02 Jul 2018

FOREX Newsletter

       

FOREX Newsletter

July 02, 2018

 

Pulse of the Market

·      The Greenback had a strong quarter, appreciating against all the major currencies

·      The Euro retested the lower end of June’s range, which is mostly $1.15-$1.18

·      There were only two weeks during the quarter that the Dollar registered a loss against the Yen

·      The Australian Dollar lost 2.2% in the month of June and 3.6% for the quarter

The U.S Dollar held firm versus the yen on Friday after U.S President Donald Trump indicated a softer approach on Chinese investment in U.S. technology companies. The White House announced on Wednesday that it would not be looking to impose the new 25% new limits on Chinese ownership in U.S. tech-related companies, as reports had suggested earlier in the week. Instead, the government would rely on the newly strengthened Committee on Foreign Investment in the United States, or CFIUS, to deal with concerns.   The U.S. Dollar Index, which tracks the greenback against a basket of six major currencies, stood at 95.02, up 0.01%. The index rose to as high as 95.534 on Thursday, the highest level since almost a year ago.  The prospects of rising U.S. interest rates were also cited as supporting the dollar. The yen fell on Friday, with the USD/JPY pair climbed 0.18% to 110.69 as trade tensions between the U.S. and its major trading partners eased somewhat. The greenback had a strong quarter, appreciating against all the major currencies. The Canadian dollar’s 2.25% decline made it the strongest of the other majors and is consistent with the Loonie’s tendency to outperform in a strong US dollar environment. The US dollar trended gently higher against the yen through the second quarter. There were only two weeks during the quarter that the greenback registered a loss. It rose a little more than 4% between the end of March and the end of June, after falling 5.6% in the previous three-month period. Sterling’s nearly 1% bounce ahead of the weekend was not sufficient to avoid the third consecutive weekly loss (-0.4%). The Australian dollar’s nearly 0.7% gain before the weekend cut the weekly loss (~0.5%), but it fell for a third consecutive week. The Aussie lost 2.2% in June and 3.6% for the quarter. It found a base in the second half of last week in the $0.7330 area.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:00 Australia TD Securities Inflation (YoY) (JUN) Medium     2.1%
07:15 Switzerland Retail Sales Real (YoY) (MAY) Medium     2.2%
07:30 Switzerland PMI Manufacturing (JUN) Medium     62.4
07:50 Markit France Manufacturing PMI (JUN) Low      
07:55 Markit/BME Germany Manufacturing PMI (JUN) Low      
08:00 Markit Eurozone Manufacturing PMI (JUN) Low      
08:30 Markit UK PMI Manufacturing s.a. (JUN) Medium     54.4
09:00 Euro-Zone Unemployment Rate (MAY) Medium     8.5%
14:00 U.S Construction Spending (MoM) (MAY) Medium     1.8%
14:00 U.S ISM Manufacturing (JUN) High   57.9 58.7
14:00 U.S ISM Employment (JUN) High     56.3
14:00 U.S ISM Prices Paid (JUN) Medium     79.5
23:50 Japan Monetary Base End of period (JUN) Medium     ¥492.6t
23:50 Japan Monetary Base (YoY) (JUN) Medium     8.1%

 

Euro

The single currency gained in Friday’s trading session after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angela Merkel, but the currency was set to log its best quarterly performance in six quarters. EU accord is helping to boost sentiment in the euro area. Overall, the EUR/USD traded with a low of 1.1556 and a high of 1.1689 before closing the day around 1.1686 in the New York session.

 

Yen

The Japanese Yen pair held firm supported by quarter-end buying as well as an absence of any fresh escalation in trade-related tensions between the United States and its major trading partners. Still, trade worries look set to dominate the market with traders increasingly worried about the impact of Sino-U.S. trade disputes on China’s economy. Overall, the USD/JPY traded with a low of 110.35 and a high of 110.92 before closing the day around 110.69 in the U.S session.

 

British Pound

The British Pound has suffered its worst quarter since the vote to leave the European Union in June 2016 triggered one of the biggest selloffs in the currency’s history. Worries that Britain will run out of time to agree on a deal with the EU for life after Brexit, a resurgent U.S dollar and weakness in the economy have combined to hammer the pound.  Overall, the GBP/USD traded with a low of 1.3067 and a high of 1.3212 before closing the day at 1.3210 in the New York session.

 

Canadian Dollar

The Canadian Dollar hit a two-week high as oil prices rose and after a surprise expansion of the domestic economy in April raised expectations for a BOC interest rate hike next month. Canada’s economy shrugged off the effects of bad weather to post growth of 0.1 per cent in April, and business optimism rose to near record levels in the second quarter. Overall, USD/CAD traded with a low of 1.3128 and a high of 1.3267 before closing the day at 1.3135 in the New York session.

 

Australian Dollar

The Australian Dollar has bounced back and is higher against the greenback, after trading at its lowest level in around 18 months. Economists have lowered their estimates of where the Australian dollar will trade by the end of this year, crystallizing a more bearish turn over the past couple of months in light of a stronger greenback. Overall, AUD/USD traded with a low of 0.7333 and a high of 0.7407 before closing the day at 0.7407 in the New York session.

 

Euro-Yen

 

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 43 and lies below the neutral zone. In general, the pair has gained 1.18%.

 

  

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 35 reading and lies below the neutral zone. On the whole, the pair has gained 1.18%.

 

  

Aussie-Yen

 

 

Currently, the cross is trading below 14, 50 and 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 gained 0.88%.

 

  

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 58 and lies above the neutral region. On the whole, the pair has gained 0.01%.

 

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 32 and lies below the neutral region. In general, the pair has gained 0.25%.

 

Appendix

  

FOREX Closing Prices for June 29, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15666 1.1689 1.15569 1.16867 0.0117
USD/JPY 110.478 110.924 110.355 110.694 0.1870
GBP/USD 1.30759 1.32122 1.3067 1.32106 0.0132
USD/CHF 0.99734 0.99794 0.98921 0.99019 -0.0074
USD/CAD 1.32495 1.32671 1.3128 1.3135 -0.0116
EUR/JPY 127.802 129.446 127.648 129.35 1.5130
GBP/JPY 144.477 146.304 144.319 146.227 1.7020
CHF/JPY 110.741 111.882 110.626 111.813 1.0220
AUD/JPY 81.225 82.011 81.014 81.98 0.7120
EUR/GBP 0.88431 0.8889 0.88343 0.88469 0.0001
EUR/CHF 1.15371 1.15982 1.153 1.1571 0.0030
GBP/CHF 1.30426 1.31159 1.30207 1.30805 0.0032

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1467 1.1512 1.1599 1.1644 1.1732 1.1776 1.1864
USD/JPY 109.82 110.09 110.39 110.66 110.96 111.23 111.53
GBP/USD 1.2969 1.3018 1.3114 1.3163 1.3260 1.3308 1.3405
USD/CHF 0.9782 0.9837 0.9870 0.9924 0.9957 1.0012 1.0044
USD/CAD 1.2947 1.3038 1.3086 1.3177 1.3225 1.3316 1.3365
EUR/JPY 126.39 127.02 128.18 128.81 129.98 130.61 131.78
GBP/JPY 142.94 143.63 144.93 145.62 146.91 147.60 148.90
CHF/JPY 109.74 110.18 111.00 111.44 112.25 112.70 113.51
AUD/JPY 80.33 80.67 81.33 81.67 82.32 82.67 83.32
EUR/GBP 0.8770 0.8802 0.8824 0.8857 0.8879 0.8911 0.8934
EUR/CHF 1.1466 1.1498 1.1535 1.1566 1.1603 1.1635 1.1671
GBP/CHF 1.2934 1.2977 1.3029 1.3072 1.3124 1.3168 1.3219

 

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

 

 

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