Daily Fundamental Analysis By ForexTime ( FXTM )

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Old Jan 10, 2017, 10:08am   #1
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Daily Fundamental Analysis By ForexTime ( FXTM )

Forextime Daily Market Analysis

Asian equities retreat as investors shift to cautious mode


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After a strong start for the year, equity markets started to cool down in the second trading week of 2017. Most Asian major indices are in red today, as Wall Street failed to make new highs and the Dow retreated further from the key psychological 20,000 mark, while oil suffered a steep selloff on Monday.

Investors who built their positions based on Trump’s victory are likely to start cashing out for the time being and shift their focus on fundamentals with the earning season kicking off later this week when U.S. big banks release their fourth quarter results. I’m not confident to call a correction yet, but certainly many investors got ahead of themselves betting on fiscal stimulus, and while business usually tends to under promise and over deliver, this doesn’t seem to be the case with the U.S. new President.

Although Kuwait’s Oil Minister Essam Al-Marzouk who is chairing the committee to oversee compliance of OPEC’s output assured the markets that OPEC and non-OPEC members will abide to the planned cuts, still both oil benchmarks dropped 4% on Monday. This clearly indicates that it’s not just an OPEC game, and the expected increase in U.S. and Canadian supplies are likely to threaten the oil rally. Data from the U.S. on Friday showed rig counts rose for ten consecutive weeks and it’s just about some time for this to translate into additional production, suggesting that downside risk may remain in play, and rather than just focusing on implementations of OPEC production cuts, investors should be looking at the bigger picture on whether supply will meet demand in the second half of 2017.

The U.S. dollar fell for a second day, extending its slide from the 14-year high hit on January 3. The pull back in the dollar came despite hawkish speeches from Fed officials suggesting that the central bank is getting closer to achieving its dual mandate. Both Fed presidents, Charles Evans and Patrick Harker aren’t ruling out three rate hikes in 2017, while Eric Rosengren called for stepping up the pace of interest rates hikes to prevent inflation from overshooting. However, traders are still not yet completely convinced and pricing in only two hikes for 2017 according to CME’s Fed Watch. With no tier one economic data on the calendar until Friday, U.S. bond yields will remain to be the key driver for the greenback.

The Pound remained under pressure after Monday’s steep selloff on comments from UK’s Prime Minister Theresa May which intensified fears of “Hard Brexit”. Although the pound looks undervalued, the risk of further selloff may remain in play as we get closer to triggering article 50. Meanwhile comments from Scotland’s First Minister on BBC that she’s not bluffing about her vow to hold a second referendum on Scottish independence if Britain leaves the single market is another factor to worry about on the medium-term.


By Hussein Sayed, Chief Market Strategist (Gulf & MENA)
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Old Jan 17, 2017, 10:05am   #2
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Volatility elevated ahead of May’s Brexit speech; Pound recovers

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It’s Sterling’s day.

Financial markets are anxiously awaiting U.K.’s Prime Minister Theresa May speech later today where she will lay out a detailed divorce plan from the EU. Lot of reports were leaked since Sunday on what to expect her to say, and the most interesting part is that she has no interest in partial departure which suggests we’re heading towards a “Hard Brexit”. Traders were very fast to react, sending the pound 1.6% lower on Monday to trade below 1.20. However, the recovery in early Asian trade Tuesday indicates that lot of the bad news are already priced in, and for the pound to fall substantially lower it requires more than just signs of a hard Brexit plan.

If the Supreme court decided that May needs to secure the consent of Parliament before triggering article 50, potentially delaying Brexit for couple of months, this is likely to provide sterling a boost by unwinding many short positions. Traders should be aware that sterling won’t be a one way play and volatility could be elevated to extreme levels.

On the data front, UK CPI is expected to hit 1.4% in December, up 0.2% from November and 0.5% from October’s reading. This will not only mark the highest inflation rate since mid-2014 but the pace of inflation escalation is pulling U.K.’s real interest rates even lower. Of course, this is going to be a challenge for the BoE, but if it indicates anything, it’s interest rates next move is only upward, leaving monetary policy with very few options to support the economy if needed.

The safe haven Yen is the major beneficiary of the heightened uncertainty over U.K.’s Hard Brexit scenario and Trump’s policies. USDJPY has fallen for the seventh straight day, and declined by more than 4.3% from January 3 peak. The fall in bond yields worldwide will continue to lend some support for the Yen, but whenever this trade is over I expect the Yen to weaken again.

The U.S. dollar is falling against all its major peers with the index dropping below 101. There’s no fundamental reason for the selloff and I don’t think the dollar’s rally is over yet, but the “Trump trade” has clearly cooled down in the past couple of days as markets still have many answered questions regarding future fiscal policies. Let’s hope we get some answers on Fridays inauguration.



By Hussein Sayed, Chief Market Strategist (Gulf & MENA)
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Old Jan 23, 2017, 9:02am   #3
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The Week ahead: Politics to take center stage

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Donald Trump is finally in power, a new era has arrived, and his policy plans in the first couple of weeks will override fundamentals. Markets spent more than two months pricing in growth policies promises, lowers corporate taxes, and deregulations, now it is time to deliver as markets will no more move on words but actions.

U.S. dollar bulls were not really impressed in the new Presidents’ inauguration speech, as it was focused more on protectionism and lacked any concrete plans to drive growth. Repealing Obamacare, building a Mexican border wall, and withdrawing from the Trans Pacific Partnership are not the kind of news investors want to hear, they need to know when pro-growth fiscal policies will come into play and more importantly whether congress will approve them.

The days and weeks ahead will likely see volatility increase in equities, fixed income, and currency markets. Investors are already buying exchange-traded products that track volatility, this explains the level of expected uncertainty going forward.

The week ahead will also see U.S. earnings season move into high gear with more than 20% of S&P 500 companies reporting fourth quarter results including Alphabet, Amazon, Microsoft, McDonald’s, Verizon, Johnson & Johnson, Boeing, EBay, and AT&T. According to Factset, 61% of the companies that reported results so far managed to beat profit estimates, while only 47% managed to beat on revenues.

On the U.S. economic data front, all eyes will be on Friday’s U.S. Q4 GDP release. Growth is anticipated to slow significantly from Q3 3.5% to only 2.2%, as net trade expected to turn negative. Homes sales, services PMI’s, trade balance, and durable goods are also on the agenda for next week.

It will also be an interesting week for sterling as U.K.’s supreme court will eventually deliver its ruling on Tuesday on whether Prime Minister Theresa May can activate the process for Brexit without parliamentary approval. We highly expect that the court will rule in favor of Parliament’s approval to trigger article 50, but any spike in sterling likely to be short lived.


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Old Feb 7, 2017, 7:17am   #4
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The Week ahead: Politics to take center stage


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The Australian dollar is taking the spotlight as the Reserve Bank of Australia is set to have its decision about the current interest rate levels, and the market thus far is not expecting anything much from the RBA. With the interest rate held at 1.50% it still remains one of the highest in the developed world, but the Australian economy is currently waiting to see what the outcome will be from the Trump effect, and while things have been rocky it does seem that the economy is starting to look slightly better. However, yesterdays retail sales showed that it's not all smooth sailing as it dipped to -0.1% m/m (0.3% exp), this result lends weight to the fact that the RBA may touch on the consumer economy not picking up as expected. But the real weight will be focused I feel on the economy as a whole and the commodity sector which has been recovering in recent months in anticipation of the global economy picking up.

Markets have been very much a fan of commodity currencies in recent weeks, with global risk appetite picking up the demand for yield has lead to large jumps in the NZD and of course the AUD, with the AUD looking very much the stronger of the two. So far the AUDUSD has been on a very bullish trend and it certainly has not seemed to lose any steam at present. The 20 day moving average has acted as dynamic support as it has moved up the chart, and this looks likely to be the first real test as comes under pressure. After all markets can't remain bullish forever, especially when it comes to FX markets. At the same time resistance at 0.7680 has so far stifled the bulls in there run up the charts, but the recent bearish movement has found strong bullish sentiment so expectations are building for further movements past this level onto the next major level at 0.7730.

Global up turn has so far been talked about, but not come through just yet. However, oil markets have been looking more and more uncertain when it comes to direction for the majority of traders. One thing that does remain clear is that oil is coming under further pressure in the markets to find some direction. At present the 20 day moving average continues to act as dynamic support and is pushing the bears out of the market as it looks to take on the key level of resistance at 54.46. As the two come together expectations will build for a bullish breakout, or if we had a reversal we could see some strong bearish pressure. Pressure will build though, and the bulls have the advantage in this sort of scenario and fundamentals starting to lean in their favour.


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Old Nov 1, 2017, 11:03am   #5
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Currencies stay range bound ahead of Fed’s decision


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It is a quiet Wednesday in the currency markets. Traders are favoring to remain on the sidelines ahead of multiple key risk events, including the Federal Reserve monetary policy decision later today; the Bank of England’s rate decision on Thursday; President Trump’s nomination of the next Fed Chair; the U.S. tax reform announcement and Friday’s NFP report.

Today’s FOMC meeting will not be accompanied by an update on economic projections, nor by a press conference. Traders have to act on very few amendments on a 500 words statement. The main theme is unlikely to change, and the Fed will stick to its plans of gradual tightening. However, recent economic releases have shown significant improvement in the U.S. economic activity, and GDP has grown 3% for two consecutive quarters, suggesting that we may see slight, positive changes in assessing economic activity.

Despite an uptick in headline inflation in September, core CPI continued to miss estimates, and remained below the targeted 2%. Thus, I expect little to no change on inflation assessment.

Overall, the Fed will likely meet market expectations, by keeping interest rates unchanged in November, and signal a rate hike in its final meeting in December.

President Trump’s nomination for Fed Chair on Thursday could easily overshadow today’s statement, especially if Fed Governor Jerome Powell is not his first choice. Powell has been supportive of Janet Yellen's policy of gradual tightening in monetary policy; thus, I do not expect big moves in Treasuries, or the U.S. dollar, if he is nominated. However, if Stanford University’s Professor of Economics, John Taylor, is nominated instead, expect big moves in Treasury yields and the dollar, which could appreciate sharply against its peers. According to Taylor rule, a forecasting model that determines where interest rates should be, based on targeted inflation and full employment, interest rates should be much higher the current levels.

The Kiwi was the only outperforming currency today, surging 1% against the dollar after labor market statistics showed that the cost of labor grew 1.9%, and the unemployment rate fell to a nine-year low. If wages continue to show signs of strengthening, the Reserve Bank of New Zealand will likely start raising rates next year, as opposed to earlier forecasts of tightening in 2019.



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Old Nov 3, 2017, 6:35am   #6
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Markets poised for Nonfarm Payroll


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The build up has begun for tomorrows NFP announcement and the market is betting big time on a strong result of 313K; this is a very large expectation, but it makes a lot of sense when you consider the seasonal impact that Christmas has on markets. Labour markets certainly boom during this period and even part time workers are considered part of the work force. I will say one thing, with such a large number it will be hard to beat, and I'm not certain that markets will take kindly to anything below the 313K, so it could be the NFP of the year on this basis. Markets will also be digesting the recent announcement that Powell will take over from Yellen as the FED chair. The markets thus far have been positive regarding this, with a number of heavy weight finance figures speaking out in favour of him. Many had expected a hawk, but the reality is that he's likely to take over from the Yellen framework and continue it in the short to medium term until he has a good grasp of the situation.

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For the NFP traders, the metal markets is always the big calling when it comes to movements. Gold has thus far been creeping up on whatever USD weakness it can find, which is not surprising as the bulls are always there. Any NFP weakness tomorrow could see gold catapulted above the current resistance level at 1281 with the potential to even break through 1295 if it's quite bad. In the event it's a very strong result and in line with expectations then 1267 and 1247 are likely to be key levels of support for the gold market. All the moving averages at present are not likely to impact any shifts upwards or downwards so it will be a case of playing of key price levels that the market can digest at this present time.

It was also a big day for the British market as the Bank of England raised interest rates by 25 basis points, leaving the intraday banking rate at 0.5%. This move had been widely expected, but the comments afterwards helped drive the pound down and encourage the doves in the market as the Bank expected inflation to taper off (as the pound stabilised) and also Brexit would bring uncertainty to the market causing issues in the long run.

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The big benefactor of this was of course the FTSE 100 which lifted sharply on the news as the bulls rushed in to take advantage, and as the UK oil producers showed strong earnings as well. The market is now poised to have another crack at resistance at 7600 and NFP could be a catalyst which could push it through tomorrow as well. In the event that markets fall back down support at 7551 and 7436 is likely to be key levels, and markets will be looking to stop the rot if anything does transpire.
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Old Nov 7, 2017, 5:05am   #7
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RBNZ set for change on new government mandate



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The New Zealand government continues to be in the eye of traders as the current changes to the Reserve Bank of New Zealand look to be fast tracked. So far what we know is that the focus will not only be on inflation, but almost full employment for the NZ economy. This should come as no surprise given the recent elections and the want for the government to change to focus on this. Additionally, there is the need for a change on current FX policy which could have far reaching impacts on the NZ economy, as the current minor party (NZ first) wants to see the RBNZ intervene in FX markets to help drive export markets and keep the NZD lower. This has been seen as futile in the past given the RBNZ being quite small compared to world markets, so it could cause minor issues going forward. Either way markets are not currently upbeat regarding the prospects of the NZDUSD, but I believe the NZD is starting to stabilise compared to other currencies and is showing the odd signs of the bulls back in the market.


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So far the NZDUSD bull have managed to claw back a considerable amount of ground in the face of uncertainty in the NZ economy. For me resistance at 0.6960 is the current strong level that is holding back any further gains on the charts, the reason being is that no one knows the current direction of the NZ market after elections. If it was positive then I would expect a jump to 0.7029, but a potential slow down shortly after this jump. In the event we did see minor falls on the charts then support could be found at 0.6891 and 0.6834 respectively, with the ability to go lower as markets are considerably more bearish after the recent election.

Oil has been one of the big jumpers on the charts as markets have been quick to worry about the situation in Saudi Arabia recently. The anti corruption crackdown has taken a few high profile heads, and the markets are worried about the state of play from the world's largest oil producer. Certainly, there have been drawdown's on global oil supplies, but the shakeup of affairs could have the largest impact in the long run and drive oil prices higher in the short term.


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So far Oil bulls have charged forward and knocked out support at 56.17 as the oil markets continued to run higher. Resistance level can be found at 59.08 and 62.12 on the charts with the potential to go higher if more political uncertainty presents itself. There is also the potential for charts to dip lower and support can be found at 56.17 and 50.21 as the market looks to drift lower as news looks more promising potentially.
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Old Nov 13, 2017, 10:39am   #8
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Sterling slides, Bitcoin tumbles & Investors seeking more clarity on tax reforms


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Sterling fell more than 0.5% early Monday, after the Sunday Times reported yesterday that 40 Conservative Party MP’s agreed to sign a letter of no confidence in the Prime Minister, Theresa May. While this remains short of the 48 votes needed to force a new leadership, it still creates much frustration amongst investors seeking clarity on Brexit negotiations. With May’s position being potentially at risk and no significant progress after six rounds of talks with EU, Sterling may come under increased pressure in the next couple of days, with the 1.3024 support level at risk of being breached. A leaked letter from Boris Johnson and Michael Gove pushing for Hard Brexit, add to the uncertainty as House of Commons meet on Tuesday.

It is also a busy week on the UK’s economic data front, with Consumer Price Index, Producer Price Index, labour data and retails sales due to release. However, politics are likely to remain the dominant factor moving the pound this week.

For investors finding the low volatility environment boring, have a look at Bitcoin. The cryptocurrency lost more than quarter of its value after reaching a high of $7,888 on Nov 8. The cancellation of a plan to increase the bitcoin’s block size “Segwit2x” on Wednesday, is what to be blamed for the price crash, but given that prices rallied $400 on Monday it seems the news has been digested. We have seen similar steep falls in Bitcoin throughout the year; specifically in June and September, but every time a considerable decline occurs, new investors jump in to experience the new asset class. The increasing investor interest in the cryptocurrency market has pushed CME Group to announce the launch of a bitcoin derivative soon, indicating that more fund managers and professional investors will become involved. Although Bitcoin might not be a suitable asset for conservative investors due to its volatility, I still see a great potential ahead.

Given that the earnings season has come to an end, equity investors will shift their attention to the U.S. tax reform plans. There is a considerable difference between the Senate and the House on how to proceed, and if no clear path evolves, I expect a further pullback in equities. The Senate’s proposed delay of the tax cut until 2019 is definitely not what President Trump is looking for, so it remains to be seen whether he can push Republicans to unify when he returns from his Asia tour.



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Old Nov 15, 2017, 6:06am   #9
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Equity markets looking increasingly unhinged




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It should be all good news for global equity markets at present as the global recovery continues to tick along nicely. So far profits are up and the market has been bullish, especially around developed labour markets. However, have we overextended at present? If you've been watching some of the major indexes you might very well think that. Recent trends in global markets have so far been bearish which is a surprise, but when you consider the level of uncertainty and the fact that rates are on the move higher it does make for some interesting thoughts and trading ideas. So far yields are looking like they're increasing in the long run, which bodes well for investors looking to move out of equities.


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The S&P 500 has come up short of the magical 2600 mark at present, this despite the recent news off the wire about NAFTA renegotiations being positive. PPI was also positive today, but once again markets were not having a bar of it, and looked to sell off. So far the S&P 500 has held up on support around 2580 where it has managed to sit above over the last few days, the 20 day moving average is also providing some additional support. Further movements lower are likely to hit key levels of support at 2565 and 2545. Just looking at the daily movements, it's very hard to say if this is the time for a correction. Certainly, markets are feeling like one is overdue, and historically data says that is the case. The question here is when and how bad, but for now the bulls have the trend and market corrections are rare for the S&P 500.

A quick glance across the Atlantic at the UK equity market and it's a similar story, just this time the market is being dominated by politics and of course the Brexit debacle. Mark Carney must have been breathing a sigh of relief today as CPI was not as strong as the previous month at 3% y/y, thus taking the pressure of the needs for any further rate rises at this time. Markets, however, were not so interested as the FTSE 100 dropped on the news and continued to be weighed down by global sentiment around equity markets.


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FTSE 100 traders will be looking to extend the trend lower if with the bears, but so far we've seen weaker and weaker candles which is a sign of caution from them. There is the possibility of the bulls swinging back into the market here and potentially pushing for resistance at 7436 and 7486 on the charts. If the bears do extend lower than the 200 day moving average, it will be key to watch here to see if traders respect it. With weaker candles that could be very much the case. Support levels below this can be found at 7377 and 7319 for the bears.



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Old Nov 16, 2017, 5:59am   #10
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USD stages comeback on CPI and retail data



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It's been a positive day for US economic data as retail sales surprised analysts lifting to 0.2% (0.0% exp). This shows a strong build up in the period before Christmas where retail sales is generally quite strong as well, and will bode well for the economy and the FED which is a big follower of the consumption based economy that is the USA. Further adding to fuel to the fire was of course CPI data which I touched on yesterday with Core CPI y/y coming in at 1.8% (1.7%) exp. While not the magic 2% mark the FED does chase it was certainly a positive reading and shows that the economy is turning over nicely in America. The real question will now be if fiscal policy from the Trump administration and can translate into real gains for the economy, or if his legislation will continue to struggle through the house and senate in America. It would be a strong mover of the dollar is something was passed with tangible gains in the near future, but so far the market is in wait and see mode on the fiscal front.

One of the major losers as a result of the USD boost was of course the Australian dollar which has lost ground after last night's economic data which showed wage growth being underwhelming. With the wage index coming in at 2% y/y (2.2% exp), showcasing that while the job market is strong wage growth is not following it and inflation will cause issues in the long run for the Australian economy if wage growth does not catch up. With the AUD now pushed against a wall traders have been of course waiting on the employment figures due out. Of course they've not been the best with employment dropping sharply to a reading of 3.7k+ (18.8k+ exp), but the unemployment rate falling to 5.4% accordingly adding some consolation for AUD bulls at present.

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On the charts the AUDUSD has not been this low since July and markets will be looking to see support at 0.7566 on the charts or if it will struggle to extend any lower and we see the predictable bounce in the AUDUSD. As the employment data is bad markets have overreacted and driven the AUD lower to support at 0.7566 where it has looked to take a breather at this key level. If the bulls do come back into the market - and it's really a maybe - then resistance levels can be found at 0.7624 and 0.7687 with the respective movements if things became worse from a fiscal point of view. Reality is however, that the bears are likely to have another crack and potentially force it down to the 0.7500 key level at present with the potential to fall further at this present time.



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Old Nov 21, 2017, 8:10am   #11
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European currencies dip on German politics



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The Euro had a pause for concern in the evening trading session as the coalition talks in Germany fell apart leading to a political crisis in Germany. This now presents the toughest challenge Angela Merkel has felt in over 12 years of being at the top, however, she seems somewhat composed and is keen to send the parties back to the polls in order to get a majority government. So far though polls have predicted that anti immigrant parties are likely to gain more momentum than the traditional centrist parties which have dominated German politics in recent decades. And for Brexit this will certainly put pressure on the British government now that Merkel is currently off dealing with her political crisis, rather than being focused on there's. For some time many had expected her to get involved and sort out the crisis, but that's certainly not going to be the case and £40 billion bill the UK is offering to settle the bill is being put to the table.

The British governments ability to settle the bills is likely to be a game of brinkmanship and the EU does not have to blink at all. What could well be worth their time is to let it play out internally as right now a number of backbencher Tories are upset over the size of the number and could in theory force a leadership vote. While plausible I do believe that the government is likely to try and push it all through as rapidly as possible in order to get backing from business. Either way the pound is likely to encounter some rough waters over the course of this week as a result.

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On the charts the GBPUSD continues to be inching its way higher on the charts, and thus far it's been on the back of some USD weakness which has been apparent. However, the recent moves higher have shown an abrupt weakness in bullish potential and we could see bears come back into the market to tighten things up before breaking out. Resistance levels for the GBPUSD can be found at 1.3256 and 1.3339, but the band in between this is likely to see a lot of action. In the event that markets turned south they would have a tough time battling the 100 day moving average which has been acting as dynamic support, and also support levels at 1.3130 and 1.3059. A breakthrough of these support levels could send the pound tumbling though.

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The EURUSD is also looking weaker after the political news out today, and for me the focus will be playing of the political news out of Germany going forward. Key resistance levels can be found at 1.1824 and 1.1891. Support levels can also be found at 1.1719 and 1.1621, with the trend looking all the more bearish as of late. Certainly also for the euro the USD weakness will be a primary factor, but so far it' s a mixed bag.






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Old Nov 22, 2017, 11:17am   #12
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Global stocks rally, Sterling on standby ahead of UK budget



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The healthy combination of rising corporate profits, strong global growth and cautious optimism over U.S. corporate tax cuts, simply reinvigorated global equity bulls on Tuesday – boosting stocks across the globe.

Asian shares headed for a record close during early trading on Wednesday, following Wall Street’s robust gains overnight. European markets concluded mostly higher on Tuesday and may open on a positive note today as market players continue to shrug off the political uncertainty in Europe. With U.S. stock indexes marching to record highs yesterday as technology and health stocks rallied, it will be interesting to see if the upside momentum is maintained this afternoon.

Chancellor Philip Hammond in the spotlight

Chancellor Philip Hammond will be in the limelight today as he presents the U.K. budget statement to the House of Commons. While Hammond’s speech may revolve around managing the housing crisis, investors will be paying attention to the Office for Budget Responsibility (OBR) which is expected to trim Britain’s GDP growth forecasts. If the overall tone of the budget statement is gloomy and Brexit concerns making an appearance, Sterling is likely to find itself under renewed selling pressure.

Taking a look at the technical outlook, the GBPUSD has found light support at 1.3230. An intraday breakout above 1.3250 could encourage a further incline towards 1.3300. Alternatively, a failure for prices to keep above 1.3230 may encourage a decline to 1.3150.

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Dollar lower ahead of FOMC minutes

The Greenback weakened against a basket of currencies on Tuesday, after Yellen’s cautious remarks reinforced market expectations of the Federal Reserve raising interest rates at a gradual pace.

Yellen cautioned that raising interest rates too quickly could obstruct the Feds efforts to reach the golden 2% target and reiterated the fact that this year’s low U.S. inflation remained a mystery. With the outgoing Fed chair uncertain over the stubbornly low inflation being transitory, investors were left pondering over how this could influence the central bank’s monetary policy strategy in 2018.

Much attention will be directed towards the minutes from the latest FOMC meeting this evening which should offer further clues on the central bank’s outlook future interest rate increases. With markets widely expecting U.S. interest rates to be increased in December, investors are likely to closely scrutinize the minutes for fresh insight into monetary policy beyond 2017.

The Dollar could receive a boost if the minutes are presented with a hawkish touch, alternatively, if the minutes express concerns over low inflation and fail to bring anything new to the table, sellers may make a move. From a technical standpoint, the Dollar Index is coming under pressure on the daily charts with resistance found at 94.00. Sustained weakness below this level may encourage a further decline towards 93.50. Alternatively, a breach back above 94.15 puts this current bearish setup at risk, with the next level of interest at 94.50.



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Old Nov 23, 2017, 5:31am   #13
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Yen bulls jump on weak FED inflation outlook


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FOMC meeting minutes are always greeted warmly by the markets, as a glimpse of the potential future direction of the FED going forward, and today didn't disappoint at all. As predicted the FED was positive about the possibility of a December rate hike before the year goes out, and the market has aptly priced this in. Markets on the other hand were caught off by certain members reluctance to actually lift rates as they felt inflation was starting to slow down and the previous large rises may not continue going forward. Now with Yellen set to resign and the new head of the FED taking over, it may be the case that we do see more hawkish movements. But the board is a democratic vote, so unless we see real movement there it becomes very unlikely at this stage and the doves could be staying on for some time.

For traders the USD sell off in safe-haven currencies was strong with the USD losing a number of points especially against the Yen. USDJPY was by far the most volatile trade of today, which surprised many given how flat it had recently been, but markets were quick to punish the FED over its dovish comments. One of the major reasons behind the sudden appreciation of the Yen is that thus far Abenomics has not been as active as expected and it continues to be at a risk of being devalued quickly. It's also a fantastic storage for traders looking for some sort of safety within the markets and a traditional one at that as well. However, for the USDJPY bears the time to jump was today and they certainly did.


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USDJPY bears crashed through the 200 day moving average ruthlessly as they looked to push the pairs to strong support levels. Support at 111.133 was able to holt the downward trend, but so far is the only thing holding back the USDJPY from storming any lower. Markets looking to swing lower further are likely to find another strong level of support at 110.202, but the market may take some breather here and give up some gains. For traders looking for a bounce higher then resistance can be found at 111.944 and 112.787. The reality for the bulls jumping back in though is slim, as this bearish trend is likely to push traders back in the water in search of blood.

After the recent failures of traders to break through resistance at 114.359 over the previous month, it's no surprise that the market has jumped on a bearish trend. The question is though will it continue to run, or will markets look to pause and take stock of the volatility we've seen today. My thoughts are that it could potentially slow down but still trend, which would be promising for traders looking for an easy wave.


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Old Nov 30, 2017, 6:12am   #14
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FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Pound rallies on divorce bill rumours



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It's been a crazy day on the markets and the GBPUSD has been a clear winner when it comes to movements today as the Market has reacted positively to the so called 'Divorce Bill' from the EU that Britain is meant to pay. So far people are expectong the figure to come in around 50-60 billion pounds that would be paid out over 40 years. Obviously, this is a large number for any sovereign nation, but it enables Britain to plow forth in its so called negotiations. The market is now looking for the next steps for the UK economy, as it expect to see some sort of trade negotiations come out of all of this. I do think that it might be a bit of a while off that we do see something realistic, the fact being that a) the UK has no strong leg to stand on, and b) it's always a long road to what people expect will be a result. Either way the volatility in the GBPUSD is likely to continue into the near future especially with the current pace of news and politics involved in Brexit.

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On the charts it's clear to see that the bulls are back into the market and are climbing higher. Yesterday we were talking about the 1.33 levels, and today we are in the 1.34 levels which shows the market is keen on these talks. After touching resistance at 1.3438 the market has pulled back to take a breather, but the real key level is to be found at 1.3588 which is where bullish traders will be looking to aim in this market. In the even the bears do regain control and look to push it lower then support at 1.3339 is likely to be a prime candidate for support as well as 1.3256. Traders should also be aware of the previous trend line which continues to be an obstacle for any bears in the current market.

The US also continued its stellar run today with US pending home sales m/m lifting by 3.5% (1% exp) once again showcasing the strength in the USD. On top of the traders were also somewhat bullish about the first round of the senate tax review of the Trump tax bill, which is likely to boost the US economy - even though running a deficit for a bit. One of the big losers for this has been the commodity currencies which have been bearish against the USD with all this support.

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For me the NZDUSD continues to be one of those currencies that will struggle with a resurgent USD in the current market climate. So far all the candles have shown exhaustion by bulls in the market as the NZDUSD dipped under resistance at 0.6891. The market is now looking to extend further lower to 0.6834 and 0.6802 on the charts, as the market looks to push it back into the red. For me the bulls are going to be a real threat until the USD gives up some ground as the NZ economy is still struggling in the interim while it figures out a new government.




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Old Dec 6, 2017, 7:51am   #15
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FXTM Official started this thread Daily Fundamental ForexTime ( FXTM )

Market waits on Bank of Canada



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With a US tax bill and a Brexit currently flying around in the markets it's hard not to get lost on the bigger picture for other countries as well. However, the Bank of Canada (BoC) is one that we should all be paying attention to as in the next 24 hours they will have their monthly interest rate decision, as well as follow up conference to the market. Now a interest rate is not priced in at present - in fact the odds are very low, but the BoC has a habit of surprising markets and the recent employment figures were very positive adding further weight to the potential for a rise. I don't anticipate we will see a surprise interest rate jump, however the words that will be used will be vital for the market when it comes to pricing in the next interest rate rise and of course are likely to have a big impact on the Canadian dollar. It's not always about oil for the Canadian economy, but one thing is clear there is certainly more to offer on the trading calendar than oil updates.

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So far the USDCAD has been a big mover and has held up nicely on the charts in preparation for the upcoming announcement. So far the USD has been losing ground against the CAD after traders were quick to attack on USD weakness and the strong jobs report. Any movements higher on the USDCAD were likely to struggle regardless with resistance at 1.2759 and 1.2921, but also with the 200 day moving average starting to ebb lower and showing a pattern of being respected strongly by the USDCAD. Movements lower are likely to find support at 1.2628 and 1.2516 in the current market, but I would also watch out for the oil figures as well, as a strong drawdown would put further bearish pressure on the USDCAD.

One of the key metal markets which has been moving sharply lower recently has been silver which has been reacting sharply to the boost in equities. There has been talk recently that metals could potentially be replaced by Bitcoin and the likes, but I don't believe they represent a tangible hedge like precious metals do in the current environment. What is clear that the US economy booming is starting to have a negative effect on the price of silver and the market is starting to shift lower as a response.

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I've always been a fan of silver and the trend is looking quite strong on the charts so far for the bears. Support has held up nicely at 15.996, with the potential to move event further lower to 15.556. Resistance is currently high in 16 dollar region at 16.546 and 16.863 at this stage. All in all though the bearish trend is strong and could continue in the current environment if we don't see any large hiccups.


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