20 Sep 2018

FOREX Newsletter

   

FOREX Newsletter

September 20, 2018
 

 

  Pulse of the Market

·      U.S current account deficit narrowed in the second quarter while housing starts jumped 9.2%

·      Brexit and trade headlines took currencies on a rollercoaster ride yesterday

·      The British Pound will remain in play today with UK retail sales scheduled for release

·      USD/CAD jumped following reports that trade deal between U.S and Canada is unlikely this week

 

The U.S Dollar ended the day lower against most of the major currencies despite a sharp rise in U.S yields and better than expected U.S data. The current account deficit narrowed in the second quarter while housing starts jumped 9.2%. These numbers easily offset the -5.7% drop in building permits. We need to look no further than risk appetite for an explanation as to why the dollar performed so poorly today. The strong performance of U.S. stocks along and the continued recovery in the Australian dollar tell us that no one is worried about the trade war. The U.S imposed tariffs on $200B of Chinese goods and China responded with levies on about $60B of U.S goods. Retaliation is not a step in the right direction but China imposed only a 5% and 10% penalty of U.S. imports, which is lower than the 5% to 25% levels previously proposed. To the market’s relief, this is also the first time that Beijing did not match Washington’s tariffs dollar by dollar. Brexit and trade headlines took currencies on a rollercoaster ride yesterday. At the start of the NY session, GBP/USD dropped 90 pips in one minute on reports by the Times of London that UK Prime Minister May plans to reject the European Union’s improved Brexit offer. Earlier this week, the EU seemed to be willing to agree on the UK rather than EC inspectors at the border but the UK refuses to accept the EU’s insistence on customs checks in the Irish Sea if there isn’t a free trade agreement after Brexit. The Irish border has been the biggest hang-up in negotiations and the possible rejection of the EU’s offer reignited concerns about a no-deal Brexit and even a second referendum. For most of the month, we heard about possible concessions from the EU and reports of progress in Brexit talks but starting last week, the tone from the UK began to change. The UK government suggested that they’ve done all they can and the EU needs to stop revisiting previous positions. GBP/USD remains in play today with UK retail sales scheduled for release. While consumer and producer price growth was stronger than expected, Thursday’s report could fall short of expectations. Spending increased significantly last month so there’s potential for a pullback especially after the British Retail Consortium reported a decline.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
07:30 SNB Sight Deposit Interest Rate (SEP 20) High   -0.75% -0.75%
07:30 SNB 3-Month Libor Lower Target Range (SEP 20) High   -1.25% -1.25%
07:30 SNB 3-Month Libor Upper Target Range (SEP 20) High   -0.25% -0.25%
08:30 U.K Retail Sales Ex Auto Fuel (YoY) (AUG) Medium   2.3% 3.7%
12:30 U.S Philadelphia Fed Business Outlook (SEP) Medium   15.8 11.9
12:30 U.S Initial Jobless Claims (SEP 15) Medium   210k 204k
12:30 U.S Continuing Claims (SEP 08) Medium   1705k 1696k
13:15 EU Informal Meeting of Heads of State Summit Press Conference High      
14:00 U.S Leading Index (AUG) Medium   0.50% 0.6%
14:00 Euro-Zone Consumer Confidence (SEP) Medium   -2.0 -1.9
14:00 U.S Existing Home Sales (MoM) (AUG) Medium   0.8% -0.7%
23:30 Japan National Consumer Price Index (YoY) (AUG) High   1.1% 0.9%

 

Euro

The single currency traded higher against the U.S Dollar yesterday. European Central Bank President Mario Draghi called for a euro-area fund to complement monetary policy, renewing his plea to governments to strengthen the currency bloc before another crisis strikes. Heads of state are due to meet in Brussels for a summit next month. Overall, the EUR/USD traded with a low of 1.1648 and a high of 1.1713 before closing the day around 1.1671 in the New York session.

 

Yen

The Japanese Yen gained slightly against the U.S Dollar as investors appeared little shaken by the latest round of tariffs announced by China and the U.S. China and the U.S plunged deeper into a trade war after President Donald Trump levied tariffs on $200 billion worth of Chinese goods. Beijing retaliated with duties on about $60 billion worth of U.S. goods. Overall, the USD/JPY traded with a low of 112.14 and a high of 112.48 before closing the day around 112.25 in the U.S session.

 

British Pound

The British Pound got another shot in the arm after the latest measure of consumer inflation was released this morning, which revealed a surprisingly strong reading for the month of August. According to the ONS, the headline Consumer Price Index (CPI) jumped to 2.7% year-on-year in August compared to 2.5% previously, while core CPI rose to 2.1% versus 1.9% last. Overall, the GBP/USD traded with a low of 1.3096 and a high of 1.3213 before closing the day at 1.3142 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened to its highest in nearly three weeks as investors grew optimistic that a deal to renew the NAFTA trade pact would be reached before an Oct. 1 deadline. Canadian Prime Minister Justin Trudeau said he wanted to see flexibility from the United States if the two sides are to reach a deal on the North American Free Trade Agreement. Overall, USD/CAD traded with a low of 1.2897 and a high of 1.3013 before closing the day at 1.2915 in the New York session.

 

Australian Dollar

The Australian Dollar has continued its rebound to a three-week high, despite an increase in US interest rates, and also gained against other major currencies. It seems global investors are betting that the US-China trade war will not be as bad as they initially feared. After all, both the tariffs imposed by Washington and Beijing on each other were less severe than they had previously warned. Overall, AUD/USD traded with a low of 0.7211 and a high of 0.7273 before closing the day at 0.7261 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 62 and lies above the neutral zone. In general, the pair has lost 0.02%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 66 reading and lies above the neutral zone. On the whole, the pair has lost 0.09%.

 

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 57 reading and lies above the neutral region. In general, the pair has gained 0.54%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 42 and lies below the neutral region. On the whole, the pair has gained 0.07%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 54 and lies above the neutral region. In general, the pair has gained 0.25%.

 

Appendix

  

FOREX Closing Prices for September 19, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16659 1.17135 1.16487 1.1671 0.0006
USD/JPY 112.338 112.428 112.142 112.258 -0.0820
GBP/USD 1.31392 1.32134 1.30961 1.31428 -0.0002
USD/CHF 0.96447 0.96986 0.96324 0.96701 0.0027
USD/CAD 1.29783 1.30131 1.28977 1.29156 -0.0056
EUR/JPY 131.096 131.659 130.757 131.045 -0.0240
GBP/JPY 147.618 148.508 147.177 147.557 -0.1300
CHF/JPY 116.447 116.55 115.721 116.056 -0.4040
AUD/JPY 81.066 81.629 80.988 81.514 0.4350
EUR/GBP 0.88781 0.89176 0.88596 0.8878 0.0006
EUR/CHF 1.12543 1.1325 1.12465 1.12869 0.0036
GBP/CHF 1.2675 1.27718 1.26704 1.27101 0.0032

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1577 1.1613 1.1642 1.1678 1.1707 1.1743 1.1772
USD/JPY 111.84 111.99 112.12 112.28 112.41 112.56 112.70
GBP/USD 1.2971 1.3033 1.3088 1.3151 1.3205 1.3268 1.3323
USD/CHF 0.9569 0.9601 0.9635 0.9667 0.9702 0.9733 0.9768
USD/CAD 1.2756 1.2827 1.2871 1.2942 1.2987 1.3058 1.3102
EUR/JPY 129.75 130.25 130.65 131.15 131.55 132.06 132.45
GBP/JPY 145.66 146.42 146.99 147.75 148.32 149.08 149.65
CHF/JPY 114.84 115.28 115.67 116.11 116.50 116.94 117.33
AUD/JPY 80.48 80.74 81.13 81.38 81.77 82.02 82.41
EUR/GBP 0.8795 0.8827 0.8853 0.8885 0.8911 0.8943 0.8969
EUR/CHF 1.1169 1.1208 1.1247 1.1286 1.1326 1.1365 1.1404
GBP/CHF 1.2562 1.2616 1.2663 1.2717 1.2764 1.2819 1.2866

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

19 Sep 2018

FOREX Newsletter

         

FOREX Newsletter

September 19, 2018
 

 

Pulse of the Market

·      Investors weighed the latest escalation in the tit-for-tat tariff dispute between the U.S and China

·      Investors grew nervous about Italy’s chances of passing a budget within the EU guidelines

·      The Canadian Dollar was boosted yesterday by rising crude oil prices

·      The Australian economy relies heavily on exporting raw materials particularly to China

The U.S Dollar was flat against other currencies yesterday as China announced retaliation tariffs against the U.S. China said it would impose new tariffs on U.S. goods worth $60 billion, effective Sept. 24, Reuters reported. The new tariffs are in response to U.S. tariffs on Monday of 10% on $200 billion in Chinese goods, which will go up to 25% at the end of the year. President Donald Trump tweeted that “there will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!” He previously stated that the U.S. would impose tariffs on another $267 billion of additional imports if China retaliates. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.02% to 94.11. Elsewhere, the dollar rose against the safe-haven yen, with USD/JPY up 0.43% to 112.36. In times of uncertainty, investors tend to invest in Japanese yen, which is considered a safe asset during periods of risk aversion. The best performing currency on Monday was sterling, which rose to its strongest level against the U.S. dollar in 6 weeks. The market is operating on the assumption that a Brexit deal in one form or another will be made. The Irish border is the biggest hang-up but there are reports that the EU is more willing to accept the idea that border inspectors come from the UK. While encouraging, Prime Minister May said today that it is time for the EU to respond to their proposal and not just fall back on previous positions which suggest that negotiations may not be moving as well as the market believes. This is a big week for the UK with inflation and retail sales scheduled for release. We believe that price pressures will accelerate given the uptick in shop prices reported by the British Retail Consortium and the increase in input/output costs reported by manufacturing and service sector PMIs. EUR/USD, in particular, benefitted from positive comments by the Bundesbank. Despite the recent downturn in German data, the Bundesbank expects German growth to improve significantly with the upswing intact.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  BOJ 10-Yr Yield Target (SEP 19) High   0.00% 0.00%
  BOJ Rate Decision (SEP 19) High   -0.10% -0.10%
00:30 Australia Westpac Leading Index (MoM) (AUG) Medium     0.01%
05:45 Switzerland SECO September 2018 Economic Forecasts Low      
08:30 U.K Consumer Price Index (YoY) (AUG) High   2.4% 2.5%
08:30 U.K Retail Price Index (YoY) (AUG) Low   3.2% 3.2%
08:30 U.K House Price Index (YoY) (JUL) Medium   2.8% 3.0%
11:00 U.S MBA Mortgage Applications (SEP 14) Medium      
12:30 U.S Housing Starts (MoM) (AUG) Medium   5.7% 0.9%
12:30 U.S Building Permits (MoM) (AUG) Medium   0.5% 1.5%
13:00 ECB’s Draghi speaks in Berlin High      
14:30 DOE U.S. Crude Oil Inventories (SEP 14) Medium      
22:45 New Zealand Gross Domestic Product (YoY) (2Q) High   2.5% 2.7%

 

Euro

The single currency advanced against the U.S Dollar on Monday, amid optimism over prospects for a Brexit deal with the European Union, while the safe-haven yen gained against the greenback as the United States was set to announce his latest plan on China tariffs after the markets close. Britain is due to leave the EU on March 29, 2019. Overall, the EUR/USD traded with a low of 1.1650 and a high of 1.1723 before closing the day around 1.1665 in the New York session.

 

Yen

The Japanese Yen is weakening considerably against the U.S Dollar by mid-September, while the Japanese government is trying to calm the market down. The Minister of Finance Taro Aso said yesterday the BOJ monetary policy is going to stay the same so as to reach the 2% inflation target, but this will require some time. Overall, the USD/JPY traded with a low of 111.64 and a high of 112.37 before closing the day around 112.34 in the U.S session.

 

British Pound

The British Pound eased away from a 6-week peak as traders exercise caution ahead of this week’s EU summit. There had been some encouraging signs from EU negotiators that a Brexit deal could be brokered within the next two months which helped to prop up the Pound. Ahead of the EU summit, traders will eye today’s release of a slew of data.  Overall, the GBP/USD traded with a low of 1.3116 and a high of 1.3170 before closing the day at 1.3144 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened against its U.S counterpart yesterday as oil prices rose and domestic manufacturing data supported the view that the Bank of Canada will raise interest rates further in October. Canadian factory sales grew by 0.9 per cent in July from June on higher sales in the transportation equipment industry. Overall, USD/CAD traded with a low of 1.2969 and a high of 1.3062 before closing the day at 1.2972 in the New York session.

 

Australian Dollar

The Australian Dollar extended a recent recovery yesterday as traders respond to an optimistic Reserve Bank of Australia (RBA) update while global markets breathe a collective sigh of relief over the scope of the latest U.S tariffs against China. Gains were cemented and then expanded by the release of the Reserve Bank of Australia minutes from its 4 September meeting. Overall, AUD/USD traded with a low of 0.7142 and a high of 0.7221 before closing the day at 0.7213 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has gained 0.32%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 67 reading and lies above the neutral zone. On the whole, the pair has gained 0.36%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 54 reading and lies above the neutral region. In general, the pair has gained 1.03%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 40 and lies below the neutral region. On the whole, the pair has lost 0.05%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 50 and lies above the neutral region. In general, the pair has gained 0.12%.

 

Appendix

  

FOREX Closing Prices for September 18, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16822 1.17231 1.16507 1.16653 -0.0016
USD/JPY 111.838 112.371 111.645 112.34 0.5130
GBP/USD 1.31589 1.31705 1.31168 1.31445 -0.0013
USD/CHF 0.96228 0.96541 0.95982 0.96434 0.0020
USD/CAD 1.30357 1.30622 1.29696 1.2972 -0.0068
EUR/JPY 130.685 131.476 130.276 131.069 0.4130
GBP/JPY 147.178 147.891 146.759 147.687 0.5340
CHF/JPY 116.203 116.886 115.956 116.46 0.2910
AUD/JPY 80.28 81.093 79.744 81.079 0.8240
EUR/GBP 0.88759 0.89071 0.88689 0.88721 -0.0005
EUR/CHF 1.12433 1.12605 1.12205 1.12507 0.0007
GBP/CHF 1.26639 1.26857 1.26036 1.26785 0.0015

   

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1564 1.1607 1.1636 1.1680 1.1709 1.1752 1.1781
USD/JPY 111.14 111.39 111.87 112.12 112.59 112.84 113.32
GBP/USD 1.3064 1.3090 1.3117 1.3144 1.3171 1.3198 1.3225
USD/CHF 0.9554 0.9576 0.9610 0.9632 0.9666 0.9688 0.9722
USD/CAD 1.2848 1.2909 1.2940 1.3001 1.3033 1.3094 1.3126
EUR/JPY 129.20 129.74 130.40 130.94 131.60 132.14 132.80
GBP/JPY 145.87 146.31 147.00 147.45 148.13 148.58 149.26
CHF/JPY 115.05 115.50 115.98 116.43 116.91 117.36 117.84
AUD/JPY 78.84 79.29 80.18 80.64 81.53 81.99 82.88
EUR/GBP 0.8820 0.8845 0.8858 0.8883 0.8897 0.8921 0.8935
EUR/CHF 1.1187 1.1204 1.1227 1.1244 1.1267 1.1284 1.1307
GBP/CHF 1.2544 1.2574 1.2626 1.2656 1.2708 1.2738 1.2790

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

17 Sep 2018

FOREX Newsletter

     

FOREX Newsletter

September 17, 2018
 

 

Pulse of the Market

·      The Japanese Yen pair defied fundamentals on Friday to hit a 7-week high above 112

·      The momentum for EUR/USD shifted back to the downside with Friday’s reversal

·      Sterling turned lower on the back of U.S Dollar strength and conflicting Brexit headlines

·      Canadian Foreign Minister Freeland should be back next week to continue negotiations

The Greenback strengthened against all of the major currencies with Euro leading the slide. Retail sales grew at its slowest pace in 6 months but the dollar rallied because every policymaker who spoke on Friday said more tightening beyond September is needed. Even FOMC voter and Fed President Brainard who is traditionally a dove suggested that the Fed could continue to raise rates beyond the long term neutral rate. Evans who is not a voting member of the FOMC described the economy and labor market as very strong and suggested that 4 hikes for 2019 is still reasonable because he wouldn’t be surprised if inflation goes a little above 2%. Kaplan agreed that the U.S consumer is strong. Hawkish comments such as these drove 10 year Treasury yields above 3% on an intraday basis on Friday and this move took USD/JPY to its highs of the day above 112. The Federal Reserve is still expected to raise interest rates this month and that’s the only thing that matters. The trend is strong in USD/JPY and the pair could continue to rise but it will be vulnerable to the Bank of Japan’s outlook and trade headlines. No changes are expected but the BoJ has been actively engaged in stealth tapering and investors will be watching closely for any comments on these actions. The momentum for EUR/USD shifted back to the downside with Friday’s reversal. The Euro rallied after the ECB’s meeting on Thursday but today, there were reports that some policymakers wanted a more cautious tone that suggested the risks were tilted to the downside. Data was also weak with the Eurozone’s trade surplus shrinking to its smallest level in 4 years in July. The divergence between Draghi’s outlook and the performance of the economy makes next week’s inflation and economic activity reports very importantly. If CPI and PMIs also surprise to the downside, EUR/USD will fall to 1.15. However if Draghi is right and the PMIs show that the outlook for the economy remains bright, EUR/USD could squeeze back above 1.17. Sterling turned lower on the back of U.S Dollar strength and conflicting Brexit headlines. Brexit talks are moving in a positive direction but the Irish border is still the big problem. UK Brexit minister Davis thinks they are closing in on a deal but the EU denied the progress. Either way, Brexit headlines or UK data put sterling in focus next week with consumer prices and retail sales numbers scheduled for release. GBP/USD ended Friday at its lows, putting the pair at risk of testing 1.30. Meanwhile, Canada – U.S trade talks failed to yield any meaningful progress this week. Canadian Foreign Minister Freeland should be back next week to continue negotiations. The main issue is dairy–Canada restricts how much foreign milk is sold to the benefit of their local industry but the U.S. wants those restrictions relaxed so U.S producers could sell more milk and cheese to Canada. Although the Australian and New Zealand dollars hit fresh 2 year lows this last week.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
08:00 Switzerland Total Sight Deposits (SEP 14) Low      
09:00 Euro-Zone Consumer Price Index (YoY) (AUG) Medium     2.1%
12:30 U.S Empire Manufacturing (SEP) Low     25.6
13:00 Canada Existing Home Sales (MoM) (AUG) Medium     1.9%
23:30 ANZ Roy Morgan Weekly Consumer Confidence Index (SEP 16) Low      

 

 

Euro

The single currency rose to a two-week high on Friday after weaker-than-expected US inflation data continued to weigh on the dollar and a broader recovery in investment sentiment supported the Euro. But by the end of the day, the Euro ended sharply lower against the U.S Dollar. The ECB continues to aim for ending its QE program in December. Overall, the EUR/USD traded with a low of 1.1619 and a high of 1.1720 before closing the day around 1.1622 in the New York session.

 

Yen

The Japanese Yen pair finished sharply higher last week. Traders, for the most part, ignored reports of lower domestic inflation data and trade dispute concerns and primarily focused on the widening interest rate differential between U.S Government yields and Japanese bond yields. Technical factors also played a role in the Forex pair’s strength. Overall, the USD/JPY traded with a low of 111.73 and a high of 112.14 before closing the day around 111.97 in the U.S session.

 

British Pound

The British Pound has seen a minor rise against the US dollar today hitting a level of $1.313, the best exchange rate since the start of August. This improvement in the pound US dollar exchange rate is mainly down to US economic uncertainty, which has made the pound the more appealing currency of the two. Overall, the GBP/USD traded with a low of 1.3054 and a high of 1.3141 before closing the day at 1.3068 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened against its U.S counterpart on Friday as the greenback rose broadly, but the loonie still had its best weekly performance in nearly three months. The U.S. dollar rose against a basket of currencies, rebounding from a near 1.5-month low, as upbeat U.S economic data. Overall, USD/CAD traded with a low of 1.2980 and a high rekindled some investor appetite for the greenback.  of 1.3052 before closing the day at 1.3030 in the New York session.

 

Australian Dollar

The Australian Dollar fell in Friday’s trading session. Blockbuster economic data bought the Australian Dollar some respite last week, but it might not be wise to hope for much more of this in coming sessions even if the long fall does not resume immediately. Official Gross Domestic Product numbers for the second quarter looked good. Overall, AUD/USD traded with a low of 0.7148 and a high of 0.7214 before closing the day at 0.7153 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 57 and lies above the neutral zone. In general, the pair has lost 0.51%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 62 reading and lies above the neutral zone. On the whole, the pair has lost 0.21%.

 

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 45 reading and lies below the neutral region. In general, the pair has lost 0.41%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 40 and lies below the neutral region. On the whole, the pair has lost 0.29%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 46 and lies below the neutral region. In general, the pair has lost 0.10%.

 

Appendix

  

FOREX Closing Prices for September 14, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16886 1.17202 1.16192 1.16227 -0.0066
USD/JPY 111.905 112.149 111.734 111.975 0.0660
GBP/USD 1.3107 1.31419 1.30548 1.30687 -0.0035
USD/CHF 0.96539 0.9674 0.96328 0.96691 0.0016
USD/CAD 1.2996 1.30521 1.29806 1.30305 0.0033
EUR/JPY 130.834 131.091 130.155 130.173 -0.6630
GBP/JPY 146.7 147.006 146.233 146.363 -0.3070
CHF/JPY 115.912 116.073 115.719 115.783 -0.1300
AUD/JPY 80.476 80.674 80.049 80.098 -0.3330
EUR/GBP 0.8916 0.8931 0.88901 0.88915 -0.0026
EUR/CHF 1.12843 1.13018 1.12395 1.12397 -0.0044
GBP/CHF 1.26553 1.26743 1.26189 1.26376 -0.0013

   

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1487 1.1553 1.1588 1.1654 1.1689 1.1755 1.1790
USD/JPY 111.34 111.54 111.76 111.95 112.17 112.37 112.59
GBP/USD 1.2948 1.3001 1.3035 1.3088 1.3122 1.3176 1.3209
USD/CHF 0.9602 0.9617 0.9643 0.9659 0.9684 0.9700 0.9726
USD/CAD 1.2919 1.2950 1.2990 1.3021 1.3062 1.3093 1.3133
EUR/JPY 128.92 129.54 129.86 130.47 130.79 131.41 131.73
GBP/JPY 145.29 145.76 146.06 146.53 146.84 147.31 147.61
CHF/JPY 115.29 115.50 115.64 115.86 116.00 116.21 116.35
AUD/JPY 79.25 79.65 79.87 80.27 80.50 80.90 81.12
EUR/GBP 0.8837 0.8863 0.8877 0.8904 0.8918 0.8945 0.8959
EUR/CHF 1.1157 1.1198 1.1219 1.1260 1.1281 1.1323 1.1343
GBP/CHF 1.2558 1.2588 1.2613 1.2644 1.2668 1.2699 1.2724

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

14 Sep 2018

FOREX Newsletter

           

FOREX Newsletter

September 14, 2018
 

 

Pulse of the Market

·      Consumer prices in the U.S rose less than expected, increasing 0.2% compared to a gain of 0.3%

·      Inflation numbers came just a day after data showed the producer price index fell 0.1% last month

·      The euro and sterling rallied after the Bank of England and European Central Bank kept rates steady

·      The ECB kept its deposit rate at -0.40% and expects its asset purchase program to end in December

Investors sent EUR/USD to its highest level this month on the back of the European Central Bank’s monetary policy announcement. Considering that Euro was trading strongly ahead of the rate decision, it didn’t take much for the currency pair to hit 1.17 and now that it has many traders are wondering if they should fade or follow the move. Market sentiment and positioning is very important when it comes to trading major event risks. Had the euro been hovering near this month’s low ahead of the rate decision, traders would have latched on to the central bank’s lower economic projections. However, the possibility of a GDP downgrade was leaked yesterday, giving investors the opportunity to discount the central bank’s move. The recent decline in Italian bond yields also helped euro stabilize this week. So when the softer US consumer price index was released, EUR/USD popped higher and extended its gains to 1.1700. Traders, who were looking for a reason to cover their shorts focused on the positive elements of Draghi’s comments. They were happy that he had anything positive to say at all and relieved there was no mention of the data disappointments in Germany and Italy. Sterling also traded higher today but not as a result of the Bank of England’s monetary policy announcement. GBP/USD actually weakened slightly after the central bank voted unanimously to leave interest rates unchanged. Their decision wasn’t a surprised considering that they had just raised interest rates in August. The BoE expects inflation to ease next year due to an energy price cap but pay could be stronger due to a healthy labor market. Ongoing tightening will be needed according to the central bank but future rate hikes will be limited and gradual. It wasn’t until the release of U.S CPI that GBP/USD started to strengthen. The pair eventually broke above 1.31 on the back of the ECB’s optimism and the general weakness of the U.S dollar. Looking ahead, Brexit negotiations continue to go well and we think that they will carry GBP/USD to 1.32. The Australian and New Zealand dollars stretched higher while the Canadian dollar held back. AUD and NZD benefitted from the general improvement in risk appetite and last night’s stronger than expected labor market report.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
02:00 China Retail Sales (YoY) (AUG) Medium   8.8% 8.8%
02:00 China Industrial Production (YoY) (AUG) Medium   6.1% 6.0%
04:30 Japan Industrial Production (YoY) (JUL) Medium      
10:00 BOE’s Carney Speaks in Dublin High      
12:30 U.S Retail Sales Advance (MoM) (AUG) High   0.4% 0.5%
12:30 U.S Retail Sales Ex Auto and Gas (AUG) Medium   0.5% 0.6%
12:30 U.S Import Price Index ex Petroleum (MoM) (AUG) Medium   -0.1% -0.1%
12:30 U.S Export Price Index (YoY) (AUG) Medium     4.3%
13:15 U.S Industrial Production (MoM) (AUG) Medium   0.3% 0.1%
14:00 U.S Business Inventories (JUL) Medium   0.5% 0.1%
14:00 U.S U. of Mich. Sentiment (SEP) High   96.8 96.2
17:00 Baker Hughes U.S. Rig Count (SEP 14) Medium     1048

 

Euro

The single currency has entered a period of correction off 2018 low, rallying up into an important zone. In fact, the major pair has just poked back above the very important resistance level for the first time since April, which if sustained, could officially result in this market transitioning from correction to uptrend. Overall, the EUR/USD traded with a low of 1.1607 and a high of 1.1699 before closing the day around 1.1688 in the New York session.

 

Yen

The Japanese Yen pair posted gains erasing the losses seen on Wednesday. In economic news, Japanese Core Machinery Orders jumped 11.0%, its sharpest gain since January 2016. Japanese PPI ticked lower to 3.0%, just shy of the forecast of 3.1%. In the U.S, key consumer inflation reports missed their mark. CPI came in at 0.2%, shy of the estimate of 0.3%. Overall, the USD/JPY traded with a low of 111.15 and a high of 111.98 before closing the day around 111.90 in the U.S session.

 

British Pound

The British Pound rallied to the highest level against the dollar since August as the U.K pledged to provide information that could help solve a stand-off with the European Union over the Irish border. Sterling has been buffeted by Brexit headlines in recent sessions, oscillating between gains and losses in volatile trading. Overall, the GBP/USD traded with a low of 1.3024 and a high of 1.3122 before closing the day at 1.3103 in the New York session.

 

Canadian Dollar

The Canadian Dollar firmed to a two-week high against its U.S counterpart yesterday as tamer-than-expected U.S. inflation data weighed on the greenback, offsetting a pullback in crude oil prices. The greenback fell to a near 1-1/2-month low against a basket of currencies after data showed U.S consumer prices increased less than expected.  Overall, USD/CAD traded with a low of 1.2973 and a high of 1.3023 before closing the day at 1.2997 in the New York session.

 

Australian Dollar

The Australian Dollar is paying for the sins of others as investors short the commodity-exposed currency to 2-1/2-year low as a hedge against risks to global trade, China and emerging markets. Yet having the world’s whipping boy currency is ironically just what Australia needs right now as it faces falling home prices, moribund wages and stubbornly low inflation. Overall, AUD/USD traded with a low of 0.7165 and a high of 0.7227 before closing the day at 0.7189 in the New York session.

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 62 and lies above the neutral zone. In general, the pair has gained 1.17%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 64 reading and lies above the neutral zone. On the whole, the pair has gained 1.05%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above491 reading and lies below the neutral region. In general, the pair has gained 0.86%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 43 and lies below the neutral region. On the whole, the pair has gained 0.09%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 48 and lies below the neutral region. In general, the pair has lost 0.11%.

 

Appendix

  

FOREX Closing Prices for September 13, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1625 1.16996 1.16077 1.16886 0.0064
USD/JPY 111.28 111.98 111.151 111.909 0.6670
GBP/USD 1.30428 1.31221 1.30245 1.31037 0.0059
USD/CHF 0.97055 0.97078 0.96499 0.96527 -0.0053
USD/CAD 1.29935 1.30233 1.29738 1.29976 0.0001
EUR/JPY 129.389 130.919 129.237 130.836 1.5070
GBP/JPY 145.167 146.793 144.991 146.67 1.5300
CHF/JPY 114.632 115.978 114.543 115.913 1.3370
AUD/JPY 79.757 80.77 79.671 80.431 0.6870
EUR/GBP 0.89113 0.89283 0.88911 0.89177 0.0008
EUR/CHF 1.12841 1.13133 1.12597 1.12835 -0.0003
GBP/CHF 1.26589 1.26869 1.26259 1.26506 -0.0014

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1539 1.1573 1.1631 1.1665 1.1723 1.1757 1.1815
USD/JPY 110.55 110.85 111.38 111.68 112.21 112.51 113.04
GBP/USD 1.2947 1.2986 1.3045 1.3083 1.3142 1.3181 1.3240
USD/CHF 0.9575 0.9612 0.9632 0.9670 0.9690 0.9728 0.9748
USD/CAD 1.2924 1.2949 1.2973 1.2998 1.3023 1.3048 1.3072
EUR/JPY 128.06 128.65 129.74 130.33 131.42 132.01 133.11
GBP/JPY 143.71 144.35 145.51 146.15 147.31 147.95 149.11
CHF/JPY 113.54 114.04 114.98 115.48 116.41 116.91 117.85
AUD/JPY 78.71 79.19 79.81 80.29 80.91 81.39 82.01
EUR/GBP 0.8859 0.8875 0.8896 0.8912 0.8934 0.8950 0.8971
EUR/CHF 1.1204 1.1232 1.1258 1.1286 1.1311 1.1339 1.1365
GBP/CHF 1.2561 1.2593 1.2622 1.2654 1.2683 1.2715 1.2744

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

13 Sep 2018

FOREX Newsletter

 

FOREX Newsletter

September 13, 2018
 

 

Pulse of the Market

·      A leading U.S inflation indicator dented expectations for a Federal Reserve rate hike in December

·      The U.S Labor Department said its producer price index decreased 0.1% last month

·      In times of uncertainty, investors tend to invest in the Yen, which is considered a safe asset

·      The British Pound was lower amid ongoing Brexit concerns, with GBP/USD falling 0.13%

Today is a big day for euro and sterling. There are 2 monetary policy announcements on the calendar and the U.S. consumer price report. This means that not only will we learn how eager central banks in Europe are to tighten monetary policy but we’ll also see how much pressure there is for the Federal Reserve to continue raising interest rates. The U.S. dollar traded lower against all of the major currencies today after an unexpected decline in producer prices. PPI fell for the first time in 18 months as oil prices stabilized and the dollar strengthened. CPI could be vulnerable to the same forces, especially as gas prices held steady last month. With that in mind according to the Beige Book, a few Fed district reported an increase in inflation pressures. However the dollar did not respond well to the Fed’s report because even though they said prices are rising in some areas and the economy expanded at a moderate pace, most districts noted concern and uncertainty over trade. They also did not see significant wage growth despite the tightness of labor market. There’s no question that the Fed will raise rates later this month especially with input costs rising but if CPI falls short of expectations, it will give investors another excuse to sell dollars. Although USD/JPY is consolidating between 110.50 and 111.80, the greenback could retreat more significantly against other currencies. The euro benefitted from Brexit optimism but there’s talk the ECB could lower their growth forecasts on the heels of softer data. These expectations are reinforced by the latest Eurozone industrial production report, which showed activity dropping 0.8% in the month of July. The ECB has taken every opportunity to talk down the currency and with trade tensions rising they should share the same concerns as Fed districts. The central bank made it clear at recent meetings that they have no plans to raise interest rates until late next year and their outlook isn’t likely to change since recent data has been mixed.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:30 Australia Employment Change (AUG) High   18.0k -3.9k
01:30 Australia Unemployment Rate (AUG) High   5.3% 5.3%
06:00 German Consumer Price Index (YoY) (AUG) Medium   2.0% 2.00%
11:00 Bank of England Bank Rate (SEP 13) High   0.750% 0.750%
11:00 BOE Asset Purchase Target (SEP) High   435b 435b
11:45 European Central Bank Rate Decision (SEP 13) High   0.000% 0.000%
11:45 ECB Deposit Facility Rate (SEP 13) High   -0.400% -0.400%
12:30 ECB President Draghi Holds Press Conference in Frankfurt High      
12:30 Canada New Housing Price Index (MoM) (JUL) Low   0.1% 0.1%
12:30 U.S Consumer Price Index (YoY) (AUG) High   2.8% 2.9%
12:30 U.S Consumer Price Index Ex Food and Energy (YoY) (AUG) High   2.4% 2.4%
12:30 U.S Initial Jobless Claims (SEP 8) Medium   210k 203k
12:30 U.S Continuing Claims (SEP 1) Medium   1710k 1707k
12:30 U.S Real Avg Hourly Earning (YoY) (AUG) Medium     -0.1%
18:00 U.S Monthly Budget Statement (AUG) Medium   -$185.0b -$107.7b

 

Euro

The single currency rose yesterday in advance of the European Central Bank meeting, putting pressure on the dollar as traders remained worried about the trade friction between the United States and China. Traders sought to exit some bearish bets on the single currency, which fell earlier on reports that ECB policymakers will trim their growth forecasts. Overall, the EUR/USD traded with a low of 1.1568 and a high of 1.1648 before closing the day around 1.1624 in the New York session.

 

Yen

The Japanese Yen gained some ground in yesterday’s trading session against the U.S Dollar, with the USD/JPY pair down 0.17% to 111.46. On Sept. 10, Japan reported accelerated growth in the second quarter. The Japanese economy grew at an annualized 3% in the second quarter, the fastest pace in two years. Overall, the USD/JPY traded with a low of 111.09 and a high of 111.63 before closing the day around 111.24 in the U.S session.

 

British Pound

The British Pound oscillated between gains and losses in volatile trading as the market faced competing headlines about Brexit prospects. Sterling is struggling to hold on to a rally this week spurred by comments from European officials on the potential for a Brexit deal within weeks. Traders will next be watching for direction from the Bank of England. Overall, the GBP/USD traded with a low of 1.2977 and a high of 13078 before closing the day at 1.3044 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher, holding on to gains from the day before as oil prices rose and domestic data showed that industries operated at a lower-than-expected percentage of production capacity. The loonie was boosted on Tuesday by increased optimism that a deal to renew the North American Free Trade Agreement would be reached.  Overall, USD/CAD traded with a low of 1.2978 and a high of 1.3076 before closing the day at 1.2996 in the New York session.

 

Australian Dollar

The Australian Dollar staged a riposte to short-sellers yesterday, rising broadly against rivals, in response to signs of a detente in the U.S. “trade war” with China and as traders took up positions ahead of the latest employment report. Australia’s Dollar was boosted Wednesday when the People’s Bank of China injected further stimulus into the domestic financial system. Overall, AUD/USD traded with a low of 0.7091 and a high of 0.7180 before closing the day at 0.7171 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 50 and lies above the neutral zone. In general, the pair has lost 0.32%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 56 reading and lies above the neutral zone. On the whole, the pair has gained 0.18%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 31 reading and lies below the neutral region. In general, the pair has lost 0.99%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 41 and lies below the neutral region. On the whole, the pair has lost 0.50%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 50 and lies above the neutral region. In general, the pair has gained 0.30%.

 

Appendix

  

FOREX Closing Prices for September 12, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16033 1.16483 1.15687 1.16246 0.0020
USD/JPY 111.55 111.633 111.095 111.242 -0.3690
GBP/USD 1.30274 1.3078 1.29777 1.30444 0.0013
USD/CHF 0.9721 0.97479 0.96938 0.97055 -0.0016
USD/CAD 1.3064 1.30761 1.29781 1.29969 -0.0069
EUR/JPY 129.453 129.787 128.913 129.329 -0.1940
GBP/JPY 145.343 145.627 144.651 145.14 -0.3040
CHF/JPY 114.716 114.79 114.292 114.576 -0.2000
AUD/JPY 79.43 79.976 79.044 79.744 0.3270
EUR/GBP 0.89042 0.8935 0.88802 0.89097 0.0005
EUR/CHF 1.12811 1.13089 1.12665 1.1286 0.0003
GBP/CHF 1.26645 1.2701 1.26268 1.26646 -0.0003

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1500 1.1534 1.1579 1.1614 1.1659 1.1693 1.1739
USD/JPY 110.48 110.79 111.01 111.32 111.55 111.86 112.09
GBP/USD 1.2888 1.2933 1.2989 1.3033 1.3089 1.3134 1.3189
USD/CHF 0.9629 0.9662 0.9684 0.9716 0.9738 0.9770 0.9792
USD/CAD 1.2860 1.2919 1.2958 1.3017 1.3056 1.3115 1.3154
EUR/JPY 128.03 128.47 128.90 129.34 129.77 130.22 130.65
GBP/JPY 143.68 144.16 144.65 145.14 145.63 146.12 146.60
CHF/JPY 113.82 114.05 114.32 114.55 114.81 115.05 115.31
AUD/JPY 78.27 78.66 79.20 79.59 80.13 80.52 81.06
EUR/GBP 0.8827 0.8854 0.8882 0.8908 0.8936 0.8963 0.8991
EUR/CHF 1.1223 1.1245 1.1265 1.1287 1.1308 1.1330 1.1350
GBP/CHF 1.2553 1.2590 1.2627 1.2664 1.2701 1.2738 1.2776

 

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

10 Sep 2018

FOREX Newsletter

FOREX Newsletter

September 10, 2018

 

  Pulse of the Market

·      U.S average hourly earnings rose 0.4% last month, the strongest pace of growth in nearly a year

·      Euro and sterling were also victims of risk aversion and U.S Dollar strength

·      On Friday Canada lost 51K jobs last month data showed

·      The Australian and New Zealand dollars hit a 2-year low and further losses are likely

 

The U.S Dollar traded higher against all of the major currencies on Friday on the back of a stronger jobs report and President Trump’s threat of fresh tariffs on China and Japan. Stocks extended their slide and unless the President retracts his threats, further losses are likely which means more risk aversion and losses for the major currencies. Friday’s non-farm payrolls report guarantees a Fed hike on September 26th. Not only were there more than 200K jobs created in the month of August but wages are growing! Average hourly earnings rose 0.4% last month, the strongest pace of growth in nearly a year. Between the record highs in U.S stocks last month and the pickup in earnings, next week’s retail sales could surprise to the upside as well. Comments from U.S. policymakers have also been hawkish with Fed Presidents Mester, Rosengren and Kaplan looking for the policy rate to move towards neutral. The greenback should extend its gains versus EUR, AUD and other major currencies, but the outlook for USD/JPY is tricky. USD/JPY dropped as safe haven carry flows returned home after President Trump hinted that Japan could be the target for their next trade fight. He’s focused on reducing deficits and in a phone interview with the Wall Street Journal he said they may not be happy “as soon as I tell them how much they have to pay.” Late Friday, he also tightened the noose on China by threatening to impose another $267B in tariffs. These threats make it very difficult for stocks and USD/JPY rise. Euro and sterling were also victims of risk aversion and U.S Dollar strength. Sterling had traded above 1.30 on the back of positive Brexit comments from the EU but it gave up all of its gains to end the day in negative territory. There’s a Bank of England monetary policy announcement in the week ahead but Brexit negotiations and data should have a greater impact on the currency because having just raised rates in August, they are in no position to tighten again. The market is also not pricing in another rate hike from the BoE until the middle of next year. The Euro ended the week near its 2 week lows on the back of softer German data. Italian yields fell every day this past week so Italy is less of a problem but there’s very little reason for the ECB, who also has a policy meeting next week to change their neutral bias.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  China New Yuan Loans CNY (AUG) High     1450.0b
01:30 China Producer Price Index (YoY) (AUG) Medium     4.6%
01:30 China Consumer Price Index (YoY) (AUG) High     2.1%
04:30 Japan Bankruptcies (YoY) (AUG) Medium     -1.68%
08:30 U.K Visible Trade Balance (Pounds) (JUL) Medium     -£11383
08:30 U.K Trade Balance (JUL) Medium     -£1861
08:30 U.K Industrial Production (YoY) (JUL) Medium     1.1%
08:30 U.K Manufacturing Production (YoY) (JUL) Medium     1.5%
08:30 Euro-Zone Sentix Investor Confidence (SEP) Low     14.7
08:30 U.K Gross Domestic Product (MoM) (JUL) Medium     0.1%
19:00 U.S Consumer Credit (JUL) Medium     $10.211b

Euro

The single currency finished in the middle of the pack last week. Thursday’s ECB meeting should bring little new information as the policy was preset for the next year back at the June meeting; a mention of European banks’ exposure to Turkish borrowers would excite markets. For the second week in a row, the Euro finished lower against the U.S Dollar. Overall, the EUR/USD traded with a low of 1.1555 and a high of 1.1560 before closing the day around 1.1555 in the New York session.

 

Yen

The Japanese Yen pair was sharply higher on Friday and erased weekly losses on the back of a rally of the US Dollar across the board following US employment data and comments from Fed’s Kaplan. The US economy added 201K jobs during August, above the 191K expected. The number that boosted the greenback was the rise in average hourly earnings. Overall, the USD/JPY traded with a low of 110.90 and a high of 111.03 before closing the day around 111.01 in the U.S session.

 

British Pound

The British Pound recorded a rare weekly advance on the Euro and other currencies in the wake of comments pertaining to the Irish border question from the EU’s chief Brexit negotiator Michel Barnier. Barnier has said he is open to “other backstops” for the Irish border question, while newswires report he now believes negotiations are 90% complete. Overall, the GBP/USD traded with a low of 1.2916 and a high of 1.2922 before closing the day at 1.2916 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened against its U.S counterpart and fell nearly 1 per cent for the week after data showed the economy unexpectedly shed jobs in August. Canada’s economy lost 51,600 jobs in August, the biggest decline since January, as losses in part-time work overtook gains in full-time employment, data from Statistics Canada showed. Overall, USD/CAD traded with a low of 1.3169 and a high of 1.3179 before closing the day at 1.3171 in the New York session.

 

Australian Dollar

The Australian Dollar has shed almost 13 per cent against the US currency since late January, and the downtrend became further entrenched at the weekend in the wake of the latest US jobs data and President Donald Trump’s decision to ratchet global trade tensions ever higher. That threat came even as the top U.S and Canadian negotiators were meeting in Washington. Overall, AUD/USD traded with a low of 0.7096 and a high of 0.7202 before closing the day at 0.7106 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 56 and lies above the neutral zone. In general, the pair has lost 0.32%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 51 reading and lies above the neutral zone. On the whole, the pair has gained 0.18%.

 

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 39 reading and lies below the neutral region. In general, the pair has lost 0.99%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 55 and lies above the neutral region. On the whole, the pair has lost 0.50%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 33 and lies below the neutral region. In general, the pair has gained 0.30%.

 

Appendix

  

FOREX Closing Prices for September 07, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1559 1.15607 1.1555 1.15551 -0.0067
USD/JPY 110.975 111.03 110.909 111.015 0.2840
GBP/USD 1.29203 1.29222 1.29161 1.29169 -0.0011
USD/CHF 0.96893 0.96919 0.96838 0.96866 0.0036
USD/CAD 1.31767 1.3179 1.31695 1.31719 0.0032
EUR/JPY 128.323 128.339 128.205 128.291 -0.4150
GBP/JPY 143.379 143.455 143.315 143.414 0.2560
CHF/JPY 114.532 114.584 114.492 114.571 -0.1370
AUD/JPY 78.814 78.90 78.814 78.892 -0.7850
EUR/GBP 0.89436 0.89461 0.89424 0.89433 -0.0045
EUR/CHF 1.1202 1.12034 1.11936 1.11944 -0.0022
GBP/CHF 1.25201 1.25204 1.25119 1.25139 0.0037

   

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1547 1.1551 1.1553 1.1557 1.1559 1.1563 1.1565
USD/JPY 110.82 110.86 110.94 110.98 111.06 111.11 111.18
GBP/USD 1.2909 1.2912 1.2915 1.2918 1.2921 1.2925 1.2927
USD/CHF 0.9675 0.9679 0.9683 0.9687 0.9691 0.9696 0.9699
USD/CAD 1.3158 1.3164 1.3168 1.3173 1.3177 1.3183 1.3187
EUR/JPY 128.08 128.14 128.22 128.28 128.35 128.41 128.49
GBP/JPY 143.19 143.25 143.33 143.39 143.47 143.53 143.61
CHF/JPY 114.42 114.46 114.51 114.55 114.61 114.64 114.70
AUD/JPY 78.75 78.78 78.84 78.87 78.92 78.95 79.01
EUR/GBP 0.8938 0.8940 0.8942 0.8944 0.8945 0.8948 0.8949
EUR/CHF 1.1181 1.1187 1.1191 1.1197 1.1201 1.1207 1.1210
GBP/CHF 1.2502 1.2507 1.2510 1.2515 1.2519 1.2524 1.2527

 

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

07 Sep 2018

FOREX Newsletter

 

FOREX Newsletter

September 07, 2018
 

 

Pulse of the Market

·      Today’s U.S Non-Farm Payrolls report will have a significant impact on USD/JPY

·      German yields have been under pressure all day and factory orders tumbled in July

·      The British Pound remained resilient as investors look forward to Brexit progress

·      Labor market numbers are also due for release from Canada in today’s session

Today’s non-farm payrolls report is very important with a Federal Reserve rate hike expected later this month. The jobs report is crucial to shaping expectations for the Fed meeting. With the market pricing in 96.3% chance of a hike, the U.S economy would have to report job losses for the central bank to pass on tightening this month. However, the question is not if the Fed would hike but whether it would be a dovish or hawkish hike. If the jobs report is strong with average hourly earnings rising by 0.3% or more, investors will expect the central bank to be optimistic, leaving the door open to another hike in December. If payrolls rise by fewer than 150K jobs and wage growth slows to 0.2% or worse, the selloff in the greenback would be more significant with EUR/USD potentially squeezing above the 100-day SMA at 1.1710. Data hasn’t been great with German factory orders falling sharply but Italian yields continue to fall, which is good news for the euro. USD/JPY sold off sharply yesterday despite stronger service sector activity and improved jobless claims. There are at least 4 reasons to explain the pair’s move. To start USD/JPY began the NY session under pressure after the Bank of Japan admitted that the idea of reducing the number of days they would buy bonds is akin to tapering. Secondly, investors are nervous about China-US trade talks. Treasury yields were also under pressure throughout the day and when 111.10 broke, stops were triggered and USD/JPY extended its losses quickly. Today’s NFP report will have a significant impact on USD/JPY. Good data will take the pair back above 111 while bad data could cause it to extend its losses to 110.00. Sterling extended its gains versus the dollar while EUR/USD hit 1.1659 before turning lower. There was no specific reason for the reversal in sterling but for the euro, German yields have been under pressure all day and factory orders tumbled in July. Sterling remained resilient as investors look forward to Brexit progress. The Swiss Franc has been unusually strong and is the day’s best-performing currency next to the yen. Stronger than expected GDP contributes to today’s gains but investors are also actively unwinding their short franc positions from the beginning of the year.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 Japan Labor Cash Earnings (YoY) (JUL) Medium   2.4% 3.3%
05:45 Switzerland Unemployment Rate (AUG) Medium   2.4% 2.4%
06:00 German Trade Balance (JUL) Medium   19.5b 21.8b
06:00 German Industrial Production n.s.a. and w.d.a. (YoY) (JUL) Medium   2.6% 2.5%
08:30 BoE/TNS Inflation Next 12 Mths (AUG) High     2.9%
09:00 Euro-Zone Gross Domestic Product s.a. (YoY) (2Q) Medium   2.2% 2.2%
12:30 Canada Unemployment Rate (AUG) High   5.9% 5.8%
12:30 Canada Net Change in Employment (AUG) High   5.0k 54.1k
12:30 U.S Change in Non-Farm Payrolls (AUG) High   195k 157k
12:30 U.S Unemployment Rate (AUG) High   3.8% 3.9%
12:30 U.S Average Hourly Earnings (YoY) (AUG) Medium   2.7% 2.7%
17:00 Baker Hughes U.S. Rig Count (SEP 7) Medium   $3115.00b  

 

Euro

The single currency has avoided falling closer to its worst levels though, thanks to some decent Eurozone data. As uncertainties about US trade protectionism worsened again this week, the Euro to US Dollar exchange rate has spent most of the week trending lower. EUR/USD may be on track to see another week of minimal movement. Overall, the EUR/USD traded with a low of 1.1604 and a high of 1.1657 before closing the day around 1.1621 in the New York session.

 

Yen

The Japanese Yen posted considerable gains yesterday. In economic news, unemployment claims dropped to 203 thousand, beating the estimate of 214 thousand. However, ADP Nonfarm Payrolls disappointed with a reading of 163 thousand. This was well below the forecast of 195 thousand. ISM Non-Manufacturing PMI climbed to 58.5. Overall, the USD/JPY traded with a low of 110.50 and a high of 111.51 before closing the day around 110.73 in the U.S session.

 

British Pound

The British Pound overturned earlier losses to record a strong gain against the Dollar and other major currencies late in the mid-week session as the currency’s Brexit yo-yo continues. It appears a report about the potential softening of demands made by the EU, combined with comments from chief EU negotiator Michel Barnier, are behind the move. Overall, the GBP/USD traded with a low of 1.2894 and a high of 1.2960 before closing the day at 1.2927 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened against the greenback yesterday, recovering from a nearly seven-week low earlier in the day after a senior Bank of Canada official said the central bank had discussed the pace at which it could raise interest rates. On Wednesday, the Bank of Canada left its policy rate on hold at 1.50 per cent. Overall, USD/CAD traded with a low of 1.3125 and a high of 1.3224 before closing the day at 1.3140 in the New York session.

 

Australian Dollar

The Australian Dollar fell earlier in yesterday’s session but reversed its losses after official data showed the economy growing at its fastest pace for nearly six years during the second quarter, as continued financial instability in the emerging world and a “risk-off” mood in markets overshadowed better domestic news flow for investors. Overall, AUD/USD traded with a low of 0.7164 and a high of 0.7209 before closing the day at 0.7197 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 56 and lies above the neutral zone. In general, the pair has lost 0.76%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 51 reading and lies above the neutral zone. On the whole, the pair has lost 0.52%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 39 reading and lies below the neutral region. In general, the pair has lost 0.63%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 55 and lies above the neutral region. On the whole, the pair has lost 0.23%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 33 and lies below the neutral region. In general, the pair has lost 0.49%.

 

Appendix

 

FOREX Closing Prices for September 06, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16294 1.16578 1.1604 1.16219 -0.0007
USD/JPY 111.497 111.513 110.501 110.731 -0.7770
GBP/USD 1.2903 1.29601 1.28945 1.29274 0.0023
USD/CHF 0.97159 0.97204 0.96486 0.96503 -0.0065
USD/CAD 1.3179 1.32241 1.31258 1.314 -0.0035
EUR/JPY 129.684 129.814 128.473 128.706 -0.9800
GBP/JPY 143.879 144.212 142.919 143.158 -0.7460
CHF/JPY 114.728 114.91 114.378 114.708 -0.0290
AUD/JPY 80.146 80.254 79.534 79.677 -0.5080
EUR/GBP 0.90103 0.9017 0.89724 0.89886 -0.0021
EUR/CHF 1.12994 1.13092 1.12153 1.12162 -0.0084
GBP/CHF 1.25384 1.25533 1.24715 1.24766 -0.0062

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1544 1.1574 1.1598 1.1628 1.1652 1.1682 1.1706
USD/JPY 109.31 109.90 110.32 110.92 111.33 111.93 112.34
GBP/USD 1.2829 1.2862 1.2895 1.2927 1.2960 1.2993 1.3026
USD/CHF 0.9554 0.9601 0.9626 0.9673 0.9698 0.9745 0.9769
USD/CAD 1.3004 1.3065 1.3103 1.3163 1.3201 1.3262 1.3299
EUR/JPY 126.84 127.66 128.18 129.00 129.52 130.34 130.86
GBP/JPY 141.35 142.14 142.65 143.43 143.94 144.72 145.23
CHF/JPY 113.89 114.13 114.42 114.67 114.95 115.20 115.48
AUD/JPY 78.67 79.10 79.39 79.82 80.11 80.54 80.83
EUR/GBP 0.8924 0.8948 0.8968 0.8993 0.9013 0.9037 0.9058
EUR/CHF 1.1091 1.1153 1.1185 1.1247 1.1279 1.1341 1.1372
GBP/CHF 1.2366 1.2419 1.2448 1.2500 1.2529 1.2582 1.2611

 

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

05 Sep 2018

FOREX Newsletter

     

FOREX Newsletter

September 05, 2018
 

 

·      ISM manufacturing data for August rose to a reading of 61.3, beating expectations of 57.6Pulse of the Market

·      Pound fell as Brexit-related worries and weaker U.K construction data weighed on the latter

·      Trade talks with Canada remained at an impasse after stalling on Friday

·      The Canadian Dollar weakened to a six-week low against its U.S. counterpart yesterday

The U.S Dollar extended gains against a currency basket yesterday as U.S markets re-opened after the Labor Day holiday, with trade tensions and market turmoil in Argentina and Turkey underpinning demand. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.48% to 95.52, the highest level since August 24. Demand for the dollar was bolstered by the risk-off mood in markets amid fears over the impact on global growth from the Trump administration’s protectionist trade policies and strains in emerging markets. U.S. President Donald Trump said last week he was ready to implement tariffs on an additional $200 billion worth of imports from China as soon as Thursday, which would ratchet up the trade row with Beijing. Meanwhile, trade talks with Canada remained at an impasse after stalling on Friday, with Trump threatening to leave Canada out of a new deal already negotiated with Mexico. The dollar was higher against the yen, with USD/JPY rising 0.28%. The euro fell more than half a cent against the firmer dollar, with EUR/USD down 0.57%. The pound was also pressured lower, with GBP/USD sliding 0.23% as worries over the prospect of a no-deal Brexit continued to weigh. In emerging markets, Turkey’s lira was pressured lower amid lingering concerns over the country’s economic and currency crisis. U.S manufacturing business conditions surged in August to a 14-year high, according to a survey of industry executives. ISM manufacturing data for August rose to a reading of 61.3, beating expectations of 57.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy. The Trump administration could impose a 25% tariff on $200 billion worth of Chinese imported goods later this week. Reports surfaced last week, claiming Trump was considering moving ahead with the tariffs on China after the comment period expires on Thursday. The Canadian dollar fell against its U.S counterpart yesterday after President Donald Trump said the U.S and Mexico could move forward without Canada in a new NAFTA deal.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 Nikkei Japan PMI Services (AUG) Medium     51.3
01:30 Australia Gross Domestic Product (YoY) (2Q) High   2.8% 3.1%
01:45 Caixin China PMI Services (AUG) Medium   52.6 52.8
07:55 Markit Germany Services PMI (AUG) Low   55.2  
08:00 Markit Eurozone Services PMI (AUG) Low   54.4  
08:30 Markit/CIPS UK Services PMI (AUG) Medium   53.9 53.5
09:00 Euro-Zone Retail Sales (YoY) (JUL) Medium   1.3% 1.2%
11:00 U.S MBA Mortgage Applications (AUG 31) Medium      
12:30 U.S Trade Balance (JUL) Medium   -$50.0b -$46.3b
13:20 U.S Fed’s Bullard Speaks in New York Low      
14:00 Bank of Canada Rate Decision (SEP 5) High   1.50% 1.50%
23:50 Japan Foreign Buying Japan Bonds (AUG 31) Low      
23:50 Japan Foreign Buying Japan Stocks (AUG 31) Low      

 

Euro

The single currency fell despite the Euro zone producer prices rose slightly more than forecast in July, driven by expensive energy, data released yesterday by the European Union statistics agency showed. Eurostat said prices at factory gates in the 19 countries sharing the euro rose 0.4 percent month-on-month in July. Overall, the EUR/USD traded with a low of 1.1583 and a high of 1.1619 before closing the day around 1.1583 in the New York session.

 

Yen

The Japanese Yen pair extended gained yesterday, rising nearly half a percent, as concerns about a possible escalation in trade conflict between the United States and China prompted investors to dump emerging market currencies. The public comment period on a U.S proposal for new tariffs on Chinese goods is set to end on Thursday. Overall, the USD/JPY traded with a low of 110.88 and a high of 111.45 before closing the day around 111.45 in the U.S session.

 

British Pound

The British Pound fell yesterday following a drop in the most recent industry survey from the UK with the GBP/USD rate falling further to trade at its lowest level in over a week. However, it should be noted that this appears to be more a case of strength in the buck and a look at other GBP pairs reveals that the pound is actually little changed. Overall, the GBP/USD traded with a low of 1.2852 and a high of 1.2874 before closing the day at 1.2855 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened to a six-week low yesterday amid an uncertain outlook for Canada’s trading arrangement with the United States and ahead of an interest rate decision this week by the Bank of Canada. Canada and the United States ended talks to revamp the NAFTA on Friday without reaching a deal. Overall, USD/CAD traded with a low of 1.3087 and a high of 1.3189 before closing the day at 1.3189 in the New York session.

 

Australian Dollar

The Australian Dollar suddenly fell as global markets absorb a rash of weak news about the Australian economy. The engine of Australia’s economy is sputtering a bit, and that is making our dollar suddenly unpopular. Retail sales figures came out on Monday and they fell short of expectations. Now, growth was not expected to shoot the lights out in the month of July. Overall, AUD/USD traded with a low of 0.7155 and a high of 0.7233 before closing the day at 0.7176 in the New York session.

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 54 and lies above the neutral zone. In general, the pair has gained 0.02%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 47 reading and lies below the neutral zone. On the whole, the pair has gained 0.22%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 36 reading and lies below the neutral region. In general, the pair has lost 0.20%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 55 and lies above the neutral region. On the whole, the pair has lost 0.20%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 32 and lies below the neutral region. In general, the pair has gained 0.42%.

 

Appendix

 

FOREX Closing Prices for September 04, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16185 1.16196 1.15832 1.15832 -0.0038
USD/JPY 111.035 111.459 110.881 111.459 0.3790
GBP/USD 1.287 1.28743 1.28523 1.28554 -0.0017
USD/CHF 0.96906 0.97455 0.96869 0.97455 0.0052
USD/CAD 1.3093 1.31898 1.30872 1.31898 0.0094
EUR/JPY 128.99 129.092 128.693 129.092 0.0280
GBP/JPY 142.987 143.289 142.634 143.289 0.3200
CHF/JPY 114.545 114.617 114.341 114.341 -0.2670
AUD/JPY 80.083 80.119 79.776 79.972 -0.1580
EUR/GBP 0.90259 0.90259 0.90108 0.90108 -0.0018
EUR/CHF 1.12596 1.12876 1.12458 1.12876 0.0024
GBP/CHF 1.24746 1.25283 1.2465 1.25283 0.0053

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1535 1.1559 1.1571 1.1595 1.1607 1.1632 1.1644
USD/JPY 110.50 110.69 111.07 111.27 111.65 111.84 112.23
GBP/USD 1.2825 1.2839 1.2847 1.2861 1.2869 1.2883 1.2891
USD/CHF 0.9648 0.9667 0.9706 0.9726 0.9765 0.9785 0.9824
USD/CAD 1.3019 1.3053 1.3121 1.3156 1.3224 1.3258 1.3327
EUR/JPY 128.43 128.56 128.83 128.96 129.23 129.36 129.62
GBP/JPY 142.20 142.42 142.85 143.07 143.51 143.73 144.16
CHF/JPY 113.97 114.16 114.25 114.43 114.53 114.71 114.80
AUD/JPY 79.45 79.61 79.79 79.96 80.14 80.30 80.48
EUR/GBP 0.8991 0.9001 0.9006 0.9016 0.9021 0.9031 0.9036
EUR/CHF 1.1218 1.1232 1.1260 1.1274 1.1302 1.1315 1.1343
GBP/CHF 1.2423 1.2444 1.2486 1.2507 1.2549 1.2571 1.2613

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

04 Sep 2018

FOREX Newsletter

FOREX Newsletter

September 04, 2018

 

  Pulse of the Market

·      The U.S Dollar held steady near one-week highs against a currency basket yesterday

·      The British Pound eased yesterday as a no-Brexit deal continued to weigh on the currency

·      Escalation of the trade war between the U.S and China weighed on market sentiment

·      Trade volumes remained thin, with U.S financial markets closed for the Labor Day holiday

The U.S Dollar consolidated near a one-week high against a basket of currencies yesterday as tensions around global trade and a continued selloff in emerging markets fueled demand for the greenback. U.S. President Donald Trump said on Saturday there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the talks to revamp NAFTA or he would terminate the trilateral pact altogether. Trade tensions are broadly supporting the dollar, but the market is hardly very conducive of risk. The U.S currency’s status as the chief reserve currency makes it the primary beneficiary of concern over trade conflicts. Traders have bought the dollar against the British pound and the Canadian dollar among others. On a positioning basis, markets are firmly in the stronger dollar camp, with net outstanding positions holding just off the highest levels since January 2017, calculations by Reuters and Commodity Futures Trading Commission data show. Investors are also jittery about emerging markets, many of which are seeing an exodus of capital. Countries such as Argentina and Turkey are already in crisis, with the Argentine peso falling more than 4 percent on the day against the dollar and the Turkish lira losing 2 percent. Pressures are building elsewhere too, with the Indonesian rupiah hitting a 20-year low and the Indian rupee at a record low. The euro slipped 0.11 percent against the dollar after data showed euro zone manufacturing growth slowing to a nearly two-year low in August as optimism dwindled due to the fears of an escalating global trade war. Sterling was the standout loser of the day as new concerns about Brexit negotiations and weak UK manufacturing data combined to push the British currency down 0.8 percent. Despite a busy week in term of economic data, political and geopolitical developments will remain the main driver in the FX market this week. In the US, August’s ISM manufacturing will be released today; ADP employment change will be published on Wednesday; August’s s ISM non-manufacturing PMI and durable goods orders will be released on Thursday; finally, the labor report is due on Friday.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:30 Australia Current Account Balance (Australian Dollar) (2Q) Medium   -A$11.0b -A$10.5b
04:30 RBA Cash Rate Target (SEP 4) High   1.50% 1.50%
07:15 Switzerland Consumer Price Index (YoY) (AUG) Medium   1.2% 1.2%
08:30 Markit/CIPS UK Construction PMI (AUG) Medium   54.9 55.8
09:00 Euro-Zone Producer Price Index (YoY) (JUL) Low   3.9% 3.6%
09:30 RBA Governor Lowe speaks in Perth High      
12:15 BOE’s Carney, Haldane, Tenreyro, and Saunders Speak in London High      
13:30 RBC Canadian Manufacturing PMI (AUG) High     56.9
13:45 Markit US Manufacturing PMI (AUG) Low   54.5  
14:00 U.S Construction Spending (MoM) (JUL) Medium   0.4% -1.1%
14:00 U.S ISM Manufacturing (AUG) High   57.6 58.1
14:00 U.S ISM Employment (AUG) High     56.5
14:00 U.S ISM Prices Paid (AUG) Medium   69.5 73.2

Euro

The single currency showed little movement in yesterday’s trading session. On the release front, Eurozone and German Final Manufacturing PMIs both softened in August but were within expectations. U.S. markets are closed for Labor Day. In today’s session, the U.S releases ISM Manufacturing PMI. Overall, the EUR/USD traded with a low of 1.1587 and a high of 1.1626 before closing the day around 1.1621 in the New York session.

 

Yen

The Japanese Yen was unchanged in thin holiday trade. In economic news, Japanese Capital Spending jumped 12.8% in the second quarter, crushing the estimate of 6.6%. This marked the strongest reading since 2007. Final Manufacturing PMI edged up to 52.5 points, matching the forecast. There was some good news from Japan’s inflation front on Thursday. Overall, the USD/JPY traded with a low of 110.83 and a high of 111.16 before closing the day around 111.08 in the U.S session.

 

British Pound

The British Pound underperformed against major rivals at the start of the new week as a barrage of fresh Brexit developments combine with some below-expectation manufacturing data. The manufacturing PMI for August read at 52.8, below market expectations for a number of 53.9; the data suggesting the sector is cooling much faster than many had anticipated. Overall, the GBP/USD traded with a low of 1.2853 and a high of 1.2931 before closing the day at 1.2872 in the New York session.

 

Canadian Dollar

The Canadian Dollar fell except the British pound. Last week, the Loonie initially rallied thanks to rising hopes for a NAFTA deal. Following a US-Mexico trade deal, the loonie gave up all of its earlier gains. Looking at Trump’s latest tweets over the weekend, the US president said that There is no political necessity to keep Canada in the new NAFTA deal. Overall, USD/CAD traded with a low of 1.3042 and a high of 1.3100 before closing the day at 1.3095 in the New York session.

 

Australian Dollar

The Australian Dollar has tumbled to a 20-month low, and there are several reasons why it may drop even further this week. Adding to the downward pressure was Canada and the United States ending their negotiations last week without agreeing to a new trade deal. The Reserve Bank will announce its interest rate decision today, but hardly any economists are expecting a rate hike. Overall, AUD/USD traded with a low of 0.7164 and a high of 0.7221 before closing the day at 0.7209 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 52 and lies above the neutral zone. In general, the pair has gained 0.07%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 46 reading and lies below the neutral zone. On the whole, the pair has lost 0.71%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 37 reading and lies below the neutral region. In general, the pair has gained 0.26%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 58 and lies above the neutral region. On the whole, the pair has gained 0.79%.

  

Sterling-Swiss

 

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 25 and lies below the neutral region. In general, the pair has lost 0.67%.

 

Appendix

  

FOREX Closing Prices for September 03, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15977 1.16265 1.15875 1.16214 0.0012
USD/JPY 111.127 111.169 110.832 111.08 -0.0260
GBP/USD 1.29239 1.29318 1.28533 1.28723 -0.0088
USD/CHF 0.96928 0.97058 0.96814 0.96937 0.0002
USD/CAD 1.30545 1.31006 1.30425 1.30959 0.0049
EUR/JPY 128.898 129.126 128.552 129.064 0.0910
GBP/JPY 143.632 143.692 142.813 142.969 -1.0240
CHF/JPY 114.618 114.655 114.248 114.608 -0.0610
AUD/JPY 79.893 80.232 79.491 80.13 0.2040
EUR/GBP 0.89718 0.90313 0.89681 0.90286 0.0071
EUR/CHF 1.12422 1.12697 1.12381 1.12637 0.0014
GBP/CHF 1.25281 1.25396 1.24671 1.24757 -0.0084

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1558 1.1573 1.1597 1.1612 1.1636 1.1651 1.1675
USD/JPY 110.55 110.69 110.89 111.03 111.22 111.36 111.56
GBP/USD 1.2761 1.2807 1.2840 1.2886 1.2918 1.2964 1.2997
USD/CHF 0.9657 0.9669 0.9681 0.9694 0.9706 0.9718 0.9730
USD/CAD 1.3001 1.3022 1.3059 1.3080 1.3117 1.3138 1.3175
EUR/JPY 128.13 128.34 128.70 128.91 129.28 129.49 129.85
GBP/JPY 141.75 142.28 142.62 143.16 143.50 144.04 144.38
CHF/JPY 113.95 114.10 114.35 114.50 114.76 114.91 115.17
AUD/JPY 78.93 79.21 79.67 79.95 80.41 80.69 81.15
EUR/GBP 0.8924 0.8946 0.8987 0.9009 0.9051 0.9073 0.9114
EUR/CHF 1.1213 1.1226 1.1245 1.1257 1.1276 1.1289 1.1308
GBP/CHF 1.2376 1.2422 1.2449 1.2494 1.2521 1.2567 1.2594

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

31 Aug 2018

FOREX Newsletter

     

FOREX Newsletter

August 31, 2018
 

 

Pulse of the Market

·      The Dollar traded higher as data showed inflation continue to meet the Federal Reserve’s target

·      Consumer spending, which accounts for more than two-thirds of U.S economic activity, rose 0.4%

·      The British Pound struggled to hold gains against the Dollar following its sharp rise

·      The Canadian Dollar retreated from 2-1/2 month peaks against the greenback yesterday

The U.S. dollar rebounded against all of the major currencies yesterday with the exception of the Japanese Yen and its underperformance tells us that the dollar was driven higher by a reduction in risk. We can identify at least 3 reasons for the dollar’s decline today. First and foremost, stocks have retreated from their highs after hitting record-breaking levels every day this week and the sell-off prompted a recovery in the dollar. All of the good news this week encouraged investors to take on risk but with stocks retreating, currencies like euro, sterling and the Canadian dollars also came off their highs. One of the main reasons for the pullback in equities and currencies is the end of the month profit taking but President Trump’s threat to withdraw from the WTO also did not help. Third, while this morning’s U.S. economic reports were mixed, economic data from other parts of the world were unambiguously disappointing leading to a weakness for those currencies. Today won’t be about data even though the Chicago PMI report and revisions to the University of Michigan’s Consumer Sentiment index is due for release. Month-end flows and updates on Brexit negotiations or Canada-US trade talks will drive currency movements. USD/JPY gave up all of yesterday’s gains but needs to close firmly below 111.00 to usher in a new wave of dollar weakness. Unlike some of the other major currencies, the slide in USD/JPY will be limited by the prospect of Fed tightening. The dollar could continue to rise against the euro. We’ve been talking about Italian bond yields all week and said yesterday’s pullback was unjustified. Today Italian yields shot up to fresh 4 year highs, driving the spread between Italian and German bond yields to their widest level in 5 years. Italy is the biggest problem for the euro right now and Fitch is scheduled to update their rating for Italy today. Sterling, on the other hand, should continue to outperform and will be an attractive long near 1.2950. UK mortgage approvals were lower than expected but the dollar’s recovery is the primary reason for the currency’s slide. The Canadian dollar sold off sharply on the back of a softer than expected GDP report. Growth stagnated in the month of June, causing the year over year rate to slip from 2.7% to 2.4%.
   

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:00 China Non-manufacturing PMI (AUG) Medium   53.7 54
01:00 China Manufacturing PMI (AUG) High   51 51.2
01:30 Australia Private Sector Credit (YoY) (JUL) Medium   4.4% 4.5%
05:00 Japan Housing Starts (YoY) (JUL) Medium   -4.3% -7.1%
06:00 German Retail Sales (YoY) (JUL) Medium   1.3% 3.0%
09:00 Euro-Zone Unemployment Rate (JUL) Medium   8.2% 8.3%
09:00 Euro-Zone Consumer Price Index Core (YoY) (AUG) High   1.1% 1.1%
10:00 Italian Gross Domestic Product w.d.a. (YoY) (2Q) Medium   1.1% 1.1%
13:45 U.S Chicago Purchasing Manager (AUG) Medium   64 65.5
14:00 U.S U. of Mich. Sentiment (AUG) Medium   95.5 95.3
17:00 Baker Hughes U.S. Rig Count (AUG 31) Medium     1044

 

Euro

The single currency fell as the Euro zone economic sentiment edged lower for an eight consecutive month in August, pulled down by less optimism in industry and services, a monthly survey by the European Commission showed. The Commission survey showed the economic sentiment indicator eased to 111.6 points in August. Overall, the EUR/USD traded with a low of 1.1640 and a high of 1.1716 before closing the day around 1.1669 in the New York session.

 

Yen

The Japanese Yen has edged higher erasing the losses seen on Wednesday. On the release front, Japanese retail sales dropped to 1.8%, but still, beat the estimate of 1.5%. Later in the day, Japan releases Tokyo Core CPI, with a forecast of 0.8%. In the U.S, Core PCE Price Index edged up to 0.2%, while Personal Spending remained pegged at 0.4%. Overall, the USD/JPY traded with a low of 110.93 and a high of 111.73 before closing the day around 110.97 in the U.S session.

 

British Pound

The British Pound held near a four-week high as investors hesitated to take fresh positions on the currency amid a spate of crisscrossing Brexit headlines. Sterling surged more than one percent on Wednesday as traders covered short positions after the European Union’s Michel Barnier said that the UK could be offered an unprecedented partnership. Overall, the GBP/USD traded with a low of 1.2983 and a high of 1.3041 before closing the day at 1.3008 in the New York session.

 

Canadian Dollar

The Canadian Dollar fell as data showed the economy grew at a slower pace in the second quarter, supporting traders’ view the Bank of Canada will leave key interest rates on hold next week. Prices on domestic government debt rose in the wake of the latest gross domestic product figures, flattening the yield curve on the notion of slowing economic growth. Overall, USD/CAD traded with a low of 1.2901 and a high of 1.2998 before closing the day at 1.2979 in the New York session.

 

Australian Dollar

The Australian Dollar fell sharply yesterday after figures for capital expenditure and building approvals missed expectations, and the New Zealand dollar took a knock on business sentiment. The Australian Dollar weakened yesterday following the release of second-quarter capital expenditure which fell 2.5 per cent compared to the previous quarter. Overall, AUD/USD traded with a low of 0.7247 and a high of 0.7313 before closing the day at 0.7254 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 55 and lies above the neutral zone. In general, the pair has lost 0.93%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 55 reading and lies above the neutral zone. On the whole, the pair has lost 0.74%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 40 reading and lies below the neutral region. In general, the pair has lost 1.24%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 50 and lies above the neutral region. On the whole, the pair has lost 0.18%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 33 and lies below the neutral region. In general, the pair has lost 0.26%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix

 

 

FOREX Closing Prices for August 30, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.17055 1.17168 1.16402 1.16696 -0.0036
USD/JPY 111.671 111.736 110.934 110.973 -0.6860
GBP/USD 1.30236 1.30411 1.29834 1.30083 -0.0015
USD/CHF 0.97028 0.97139 0.96842 0.96905 -0.0013
USD/CAD 1.29103 1.2998 1.29011 1.29796 0.0075
EUR/JPY 130.733 130.843 129.394 129.501 -1.2200
GBP/JPY 145.454 145.662 144.356 144.369 -1.0700
CHF/JPY 115.06 115.268 114.412 114.487 -0.5560
AUD/JPY 81.614 81.675 80.466 80.597 -1.0080
EUR/GBP 0.89863 0.89909 0.89518 0.89682 -0.0016
EUR/CHF 1.13589 1.13668 1.13013 1.1309 -0.0051
GBP/CHF 1.26384 1.26608 1.25952 1.26065 -0.0033

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1558 1.1599 1.1634 1.1676 1.1711 1.1752 1.1787
USD/JPY 109.89 110.41 110.69 111.21 111.49 112.02 112.30
GBP/USD 1.2923 1.2953 1.2981 1.3011 1.3038 1.3069 1.3096
USD/CHF 0.9649 0.9667 0.9679 0.9696 0.9708 0.9726 0.9738
USD/CAD 1.2824 1.2863 1.2921 1.2960 1.3018 1.3056 1.3115
EUR/JPY 127.53 128.46 128.98 129.91 130.43 131.36 131.88
GBP/JPY 142.62 143.49 143.93 144.80 145.24 146.10 146.54
CHF/JPY 113.32 113.87 114.18 114.72 115.03 115.58 115.89
AUD/JPY 78.94 79.70 80.15 80.91 81.36 82.12 82.57
EUR/GBP 0.8911 0.8931 0.8950 0.8970 0.8989 0.9009 0.9028
EUR/CHF 1.1219 1.1260 1.1285 1.1326 1.1350 1.1391 1.1416
GBP/CHF 1.2515 1.2555 1.2581 1.2621 1.2646 1.2686 1.2712

 

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.