sales might reverse previous -0.1% loss with +0.5% growth. Further, the as Empire State Manufacturing Index can dip to 19.3 from 21.1 whereas Philly Fed Manufacturing Index may soften to 20.7 from 22.2 on the Thursday as well.

On Friday, EU Final CPI is expected to rise to 2.2% from 2.1% preliminary forecast while Canadian Manufacturing Sales could register +0.1% surge vis-a-vis -0.4% previous decline. The US Industrial Production is also there for publish on Friday and can soften to +0.2% from +0.3% market last-month.

At the political side, US & Chinese representatives are talking trade on all the levels and chances are high that both the global leaders may communicate peace of prevailing trade-war when they meet at November end. Though, Mr. Trump is still standing with his previous threat of levying additional tariffs on all imports from China should their talks fail and the same may dilute the quality of outcome.

Talking about EU-Italy standoff, Rome didn’t respect EU demand to alter its budget proposal even at the time of final submission and hence the regional leaders are all set to take a hard stand against the nation, which in-turn could curb the EUR’s rise.

In case of the Brexit, many of the Theresa May’s own party members as well as top-notch opposition members are likely to vote down her Brexit proposal at the parliament as they perceive it to be “too EU-friendly”. Among those who may vote for Mrs. May’s plan, some are expected to resign due to internal party problems and that in-turn could raise problems for the British PM to let her plan become a deal.

Looking for the central-banks’ comments, the Fed Chairman may again favor the central-bank’s support for rate-hikes during his public appearance on Thursday while ECB President might not risk downplaying the EU’s readiness for monetary policy tightening when he speaks on Friday.

Hence, while scheduled economics are all likely to support their respective currencies, namely EUR, USD, GBP & CAD, the political pessimism concerning Brexit & at EU might restrict gains of the Euro & the Pound. Though, the USD is less likely to post a positive weekly closing based on the same due to present optimism concerning US-China deal trimming the greenback’s safe-haven demand and helping commodity currencies like AUD, NZD & CAD.

Technical Analysis

EURUSD’s reversal from 1.1300-1.1285 support-zone may help it visit the 1.1360 and the 1.1430 resistances while 1.1215, 1.1120 & 1.1080 can entertain sellers past-1.1285 break. Alternatively, the GBPUSD has to surpass 50-day & 100-day SMA region of 1.3025-35 in order to aim for 1.3110 & 1.3220 resistance-line otherwise 1.2840 & 1.2750 may regain market attention. On the other hand, the USDJPY failed to conquer the 114.00 barrier and may jump back to 50-day SMA level of 112.80 with 114.50 & 112.15 acting as following levels to watch during either side break.

Further, the USDCAD also couldn’t cross the 1.3255-60 resistance and might drop to 1.3180 but 1.3140 can confine its additional downside whereas 1.3320 & 1.3385 may please the Loonie Bulls after 1.3260 break. Moreover, AUDUSD seems all set to challenge the 0.7300-0.7305 resistance-area, breaking which 0.7335 can be highlighted but its dip beneath the 0.7235 can drag it back to short-term ascending TL figure 0.7185. At last, NZDUSD is rising towards 0.6850-55 upside barrier to 200-day SMA level of 0.6895 while 0.6700 & 100-day SMA level of 0.6655 can become Bears’ favorites if prices take a U-turn from present levels.

Have a nice trading-day ……

[FxAnil]

I know that market is smarter than we think and majority of the political risks have already being capitalized but there are still some wildcards hidden beneath carpet, like Trump’s rejection to Chinese deal, failed Brexit Plan & EU-Italy political war, that could keep troubling investors.

[FxAnil]

Daily Fundamental Dose: 16 – November – 2018

Hello Traders,

In addition to robust Retail Sales & another shock to UK PM by her own party members’ resignations, comments from top-notch White House member challenging possible US-China trade deal also helped the US Dollar Index (I.USDX) to remain positive by the end of Thursday. Though, EUR refrained to respect the greenback’s rise as Italian PM finally agreed to discuss his budget proposal with EU leaders after it was rejected by the regional policymakers. On the other hand, GBP slumped after some of the frontline supporters to Theresa May’s Brexit plan, including her Brexit Minister Dominic Raab, resigned and the British Retail Sales also flashed disappointing numbers. While political pessimism was highlighting risk-safety and fueling JPY & Gold, AUD & NZD took advantage of welcome data-points from home & CAD recovered some of its losses after Crude witnessed short-covering on OPEC’s readiness to cut output from next year.

With lack of new developments taking place overnight, global investors carried their Thursday mood forwards during early trading hours of Friday. As a result, EUR, JPY & Gold kept rising but there was a halt in buying for AUD, CAD & NZD. Moreover, the GBP took a U-turn as speculations grew that UK PM Theresa May will be able to moves past present political challenges and will be able to get her plan approved by parliament. It should also be noted that recent outcomes from Sino-US trade front seem paving way for a fruitful dialogue between Donald Trump & Xi Jinping when they meet on the sidelines of G20, which in-turn eased some worries of the market players and dragged the USD down.

Looking forward, economic calendar has fewer details to observe. Among them, EU Final CPI, Canadian Manufacturing Sales & US Industrial Production are some second-tier stats that could entertain momentum traders. Forecasts suggest improvement of EU Final CPI to 2.2% from 2.1% Flash projection while the Canadian Manufacturing Sales is likely to post +0.1% growth against -0.4% earlier contraction. Moreover, US Industrial Production can soften to 0.2% from 0.3%.

Even if economic calendar isn’t expected to generate any big catalyst, political front may continue directing near-term market sentiments. Out of them, comments from US & Chinese policymakers indicating the likelihood of having a trade-deal and how Mrs. May manages to calm UK politicians would be of utmost importance. Additionally, Italy’s ability to justify their budget proposal and gain approval from the regional policymakers will also become crucial to observe.

To sum up, scheduled data-points are less likely to play any key role in directing respective currencies’ moves, in spite of signaling positive outcome for EUR & CAD, but political pessimism concerning EU & UK could weigh on the Euro & the GBP.

It should also be noted that optimism surrounding a trade deal between world’s two largest economies may negatively affect the USD’s safe-haven demand and support commodity-linked currencies but problems at EU & Britain may confine the greenback’s declines.

Technical Talk

Sustained trading beyond 1.0045 continue fueling the USDCHF towards 1.0105-15 resistance-region, which if broken could escalate the pair’s rally towards 1.0170 & 1.0250 upside barriers. However, break of 1.0045 can recall 1.000 & 0.9980 as quotes. Further, GBPUSD’s refrain to dip beneath the 1.2700 indicates brighter chances of its pullback to 1.2840 and the 1.2920 whereas 1.2660 can lure the past-1.2700 support-mark. Moving on, the GBPJPY may struggle to extend its recent downturn as three-month old ascending TL, at 143.50, followed by 142.60-45 support-zone can trigger the pair’s U-turn to 100-day SMA level of 145.85 and the 147.20, comprising 200-day SMA.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 19 – November – 2018

Hello Traders,

During last-week, optimism surrounding US-China trade deal and comments from Fed Vice Chair, raising questions on the central-bank’s future rate-hikes, dragged the US Dollar Index (I.USDX) down for the first time in five weeks. As a result, the EUR registered gains even if EU & Italian policymakers are far from agreeing on Rome’s budget proposal while AUD, NZD & CAD surged on welcome data-points at home & at China whereas upbeat sentiment concerning commodity demand, based on expectations of Sino-US trade peace, added strength to upside momentum. However, the GBP couldn’t take advantage of the greenback’s decline as difficulties grew for Brexit & Theresa May’s own position after some of her leading supporters resigned and some other are still plotting to topple her from the PM seat. Moving on, the JPY & the Gold surged because of USD’s decline & rising political tensions at EU & UK but Crude couldn’t limit its south-run due to weaker demand forecast & increasing output from US confronting OPEC leaders’ readiness to cut the production.

While Friday turned out to be another bad day for the US Dollar after Fed Vice Chair raised doubts on future rate-hikes, overall market sentiment turned against the U.S. currency at the start of the week fearing fewer or not rate-lifts in 2019. Though, news that Chinese President Xi Jinping and U.S. Vice President Mike Pence couldn’t strike a conciliatory tone at ASEAN meet & failed to produce a joint statement, for the first time in history, provided some safe-haven support to the USD. Rising USD & questions on US-China trade-deal triggered profit-booking of commodity-linked currencies like AUD, NZD & CAD.

On the other hand, GBP recovered some of its latest losses after British PM, Theresa May, said challenging her position would be harmful for Brexit negotiations as new PM will face the same situation as she does. Not only this, one of the Euroskeptic UK politician supported her after the speech, which gave reasons for others to wait before favoring any such leadership change. At the economic front, recovery in Japanese exports added strength into the JPY whereas Gold failed to stretch earlier strength forward with recent pullback of the USD.

If we take a look at rest of the day’s economic calendar, there isn’t anything left for publish that can be considered important, which in-turn raises the importance of developments at US-China trade tussle, Brexit & Fed.

The U.S. & Chinese policymakers are sending mixed signals for likeliness of a deal between Trump & Xi when they meet next weekend but UK leaders are likely changing their attitude towards Mrs. May’s Brexit proposal after her statement raised possibilities of hard Brexit. In case of the Fed’s rate-hike views, Federal Reserve Bank of New York President John Williams is up for giving a speech at Hispanic Chamber of Commerce and might support Vice Chair’s threat to prolonged rate-lifts.

Given the recent turbulence in US-China relations, the commodity-linked currencies can witness renewed selling pressure and the greenback may regain its strength but Fed’s doubt on future actions could confine the USD’s rise. Moreover, support for Theresa May might help the GBP to disappoint Bears but not for long unless the parliament approves her proposal. In all these, JPY can maintain its strength but not the Gold, due to expected recovery of the US Dollar.

Technical Talk

Break of 1.1355-60 can’t be considered as a strong signal for the EURUSD’s upside as 1.1425 & 1.1445 still stand tall to challenge Euro buyers, which in-turn highlights the importance of 1.1355 & 1.1300 supports. Further, the AUDUSD tests the 0.7305-0.7300 resistance-turned-support, breaking which it can drop to 0.7250 & 0.7215 while 0.7360, 0.7380 & 0.7410 can confine the pair’s near-term advances. At the end, the EURGBP has to surpass 0.8905 resistance-line if it is to meet the 0.8940 & 0.8960 numbers to north otherwise 100-day SMA level of 0.8880 & the 0.8835-30 rest-region, including 50-day & 200-day SMA, could gain sellers’ attention.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 20 – November – 2018

Hello Traders,

Friday’s comments from Fed Vice Chair raised questions on the U.S. central-bank’s future course of action and the same weren’t smashed till Monday-end as more than two-year low of NAHB Housing Market Index and not so hawkish comments from New York Fed chief John Williams provided another negative daily closing to the US Dollar Index (I.USDX). While US Dollar was declining the EUR and the GBP didn’t give much attention to their own political problems but commodity-linked currencies like AUD, NZD & CAD had to liquidate some of their latest losses as doubts over US-China trade-deal grew stronger. Further, the JPY & the Gold stretched previous rises forward due to decline in greenback favoring traditional safe-havens while Crude witnessed pullback on multiple news like expected dip in U.S. oil inventories, EU’s readiness to sanction on Iran and likely upcoming output cuts from OPEC.

At the start of Tuesday, weakness at global equities, mainly resulted by technology companies and arrest of Renault’s leader, challenged market optimism and kept favoring the JPY & the Gold while negatively affecting the US Dollar. As a result, the EUR ignored Austrian and Dutch finance ministers’ demand to pressure Italy for an acceptable budget while the GBP extended its earlier gains after Theresa May seem recovering the loss to her reputation during last-week. Though, RBA minutes kept dragging the AUD southwards and the CAD also declined on Crude’s fresh drop but the NZD benefited from USD’s recent softness.

If we take a look at rest of the day’s details/events, UK Inflation Report Hearings, the U.S. housing market stats, namely Building Permits & Housing Starts, followed by New Zealand GDT Price Index, are scheduled catalysts to play their roles. Not only this, political problems between the EU & Italy, amid British policymakers and the Sino-US tussle can also keep entertaining investors.

Starting with the UK Inflation Report Hearings, the central-bank is less likely to affirm strong inflation going forward considered recently downbeat data-points and Brexit uncertainty, which in-turn could trigger the GBP’s downturn. On the other hand, US Building Permits & Housing Starts are both likely to increase to 1.26M & 1.23M from their respective priors of 1.24M & 1.20M while New Zealand GDT Price Index may extend recent pattern of slump and might hurt the NZD.

While scheduled data-points & events are less likely to help the GBP & NZD maintain their latest upsides, positive developments from US-China trade front and Brexit could offer additional strengths to these currencies. However, the USD is less likely remain down for long as expected strength of housing market numbers and global political pessimism may help the greenback regain its dominant position backed by Fed’s monetary policy divergence with most other central-banks.

Technical Talk

Sustained trading beneath 50-day SMA again highlights the importance of 100-day SMA level of 112.00 for the USDJPY traders, breaking which 111.30 might appear on sellers’ radar while an upside closing beyond 112.85 could fuel the quote towards 113.55-60 resistance-region. On the contrary, the NZDUSD is likely to challenge the 200-day SMA level of 0.6885 for one more time, which if broke can please buyers with 0.6920 & 0.6955 numbers to north whereas 0.6820 & 0.6770 may confine the pair’s near-term downside. Though, CADCHF has altogether a different story to tell as its dip beneath two-month old ascending TL, at 0.7600 now, together with 100-day & 200-day SMA confluence region of 0.7565-50 indicates brighter chances of its further drop to 0.7510-05 and then to the 0.7465 support-levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 21 – November – 2018

Hello Traders,

Be it stocks, commodities or cryptocurrencies, all plunged on Tuesday as growing concerns about global economic health and Sino-US trade-war pushed investors off from riskier assets to safe haven currencies like the US Dollar and the JPY. As a result, US Dollar Index (I.USDX) took advantage of upbeat Housing Starts to register first positive daily closing of the week but JPY’s gains were slightly confined due to absence of any big releases. While USD was regaining its strength and commodities were declining, AUD, NZD & CAD couldn’t refrain from selling pressure wherein the Canadian Dollar was badly hit as Crude flashed fresh low of the year on speculations that OPEC’s production-cut won’t please energy traders at a time when US inventories are rising & fuel demand may dip because of expected economic slowdown.

Not only commodity-linked currencies, the EUR & the GBP also couldn’t confront the stronger USD and had to dip based on political pessimism at UK & between the EU & the Italy. It should also be noted that Gold marked a negative close despite surge in risk-safety as rising greenback challenged the yellow metal buyers.

During early Wednesday, traders booked some of their profits off the USD on news that U.S. President Donald Trump again threatened Fed’s rate-hike by saying that the central-bank is creating problems for them and asked for lower rates. With this, EUR, GBP, AUD, NZD & CAD all witnessed pullbacks at the start of trading day. However, commodity basket was still fearing no successful trade deal between US & China as the former recently complained against the dragon nation’s continuation of state-backed campaign supporting intellectual-property theft. Moreover, the EUR was also struggling when Italian PM kept criticizing EU budget norms while the GBP pleased Brexit optimists with latest support to the UK PM’s proposal emerging from the central-bank governor. Though, Northern Irish Democratic Unionist Party, that supports May’s party to remain in power, threatened to have a good Brexit deal to keep gaining their back-up for government.

While political plays were all active to offer busy day to analysts, scheduled economics from the U.S. are also there to add burden to their tasks. Among them, monthly readings of Durable Goods Orders and Existing Home Sales may take the front-seat whereas weekly prints of Jobless Claims & Crude oil inventories could offer intermediate trade moves.

Forecasts suggest a -2.2% contraction of Durable Goods Orders vis-a-vis +0.7% flashed previously but the Core Durable Goods Orders are expected to rise by +0.4% growth against 0.0% earlier. Further, the Existing Home Sales can justify the housing market growth with 5.20M mark compared to 5.15M prior while Jobless Claims could soften to 215K from 216K and the Crude inventories might drop to 2.5M from 10.3M earlier.

Even if scheduled stats are less likely to extend the USD’s recent recovery, present political pessimism surrounding EU & UK, not to forget US-China trade-tussle and worries about energy market, could continue helping the greenback before tomorrow’s Thanksgiving Holiday and the Black Friday which marks historical start of Christmas shopping.

Technical Talk

Even after closing at the highest level in five-months, the USDCAD might find it hard to extend latest rally as resistance-line of a short-term ascending trend-channel, at 1.3335 now, followed by June month high of 1.3385, could challenge the pair Bulls. With this, chances of the pair’s pullback to 1.3265 & 1.3215 can’t be denied. Meanwhile, GBPUSD is coming back to re-test the 1.2710 TL support, breaking which it can drop to 1.2660 whereas 1.2885 & 1.2910 can entertain counter-trend traders during the pair’s pullback. Additionally, the EURAUD may also re-test the 1.5685-80 support-region & the 1.5630 rest-points unless it manages to surpass the 1.5785 trend-line resistance and the 1.5810 upside barrier.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 22 – November – 2018

Hello Traders,

While doubts over Fed’s future rate-hikes and sluggish economics, not to forget political pessimism at UK, EU & China, have been entertaining investors till now, EU PMIs, Canadian consumer-centric stats & developments of qualitative catalysts already mentioned could keep pleasing traders during US & Japanese markets’ close respectively on Thursday & Friday.

Let’s start discussing influential events that’s already played their part and some more which are in pipeline.

Growing Optimism Bit USD

Upbeat comments from the U.S. & Chinese policymakers concerning likelihood of a trade-deal between world’s two largest economies dimmed the impact of welcome American consumer-centric numbers and dragged US Dollar Index (I.USDX) down for the first time in five weeks. With the USD liquidating its prior gains, EUR didn’t pay much attention to EU-Italy problems and marked a positive weekly closing whereas optimism at trade-front helped the AUD, NZD & CAD to please buyers. However, the CAD’s gains were limited due to Crude’s extended south-run based on rising US inventories and dovish outlook for future energy demand.

Sino-US optimism wasn’t the only thing that ruled last-week as political drama at UK also grabbed market attention when some influential members of Theresa May’s party resigned and some other were plotting to topple her from PM seat. As a result, traders maintain their risk-off mood active and propelled the JPY & the Gold bids.

Tumultuous Week It Is

Having witnessed optimistic news for the U.S. & China’s future trade-deal, investors had to digest the weekend update when US Vice President & Chinese President marked their disagreements on APAC’s closing statement for the first-time in history, which in-turn rejuvenated fears of no-deal. However, the same couldn’t rule the analysts’ mind for long as Fed Vice Chair & one another FOMC member raised doubts on the central-bank’s rate-hikes next-year. Not only this, mixed US economics also challenged the traders’ positive outlook and turned the risk-off mode on in favor of the USD.

Alternatively, EUR witnessed profit-booking as Brussels took the first step in penalizing Italy’s budget foul while GBP couldn’t deny declining due to Theresa May’s continued struggles in front of the EU leaders and at home before she can get her Brexit proposal approved. Furthermore, AUD, NZD & CAD failed to ignore disappointments at US-China front and sustained downturn of the Crude prices while JPY had to respect greenback’s rise but Gold benefited from its risk-safety demand.

Looking Forward

Even if Thanksgiving and Labor Thanksgiving holidays at US & Japan are likely to challenge market moves on Thursday & Friday respectively, political drama at EU & UK, not to forget China’s response to clinch a deal with US & speculations relating to Fed’s future actions, could keep pleasing traders going forward. Moreover, Friday’s Flash Manufacturing & Services PMIs from EU & Canada’s CPI & Retail Sales are some other indicators that are worth observing.

Starting with Thursday, EU leaders are scheduled to sit together in order to discuss raw Brexit proposal and stay prepared to have it agreed on Sunday’s summit. Though, it requires a final proposal from the Theresa May administration which wasn’t ready till Wednesday night at UK. Even if Mrs. May manage to surprise EU politician with her last-moment efforts, as she always does, there are many thorny issues like Gibraltar and how long Britain can be in customs region and who will decide when it can leave can keep troubling the Brexit optimists. It should also be noted that Sunday’s approval by EU, if at all it comes, must be passed by House of Commons where it is most likely to be turned down and could create another round of problems for the GBP buyers.

Moving on to another catalyst, namely bets that Fed’s rate-hike saga is near to done. Some of the influential Fed leaders have already communicated their support to fewer or no rate-hikes in the upcoming year, after the one that’s almost likely to take place in December. Additionally, expectations of global economic growth slowdown, receding impacts of U.S. fiscal stimulus and disappointing outcomes from financial markets are also likely to push the Federal Reserve to stay calm with the effective (neutral) policy-rate.

Other than Brexit & Fed related fundamentals, the EU-Italy saga and latest news that the U.S. President Donald Trump was urged to fast-track new NAFTA deal’s appearance for vote at Congress before Republicans lose their control at the 2019 start can keep marking their importance.

At the economic front, EU Flash Manufacturing PMI is expected to remain unchanged at 52.0 and the Flash Services PMI may post a 53.6 mark against 53.7 earlier. Further, Canadian CPI isn’t expected to move much from -0.4% MoM & +2.2% YoY whereas the Retail Sales are also likely to remain unchanged at -0.1% monthly figure and +3.6% yearly growth.

Hence, absence of US & Japanese players from market is less likely to disappoint momentum traders as important qualitative & quantitative catalysts remain present to keep fueling the trade-sentiment. Among them, political pessimism can continue helping safe-havens like USD, JPY & Gold but doubts over Fed’s future rate-hikes may hurt the greenback.

On the other hand, EU PMIs must post strong numbers to avoid political problems at home and mark a positive weekly closing whereas CAD & rest of the commodity-linked currencies might not be able to recover their recent losses unless US-China trade-talk give any welcome signal and/or commodity basket reverse the present move.

At last, the GBP might have to struggle for some more time as EU leaders & Theresa May’s own party members, coupled with opposition, continue flashing negative signs for Brexit.

Technical Analysis

EURUSD’s reversal from 1.1470-75 continue favoring brighter chances of the pair’s pullback to 1.1370-65 and then to the 1.1300 supports while break of 1.1475 still needs to surpass the 50-day SMA level of 1.1495 in order to aim for the 1.1550 & the 1.1610 trend-line barrier. In the same line, GBPUSD is also indicating downside prospects but break of 1.2715 support-line is required for the quote to revisit the 1.2660 & the 1.2600 rest-points till then 1.2880 and the 1.2935 can keep troubling the pair buyers. On the other hand, USDJPY again ticked up the 50-day SMA level of 112.95 and may revisit the 113.55-60 resistance-region ahead of targeting the 114.10 levels whereas 112.30 and the 112.10, including 100-day SMA, could limit the pair’s near-term declines.

In case of commodity-linked currency pairs, the AUDUSD should clear the 0.7300 round-fgure prior to challenging the 0.7335 and the 0.7385 resistances otherwise 50-day SMA level of 0.7170, the 0.7150 and the 0.7090 may entertain the Aussie sellers. NZDUSD also portrays the weakness unless it closes beyond 200-day SMA level of 0.6880, which in-turn can propel prices to the 0.6920 & the 0.6975 numbers to north if not then 0.6780 & 0.6725-20 may gain market attention. Further, the USDCAD may witness profit-booking towards 1.3185 & 1.3150 as it took a U-turn from resistance-line of an upward slanting channel at 1.3345 and also dipped beneath 1.3265-70 area.

Have a nice trading-day ……