Daily Fundamental Dose

[FxAnil]

Daily Fundamental Dose: 23 – November – 2018

Hello Traders,

Thursday was no Thanksgiving for the US Dollar Index (I.USDX) as it continued recent downturn based on market optimism surrounding a Brexit deal between EU & UK policymakers, together with mounting doubts over Fed’s future rate-hikes. While news concerning Theresa May’s ability to present draft Brexit proposal for discussion at Sunday’s EU leaders’ meet gave a sigh of relief to Pound Bulls, the EUR also remained positive as it showed the region’s capacity to escalate the matters on time. Not only positive updates from EU-UK but absence of negative statements from either US or China relating to trade-deal also cut risk-safety demand of the greenback, which in-turn was aptly capitalized by the JPY & the Gold. However, Crude’s extended south-run, due to updates from Saudi Arabia that it has exported record oil, coupled with weakness at commodity-basket, did hurt the AUD, the NZD & the CAD.

During early Friday, when US traders came back from a holidays, market sentiment sound a bit calm as Japan & Indian bourses are close but there was no mercy for the USD as latest comments from Sino-US leaders show brighter chances of a trade-deal between the world’s two largest economies during next weekend. The same helped commodities to witness pullback but Crude couldn’t reap those benefits on supply-glut outlook.

On the other hand, the GBP also shed some of its gains as close look to Mrs. May’s draft proposal indicate lesser chances of it being passed through UK parliament. Alternatively, the EUR maintained its strength after Italian PM showed readiness to reconsider budget proposal while JPY & NZD took advantage of greenback’s weakness but the AUD & the CAD couldn’t avoid Crude’s slide and challenge the RBA’s future policy moves.

Looking forward, Flash readings of EU Manufacturing & Services PMI are likely to gain the market attention at first before monthly prints of Canadian Retail Sales and CPI, followed by US Flash Manufacturing & Services PMI, appear at the front. Forecasts suggest EU Flash Manufacturing PMI to remain unchanged at 52.0 and the Flash Services PMI may post a 53.6 mark against 53.7 earlier while Canadian CPI isn’t expected to move much from -0.4% MoM & +2.2% YoY whereas the Retail Sales could also hold tight the previous releases of -0.1% monthly figure and +3.6% yearly growth. Moving on, the U.S. Flash Manufacturing PMI could strengthen a bit to 55.8 from 55.7 and the Flash Services PMI might rise to 55.0 from 54.8 earlier.

Other than aforementioned data-points, qualitative catalysts like developments at Brexit, market speculations for Fed’s upcoming rate-hikes and the U.S.-China trade relations are also likely to play their role. It should also be noted that Italy has given its consent to reconsider budget and hence the EU-Italy political drama may acquire less attention.

Hence, while expectations of upbeat US data-points and uncertainty concerning Brexit can continue challenging the USD sellers, optimism surrounding Sino-US trade-deal & doubts over the Fed’s future actions may keep the greenback in check.

Technical Talk

Short-term ascending trend-line portrays EURUSD’s another attempt to challenge the 1.1430 & 1.1475 resistances prior to aiming the 1.1510 mark; though, pair’s dip beneath the 1.1400 support-line might not hesitate fetching it to 1.1350 & 1.1300 rest-points. Further, USDCAD seems recovering its latest losses and can revisit the 1.3220 & 1.3265 whereas upward slanting channel-support, at 1.3160, and the 1.3130 could limit the pair’s immediate downside. At last, CHFJPY struggles to extend recent advances to 114.10-20 as 113.60-70 plays its role of resistance, which in-turn signal brighter chances of the pair’s pullback to 113.30 & 112.90 support-levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 26 – November – 2018

Hello Traders,

Even if doubts over Fed’s future rate-hikes, sluggish US data-points & better chances of a trade-deal between world’s biggest two economies dragged the greenback down early last-week, Friday’s market fears concerning global economic growth and extended plunge in Crude prices helped the US Dollar Index (I.USDX) register a positive weekly closing. Alternatively, commodity-linked currencies like AUD, NZD & CAD couldn’t deny Bears ruling at commodity front while Theresa May’s ability to present Brexit proposal to EU leaders at last-minute failed to please Pound buyers as British politicians kept fretting about challenges to her position at home. On the same line, EUR had to liquidate prior gains after official Flash PMI spread disappointments whereas news that Saudi Arabia pumped record export & US inventories are steadily rising continued hurting the Crude. At the end, JPY reflected to negative data-points and BoJ’s sustained support for loose monetary policy but Gold took advantage of its safe-haven allure.

While Friday moves entertained greenback optimists, weekend news haven’t been favorable to the currency as EU leaders finally approved Brexit proposal from Theresa May and the ball will be in British parliament for vote before the regional leaders gather for another summit around December 13-14. Moreover, Italian leaders are also considering to cut their budget deficit targets for next year and respect EU demands for which they’ll be meeting the Brussels officials today. Additionally, hopes that US-Chinese leaders will be able to stay positive when Xi-Trump meet helped NZD ignore soft Retail Sales but slowest growth of Japanese Flash Manufacturing PMI in two years continued hurting the JPY.

Having witnessed good start to the week, investors will now concentrate on slew of Eco-politico leaders’ appearances, together with German IFO Business Climate Index & New Zealand Trade Balance, in order to determine rest of the day’s moves. Among the qualitative catalysts, UK PM will try convincing to parliament members for her proposal from today whereas ECB President Mario Draghi is up for testimony and the Italian leaders are also ready to discuss their budget alteration plans with EU.

Even if Theresa May is likely to receive calm response from parliament members, the GBP might remain subdued unless voting begins on the proposal while EUR may have to witness upbeat response from Italy and ECB President to avoid declines. It should also be noted that uncertainty concerning Sino-US trade deal can also play its role to trouble traders.

At the economic front, German IFO Business Climate Index may drop to 102.30 from 102.80 and can keep disappointing EUR traders while NZD buyers may have a reason to extend their support if Trade deficit shrinks to -850M from -1560M prior.

Hence while Eco-politico leaders are ready to offer volatility to markets, presence of economic details can add liquidity into the session going forward.

Technical Talk

Even after bouncing off the support-line of short-term descending trend-channel, NZDUSD is less likely to extend its north-run as immediate TL resistance, at 0.6825, followed by upper-line of the channel, at 0.6845, may keep limiting the pair’s upside. On the contrary, a downside break of 0.6750 channel-support can quickly fetch the quote 0.6700 mark. Meanwhile, USDJPY again aims for 113.55-60 resistance-region, breaking which 114.10 might appear on the chart whereas 112.60 & 112.30 could confine the pair’s immediate declines. Furthermore, AUDCAD has 0.9515 & 0.9615 as adjacent levels to conquer in order to either challenge 0.9490-70 support-zone or 200-day SMA level of 0.9655.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 27 – November – 2018

Hello Traders,

In spite of having no big releases to offer, investors rushed to safe-havens on Monday after U.S. President Donald Trump showed readiness to levy tariffs on all Chinese imports if the much anticipated Sino-US meet fails to deliver a trade-deal, which in-turn helped the US Dollar Index (I.USDX) to post a positive daily closing. Additionally, doubts over Theresa May’s ability to win December 11 parliament vote on Brexit dragged GBP down while EUR couldn’t enjoy Italy’s preparedness to cut budget deficit target and respect EU norms as ECB President Mario Draghi conveyed fears of slowing growth.

On the other hand, JPY & Gold had to respect USD’s strength with declines whereas AUD & CAD also couldn’t avoid pessimism concerning US-China trade-deal but the NZD benefited from lesser than expected trade deficit. It should also be noted that Crude prices witnessed short-covering rally after OPEC leaders expressed positivity towards cutting their output in upcoming gathering and the U.S. inventories are also likely to dip on Wednesday for the first time in 10 weeks.

Having witnessed rejuvenated trade-war fears, traders kept supporting risk-safety during early Tuesday wherein USD & JPY were the gainers while Gold, CAD, EUR & GBP lined up for losses. There was a bit of profit-booking in AUD and the NZD ignoring the fact of China’s Industrial Profit’s plunge for sixth month but the Crude couldn’t sustain its earlier gains as negative vibes from trade-front kept signaling a dent in future demand.

While Trump’s threat to China has already turned down chances of a successful deal and pumped market fears, traders will now observe what central-bankers from the U.S. & New Zealand wants to convey. Out of the two policymakers, namely Fed Vice Chair Richard Clarida & RBNZ Governor Adrin Orr, the former is likely to limelight due to recent doubts over the Fed’s ‘neutral-rate’. However, that doesn’t cut the importance of RBNZ’s bi-annual Financial Stability Report & communication from the Governor about the same.

Mr. Richard is a dove among FOMC members and has recently signaled brighter chances favoring fewer rate-hikes from the Federal Reserve during next-year. If the Vice Chair continue supporting his latest remarks, the USD might have to trim some of its latest gains. On the other hand, RBNZ Governor may not risk deviating from the central-bank’s dovish outlook at a time when trade-front isn’t showing any positive signs, which in-turn could add weakness into the NZD.

At the economic front, US CB Consumer Confidence will be the only release to watch and is likely not to support present strength of the greenback as consensus favor 136.2 mark against 137.9 earlier.

To sum up, Trump’s threat to US-China deal and Brexit pessimism can keep supporting safe-havens, like USD, JPY & Gold, but the greenback may have to shed some of its weight given the consumer confidence spread disappointment & Fed Vice Chair continue challenging rate-hikes. As a result, commodity-linked currencies, like AUD, NZD & CAD, can witness recovery together with EUR but overall strength of the USD isn’t expected to go off.

Technical Talk

Having breached adjacent support-line, the EURUSD can drop to 1.1300 & 1.1270 before revisiting the 1.1215 rest-point whereas an upside clearance of 1.1385 becomes neccessary for the pair to target 1.1430 resistance-mark. Further, GBPUSD also declines towards 1.2715 support-line, breaking which 1.2660 may gain market attention while 1.2860 & 1.2910 could keep limiting the pair’s near-term advances. Moreover, the CADJPY has to surpass 85.90 TL to meet the 86.30 otherwise its pullback to 85.30 & 85.00 can’t be denied.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 28 – November – 2018

Hello Traders,

Tuesday proved to be another positive day for the US Dollar Index (I.USDX) as it surged for third consecutive time after Federal Reserve Vice Chairman supported the central-bank’s gradual rate-hikes. While USD was up on rate-lift optimism, commodity-linked currencies, like AUD & NZD, also gained with White House economic adviser Larry Kudlow’s announcement of a dinner between Donald Trump and Xi Jinping on Saturday by supporting the case for a trade-deal between the world’s two largest economies. However, the CAD couldn’t avoid declines as stronger USD & weaker energy demand kept hurting Loonie moves. Moving on, EUR dropped on pessimism concerning regional economic growth and German news that US stand ready to impose fresh tariffs on European cars whereas the GBP also dropped after UK official quoted saying lesser chances of Mrs. May to get parliamentary approval if she insists on it now. On the other hand, traditional safe-heavens, namely the Gold & the JPY, dropped as upbeat performance of global equity market & greenback’s rise adversely affected them but the Crude managed to extend prior short-covering on declining Gasoline stock numbers from API.

Having witnessed Fed policymaker’s U-turn on future moves, investors stretched their support in favor of the USD and continued liquidating JPY & Gold during early Wednesday. Not only this, receding fears for Sino-US trade-war also helped market players to remain positive at the day-start and the same carried yesterday’s Aussie & Kiwi gains forward. It should also be noted that there was no recovery in the EUR but the GBP recovered some losses as Theresa May is likely to try harder when reaching Scotland to promote her Brexit plan during the day.

With the recent support for the Federal Reserve’s gradual rate-hikes, today’s preliminary reading of Q3 2018 GDP & speech by the Fed Chair at New York Economic Club will be closely observed. Also, weekly release of Crude inventories may as well command high eye-share considering yesterday’s API results.

While expected increase in US GDP number from 3.5% advance estimates to 3.6% can portray rosy picture of the world’s largest economy, investors may put greater emphasis on any signs of Fed’s future rate-hike patterns considering December as done deal from the Fed Chair’s speech. Moreover, the US weekly Crude Oil stockpile bears the consensus to post 0.6M mark against 4.9M earlier.

Even if Mr. Powell is more likely to maintain his hawkish outlook at today’s appearance, recent threats from the U.S. President to central-bank policies, global slowdown, trade-war fears and equity market performance might push the FOMC leader to sound a bit neutral.

Hence, developments relating to Brexit & Trump-Xi meet may offer background music to market movements but US GDP could help the greenback ahead of Powell’s speech. Although, broader risk-appetite might be confined due to possibility of neutral statements from the central-banker amid global economic fear, which in-turn increases the importance of traditional safe-havens.

Technical Talk

AUDUSD’s bounce off the 0.7200-0.7190 is less likely to help the pair much unless it clears the 0.7255 resistance-line, which in-turn signals its pullback to 0.7165-55 support-zone; though, a successful clearance of 0.7255 can propel the quote towards 0.7300 mark. Further, the USDCAD is again confronting the 1.3310-20 resistance-region, breaking which it could rise to 1.3385 & 1.3400 whereas 1.3260 and an upward slanting trend-line, at 1.3190 now, might confine the pair’s immediate declines. Additionally, the EURAUD continues observing five-week long descending TL and may revisit the 1.5580-70 rest-area prior to pleasing sellers with 1.5510 & 1.5440 supports while 1.5800 & 200-day SMA level of 1.5855 could mark their presence on the chart after the break of 1.5710 upside barrier.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 29 – November – 2018

Hello Traders,

After Fed Chair’s U-turn on ‘neutral-rates’ and softer than expected US GDP, not to forget worrisome statements from BoE, IMF & ECB, investors are all set to concentrate on this week’s big issues, namely Trump-Xi meet on the sidelines of G20 and minutes of latest FOMC. However, possibilities of EU Flash CPI & China’s official Flash PMIs offering intermediate moves can’t be denied as well.

Let’s not waste much time and start discussing market fundamentals.

Pessimism Played Its Role & Rejuvenated USD Growth

During last-week upbeat sentiment concerning Sino-US trade deal and doubts over Fed’s future rate-lifts dragged the greenback down till late but fears surrounding global economic growth and plunging Crude prices finally offered US Dollar Index (I.USDX) the room to mark positive weekly closing. With the USD on recovery mode, EUR couldn’t ignore sluggish PMIs & political tensions between the EU & Italy while GBP remained weak on Brexit uncertainty. Moving on, AUD, NZD and CAD became victims of commodity plunge and the JPY also failed to enjoy safe-haven support, which Gold aptly realized, after disappointing data-points at home favored BoJ’s lose monetary policy. Moreover, Crude maintained its top-spot on Bears’ radar based on surging US inventories and recent reports showing highest exports by an OPEC leader.

Trump & Powell’s Remarks, Together With Soft GDP, Challenged Greenback Bulls

While fears emanating from US-China trade-deal & Fed Vice Chair’s comments supporting gradual rate-hikes helped the US Dollar to extend its upside till mid-week, Trump’s another fire on Federal Reserve Chairman and the Chair’s comments mentioning that the Fed Rate is ‘just below’ neutral-rate dragged the US currency downwards. With this, the EUR buyers forget about early-week’s dovish comments from ECB President and rather concentrated on Italy’s readiness to respect EU budget norms but GBP kept being volatile on Theresa May’s efforts to get her proposal approved by UK parliament.

If we look at the AUD & the NZD, both of them seem recovering earlier losses ahead of the G20 on expectations of a positive outcome whereas CAD couldn’t avoid Crude’s south-run due to increasing US output & likely dent in future energy demand. Moving on, JPY & Gold recently started benefiting from USD’s decline & rush towards risk-safety.

Not Only Xi-Trump Meet But FOMC Minutes Also Remain Highlighted

Having witnessed investors’ response to recent communication from Fed, Mr. Trump & US stats, it’s important to watch over Thursday’s FOMC minutes & the developments at G20, starting from Friday, in order to determine near-term market moves. Also, Friday’s Chinese official Manufacturing & Non-Manufacturing PMIs, followed by EU Flash CPI and Canadian GDP, may entertain momentum traders.

First things first, the FOMC meeting minutes, which generally go unnoticed if the meeting doesn’t carry Fed Chair’s speech & quarterly economic forecast, would command a higher eye-share this time. The reason being on & off signals from the Fed policymakers and Mr. Trump’s sustained opposition to rate-lifts, coupled with expected global economic downturn & positive fundamentals at home. Even if the central-bank held its monetary policy unchanged at latest meeting, analysts might want to check how many of the FOMC board members are in favor of restricting the central-bank’s tightening.

Turning to G20, the gathering in Argentina starts from Friday but what’s actually crucial is Saturday’s dinner of US & Chinese leaders alongside the summit to discuss their future trade-ties. Not only Sino-US trade prospects but comments from global leaders concerning US President’s trade protectionism and how Saudi Arabia would reflect to recent drop in Crude prices would also be closely observed.

Looking at the trade side, White House communicates Mr. Trump is ready to have a deal with China but the President has repeatedly threatened the dragon nation to levy fresh tariffs on $200 billion if the talks fail. The U.S. demands include opening up Chinese borders for American businesses without infringing their intellectual properties and promising higher imports while China stands ready to co-operate on globalization, at least verbally, but hasn’t spoke for IPR allegations and imports from world’s largest economy. Considering the nature of demand and the leaders, it’s less likely that any trade-deal can be struck at this meeting; however, chances of witnessing a positive announcements for future deal and/or halt to present trade-war can’t be denied.

Moving on to scheduled economics, the China’s Flash Manufacturing PMI is likely remaining unchanged at 50.2 and the Non-Manufacturing PMI may soften to 53.8 from 53.9 whereas Canadian GDP isn’t likely to benefit from a 0.1% mark. Moreover, EU Flash CPI may soften to 2.1% from 2.2% and can push ECB to remain on sidelines before announcing a rate-hike at the end of 2019.

At the political front, Theresa May is trying hard to convince her party members & opposition leaders to vote in favor of her Brexit proposal on December 11 but majority of them have already shown readiness to turn it down and topple the PM, if needed. In case of EU, Italy has communicated its desire to cut budgetary deficit to respect regional norms but is yet to take any strong action.

Hence, while FOMC minutes could help clear the current doubts over future Fed moves, Xi-Trump meet may spread worries across the board if both the global leaders refrain respect each others’ demands. Also, political pessimism at UK & EU, together with likely soft outcomes from scheduled EU, Chinese & Canadian numbers, can keep pushing investors to risk-safety.

As a result, the USD may maintain its gains due to its safe-haven appeal whereas commodity-linked currencies, EUR & GBP can witness pullback. Though, a strong positive outcome from the G20 might not hesitate fueling the ex-USD batch of currencies.

Technical Analysis

Although Fed Chair’s remarks on Wednesday triggered noticeable recovery of the EURUSD, the pair is still far from being strong as the 1.1455-65 resistance-confluence, comprising 50-day SMA & immediate descending TL, followed by 100-day SMA level of 1.1535 stand tall to challenge the buyers. As a result, the 1.1260 and the 1.1215 can continue remaining on the market radar as supports. Same is the case with GBPUSD that’s recently bounced off the upward slanting support-line stretched since mid-August, at 1.2710 now, but has to surpass the 50-day & 100-day SMA joint around 1.2975-80 in order to meet the 1.3000, the 1.3070 & 1.3135 resistances otherwise it’s pullback to the 1.2760, 1.2710 & 1.2660 can’t be denied. On the other hand, USDJPY again failed to clear the 114.05-10 resistance-region and may revisit the 112.90 & 112.50 rest-points whereas the 112.30, 100-day SMA level of 112.15 and an ascending trend-line, at 112.00, could restrict the pair’s near-term declines.

In case of commodity-linked currencies, the AUDUSD needs to conquer the 0.7340-50 area so that 0.7380 & 200-day SMA level of 0.7425 can gain market attention else the 0.7240, comprising 100-day SMA, the 0.7200 & the 50-day SMA mark near 0.7175 may please the sellers. Further, NZDUSD rises above 200-day SMA level of 0.6865 towards the 0.6885 & 0.6900 barriers, breaking which 0.6925 & 0.6950 might become Bulls’ favorites but inability to sustain the breakout could reprint 0.6810 & 0.6755 as quotes. At the end, the 1.3310-20 zone again played its role in limiting USDCAD’s upside, which in-turn can flash 1.3250 & 1.3200 on chart while the 1.3385, the 1.3400 & 61.8% FE level of 1.3485 may entertain pair optimists past successful break of 1.3320 barrier.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 30 – November – 2018

Hello Traders,

While upbeat Personal Income & Spending details helped the USD during early Thursday, not so hawkish FOMC minutes and rising Jobless Claims paved the way for a negative daily closing of the US Dollar Index (I.USDX). Not only this, Trump’s recent comments to “doing something” with China before the crucial event and latest developments at Robert Mueller’s investigation offered additional weakness to the greenback. With the USD extending its pullback, the EUR ignored disappointing economics from Sweden & Switzerland but GBP kept declining across the board, except against USD, due to Theresa May’s latest statements highlighting negative outcomes if her proposal is being rejected at December 11 parliament voting. On the other hand, JPY & Gold took advantage of the USD’s dip and market fears for Sino-US trade war while Crude stretched its recovery on expectations of a supply-cut accord between Russia & Saudi Arabia when they meet at G20. Additionally, AUD maintained its upside but NZD & CAD failed to turn the sellers down after IMF’s another warning for global economic slowdown.

During early Friday, investors were all concerned for what could happen when leaders of world’s two biggest economies confront each other on trade-deal discussions, up for Saturday night. Other than US-China trade-deal prospects, traders were also looking for any signs of crude supply cut accord between Russia & OPEC leader Saudi Arabia.

At the economic front, JPY remained volatile on risk-off sentiment and mixed economics, namely Preliminary Industrial Production & Tokyo Core CPI, whereas AUD, NZD & CAD weakened after China’s official Manufacturing PMI stalled for the first-time in nearly two years. Based on all this, USD recovered some of its latest losses but overall market pessimism didn’t give much room to moves.

Looking forward, EU Flash CPI, Canada’s monthly GDP & US Chicago PMI can affect intermediate market mood while updates from G20 could keep being major catalysts. Among the scheduled stats, EU Flash CPI may soften to 2.1% from 2.2% and can push ECB to remain on sidelines before announcing a rate-hike at the end of 2019 whereas Canadian GDP isn’t likely to deviate from a 0.1% mark. However, the Chicago PMI may please US optimists with 58.6 mark against 58.4 prior.

Talking about the trade, U.S. President Donald Trump & his Chinese counterpart Xi Jinping are to appear for the G20 on Friday but might not reveal any secrets of their trade-discussion tactics ahead of Saturday night dinner. Both the parties are so far showing interest in resolving the present trade-war conditions but US is using the power of tariff threats and economic problems at China to sound itself strong whereas Chinese media say they won’t tolerate any push. The U.S. demands include opening up Chinese borders for American businesses without infringing their intellectual properties and promising higher imports while China stands ready to co-operate on globalization, at least verbally, but hasn’t spoke for IPR allegations and imports from world’s largest economy. Hence, it would be very interesting to watch how both the global leaders manage to sooth market fears.

Even if a trade-deal between the U.S. & China is less likely, considering demands of both the parties, any positive announcements for a halt to tariff war and/or future ties could trigger risk-on sentiment and hurt the USD. Alternatively, no deal and a fierce end to conversation might propel the risk-off and damage the commodity-linked currencies by supporting the safe-havens.

Technical Talk

50-day SMA again played its role in restricting the USDCHF declines, which in-turn highlights the importance of the 1.0000 & the 1.0055 resistance-levels; though, a downside break of 0.9945 SMA figure might not hesitate fetching the quote to 0.9915 & 0.9900 supports. Further, USDJPY is likely declining towards 113.15 & 112.80 rest-points unless clearing the 113.55-60 and the 114.05-10 resistance-region. Moreover, the GBPCAD follows short-term descending trend-channel with 1.7000 & 1.7065 being immediate upside barriers whereas 1.6925 & 1.6885 could challenge the pair’s near-term pullback moves.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 03 – December – 2018

Hello Traders,

Even after witnessing sluggish economics and Fed Chair Powell’s dovish remarks, not to forget neutral FOMC minutes, the US Dollar Index (I.USDX) managed to register another positive weekly closing as fears of Sino-US trade-talks kept pushing investors to greenback. While USD marked its strength around later-week, the EUR couldn’t ignore weaker than expected Flash CPI in light of ECB President’s earlier comments conveying not so strong outlook for the regional economy whereas the GBP had to take losses considering UK PM’s struggle to convince British policymakers before December 11 parliament voting for her Brexit proposal. Moving on, JPY & Gold respected US Dollar by marking negative weekly closes while Crude stopped extending its south-run on expectations of a supply cut from major producers. On the other hand, AUD & NZD benefited from optimism at commodity basket but CAD failed to enjoy such pullback as Canadian data-points kept challenging the Loonie Bulls.

While G20 was all in limelight during last-week, mainly because of scheduled meeting between the leaders of world’s top two economies, weekend outcome communicating the U.S.-China trade-truce boosted traders’ morale at early-Monday. The U.S. President & Chinese Premier agreed to stop increasing tariffs on each others’ goods for 90-day period after which a complete trade-deal will be finalized. The U.S. refrained from stretching its Jan. 01 tariffs on $200 billion Chinese goods from 10% to 25% and China also promised to stretch trade-war while the negotiations take place. Moreover, US President Donald Trump said China is ready to lessen and cut its duties on US cars together with agreeing to import more of American farm products. Though, there was no clear announcement for technology rights and IPR theft allegations against the dragon nation, which in-turn dimmed the prospects of a successful trade-deal between the two economies going forward. Another important announcement came from Russia which agreed to move forward with OPEC and manage the oil market, which some assume could lead to production cuts.

With the G20 giving almost everything once analysts wanted, market sentiment turned risk-on during early-day trading sessions and dragged the USD downwards. The Crude was a big gainer as not only positive signals from Russia but Canada’s readiness to cut its output to manage pipeline problems also pleased energy traders after a long time. As a result, commodity-linked currencies, like AUD, NZD & CAD surged but disappointing Australian housing market numbers and soft print of China’s Caixin Manufacturing PMI restricted their advances.

Having received welcome results from much awaited events, early-month Manufacturing PMIs from UK & US, together with comments from some FOMC members, are likely to entertain momentum traders for rest of the day.

First things first, the UK Manufacturing PMI is expected to post 51.6 mark against 51.1 earlier but the U.S. ISM Manufacturing PMI might add weakness into greenback if matching 57.5 consensus versus 57.7 prior. Speakers FOMC members include Federal Reserve Vice Chairman Richard Clarida, Randal Quarles and John Williams. Out of them, Clarida & Williams have recently triggered concerns questioning the Fed’s rate-hikes and hence clues relating to the same will be closely observed during their speeches.

Given the first trading-day after US-China truce, market-players might want to capitalize the news and fuel trade-moves. With this, USD might have to post negative daily closing on market optimism and sluggish PMI but GBP’s likely gains, based on expected upbeat print of Manufacturing PMI, could be confined by Brexit worries.

In all these, commodity-linked currencies & Crude can move forward in their recent upsides while JPY & Gold may take advantage of USD’s declines.

Technical Talk

Having slide benath two-month old ascending trend-line, the USDCAD has to dip below 1.3180 in order to revisit the 1.3130 rest-point otherwise its pullback to 1.3255-60 and then to the 1.3310-20 can’t be denied. On the same line, the NZDUSD needs to surpass 0.6920 barrier to challenge the 0.6970-75 resistance-zone else 0.6880 & 0.6865 may comeback on the chart. Further, the AUDCHF failed to cross medium-term resistance-line, at 0.7370, and might drop to 0.7310 & 200-day SMA of 0.7290 if the present profit-booking continues while 0.7400 & 0.7440 could please buyers on successful rise beyond 0.7370.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 04 – December – 2018

Hello Traders,

Not only the U.S.-China trade truce but declining yields on American bonds & comments signaling uncertain path of the Federal Reserve’s future policy moves from some of the leading FOMC members also dragged the US Dollar Index (I.USDX) down on Monday. The greenback’s dip & optimism at trade front were aptly capitalized by the EUR, the CAD & the NZD wherein CAD had extra advantage in the form of Crude recovery after Russia & Saudi Arabia pledged to maintain global oil markets, indicating a supply-cut accord soon. However, evening reports from the White House were quite disturbing for trade-watchers as Trump administration struggled to justify what was agreed between the world leaders at G20. The same got additional skepticism after China refrained to provide any hints of 90-day period and car tariffs that Mr. Trump lauded earlier. As a result, the Australian Dollar, which was already bearing the burden of disappointing housing market stats, witnessed negative daily closing whereas GBP couldn’t benefit from earlier positivity as Brexit risks loomed large. It should also be noted that JPY & Gold marked gains on USD’s drop and fears concerning developments at Sino-US trade & Brexit.

As yesterday’s relief-rally didn’t last long and analysts started fearing for a trade-pact, not to forget Fed’s future rate-hikes, traditional safe-havens like JPY & Gold became investors’ favorites during early-Tuesday. Additionally, RBA’s hawkish economic outlook and surprise uptick in Swiss CPI strengthened market favor for the ex-USD currency-bag.

With the recent doubts over Fed’s rate-hike path, every incoming comments from a Fed policymaker gains more important, which in-turn highlights today’s press conference by the FOMC voting member and Federal Reserve Bank of New York President John Williams about local employment and labor force trends. Herein audience questions are expected and answers to the same could further provide clues for the U.S. central-bank tactics moving forward.

Other than Fed policymaker, the BoE Governor Mark Carney, together with three MPC members, are also scheduled to testify about the Brexit Withdrawal Agreement before the Treasury Select Committee. In this case, not only cues for BoE’s readiness to tackle no-deal Brexit could be observed but chances of the same outcome to happen might also gain attention.

At the economic front, UK Construction PMI seems the only left-ones and is likely to post 52.5 mark against 53.2 prior.

Hence, while fewer announcements are likely to take place from either US or China concerning trade-deal and the RBA has already played its role, questions surrounding FOMC & BoE are there to answer.

As majority of the Fed policymakers have already shown their readiness to discuss tapering the rate-hikes, additional support from the New York Fed Chief may weaken the US Dollar, which in-turn can help the JPY & the Gold. However, GBP might not benefit from the same as BoE Governor has been worried about the Brexit and could convey the fears during his today’s appearance.

In case of EUR, comments supporting ECB’s rate-hike from the Bundesbank President and hard work by the Italian & French leaders to solve their issues, namely the budget deficit problem with EU & public outrage against tax respectively, could help the regional currency to maintain its latest strength.

Technical Talk

GBPUSD’s another bounce off the 1.2715 support-line signals brighter chances of its pullback to 1.2770 but near-term TL resistance, at 1.2810, might confine the pair’s further recovery. Alternatively, a downside break of 1.2715 can quickly drag the quote to 1.2660 rest-point. Further, the AUDUSD also refrained to respect yesterday’s dip and is again rising towards 200-day SMA level of 0.7415, breaking which 0.7445-50 may gain buyers’ attention whereas 0.7340 and the 0.7310 could offer immediate supports during the pair’s decline. Moreover, GBPJPY has to provide a D1 close beneath 144.10 in order to please sellers with 143.70 & 143.15 supports else its U-turn to 145.30 & 100-day SMA level of 145.55 can’t be denied.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 05 – December – 2018

Hello Traders,

Monday’s risk-on moves couldn’t last long as absence of meaningful statements from China & Trump’s readiness to restart trade-war on failure to clinch the deal rejuvenated market fears. Not only trade related pessimism but UK policymakers’ angst against PM Theresa May’s Brexit plan and FOMC member’s hawkish statements favoring Fed’s gradual rate-hikes also supported the US Dollar Index (I.USDX) to post a positive daily closing by Tuesday-end. The EUR couldn’t avoid overall support for the greenback but JPY & Gold extended their earlier rise based on political uncertainty. Moving on, commodity-linked currencies like AUD, NZD & CAD had to bear the burden of Sino-US tussles wherein Canadian Dollar had extra load from Crude’s decline based on higher API inventories and comments from Saudi Arabia that it isn’t certain to announce production cut at this week’s OPEC+ meeting.

Given the recent lift to risk-safety, early Wednesday’s disappointment from AU GDP provided additional weakness to the Australian Dollar while NZD & CAD continued on their downturns. However, there was a change in sentiment concerning JPY & Gold as the traditional safe-havens dropped after Chinese authorities communicated optimism to sign a deal with US. The EUR & the GBP kept trading southwards as lack of big details/announcements from EU and on-going challenges to UK PM at House of Commons pushed sellers to these currencies.

While global investors reconfirmed their trust in the USD, holiday at American markets in honor of former President George H.W. Bush might challenge the momentum during the day. Though, UK Services PMI, political drama at British House of Commons & monetary policy meeting by the Bank of Canada (BoC) could entertain traders.

The UK Services PMI, core to British GDP, may rise to 52.5 from 52.2 and join the league of recent upbeat numbers from the nation but may not be able to strengthen the GBP unless Theresa May receives support for her Brexit plan. It should also be noted that her party was found in contempt of parliament by restricting full details of the agreed deal with EU leaders whereas opposition & some Tory rebels stand ready to vote her proposal down on December 11. Though, Mrs. May has been able to remain in power with the threat that if UK policymakers reject her deal, the nation won’t be able to get another one from the EU and may have to face further problems. The same could help the Prime Minister to finally push politician towards her plan, even with some mild arrangements like giving parliament a power to reject the deal and know about everything of it at a later stage.

In case of the BoC meeting, the Canadian central-bank has been hawkish so far since early 2018 and has already announced three rate-hikes during the year, which in-turn signal brighter chances of it to avoid being optimistic. However, recent data-stream from the nation and a plunge in Crude prices are the negatives that can play their roles.

Other than what’s already mentioned above, join ministerial monitoring committee meeting between the Saudi Arabia & Russia ahead of tomorrow’s full-fledges OPEC+ gathering could also determine the mood of global oil producers. Both the leaders sound positive of maintaining Crude market at G20 but none of them has clearly supported a production-cut, which US President Donald Trump also criticized.

Even if UK Services PMI favor GBP’s uptick, Brexit worries can keep the Pound under check while CAD might have to witness further disappointment if the BoC puts more emphasis on recent economic weakness & crude price-slid.

Moreover, oil producers are expected to come to a consensus for limiting the oil price-plunge and may offer intermediate strength to the quote. Due to all this, USD may enjoy being a risk-safety but JPY & Gold, not to forget EUR and commodity-linked currencies, can witness lack of buying.

Technical Talk

Following its reversal from seven-week long ascending TL support, the USDJPY may again confront the 113.20 & 113.55-60 resistances prior to targeting the 114.05-10 horizontal-barrier. However, slide beneath the 112.50-55 support-line might not hesitate fetching the quote to 112.25 & 111.80 rest-points. On the other hand, the USDCHF needs to surpass the 1.0005-10 resistance-area in order to aim for 1.0050 & 1.0080 else its pullback to 0.9950 & 0.9920 can’t be denied. Furthermore, CADJPY’s failure to dip below 200-day SMA level of 84.90 and nine-month old ascending support-line near 84.75 can trigger its U-turn to 85.60 & to 86.20-25 resistance-confluence, comprising 50-day SMA & adjacent trend-line.

Have a nice trading-day ……

[FxAnil]

Weekly Fundamental Dose: 06 – December – 2018

Hello Traders,

After a brief risk-on stint, investors turned back to safe-havens on uncertainties concerning US-China trade deal and Brexit. While these political plays can keep offering background music to determine near-term market momentum, Friday’s jobs report from the U.S. will become eye-candy for traders.

Let’s discuss fundamentals relating to them and some more.

Doubts Over Sino-US Trade-Deal Helped The US Dollar

In spite of witnessing sluggish data-points at home & dovish remarks from the Fed Chair, the US Dollar Index (I.USDX) managed to register second consecutive weekly gains on fears that whether world’s top two economies will be able to clinch a deal at G20 or not. With the USD’s rise, traditional safe-havens like JPY & Gold lost their allure but AUD & NZD marked recoveries due to short-covering at commodity-front. Though, CAD had to bear the burden of disappointing data-points. In the same line, EUR also dropped after EU Flash CPI rejuvenated doubts over ECB’s future moves whereas GBP couldn’t avoid Brexit pessimism. The Crude prices, however, stopped south-run on expectations of production-cut from OPEC+ alliance.

Successful G20 Seems Unsuccessful And The Brexit Woes Remain Present

Saturday night dinner between the U.S. President Donald Trump & his Chinese counterpart Xi Jinping offered sigh of relief to trade-watchers after both the nations agreed for a 90-day halt to their tariff-war while Mr. Trump claimed China’s readiness to cut/cancel duties on American cars & import more of farm productions from them. As a result, Monday proved to be a risk-on day for global investors; though, those moves couldn’t last long as White House members struggles to justify details of agreements at a time China was almost quiet about its commitments. Hence, USD regained its risk-safety demand while AUD, NZD & CAD dropped due to challenges at commodity front and negative economics at home. Adding to pessimism, arrest of Huawei’s chief financial officer in Canada on U.S. commands reignited differences between the two global giants.

At Britain, UK PM Theresa May continued struggling to convince British policymakers at House of Commons’ five-day debate over her Brexit deal and is likely to compromise her veto-like power to get the plan supported. Looking at other catalysts, BoJ Governor conveyed downside economic risk while RBA & BoC turned cautious on growth. Additionally, Saudi Arabia & Russia are almost ready to announce oil production-cuts but how much is the point that will be observed during OPEC gathering.

Hence, even after witnessing a successful meet between Trump and Xi at the sidelines of G20, uncertainties still loom large over their future trade-deal. Adding to that, Brexit worries, less clarity on crude output cut & central-bankers’ cautious tones have so far troubled market-players.

It’s NFP Time For Analysts!

Having observed sustained pressure of doubts over Sino-US trade-war & Brexit, Friday’s monthly reading of U.S. employment report is likely to gain major market attention as it becomes the only major indicator left to foresee Federal Reserve’s future moves after Wednesday’s holidays at America cancelled Fed Chair’s testimony. Other than that, OPEC meet and U.S. ADP Non-Farm Employment Change can offer intermediate trade opportunities on Thursday whereas Friday’s American Prelim UoM Consumer Sentiment & Saturday’s Chinese Trade Balance may provide active market sessions afterwards.

Starting with the Thursday’s U.S. ADP Non-Farm Employment Change, the early signal for Friday’s NFP is expected to dip to 195K from 227K. On the other hand, the OPEC leaders are likely to announce a production-cut but aren’t clear as to how much considering repeated push from Donald Trump to avoid such actions.

On Friday, US job numbers are mostly up for another mixed-print wherein Non-Farm Employment Change (NFP) may soften a bit from 250K prior to 200K but the Average Hourly Earnings’ growth could rise to 0.3% from 0.2% whereas Unemployment Rate might not change from 3.7%. The Canadian employment stats, to be released simultaneously, indicate weaker Employment Change figure of 10.3K from 11.2K without any change to 5.8% Unemployment Rate. Further, Prelim UoM Consumer Sentiment could drop to 97.1 from 97.5 whereas Chinese Trade Balance might also soften to $34.0B from $34.01B prior.

In case of politics, Theresa May is finally thinking to use her veto-like power to push British policymakers to support her Brexit deal if the five-day debate seem unfavorable to her. In this case, members of house aren’t allowed to wait for the decision on Irish border issue before voting on the deal, which in-turn may raise the chance of her success. However, majority of opposition members and some of Tory rebels may still turn her proposal down and hence continue highlighting the risk to Mrs. May’s position as PM.

At the US-China trade front, the dragon nation has finally started talking in favor of the Saturday’s Trump-Xi meet but haven’t yet being loud mouthed like their American counterparts. On the top of that, recent arrest of an officer from Chinese tech-giant could raise bars for a smooth discussions over 90-day’s trade-talk period. If the talks fails, Mr. Trump has already showed readiness to levy harsh measures on almost all of Chinese imports while Xi & party are also firm not to bow down against unjustifiable US demands.

Considering present political problems at the US, China & the UK, greenback’s risk-safety demand is likely to prevail for some more time; though, disappointments from American employment numbers may confine the USD’s upside. Alternatively, GBP can continue being victim of Brexit woes and same is the case with AUD, NZD & CAD when it comes to pessimism at trade-front herein CAD can witness additional downside pressure if OPEC refrains to give clear details of their expected output cut.

Technical Analysis

Short-term symmetrical triangle confines EURUSD moves between 1.1290 & 1.1420 with 1.1215 & 1.1480 being follow-on numbers to watch during either side break. On the other hand, the GBPUSD rests on important support-line, at 1.2715, but needs to provide a D1 close beneath the same in order to please sellers with 1.2660 & 1.2580 else its pullback to 1.2770 & 1.2850 can’t be denied. Further, USDJPY repeatedly respects two-month long support-line, at 112.55 now, which in-turn can help it revisit the 113.20 & 113.55-60 whereas 112.20 & 111.80 may gain market attention past-112.55.

Talking about commodity-linked currency pairs, the AUDUSD might avail 0.7180 & 0.7160 rest-points before testing the 0.7080 support-mark while 0.7340, 0.7390 & 200-day SMA level of 0.7410 could limit the pair’s near-term advances. Moving on, NZDUSD still remains above 200-day SMA level of 0.6855 that can trigger its U-turn to 0.6920, 0.6970 & 0.7000, if not then 0.6810 & 0.6750 may entertain the Bears. At last, USDCAD could continue aiming for 1.3425, 1.3480 & 1.3530 resistances unless breaking 1.3180 & 1.3060 support-levels.

Have a nice trading-day ……

[FxAnil]

Daily Fundamental Dose: 07 – December – 2018

Hello Traders,

Although arrest of Huawei’s chief financial officer continued raising doubts over the Sino-US trade-truce and helped traditional safe-havens like Gold & JPY, the US Dollar Index (I.USDX) had to mark a negative daily closing as disappointing outcomes of ADP Employment Change & Trade Balance joined cautious comments from FOMC members. The greenback decline supported EUR & GBP without any major positives from their side but AUD, NZD & CAD couldn’t ignore pessimism concerning a trade-deal between world’s two largest economies wherein CAD was badly hit after Bank of Canada (BoC) Governor suggested more gradual rate-hikes. Moving on, Crude failed to enjoy larger than expected drawdown in US inventories as OPEC leaders refrained to convey production-cut during their first-day of meeting.

During early-Friday, the USD recovered some of its latest losses on sluggish German Industrial Production & expectations of strong employment details whereas commodity front remained weaker on uncertainty surrounding US-China deal & global oil output-cut. The EUR slide on German figures and the GBP also dropped due to on-going worries for Brexit. Additionally, JPY trimmed its recent gains based on lesser than forecast Leading Indicators but Gold kept trading strong as political problems at US, China & UK favor risk-off.

Looking forward, US employment details and the OPEC outcome are likely to acquire major market attention for the rest of the day; though, Canadian Job numbers and U.S. Prelim UoM Consumer Sentiment can also offer intermediate trade opportunities. Moreover, political news from trade-front & Brexit may continue challenging investors.

The U.S. employment report is likely to portray a rosy picture of world’s largest economy with the Average Hourly Earnings expected to register 0.3% wage growth versus 0.2% prior and the Unemployment Rate bears the consensus to remain unchanged at 49-year low of 3.7%. The leading Non-farm Payrolls (NFP) might hurt the trade-sentiment if matching 200K forecast versus 250K earlier but even at that level the NFP will be above year’s average in spite of early-year hurricane impact. In case of Canadian job figures, Employment Change can soften to 10.5K from 11.2K previous and the Unemployment Rate may reprint 5.8% stat. Furthermore, U.S. Prelim UoM Consumer Sentiment could dip to 97.0 from 97.5.

At the political front, China is yet to convey its resentment towards the U.S. after Huawei CFO arrest, which if takes place could raise bars for the possibilities of a trade-deal between the two nations. In case of OPEC meet, the oil cartel is up for meeting again on Friday and may seek Russia’s support, even if it’s not in the group, in order to communicate its much anticipated 1 million barrel-a-day cut from the OPEC+ alliance. At last, Brexit debate in UK House of Commons is getting fierce for the British PM day-by-day as not only opposition but her own party-members are seeking to topple her from the power.

While expected upbeat prints of employment figures and on-going tensions at trade front can support the US Dollar strength, doubts over Fed’s future moves may confine the greenback’s advances. Further, the CAD could keep declining on BoC’s statements if job numbers meet expectations but OPEC’s production-cut, if announced, might help the Loonie a bit.

Moreover, GBP is less likely to recover unless there are any positive news for the Brexit, which isn’t expected at the moment. Due to aforementioned catalysts, safe-havens can enjoy few more days of buying and commodity-linked currencies may have to witness selling pressure for quite some time.

Technical Talk

Repeated failures to surpass 1.1415-20 resistance-confluence, comprising 50-day SMA & nearby TL, divert market attention to 1.1300-1.1295 support-zone, which if broken can quickly fetch the quote to 1.1260 & 1.1215 whereas 1.1440 & 1.1500 may please buyers past-1.1420 break. Alternatively, USDCAD has to close beyond 1.3410 in order to aim for 1.3450 & 1.3500 else 1.3330 & 1.3260 are likely coming back on the chart. With this, the EURCAD also struggles to clear 1.5235 trend-line and the 200-day SMA level of 1.5280 to target the 1.5320 that signals brighter chances of the pair’s pullback to 1.5130 & then to 1.5060, including 100-day SMA.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 10 – December – 2018

Hello Traders,

While absence of hawkish statements from FOMC members and doubts over Sino-US trade-pact were challenging sentiments in support of Fed’s future rate-hikes, Friday’s sluggish employment numbers provided additional reason to the greenback doves and fetched the US Dollar Index (I.USDX) towards a negative weekly closing. With the US Dollar bearing the burden of market pessimism, the EUR gave more weight to Italy’s progress in direction to please EU leaders with their renewed budget proposal rather than French problems but the GBP couldn’t ignore disappointing PMIs and Brexit worries. Further, the commodity-linked currencies like AUD, NZD & CAD all became victims of uncertainty over US-China deal whereas the same sentiment helped JPY & Gold to register gains. It should also be noted that Crude managed to recover most of its early-week losses after OPEC-led alliance announced higher than expected production cuts.

Having witnessed renewed tensions between US & China after the arrest of Huawei’s chief financial officer, investors got another blow early this week when Chinese vice foreign minister summoned American ambassador to protest over the issue. Adding to negativity were weaker outcomes for China’s inflation & Japan’s GDP.

Given the multiple eco-political factors stand ready to challenge trade-sentiments, the week-start has been in favor of the traditional risk-safeties, like JPY & Gold, while USD kept running southwards. However, short-covering moves were noticed in most of the major currencies except greenback and the Crude stretched its pullback forward on news of Libya’s output halt due to protests.

Even if developments at US, China & UK political fronts are likely to take the center-stage of market attention, British GDP, Manufacturing Production & Canadian housing numbers could offer intermediate trade opportunities. Out of them, UK GDP may rise to 0.1% from 0.0% earlier but Manufacturing Production could dip to 0.0% from 0.2%. On the other hand, Canadian Housing Starts could soften to 198K from 206K and the Building Permits might also shrink by -0.2% against +0.4% earlier.

With the China’s retaliation over its executive’s arrest, coupled US President’s strict attitude to have a trade-deal before March 01, chances are higher that both the economies might fail to reach much awaited trade-settlement. As a result, USD, JPY & Gold can receive safe-haven demands but greenback’s gains may be challenged by concerns over Fed’s future rate-lifts. Additionally, AUD, NZD & CAD are less likely to stretch their latest up-moves as being heavily dependent on China & international trade where prospects are dark.

In case of Brexit, Theresa May government’s fate will be sealed on Tuesday’s vote at House of Commons but fewer analysts expect parliament support to her proposal and a challenge to the PM’s power, which in-turn can keep dragging the GBP to south.

As UK & US offer lesser reasons to buyers, not to forget pessimism at commodity front, EUR can benefit if French President pleases domestic protesters and Italy regain EU policymakers’ support.

Technical Talk

Inability to cross immediate trend-line resistance, at 1.2790 now, continue signaling brighter chances of the GBPUSD’s extended south-run towards 1.2660 & then to the 1.2600. If at all the pair manage to surpass the 1.2790 barrier, the 1.2850 & the 1.2885 can still question buyers’ strength. Alternatively, NZDUSD’s U-turn from 0.6840 may help it challenge the 0.6910 resistance, breaking which 0.6940 & 0.6970 can grab the traders’ eye-share. However, pair’s dip beneath the 0.6840 could avail 0.6810 & 0.6770 rest-points. At the end, the NZDJPY’s latest pullback can’t be considered as a sign of its rally as 78.00 & 78.35 may restrict the pair’s near-term advances, which in-turn highlights the importance of the 77.25 & the 76.60 supports.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 11 – December – 2018

Hello Traders,

When everybody on the floor was waiting for Tuesday’s British House of Commons’ vote on Brexit plan, wildcard announcement from Mrs. May that scheduled voting is canceled for the time being in order to avail greater concessions from the EU triggered risk-off across the board. Adding to this, early-day disappointments from Chinese & Japanese data-points also played their roles and helped the US Dollar Index (I.USDX) to post gains while negatively affecting JPY & Gold. The EUR couldn’t ignore French protests and stronger greenback whereas GBP plunged as deferred voting highlights the risk of no-deal Brexit. On the other hand, AUD & CAD dropped based on pessimism at commodity front but the NZD refrained from declining. Furthermore, Crude prices also traded southwards as doubts grew that production-cut announcements from OPEC-led alliance isn’t sufficient to conquer present supply-glut.

With the Brexit factor out of the view till Theresa May returns to parliament, investors shifted their attention back to economic calendar and the trade-war concerns, not to forget political plays at EU & US. In case of Sino-US trade-deal, news that Chinese Vice Premier Liu He and the U.S. Treasury Secretary Steven Mnuchin talked on phone about timetable for future discussions helped AUD & NZD a bit during Tuesday-start but the pending decision over whether to allow bail to CFO of China’s Huawei kept challenging optimism surrounding a trade-deal between world’s two largest economies. Elsewhere, the European Commission showed willingness to accept Italy’s budget deficit it’s not exceeding 1.95% during next year; though, Italian policymakers are still craving for 2.0% mark after their 2.4% proposal was turned down earlier.

The economic calendar is up for releasing monthly readings of UK jobs report, US PPI, EU ZEW Economic Sentiments & Japanese PPI during the day. Among them, British Unemployment Rate & Average Hourly Earnings aren’t expected to change from their 4.1% & 3.0% levels but the Claimant Count Change may dip to 13.2K from 20.2 prior. Further, the US PPI could soften to 0.0% from 0.6% previous and the Japanese PPI might also weaken to 2.4% from 2.9% whereas EU ZEW Economic Sentiment is likely flashing -23.2 figure versus -22.0 earlier.

Given the cancellation of Brexit vote, catalysts like trade-war, politics and headline economics can witness increased response from traders. Out of them, uncertainty at trade-war can keep helping the USD but expected soft PPI may restrict the USD’s upside momentum while news on Italy seems positive for the EUR unless ZEW numbers don’t flash extremely negative numbers.

The Japanese Yen may recover some of its latest losses if USD weakens and PPI marks positive change but commodity-linked currencies, like AUD, NZD & CAD, and GBP may have to bear the burden of uncertainty at trade-front & Brexit respectively.

Technical Talk

Not only its bounce off the 100-day SMA but a successful D1 close beyond 50-day SMA also favors the USDJPY’s recovery to 113.55-60 and then to 114.00 resistance-mark while the 113.00, the 112.50 and the 100-day SMA level of 112.25 could limit the pair’s immediate downside. On the contrary, AUDUSD struggles between 50-day SMA level of 0.7180 and the 0.7230 figure including 100-day SMA with the 0.7160 & the 0.7280 likely being follow-on numbers to appear on chart after either side break. Moreover, the CADCHF seems finding it hard to extend its downturn as nine-month old support-line, at 0.7370, stands tall to challenge Bears, which in-turn can pull the quote back to the 0.7400 & the 0.7435 upside levels whereas 0.7300 & 0.7250 may entertain sellers past-0.7370 clearance.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 12 – December – 2018

Hello Traders,

Even if optimism at trade-front, Trump’s repeated attacks on Fed’s rate-hike & sluggish PPI tried hurting the greenback, the U.S. Government shutdown fears and political pessimism at UK & EU favored the US Dollar Index (I.USDX) to post another daily positive closing. At the trade-front, news that Huawei’s CFO was given a bail at Canada, Mr. Trump assured he would intervene to the arrest matter if it helps the trade deal and China showed interest in cutting duties on American cars spread positive vibes and helped the commodity-linked currencies like AUD, NZD & CAD. However, French PM’s comments that President’s readiness to calm protests will widen budget deficit and UK policymakers’ intent to raise a no-confidence motion against Theresa May negatively affected market sentiment and respective currencies, namely EUR & GBP, despite upbeat economics from Europe & Britain. With the investors’ getting good signals at trade-front, JPY & Gold had to decline but Crude witnessed pullback after surprise drawdown in industry numbers showing oil inventories.

During early Wednesday, traders favored commodity-linked currencies and Crude on hope for a trade-deal between world’s two largest economies but the US Dollar trimmed some of its latest gains with receding political tiff amid US President Donald Trump & their opponents. Though, there was little help for the EUR & the GBP due to problems at their hands.

Given the recent boost to market expectations concerning a successful Sino-US deal, developments at that front will be closely observed whereas UK policymakers’ readiness to topple Theresa May from PM seat creates additional problem for the GBP that’s still struggling with Brexit. At EU, France and Italy can keep making EU policymakers busy and disappoint regional currency buyers but upcoming ECB may restrict the regional currency’s downturn if showing hawkish mood of Mr. Draghi.

Other than trade and politics, U.S. CPI also become an important catalyst for the market. Forecasts suggest, the yearly figures might shrink to 2.2% from 2.5% and there prevails consensus of 0.0% MoM mark against 0.3% prior. The Core CPI, on the other hand, may remain unchanged at 0.2% on monthly basis but can rise to 2.2% YoY from 2.1% earlier.

If the US inflation posts soft numbers, odds against Fed’s future rate-hikes will be high considering President Trump’s criticism to the central-bank’s policy-moves. As a result, the US Dollar might witness a pullback but Mr. Trump’s threat to shutdown government if his Mexican border plan isn’t approved can keep highlighting USD’s safe-haven appeal.

To sum up, political plays at EU, US & UK, together with US inflation numbers and trade developments, can add another volatile day into the trading week.

Technical Talk

While EUR weakness dragged EURUSD southwards on Tuesday, support-line of a month-old symmetrical triangle stopped the pair’s further declines; though, the 1.1350 & the 1.1400 can challenge the quote’s recent recovery, which in-turn may fetch it back to 1.1305 formation support. Should prices slid beneath 1.1305, the 1.1260 & the 1.1215 might please sellers. Alternatively, USDCHF bounced off the 0.9865-55 rest-zone and may aim for 0.9960 ahead of confronting the 0.9970-75 resistance-confluence, including 50-day SMA & immediate TL. If at all the pair manages to conquer the 0.9975 barrier, its surge to 1.0000 & then to 1.0040 can’t be denied. Given the pair fails to sustain latest strength, the 0.9855 and the 200-day SMA level of 0.9845 could confine its downturn. At last, EURAUD’s inability to rise past 50-day & 200-day SMA keep portraying its weakness to test 1.5630 & 1.5580 supports with 200-day SMA level of 1.5845 and the 1.5870, comprising 50-day SMA, being nearby important resistance to watch during its U-turn.

Have a nice trading-day …

[FxAnil]

Weekly Fundamental Dose: 13 – December – 2018

Hello Traders,

Positive developments at US-China trade front and Theresa May’s ability to overcome no-confidence vote helped trigger market optimism but monetary policy meeting by the ECB, EU & US PMIs and American Retail Sales are still left for release. Additionally, political plays surrounding US, China, EU & UK can keep offering background music to trade-sentiment.

Let’s start discussing each one of them in detail.

Disappointments Dragged USD Down

Not only absence of hawkish comments from Fed members but sluggish prints of US monthly jobs numbers also spread disappointments that the U.S. central-bank might refrain to extend its rate-hike trajectory in 2019, which in-turn flashed a negative weekly closing of the U.S. Dollar Index (I.USDX). When USD was bearing the burden of uncertainty concerning Fed’s future moves, pessimism relating to Brexit and Sino-US trade-deal played their roles to drag GBP & commodity-linked currencies like AUD, NZD & CAD southwards. Though, JPY & Gold benefited from market risk-off due to their traditional risk-safety status whereas Crude prices also ticked up with OPEC-led alliance surprising energy Bulls with higher than expected production cuts. It should also be noted that EUR managed to rise despite not so positive economics as USD’s drop pushed traders to the regional currency.

A Volatile Week So Far

Present week has been too volatile since start as early-week retaliation by China in the matter of Huawei’s CFO arrest and scheduled parliament vote on Brexit kept supporting the risk-on mood but Theresa May’s announcement to postpone the House of Commons’ voting on her Brexit plan, together with Mr. Trump’s readiness to jump in CFO arrest case, gave a sigh of relief to investors afterwards. Though, the relief was tepid as British Tories planned to topple Mrs. May from her PM seat by raising ‘no-confidence’ vote and there were political problems between EU-Italy and amid US leaders.

By Thursday, positivity came back to its fore with Theresa May successfully winning over rebel’s effort to snatch her power and China also undertaking some measures, like importing US Soybeans & expected to announce lesser tariffs for American cars, to win over trade-deal.

With this, safe-havens like US Dollar, JPY & Gold lost some of their previous gains and commodity-linked currencies taking advantage of the same. The EUR also recovered due to Italy & EU seems finally coming closer to a budget deficit target and the GBP surged after Theresa May’s victory. While currencies & commodities were registering wild moves, Crude prices kept declining as higher than expected US inventory draw-down & doubts over energy-producers’ ability to cap supply-glut worries the oil traders.

Active Sessions Ahead

Even if upbeat sentiments at EU, UK & trade-front are likely pleasing investors now, Thursday’s monetary policy meeting by the European Central Bank (ECB), Friday’s Manufacturing & Services PMI from the EU & the U.S., together with American Retail Sales and Chinese Industrial Production, could still trouble analysts. Moreover, US policymakers are continuously pushing China for more reforms and UK PM won the no-confidence vote by not so big difference, which in-turn continue highlighting political worries to observe.

Starting with ECB meeting, the European Central Bank is expected to announce end of its 2.6 trillion euros ($3 trillion) of stimulus but investors are more concerned about Mr. Draghi’s press conference after the rate-statement. The central-bank President is scheduled to retire from his duties in October 2019 and market expects a rate-hike announcement from his before he leaves the job. In order to do so, he must maintain the hawkish economic outlook and signal preference for rate-change, which can boost EUR traders’ morale for the time being.

The Chinese Industrial Production isn’t expected to change from 5.9% but recent releases from dragon nation have been quite worrisome and can keep challenging the commodity-basket. Further, EU Flash Manufacturing PMI may recover to 51.9 from 51.8 while Flash Services PMI likely being static at 53.4. On the contrary, U.S. Retail Sales shows disappointing forecast of 0.1% expected growth versus 0.8% previous together with Core Retail Sales that’s likely declined to 0.2% mark compared to 0.7%.

In case of politics, Mr. Trump pushes US politicians to support his Mexican border plan and threatens to shutdown the government if they fail whereas presence of one rebel in every three Tories could harden the road for Theresa May’s Brexit proposal when it appears for voting in the parliament. Also, comments from U.S. Commerce Secretary Wilbur Ross were also raising doubts over Mr. Trump’s readiness to help in Chinese official’s arrest and demands from White House continue surging when they see China is already doing something to please them.

Hence, scheduled economics are less likely to activate US Dollar’s recovery but any negative developments at either trade-front & Brexit or amid domestic politicians could highlight the greenback’s risk-safety status and can also help JPY & Gold to remain strong.

AUD, NZD & CAD may benefit from presently pleasant progress at US & China’s trade talks but weakness of Chinese stats & Crude can act as challengers. At the end, ECB President should convey positive outlook for rate-hike during 2019 in order to win over the EUR bears.

Technical Analysis

Unless clearing short-term symmetrical triangle, presently between 1.1310 & 1.1430, the EURUSD is less likely to register much moves while either side breaks can open the door for 1.1230 & 1.1495-1.1500 respectively. On the other hand, GBPUSD needs to close beyond 1.2720 support-turned-resistance in order to aim for 1.2830 otherwise its additional declines to 1.2475 and the 1.2350 can’t be denied. Further, the USDJPY also has to cross the 113.95 resistance-line if it is to meet the 114.15 & 114.55 numbers whereas 50-day SMA level of 113.00, the 112.50 and the 112.35-30, including 100-day SMA & a quarter-old ascending TL, may keep limiting the pair’s short-term downside. Moving on, USDCHF couldn’t dip beneath 0.9865-55 support-zone, needless to mention about 200-day SMA level of 0.9850 rest-point, which in-turn highlights the importance of 0.9970 and the 1.0000 as adjacent upside barriers.

Moreover, AUDUSD’s reversal from 50-day SMA can help it challenge the 0.7260 & 0.7300 but downside breach of 0.7185 support might not hesitate fetching the quote to 0.7150 & 0.7100 levels. In the same line, NZDUSD successfully trades beyond 200-day SMA and continue signaling upside to the 0.6900, the 0.6940 & the 0.6970 resistances with 0.6815 & 0.6750 being expected figures to appear on chart past-0.6845 break. At last, USDCAD has 1.3320 & 1.3210 as adjacent supports contrast to 1.3440 & 1.3500 acting as nearby hurdles to north.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 14 – December – 2018

Hello Traders,

While optimism surrounding Sino-US trade deal and record U.S. budget deficit dragged the greenback down during early Thursday, dovish comments from the European Central Bank President Mario Draghi helped US Dollar Index (I.USDX) to register a positive daily closing. Mr. Draghi conveyed downside risks to euro-area economy and prospects of hard Brexit while speaking at the press conference after the regional central-bank officially announced an end to its 2.6 trillion euro QE. With this, the EUR dropped across the board but GBP refrained from registering downside as Theresa May managed to retain her position of British PM and also because EU leaders seem discussing to provide formal declaration on Irish backstop issue that may ease Brexit pressure off the UK PM. Alternatively, welcome developments at US-China trade front favored commodity-linked currencies like AUD, NZD & CAD but the same resulted losses of the JPY and the Gold. Moreover, Crude prices also benefited from concerns that world’s two largest economies are progressing to reach a trade-pact soon.

At the start of Friday, investor sentiment again turned towards risk-safety due to disappointing Industrial Production & Retail Sales from China, not to mention RBNZ’s likeliness to harden reserve requirements in order to withstand shock to economy, which in-turn triggered a plunge of AUD, NZD & CAD. Additionally, GBP also trimmed some of its latest gains after EU policymakers turned down Mrs. May’s appeal to renegotiate previously agreed Brexit proposal.

With the commodity-linked currencies, EUR & GBP witnessing selling pressure, the US Dollar maintained its strength but there was absence of buying for JPY & Gold. It should also be noted that negative news from China, world’s largest oil importer, dragged the Crude prices south on speculations of weak future demand.

Having recovered majority of its last-week losses, the USD traders are now waiting for monthly release of Retail Sales & Flash PMIs, up for later today, prior to being ready for next-week’s Fed rate-hike and clues for the 2019 policy moves. Moreover, questions are also up for the partial U.S. government shutdown if American policymakers don’t agree on Mexico border wall that Mr. President insists. Other than US catalysts, Flash reading of EU Manufacturing & Services PMIs are also scheduled for release today.

The EU Flash Manufacturing PMI may inch a bit up to 51.9 from 51.8 but no change is expected in Flash Services PMI figure of 53.4. On the contrary, U.S. Flash Manufacturing PMI could weaken to 55.1 from 55.3 with unchanged Flash Services PMI number of 54.7. Moving on, Retail Sales shows disappointing forecast of 0.1% expected growth versus 0.8% previous together with Core Retail Sales that’s likely declined to 0.2% mark compared to 0.7%.

Given the scheduled economics less likely to extend greenback strength, buyers’ attention may shift towards pessimism at Brexit & rest of the major economies in order to help the USD close in positive territory by weekend. However, welcome trade developments and government shutdown fears may limit the U.S. currency’s rally.

Technical Talk

USDCAD’s recovery from 1.3320 again fuels it towards nearby resistance-line, at 1.3400, breaking which 1.3440 and the 1.3500 may become buyers’ favorites; though, pair’s dip beneath 1.3320 can quickly test 1.3260 prior to availing the 1.3220 trend-line support as a rest. On the other hand, GBPUSD failed to surpass 1.2715-20 support-turned-resistance and could revisit the 1.2550 and the 1.2470 numbers to south but an upside clearance of 1.2720 might not hesitate propelling prices to the 1.2850 and then the 50-day SMA level of 1.2900. Furthermore, CADJPY struggles around immediate TL support of 84.80, breaking which 84.30 & 84.00 may please sellers whereas 85.15-25 and the 85.60 can keep restricting the pair’s near-term advances.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 17 – December – 2018

Hello Traders,

In addition to ECB President’s dovish comments and U.S. government shutdown fears, disappointing stats from EU & China, together with political pessimism surrounding Brexit, countered positive developments at Sino-US trade-front and helped the US Dollar Index (I.USDX) to post gains by weekend. While USD benefited from safe-haven buying, the JPY & the Gold couldn’t register much advances as greenback’s strength adversely affects traditional risk-safety measures whereas EUR & GBP dropped due to the reasons already mentioned. In case of commodity-linked currencies, AUD, NZD & CAD couldn’t please buyers in spite of a likely trade-deal between world’s two biggest economies as sluggish Chinese data-points and lowered down economic growth forecasts from global leaders point to weaker commodity demand in future. With this, Crude also failed to enjoy production-cut news at a time US inventories continue posing problems for energy traders.

With the renewed worries concerning global economic strength, investors remained on sidelines during early-Monday. However, USD witnessed pullback after news of multiple likely alterations in the team of White House officials, including Commerce Secretary Wilbur Ross. As a result, AUD, NZD, EUR & GBP took advantage of the greenback’s dip but CAD, JPY & CHF fall short of being market favorites based on their individual fundamental weakness, namely soft oil prices, sustained support for loose monetary policy and downbeat economics. Additionally, updates from UK that Theresa May government isn’t planning for another Brexit referendum eased some more tension off the Pound traders.

While presence of Fed’s much awaited rate-hike decision and few other top-tier releases highlights the importance of this week, today’s final reading of EU CPI & U.S. Empire State Manufacturing Index can entertain short-term traders. Not only this, Theresa May is likely to face problems at UK parliament after EU rejected her appeal to re-discuss previously agreed Brexit proposal. Moreover, changes in the White House team, Trump’s statements surrounding chances of U.S. government shutdown and progress at US-China trade discussions could offer intermediate market moves to observe.

EU Final CPI isn’t likely to deviate from 2.0% initial forecast but the U.S. Empire State Manufacturing Index may soften to 20.1 from 23.3 earlier. Also, Mr. Trump seems strong enough to shake White House team and announce partial government closure in order to achieve predetermined goals.

Given the lesser likelihood of U.S. President changing his earlier notions on Mexico border, coupled with British politician’s anger over Theresa May’s Brexit plan, the USD’s risk-off demand may continue to please greenback buyers. Though, weaker manufacturing PMIs & progress at trade-talks with China might confine the currency’s surge.

On the other hand, no change in inflation can continue pushing ECB President towards cautious moves and drag the EUR to south while GBP may have to g through some more pain unless Brexit problem solves.

Technical Talk

Even after reversing from 1.1270-65 support-zone, EURUSD has to clear the 1.1355-60 resistance-area in order to aim for the 1.1400 mark otherwise its pullback to 1.1265 and then to 1.1215 can’t be denied. Further, AUDUSD also took a U-turn from 0.7150 rest-point but is still to cross 0.7200 upside hurdle to target the 0.7235-40 else 0.7150 & 0.7100 may come back on the chart. At the end, AUDCHF observes BPC formation that could fetch the quote to 0.7100-0.7095 and the 0.7055 supports unless it surpasses the 0.7195 support-turned-resistances, which in-turn might fuel prices to the 0.7235 and the 0.7255 levels.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 18 – December – 2018

Hello Traders,

Not only personnel changes within Trump administration but the President’s repeated attacks on Fed’s rate-hike and disappointing results of NAHB Housing Market Index also challenged market mood on Monday, which in-turn dragged the US Dollar Index (I.USDX) down at the start of crucial week. Other than uncertainty surrounding Fed’s 2019 action-plan, fears of global economic slowdown also dominated investor performance and pushed them towards traditional safe-havens like JPY & Gold.

While growing doubts over the Federal Reserve’s future policy moves hurt the greenback, the EUR benefited from the sentiment despite witnessing slower than expected growth of EU CPI whereas GBP ticked up after Theresa May announced previously delayed Brexit vote in the parliament to hold in mid-January. Additionally, AUD & NZD took advantage of the USD’s decline but CAD had to bear the burden of Crude’s decline, based on supply-glut outlook, together with dovish comments from the BoC President.

When confidence on the trade-floor was already shaken, comments from Chinese President Xi Jinping during early-Tuesday raised bars for enthusiast. Mr. Xi, speaking at the 40th anniversary of Deng Xiaoping’s globalization efforts, sound worried for the economic well-being of China amid rising trade-protectionism and sluggish stats. He seemed pushing policymakers to undertake extra efforts to maintain the nation’s stage as world’s second largest economy. With this, commodity-linked currencies like AUD, NZD & CAD stretched their earlier rise on expectations of more easing from their largest consumer and probable US-China trade-deal. Among them, NZD has additional positive in the form of ANZ Business Confidence that surged to eight-month high.

Although start of two-day monetary policy meeting by the U.S. Federal Reserve and developments at Brexit are likely being the biggest catalysts for now, German Ifo Business Climate Index, US Housing market numbers and New Zealand Westpac Consumer Sentiment could offer intermediate trade opportunities.

The German Ifo Business Climate Index may soften to 101.8 from 102.00 and the New Zealand Westpac Consumer Sentiment is likely to extend recent trend of declining from 103.5 mark. However, the U.S. Building Permits might provide short-term strength to the USD if matching 1.27M forecast compared to 1.26M prior when Housing Starts aren’t expected to deviate from 1.23M figure.

Looking at the qualitative factors, Fed may emphasize on slowing rate-hike pace considering global economic weakness and not so strong inflation at home while Theresa May might not win over fellow politicians in the parliament votes unless satisfying some of their demands, including formal clearance of Irish border issue, right to vote on final Brexit and less proximity to EU. Also, US-China trade-front has been quiet off-late mainly due to Mr. Trump’s focus on taming Fed rate-hike and the same may delay solution within 90-day deadline.

With the scheduled economics bearing lesser importance than the broader qualitative factors, improvements in market sentiment after the stat release, if any, might be ephemeral. As a result, US Dollar could keep finding it hard to remain strong ahead of tomorrow’s FOMC outcome and the same can help ex-USD majors, together with risk-safe asset classes.

Technical Talk

Unless breaking 112.40-35 support-confluence, comprising 100-day SMA & a quarter old ascending TL, the USDJPY is less likely to revisit the 111.80 and the 111.00 rest-points, which in-turn continue highlighting the importance of 50-day SMA level of 113.00, the 113.55-60 and the 113.85 resistance-line. Alternatively, NZDUSD has to surpass immediate trend-line barrier, at 0.6860 now, in order to aim for the 0.6900 mark otherwise its pullback to 0.6755 & 0.6700 can’t be denied. Elsewhere, EURJPY dropped beneath near-term important support-line, which in-turn signals its further downturn to the 127.50 & the 127.00 whereas the 128.15 and the 128.75, including 50-day SMA, seem crucial upside hurdles for the pair.

Have a nice trading-day …

[FxAnil]

Daily Fundamental Dose: 19 – December – 2018

Hello Traders,

With the U.S. President Donald Trump warning Fed to avoid “yet another mistake” of a rate-hike and the equities also taking their toll on global economic outlook, the US Dollar Index (I.USDX) couldn’t avoid consecutive second negative daily closing on Tuesday. While USD was bearing the burden of uncertainty concerning Fed’s future moves, the EUR & the GBP benefited from the greenback’s decline. Additionally, AUD & NZD also registered gains as soft USD favors commodity basket but the CAD couldn’t please buyers as pessimism surrounding future economic growth & higher API inventories fetched the Crude prices downwards. Moving on, JPY & Gold also surged as doubts over global economic health & weaker USD propelled traditional safe-havens.

At the start of decision-day for the U.S. Federal Reserve, investors remained worried about the central-bank’s announcement considering heavy pressure from Donald Trump and mixed economics challenging its rate-hike trajectory during 2019. As a result, the US Dollar extended its previous losses forward, which in-turn helped rest of the majors to maintain their earlier strength. However, the Canadian Dollar recovered some of its recent losses on Crude’s short-covering moves whereas JPY declined a bit after Japanese trade balance flashed disappointing numbers.

Even if FOMC decision is surely expected to take front-seat of market attention, monthly releases of UK & Canadian CPI, followed by New Zealand’s quarterly GDP, could offer intermediate trade opportunities. The British CPI is likely to test the 2.3% mark against 2.4% prior and the Canadian CPI may drop to -0.4% from +0.3%. Also, the New Zealand Q3 2018 GDP shows brighter chances of marking 0.6% growth versus 1.0% earlier.

Moving to the Federal Reserve meeting, the central-bank is almost certain to inflate the benchmark target for rates by a 0.25% margin. Though, what’s more important is how policymakers weigh Fed’s future moves and quarterly economic forecasts against the backdrop of financial market turmoil and Mr. Trump’s pressure. In order to gain more insight about these aspects, investors will closely observe the FOMC statement and Fed Chair’s press conference.

Federal Reserve Chairman, Jerome Powell, sound a bit dovish during his November appearance and is likely to be questioned about how he feels for 2019 rate-hikes. In answering them, the Fed Chair might use neutral tone if he wants to avoid confronting Trump and other doves in the panel. If at all the Mr. Powell refrains to respect President’s pressure and remain hawkish, further questions seeking details of his decision can be expected.

In light of latest market speculations, it is much debated that the Fed might announce a dovish rate-hike, i.e. a rate-hike with dovish message for future moves of the central-bank and can negatively affect the USD. However, nothing can’t be said for sure unless the event results spread out.

Given the broader expectations of a dovish rate-hike likely dragging the USD further down, rest of the currency majors and commodity basket can take advantage of the same but it should also be noted that any surprise will have higher repercussions across the board.

Technical Talk

In spite of registering pullbacks in last few sessions, GBPUSD is yet to surpass the 1.2715-20 resistance-zone in order to justify its strength in targeting the 1.2800 mark, failing to which can drag the pair back to 1.2575 support-line and then to the 1.2515 rest-point. On the same line, USDCAD also needs to provide a D1 close beyond 1.3500 to visit the 1.3540 and the 1.3600 landmarks otherwise chances of its slide to 1.3385 and the 1.3320 can’t be denied. Moreover, EURCAD’s sustained trading beyond 200-day SMA opens the gate for its rally to 1.5360 & 1.5420 numbers to north with 200-day SMA level of 1.5245 and the resistance-turned-support line at 1.5195 being nearby supports to watch during the pair’s declines.

Have a nice trading-day …

[FxAnil]

Weekly Fundamental Dose: 20 – December – 2018

Hello Traders,

In spite of ignoring Mr. Trump’s repeated attacks on rate-hikes and signaling two such changes in 2019 against broadly expected one, the U.S. Federal Reserve fall short of boosting investor confidence, which in-turn highlights the importance upcoming catalysts from the UK, the U.S. and Canada.

Before discussing those events/details, let’s have a look at immediate market moves and major news.

Global Pessimism Helped US Dollar

During last week, positive developments surrounding US-China trade-deal failed to soothe market pain as sluggish data-points from EU, China & US, coupled with political problems at America & Britain, continued being louder. As a result, traders rushed to US Dollar in search of risk-safety and trimmed their bets in favor of other majors. With the greenback’s rise, traditional safe-havens like JPY & Gold couldn’t gain buyers’ attention while ECB President’s dovish remarks were enough for the EUR to stretch its downside. On the other hand, the GBP had to bear the burden of Brexit uncertainties and commodity-linked currencies, like AUD, NZD & CAD, also remained weak on strong USD and disappointing stats from China. Finally, Crude Bulls seems requiring more than a production-cut news to shift back to energy front.

Negativity Spread To Greenback Even After Fed’s Rate-Hike

Ever since the week containing much awaited FOMC began, worries for global economic growth jumped to the front and challenged US central-bank’s rate-hikes, together with Donald Trump. The same played its role in fetching the greenback downwards till the Fed announced a quarter percentage change to its benchmark Fed rate ignoring Mr. Trump’s repeated attacks. The Federal Reserve not only raised its benchmark rate but also announced two such actions that may take place in 2019 compared to broadly expected one. Though, comments from FOMC statement and Fed Chair were slightly dovish and the economic projections also trailed backwards for the upcoming year. With this, the US Dollar continued trading down and rejected the central-bank’s efforts to rejuvenate USD.

While US Dollar was suffering from less faith on Fed’s future rate-lift trajectory, the EUR benefited from upbeat export numbers and EU-Italy peace whereas GBP witnessed pullbacks after Theresa May announced mid-January deadline for previously postponed parliament votes on Brexit. However, the JPY & the Gold became market favorites as pessimism on the trade-floor brightened safe-haven assets. Even if some of the major ex-USD currencies were marking gains, AUD, NZD & CAD failed to enjoy such liberties due to doubts over future commodity demand, including Crude, joined weaker stats from China & at home to challenge the buyers.

What Next?

Although the year’s much awaited event, December FOMC, is already over, investors still have some frontline details from the UK, the U.S. and Canada in order to continue market volatility. Among them, Thursday’s UK Retail Sales and monetary policy meeting of the Bank of England (BoE) will appear first. Then after, British, American & Canadian GDP numbers, coupled with U.S. Durable Goods Orders, Personal Income & Spending and Canadian Retail Sales, might play their roles. It should also be noted that political developments relating to US-China trade-deal, Brexit and US Government shutdown could keep offering intermediate market moves.

Starting with UK Retail Sales, the leading indicator to predict British GDP may please the Pound buyers if matching 0.3% forecast against -0.5% prior contraction; though, communication of the problems relating to hard Brexit and recently weaker data-points from the BoE could keep the Cable under check. The British central-bank isn’t expected to alter its monetary policy.

Turning towards Friday, GDP numbers from UK & US both are likely to remain intact at their initial estimates of 0.6% and the 3.5% respectively but Canadian GDP may reverse from -0.1% earlier to 0.2% growth. The U.S. Durable Goods Orders may also recover previous contraction of -4.3% with +1.6% while Core Durable Goods Orders can rise further to 0.3% from 0.2 Moreover, US Personal Income & Spending are both expected to soften to 0.3% against their previous releases of 0.5% & 0.6% respectively.

At the political front, Treasury Secretary Steven Mnuchin recently announced a Sino-US trade meeting between the world’s two largest economies in January considering latest positive developments at both the ends. However, no contact between the authorities to take place before then and the same may keep raising mixed signals to market players.

In case of U.S. Government shutdown fears, Democrats finally agreed to provide a stopgap fund bill to avert a partial federal shutdown on Friday but the bill is yet to pass and Mr. Trump wants assurance for his $5 billion demand for building U.S. border wall adjacent to Mexico.

For Brexit watchers, Theresa May is trying hard to please party rebels and opponents which pushed her to announce that she’ll reveal what concessions the present proposal got from EU which she earlier never conveyed.

Given the present market pessimism surrounding health of global economy and future moves of the Fed remain strong, US Dollar is less likely to post a weekly positive closing unless scheduled data-points flash extremely welcome numbers, which in-turn could keep fueling EUR, JPY & Gold.

Even if USD remain weak, commodity-linked currencies aren’t expected to surge considering doubts over future demand and sluggish data-points at home and at their largest consumer, i.e. China.

Technical Analysis

With its frequent bounces off the 1.1265-60 support-zone, EURUSD now aim for 100-day SMA level of 1.1485 with 1.1430 being intermediate halt; though, a downside close beneath 1.1260 might not hesitate fetching the quote to 1.1215 and the 1.1200. Further, GBPUSD is still lacking strength to surpass 1.2715-20 resistance-region, that could help it visit 1.2800, which in-turn signal brighter chances of its pullback to the 1.2570, the 1.2530 and the 1.2475. Moving on, the USDJPY’s slide under 100-day SMA highlights the importance of 111.80, the 111.30 and the 200-day SMA level of 110.85 while successful clearance of 112.45 can propel prices to the 113.00, the 113.15 and the 113.55-60 consecutive resistances.

Looking at the commodity-linked currency pairs, the AUDUSD is likely to revisit the 0.7040 and the 0.7020 before taking rest on the 0.7000 round-figure with 50-day SMA level of 0.7195 and the 0.7215, including 100-day SMA, being expected nearby resistances for the pair. On the other hand, NZDUSD tests 50-day SMA level of 0.6730, breaking which 0.6700 and the 0.6665 mark comprising 100-day SMA may please sellers whereas 200-day SMA level of 0.6835, followed by 0.6915, seem immediate upside barriers for the pair traders to watch. At the end, USDCAD has to conquer 1.3500 hurdle in order to target the 1.3540 and the 1.3610 else its profit-booking moves towards the 1.3430, the 1.3385 and the 1.3320 can’t be denied.

Have a nice trading-day …