15 Nov 2018

FOREX Newsletter

FOREX Newsletter

November 15, 2018

 

Pulse of the Market

·      The dollar fell after inflation data supported the Fed increasing rates at a gradual pace

·      U.S annual core consumer price index (CPI) rose 2.1%, which was less than expected

·      Sterling increased on news that the EU and the UK have reached a draft agreement on Brexit

·      The shared currency edged higher yesteray, but was held back by a row over Italy’s budget

The U.S Dollar continued to give up gains against its rivals yesterday following subdued inflation data. Meanwhile, sterling climbed after UK Prime Minister Theresa May secured support from her Cabinet for a draft Brexit deal. May said that cabinet had backed her Brexit plan, adding it was in the national interest but that there would be difficult days ahead. “The collective decision of cabinet was that the government should agree the draft withdrawal agreement and the outline political declaration,” May said outside her Downing Street residence after a five-hour cabinet meeting. The U.S Dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.41% to 96.75. The Labor Department said yesterday its core consumer price index rose 0.2% last month, in line with economists’ estimates, but for the 12 months through October consumer prices rose 2.1%, lower than forecasts. The subdued inflation report did little to puncture Wall Street’s Federal Reserve theory, with analysts touting further room for prices to increase in the year ahead, keeping the Fed on course to hike rates. While businesses are beginning to see a break on some commodity prices, tariffs and a tight labor market are pushing other costs higher. In the UK, sterling turned positive after the Telegraph initially reported that the prime minister had secured support from cabinet for the deal. The euro rose yesterday as traders monitor the latest developments between the European Union and Britain on the latter’s departure from the economic bloc, and the EU and Italy on the resubmission of the latter’s 2019 budget. Italy re-submitted its draft budget for next year to the European Commission with the same growth and deficit assumptions, but with falling debt, the new draft showed. Euro zone growth rose by 0.2 percent in the third quarter, official data showed, confirming its earlier preliminary flash estimate from Oct. 30.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 Australia Employment Change (OCT) High   20.0k 5.6k
00:30 Australia Unemployment Rate (OCT) High   5.1% 5.0%
01:30 China New Home Prices (MoM) (OCT) Medium     1.0%
09:30 U.K Retail Sales Ex Auto Fuel (YoY) (OCT) Medium   3.4% 3.2%
10:00 Euro-Zone Trade Balance (euros) (SEP) Low     11.7b
13:30 U.S Empire Manufacturing (NOV) Low   20 21.1
13:30 U.S Philadelphia Fed Business Outlook (NOV) Medium   20 22.2
13:30 U.S Retail Sales Advance (MoM) (OCT) High   0.5% 0.1%
13:30 U.S Retail Sales Ex Auto and Gas (OCT) Medium   0.4% 0.0%
13:30 U.S Import Price Index ex Petroleum (MoM) (OCT) Medium   0.0% 0.0%
13:30 U.S Export Price Index (YoY) (OCT) Medium     2.7%
13:30 U.S Initial Jobless Claims (NOV 10) Medium   214k 214k
14:00 Canada Existing Home Sales (MoM) (OCT) Medium   -0.2% -0.4%
16:00 DOE U.S. Crude Oil Inventories (NOV 9) Medium     5783k
16:30 U.S Fed’s Powell Reviews Post-Hurricane Harvey Recovery Efforts High      

 

Euro

The single currency rose yesterday as traders monitor the latest developments between the European Union and Britain on the latter’s departure from the economic bloc, and the EU and Italy on the resubmission of the latter’s 2019 budget. Italy re-submitted its draft budget for next year to the European Commission with the same growth but with falling debt. Overall, the EUR/USD traded with a low of 1.1261 and a high of 1.1346 before closing the day around 1.1307 in the New York session.

 

Yen

The Japanese Yen pair came under selling pressure dragged lower by a sharp reversal in US equities also weighed by a pullback in US Treasury yields after U.S inflation missed market’s expectations. Data released at the beginning of the day showed that the economic growth shrunk in Japan according to Q3 GDP, down 0.3% in the three months to September. Overall, the USD/JPY traded with a low of 113.27 and a high of 113.99 before closing the day around 113.60 in the U.S session.

 

British Pound

The British Pound climbed higher in yesterday’s trading session as investor confidence rose on news Britain had struck a draft divorce deal with the European Union after more than a year of talks. The surge in the euro and sterling led investors to take profits on the US dollar, which retraced from a 16-month high. Overall, the GBP/USD traded with a low of 1.2879 and a high of 1.3070 before closing the day at 1.2988 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher against the U.S Dollar, extending its recovery from a nearly four-month low the day before as oil prices rebounded. The price of oil, one of Canada’s major exports, recouped some of the previous session’s slide on the growing prospect of OPEC and allied producers cutting output at a meeting next month. Overall, USD/CAD traded with a low of 1.3205 and a high of 1.3261 before closing the day at 1.3239 in the New York session.

 

Australian Dollar

The Australian Dollar handed back earlier gains after official data showed wage pressures remained elusive down under in the third-quarter and Chinese data cast a shadow over the world’s second largest economy. Australian pay packets rose by 0.6% during the three months ending in September, up from a downwardly-revised 0.5% in the second quarter. Overall, AUD/USD traded with a low of 0.7186 and a high of 0.7240 before closing the day at 0.7239 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 issuing a bullish stance. The Relative Strength Index is above 46 and lies below the neutral zone. In general, the pair has lost 0.01%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is 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 0.01%.

 

Aussie-Yen

Currently, the cross is trading above 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 59 reading and lies above the neutral region. In general, the pair has gained 0.05%.

 

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is issuing a bearish signal. The Relative Strength Index is above 35 and lies below the neutral region. On the whole, the pair has gained 0.06%.

 

Sterling-Swiss

This cross is trading above 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 58 and lies above the neutral region. In general, the pair has gained 0.06%.

 

Appendix

  

FOREX Closing Prices for November 14, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.12889 1.13462 1.12616 1.13079 0.0019
USD/JPY 113.804 113.99 113.279 113.601 -0.1960
GBP/USD 1.29731 1.30705 1.28796 1.29889 0.0016
USD/CHF 1.00679 1.01024 1.004 1.00576 -0.0011
USD/CAD 1.32333 1.32616 1.32052 1.32397 0.0008
EUR/JPY 128.48 129.206 128.107 128.48 -0.0180
GBP/JPY 147.629 148.403 146.297 147.561 -0.0090
CHF/JPY 113.003 113.26 112.661 112.905 -0.0780
AUD/JPY 82.138 82.435 81.754 82.159 0.0440
EUR/GBP 0.86984 0.87558 0.86652 0.87053 0.0005
EUR/CHF 1.13667 1.14213 1.13571 1.1379 0.0014
GBP/CHF 1.30634 1.31244 1.29729 1.3065 0.0008

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1180 1.1221 1.1264 1.1305 1.1349 1.1390 1.1433
USD/JPY 112.55 112.91 113.26 113.62 113.97 114.33 114.68
GBP/USD 1.2698 1.2789 1.2889 1.2980 1.3080 1.3171 1.3271
USD/CHF 0.9969 1.0004 1.0031 1.0067 1.0093 1.0129 1.0156
USD/CAD 1.3153 1.3179 1.3209 1.3236 1.3266 1.3292 1.3322
EUR/JPY 126.89 127.50 127.99 128.60 129.09 129.70 130.19
GBP/JPY 144.33 145.31 146.44 147.42 148.54 149.53 150.65
CHF/JPY 112.03 112.34 112.62 112.94 113.22 113.54 113.82
AUD/JPY 81.12 81.44 81.80 82.12 82.48 82.80 83.16
EUR/GBP 0.8571 0.8618 0.8662 0.8709 0.8752 0.8799 0.8843
EUR/CHF 1.1286 1.1322 1.1350 1.1386 1.1415 1.1450 1.1479
GBP/CHF 1.2832 1.2903 1.2984 1.3054 1.3135 1.3206 1.3287

 

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

 

Disclaimer

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