Daily Fundamental Analysis By ForexTime ( FXTM )

This is a discussion on Daily Fundamental Analysis By ForexTime ( FXTM ) within the Daily Analysis forums, part of the Commercial category; Daily Fundamental ForexTime ( FXTM ) CAD in focus on dovish comments The Canadian dollar was back in focus today ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Dec 7, 2017, 8:30am   #16
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

CAD in focus on dovish comments


Click the image to open in full size.


The Canadian dollar was back in focus today as the market was looking for hawkish signs from the Bank of Canada, on the back of the recent interest rate statement. The interest rate was kept at 1% however, and the market was caught off guard by the dovish comments made by the BoC. While the economy has been adding new jobs and Fridays figures were a testament to that (+441,400), the BoC is still concerned about the NAFTA negotiations that are ongoing, as well as recent housing market developments. This came as a shock for a lot of market pundits, but more important it forced forecasts further out for future rate rises, while before the market was betting heavily on the BoC to come through and cause further positive betting on rate rises.

Click the image to open in full size.

The USDCAD was quick to jump on the back of the news out from the BoC, as USD bulls rushed away with all the recent gains and pushed through resistance at 1.2759. Further levels higher can be found at 1.2921 with the potential for any higher gains to the 200 day moving average - which would be very hard to push through. If the market does turn around and head back south then support at 1.2628 and 1.2516 are likely to be the prime candidates for bearish traders, with the area between these two levels likely to act as a key selling point on the market.

Crude has been one of those funny players in the market as of late with a bullish rise, which has been purely on the back of OPEC extending production cuts. Now for many this comes as no surprise as the oil market did need to stabilise but today's fall caught many off guard given that the drawdown came in stronger than expected at -5.61M (-2.5M exp). The reason for this was refined oil products with gasoline showing an increase to 6.8M barrels, beating market expectations and causing the oil market to sell-off. Selling pressure is common when you have a build up of refined products as the market might start to think it's flagging or peaked already.

Click the image to open in full size.

Oil now finds itself in a weird place at present as the recent rise has struck strong resistance at 59.08 in this market, and the fall today hit the current old trend line which the market is respecting before taking a pause and stopping all together. I'm not sure if there is further potential falls on the cards given the bulls have been so strong, and this could be an excuse to unwind. However, if the trend line did break then support could be found at 55.14. If oil does indeed jump back higher, then for me resistance at 57.38 and 59.08 are the key levels traders will look to target. Expectations are though that 59.08 will be the level to beat currently.



More Info Here
FXTM Official is offline   Reply With Quote
Old Dec 11, 2017, 10:35am   #17
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Bitcoin future trading kicks off; Investors awaiting central banks decisions


Click the image to open in full size.



Trading bitcoins entered a new phase today, after Chicago’s CBOE listed the first futures contract on the cryptocurrency. The initial reaction was beyond expectations with the futures contract climbing more than 20% and triggering two trading halts. CBOE’s website experienced unprecedented traffic which may well have sent a new benchmark, the frenetic activity lead to delays and outages. So far, it seems professional investors aren’t willing to bet against the bitcoin, despite the many warnings of a bubble that will burst soon. Many traders aren’t even interested in the price direction, but the listing of the futures contract on CBOE and later next week on the CME, will provide them an arbitrage trading opportunity due to the vast pricing differences. However, the arbitrage trading will lead to improved price efficiency and probably less volatility. After volatility settles down, the focus will return to the price direction.

Central Banks Meetings

Currency markets were trading in tight ranges early Monday with the dollar slightly weaker against its major peers. Expectations of the Fed hiking rates on Wednesday, stands at 90.2% according to CME’s Fedwatch tool which means the disappointment in wage growth won’t shift the needle for US monetary policy. However, it isn’t the rate hike that will move the dollar on Wednesday, it’s the tone, economic projections and the dot plot. Given that we’re getting closer to a deal on tax reforms, the Fed might become slightly more hawkish. It remains to be seen whether this will shift up the Fed’s dots for future interest rate expectations.

The European Central Bank and Bank of England are also meeting this week. Despite no substantive monetary policy changes expected, the language might still move the Euro and the Pound.

Will the Fed support further rotation in stocks?

Tech shares have been in focus over the past two weeks after the S&P tech index plunged more than 4% between 29-Nov and 05-Dec, before recovering last week. The fall in Teck stocks wasn’t accompanied by a selloff in other sectors, particularly the financials which have been on the rise. This is a classic type of rotation with active managers balancing their portfolios before year end. Tax reforms don’t seem to be of great support to Tech firms, given that their effective tax rate is considered to be the lowest in the U.S. Meanwhile, it’s a big deal for the rest of the U.S, with financials having an effective tax rate of more than 30%. The new Fed Chair, Jerome Powell will likely speed up deregulation for the financial sector which will drive more inflows. And of course, higher interest rates for 2018 will further support the banks' profit margins. That’s why the trajectory of interest rates in 2018 will likely lead to more portfolio balancing before year end.

EU Summit

The breakthrough in Brexit talks on Friday was a great relief for policymakers, who can now move to phase-2 of the talks. Interestingly though, Sterling instead of rising sharply, dropped on the news. Investors seem reluctant to buy Sterling as they view the next phase more complicated than the first. They want to see details of the transition agreement and trade talks concluded before buying Sterling. I don’t think the EU summit on Friday will reveal much, but blessings from EU leaders might lend some support to the Pound.




FXTM Official is offline   Reply With Quote
Old Dec 15, 2017, 6:12am   #18
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

US retail sales beat expectations


Click the image to open in full size.


It's been a funny day for the USD as it slipped lower on Tax legislation worries. For the most part it has fallen around two senators who are keen to fix the current child tax credits. In reality this is something republicans are likely to help remedy in order to get this bill over the final hurdles and in front of the president to sign before Christmas. However, for me the big mover - and what might have a much more interesting impact - was of course today's retail sales which lifted sharply to 0.8% m/m (0.3% exp). This is a very strong move just ahead of the December rush season and in return we could expect to see GDP forecasts raised for the 4th quarter going forward. I would be surprised if we didn't see solid earnings this season in the equity markets as well given the huge rises in consumer and business confidence. For now it would seem the Trump effect might be still there after all heading into the new year.

Click the image to open in full size.

One of the key areas this was felt was on the USDCAD which was swinging heavily today, not only on the USD weakness but also Bank of Canada comments which pushed up the chances of a rate hike for March next year. For the most part the USDCAD has been ranging for some time, and it has struggled to break through the major resistance level at 1.2921, which has so far seemed like an impossibility at present. One of the main reasons also has been the 200 day moving average bearing down on that level which of course adds further pressure. At the same time the swing lower today failed to stay below support at 1.2759 which leads me to believe that the bulls are still in this market despite the Canadian recovery we've seen. If the bulls do leap back into the market 200 day moving average will be the key level to close above, and if we do close above then expectations are that we could see a move upwards to the 1.3000 level. For now though it's a case of waiting to see if the ranging does stop and the trends continue.

The other key one to watch out for is the AUD, with the market likely to be looking forward now to next week's RBA minutes on the economy and their thoughts after the most recent unemployment figures. We could certainly see the case made for a potential rate rise in the future, but for now it's a case of wait and see - even though the market is fairly bullish.

Click the image to open in full size.

Chart wise, and it's clear the AUDUSD bulls are back in fashion and looking to make up some ground. After the positive news yesterday and weak USD it is a surprise to see that it has failed to climb higher to the 200 day moving average and resistance at 0.7687. I still believe this is a key level to watch and if we do see further extensions it could lead to bigger things. For now though like the USDCAD it's a case of wait and see as the market looks to enter Friday trading.



FXTM Official is offline   Reply With Quote
Old Dec 21, 2017, 9:59am   #19
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Equities reaction muted on tax breakthrough; Watch the bond market



Click the image to open in full size.



Asian markets woke up on Thursday to the news that Republicans had passed the long-awaited tax bill. President Trump is now just a pen stroke away from overhauling the tax code. Interestingly there aren’t any fireworks on the announcement of Trump’s Christmas gift; because as expected, the good news is already priced in.

In fact, the reaction was more evident in fixed income markets. U.S. 10-year bond yields traded above 2.5% for the first time since March 2017, allowing the yield curve to steepen after flattening for most of 2017. The spread between 2-year and 10-year treasury bonds climbed more than 12 basis points, reaching 63 basis points, after falling to its lowest level in a decade last week. The spike in long-term bond yields is supposed to be positive for the U.S. dollar, as it suggests the Federal Reserve should become more aggressive in tightening policy next year. However, the dollar’s reaction was muted because there’s another side to this story. The additional supply of U.S. bonds due to the unfunded tax cuts, will probably make U.S. treasuries less attractive in the longer run, and given that most central banks are trying to catch up with the Federal Reserve, yields in Europe and other markets are also anticipated to move higher in 2018, thus narrowing the interest rate differentials gap.

The enormous expected increase in U.S. deficit will also put the U.S. sovereign credit rating at risk. If any of the credit agencies- Standard & Poor’s, Moody’s or Fitch downgrades the U.S. sovereign rating, yields will spike even higher. However, the impact on the dollar won’t necessarily be positive, with the opposite reaction being more likely.

The Yen’s reaction was also muted to Bank of Japan’s monetary policy decision. As expected, the central bank kept interest rates unchanged at -0.1% and maintained its 10-year bonds yield target at around 0%. Given that weak inflation is expected to continue dominating the monetary policy outlook, I don’t expect any significant change in policy next year. Thus, the Japanese Yen will continue to take its cue from risk appetite/aversion in equity markets for the foreseeable future.

Euro traders are awaiting the outcome of today’s Catalonia’s election. Polls are suggesting that it will be a tight race between the Catalan Republican Left party, which supports independence and Ciudadanos which is in favor of a unified Spain. Given that the election is not expected to be decisive and parties may form coalitions to govern, the risk of tensions flaring with Madrid again, remain limited.



FXTM Official is offline   Reply With Quote
Old Jan 8, 2018, 11:37am   #20
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

A critical week for the US Dollar after a fragile start



Click the image to open in full size.



After having the worst annual performance since 2003, the dollar continued to struggle in the first trading week of 2018. The dollar index fell to a three-and-a-half-month low to trade below 92, leaving many traders wondering whether this year will be another devastating one for the greenback. When looking at the Commitment of Traders (COT) report, speculators are not showing interest in buying the U.S. dollar yet, and the latest bunch of data did nothing to support the dollar.

Friday's jobs report did not motivate the dollar bulls to return, with non-farm payrolls rising 148,000 in December versus expectations of 190,000. Although I think the numbers weren’t bad and the labor market remains healthy with unemployment at 4.1%, wages are not yet showing signs of accelerating, and this remains the key missing ingredient of the U.S. economy’s recovery.

The latest minutes of the Fed’s meeting also showed that policymakers aren’t sure whether inflation will return to the central bank’s target which is why markets believe that only two rate hikes will occur in 2018, as opposed to the three in the Fed’s dot plot. This week many Fed speakers are due to speak including the two dissenters against a rate hike in December, Neel Kaskhari and Charles Evans. Whether they have changed their mind, or still believe rates shouldn’t be hiked, remains to be seen but we’ll also tune into other Fed speakers for fresh insights.

If the Fed speakers don’t deliver news, tier one economic releases may provide the needed clues. Consumer prices and retail sales are both due for release on Friday. Given that energy prices spiked in December consumer prices are expected to increase 0.2%. However, I think traders will be more interested in the core CPI figure, which strips out volatile items like food and energy. Any upside surprise in the inflation numbers will likely bring back the dollar bulls.

Given that the major U.S. economic releases are four days away, many traders will focus on whether any technical breakouts will occur. EURUSD failed to break above 1.2092 (2017 high) last week, but a successful breakout will likely lead to further buying of the single currency towards 1.22. Similarly, Sterling is only 100 pips short of 1.3656 (2017 High). So traders should keep a close eye on these levels.




FXTM Official is offline   Reply With Quote
Old Jan 26, 2018, 8:54am   #21
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

US dollar claws back some ground



Click the image to open in full size.


It's been a mixed day for the USD, but it has seen some respite from the relentless selling as of late. With Trump in Davos it has meant more positive than controversial from him, as he puts the gloss on with world leaders. However, economic data continued to be mixed and not necessarily positive, as US new home sales m/m dropped to 625K (675K exp) , this is a -9.3% drop on the previous month. So not positive at all. The big ray of light though, was that the US job market continues to thrive and tick over, with US jobless claims coming in at 233k (235K exp), showing that the labour market is still the major story when it comes to positivity. The consumer market though will be a key focus for the incoming chair Powell as any movements here are likely to have big impacts, but also could point to future inflation rates and the chance to lift rates higher, as 2018 is set to be the year of hikes I feel for the FED.

Click the image to open in full size.

For me the USDCAD is still in the focus when it comes to bearish movements at present, the reason being that oil prices have risen higher and the USD continues to fall. All the while the Canadian economy is not doing so bad either on the back of stronger commodity prices. As a result the bears have been chipping away forcing it lower, and support at 1.2256 is likely to be in the cross hairs for traders drifting lower, followed by 1.2108. If the bulls do come back into the market then resistance levels at 1.2423 and 1.2585 are likely to come under some pressure. However, the recent market conditions have not warranted any serious bullish pullbacks as of late.

Meanwhile it could be more trouble in the United Kingdom, as news has come out that there might be further political revolting in Theresa Mays Tory party. This is not likely to topple the prime minister, but it does show the growing discontent within the party relating to current Brexit negotiations. The flow on effect for the pound of such events has been negative, with it taking some heat today and losing ground against the USD. It's likely that tomorrow will bring further news, but if none then the market is likely to focus on US GDP figures when it comes to moving the GBPUSD.

Click the image to open in full size.

The GBPUSD though is currently caught on support at 1.4117 with the market looking to find some breathing space before continuing. I would expect the bulls to either take another big run, or the bears to take a firm hold and drive it back down from the recent volatility. Resistance can be found at 1.4240 and this will be the key level at present. Support levels can be found at 1.3996 and 1.3856 is the GBPUSD continues to find itself under bearish pressure.
FXTM Official is offline   Reply With Quote
Old Jan 31, 2018, 10:31am   #22
Joined Dec 2016
FXTM Official started this thread FXTM Forex Market Update | 31/01/2018

New Video from FXTM Market Update with Research Analyst ForexTime, Lukman Otunuga


Click the image to open in full size.


Global stocks were under pressure on Tuesday as investors remained cautious ahead of the Federal Reserve meeting. The Dollar struggled to hold ground against a basket of major currencies while Sterling was bruised by Brexit jitters. In the commodity arena, Gold benefitted from a vulnerable Dollar. The main event risk today will be BoE Mark Carney’s testimony and CB Consumer confidence for the United States.

- The #EURUSD remains bullish on the daily charts
- #GBPUSD is currently towards 1.4175
- #Gold bulls are eying $1360


Watch The Video @ https://youtu.be/Ab_PJqjlVj8


For more Market Analysis read the latest @ http://fxtm.co/marketupdate-yt
FXTM Official is offline   Reply With Quote
Old Feb 2, 2018, 6:36am   #23
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Markets set to focus on non-farm payroll



Click the image to open in full size.


The market is currently taking a breather after the US data today as it's almost time for non-farm payroll. Markets previously have been surprised by the recent swings in the labour market, especially with wage growth not matching the pace, but analysts and economists are now expecting wage growth to pick up, and this in turn could lead to a more aggressive hawkish Fed if that is the case. The Fed has always commented on the lack of wage growth being a key factor in holding it back, but if we were to see that growth then certainly there would be a case for further future hikes at a more aggressive pace. Analysts are expecting 180k, the reality could be much lower, but whatever the case there will be some large swings.

The USDCAD has been a key one for me to watch as of late with all the USD weakness we've seen. Commodities have risen in value as a result, and none more so than oil which has lifted on the back of it. At the same time the NAFTA treaty negotiations are looking positive thus far, and the Canadian economy is positive all round about expectations for further growth. The Bank of Canada has been a little bit more neutral, but that's more to take pause and look at its southern neighbour the US more than anything else.

Click the image to open in full size.

So far the USDCAD has slipped lower to support at 1.2256 and is looking to extend even lower to 1.2108. While a bit of a slow mover it has been trending fairly reasonably so markets have taken notice and played on that accordingly. If the USD did see some strength from the bulls then resistance at 1.2423 and 1.2585 would be key targets for the market to move to. I still believe that if there were any bulls in this market that the 200 day moving average would be the real test, as the market has been quick to bounce of it and give up and bullish sentiment in the previous months.

The S&P 500 has shown another day of losses on the charts which is quite rare, so much so that people have taken a fair degree of notice. In part this has been driven by the rise in treasury yields which is starting to look like it could compete in the future with the current rates of return from equity markets. Expectations still continue to mount that the market may be slightly overbought and this may be a correction.

Click the image to open in full size.

For me the S&P 500 is a great technical mover and this can be seen from the levels it plays off. One of the most important things though at present is the 20 day moving average which has been a sign of bullish action lately. Support can be found at 2825, 2806 and 2775, but I would mainly focus on the moving average. Resistance can be found at 2850 and 2875 in the current market climate.
FXTM Official is offline   Reply With Quote
Old Feb 19, 2018, 12:49pm   #24
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Global shares extend recovery; dollar remains weak


Click the image to open in full size.


Asian equity markets continued to build on last week’s gains, after U.S. stocks capped their best week since 2013. Investor sentiment has gradually improved after fears of rising inflation sent most global indices into correction territory. The Cboe’s Volatility Index (VIX) ended Friday’s session below 20, suggesting that indictments from Special Counsel Robert Mueller against 13 Russian nationals for alleged interference in the 2016 elections did little to impact investor decisions. With the U.S. markets closed on Monday for President’s Day and the Greater China region remaining offline for the Lunar New Year, expect trading volumes to be below average.

The U.S. Dollar’s weakness remained a bit of a mystery for many currency traders, as it is supposed to follow differential in yields. The gap between U.S. and German 10-year yields widened to 217 basis points, and had gained 28% since mid-July 2017. Similarly, U.S. – Japan 10-year yields widened 285 basis points, the highest increase since 2007. Still, the Dollar declined against the Euro, Japanese Yen and all other major currencies.

One explanation for why the correlation between the Dollar and yield differentials has broken recently, is that financial market participants are forward-looking. Investors believe that rising inflation in the U.S. will spread to other economies, leading to tighter monetary policies elsewhere. When major central banks such as the European Central Bank, Bank of England and Bank of Japan begin normalizing policies, rate differentials will narrow at a fast pace, given that they are starting from a very low base.

Yields in the U.S. are not just rising because of higher inflation expectations, but also due to rising twin deficits – the fiscal and current account. This should make U.S. debt less attractive, and gold will likely become the primary beneficiary as it continues to benefit from inflationary pressures and budget deficit worries.

However, this view may change if the Fed decides to take a more aggressive approach in fighting inflation. Wednesday’s FOMC minutes will likely reveal fresh hawkish insights, but for the dollar to make a U-turn, it requires the Fed to tighten policy faster than previously estimated. Any indication of four rate hikes instead of three in 2018 will do the trick, but this is unlikely to appear in Wednesday’s minutes, and investors will probably need to wait until the March meeting.

FXTM Official is offline   Reply With Quote
Old Feb 27, 2018, 5:39am   #25
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Sterling tumbles, Euro slips while Gold fumbles



Click the image to open in full size.



Sterling initially entered the trading week on a solid footing following hawkish comments from Bank of England (BOE) deputy governor sir Dave Ramsden.

In a Sunday time’s article over the weekend Ramsden said “Relative to where I was, I see the case for rates rising somewhat sooner rather than somewhat later”. The firmly hawkish comments swiftly reinforced market expectations of an interest rate hike in May. With the Pound sensitive to monetary policy speculation, the prospects of higher UK interest rates in 2018 simply injected bulls with a renewed sense of confidence to attack on Monday morning. Interestingly, the British Pound eventually found itself under fresh selling pressure in the afternoon as bears re-entered the scene.

From a technical standpoint, the GBPUSD punched above the 1.4050 level during early trading on Monday. A touch of Dollar weakness fueled the upside with prices eventually peaking around 1.4069 before sinking back below 1.4000 as of writing. Daily bulls need to maintain control above the 1.4000 level for the GBPUSD to challenge 1.4100 and 1.4230, respectively. A failure for prices to keep above 1.4000 could result in a decline back towards 1.3900 and 1.3850.


Click the image to open in full size.



EURUSD blocked by 1.2350 resistance level

Euro bulls have been halted on repeated occasions by the stubborn gatekeeper known as 1.2350.

Although the EURUSD remains fundamentally bullish, the currency pair is at risk of sinking lower if bulls fail to conquer and break above the 1.2350 level. Taking a look at the technical picture, there have been consistently higher highs and higher lows while the MACD trades to the upside. With the daily candlesticks trading comfortably above the 50 Simple Moving Average, a breakout seems imminent. If bulls are able to break above 1.2350, then the next key levels of interest will be at 1.2400, 1.2430 and 1.2520, respectively. Alternatively, sustained weakness below 1.2350 could encourage a decline back towards 1.2260 and 1.2200.


Click the image to open in full size.



Commodity spotlight – Gold

Gold struggled to maintain gains during Monday’s trading session thanks to a stabilizing Dollar.

It is becoming clear that market expectations of higher US interest rates have exposed the yellow metal to downside risks. It must be kept in mind that Gold is zero-yielding, and is likely to remain pressured in a high interest rate environment. Technical traders will continue to observe how the yellow metal behaves around the $1340 region. Sustained weakness below $1340 could encourage a decline back towards the $1324.15 level. Alternatively a decisive breakout and daily close above $1340 may open a path higher towards $1360.


Click the image to open in full size.



Currency spotlight – GBPJPY


The notoriously volatile GBPJPY ventured towards the 150.00 level during early trading on Monday.

Price action suggests that the currency pair is under pressure on the daily charts with 150.50 acting as the first level of interest. If prices are unable to break above the 150.50 level, then bears could be inspired to drag the GBPJPY lower towards the 148.50 support regions. A breakout above 150.50 simply invalidates the current downtrend and suggests that prices could test 151.60.


Click the image to open in full size.

FXTM Official is offline   Reply With Quote
Old Mar 20, 2018, 11:34am   #26
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Tech selloff drags down global equities



Click the image to open in full size.


The steep losses in U.S. technology stocks were carried into Asian markets today with all major indices tracking Wall Street declines. Facebook made the headlines on Monday as reports over the weekend claimed that data from 50 million users was accessed without their permission. The stock fell 6.8% and wiped out almost $37 billion from its market cap. The news will undoubtedly scare advertisers, especially if it leads to regulators changing Facebook’s business model in a way which it may impact the company’s revenues.

Investors should not only be worried about the drop in Facebook equities but also FAANG stocks which have been leading the bull market for many years. Alphabet dropped 3% yesterday, while Apple, Netflix, and Amazon declined 1.53%, 1.56%, and 1.7% respectively. While the fall in Facebook might have impacted the sector negatively, it does not explain the full picture. Concerns that the European Commission will impose new taxes on Tech firms in retaliation for U.S. steel and aluminum tariffs, is an early indication that the trade war should be taken more seriously. If markets decided to turn on FAANG stocks, we would likely see a similar reaction to last February’s correction.

Jay Powell Fed & the dots

The newly appointed Fed Chair, Jay Powell will hold his first press conference tomorrow when the U.S. central bank is expected to raise interest rates for the first time in 2018. Markets have fully priced in a 25-basis point rate increase, so do not expect this to have any influence on the dollar’s direction.

The key to dollar traders is how Fed officials, led by the new Chair, will act on recent economic data and whether the fiscal stimulus will eventually lead to tighter monetary policy in 2018. Market participants are split on whether the Fed will project four rate hikes in 2018 compared to three in the last meeting. An upward shift in the dot plot should support the dollar, although it is likely to lead to further flattening in the U.S. yield curve.

Brexit transition deal sends Sterling higher

The pound was the best performing currency on Monday rising 0.6% against the USD to trade back above 1.40. A Brexit deal was thought to be more positive for Sterling, but given that no agreement was reached on the Irish border, gains were capped. I believe that Sterling may still have further room to appreciate against its peers especially if Consumer prices today and wage data tomorrow provide new signs of inflationary pressure before Bank of England meet on Thursday.



FXTM Official is offline   Reply With Quote
Old Apr 3, 2018, 7:20am   #27
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

S&P 500 breaks 200 day moving average



Click the image to open in full size.


Easter Monday is normally characterised by light trading, but today was anything but out the ordinary, as the US equity markets swung lower sharply on the back of the announcements of tariffs from China on the US. This is quite serious as the 200 day moving average has been broken, and this held back bearish movements previously. With the last line of defence now gone, it could be a case of the bears looking to push their control. This in theory has not been helped by President Trumps attacks on Amazon which have sent tech stocks down as he looks for a target. If the market sentiment is anything to go by then I would be deeply concerned for the bulls, as many have long thought of the share market being overbought, and this could be the start of some serious bearish pressure.

Click the image to open in full size.

With the 200 day moving average being broken I would expect to see some bullish pressure to see what the market is made of. In this instance I believe any push-back up higher would likely treat the 200 day moving average as dynamic resistance in this instance. The target now for any bears looking for lower lows will be of course the 2532 resistance level, closely followed up by the 2508 level. This area will be the key to see if the S&P 500 has the legs to go even lower, and the bulls and bears will battle it out around here. In the event the bulls cane reassert control, then as mentioned before the 200 day moving average will be a hard task to beat with such a huge extension lower. All in all market sentiment is bearish now, and it will be hard to beat. But it's also worth noting that this is no 2008 scenario, the American economy is still doing strong and it's mainly politics which is driving the lower lows. In reality we could just end up with the market correction we've anticipated for some time.

Crude oil has been one of the big movers today as well, but this should come as no surprise after the recent economic woes on equity markets have spooked bulls, and as the USD lifted strongly against most of the major pairs. Many market commentators have been quick to point that over $70.00 a barrel seems unlikely as demand stays static and they expect a range of 50-70 dollars in the short to medium term. Then again time and time again we've seen commentators be wrong and oil can swing quite wildly.

Click the image to open in full size.

On the charts the fall lower has so far been stopped by the 20 day moving average. This shows reluctance from the bears to test the technical's, so this looks more like a test the waters sort of move today. However, the ceiling at 66.05 has held for some time and is not looking like it may face much pressure. As a result this could just be trending sideways for the short term and levels will be key for traders looking to take profits. In particular support levels at 62.64, 61.00 and 58.88. With the long term daily bullish trend line to also take into consideration.


FXTM Official is offline   Reply With Quote
Old May 4, 2018, 6:47am   #28
Joined Dec 2016
FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

US equities in spotlight before Non-farm


Click the image to open in full size.


It could be a case of the straw that breaks the camel's back with the upcoming non-farm payroll data due out tomorrow. So far there have been some very strong economic figures out from the US economy, but there are also worries that Trumps trade wars could push the US economy into a recession, a voice that has been echoed recently by a letter signed by 1000 economists warning him of such at thing. However, the market will be watching employment figures as usual and with a keen sense of interest to see if Trump has made a dent in them recently as we start to head into the summer period. So far the market is expecting 192K tomorrow, which is a lot more robust than the previous 103K reading we saw last month, and a drop in the unemployment rate to a record 4%, something that seems tantalising close for the US economy.

Today however we saw the market react sharply though to bad news as US durable goods (core) m/m missed expectations to come in at 0.1% (0.5% exp), and the worry is that with non-farm payroll we could see another sharp turn in the market again. Something that would play out across the US dollar and of course US equity markets.


Click the image to open in full size.


The biggest impact today was on the S&P 500 which faltered sharply in today's trading before clawing back some ground as the bulls rushed back into the market. At present the US equity markets are very vulnerable to economic data and we've seen some big swings as of late. We've also seen the S&P 500 looking to sit between the 200 day moving average and the 100 and this looks like it may continue unless we saw a solid breakout of these levels. A very weak non-farm figure tomorrow could push the S&P 500 much lower as markets are quite jittery at present compared to a year ago. If we see a positive figure I would look to see a push back up to the 100 day moving average at present, as it looks to act as dynamic resistance in this market.


Click the image to open in full size.


Across the Pacific and the bears took a break today from the AUDUSD as it was upbeat for a change. This was on the back of weaker US dollar, but also the fact that the AUDUSD encountered strong support at 0.7472 as it bottomed out. There is a chance we could see further bearish pressure tonight with the Monetary policy report, so traders will be looking for a retest here and potentially a move to lower support at 0.7371. In the event it's hawkish I would expect a breakout above 0.7546 and potentially move to the topside of 0.7638 as the bulls will be keen to have a crack at this one. All in all though, the Australian economy continues to struggle so it may be a hard ask for the Reserve Bank of Australia to be more optimistic at present - especially based of their recently neutral statements.



FXTM Official is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
DAILY/WEEKLY technical/fundamental analysis Mrtynas Forex 0 Oct 28, 2012 1:08am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)