06 Jul 2018

FOREX Newsletter

           

FOREX Newsletter

July 06, 2018

 

Pulse of the Market

·      U.S jobs rose less than expected in June reined in the greenback’s recent rally

·      The euro climbed after German industrial orders had a higher-than-expected jump in May

·      Another key Brexit meeting will take place in today’s trading session

·      The British Pound continues to find support and traded higher against the US Dollar

The U.S Dollar moved off its lows against its rivals but remained under pressure amid mixed U.S economic data and a stronger euro ahead of the release of the Federal Reserve’s minutes. The U.S dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.11% to 94.09. ISM nonmanufacturing data for June showed an uptick to 59.1, beating expectations of 58.3. The services sector is a critical component of the US economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP). A duo of reports, meanwhile, showed a mixed backdrop for the U.S. labor market as private payrolls fell short of forecasts, while initial jobless claims were in-line. Private payrolls grew by 177,000 for June, a decline from 189,000 in May, according to a report released Wednesday by ADP and Moody’s Analytics. That missed a economists’ forecast for an increase of 190,000. The U.S. Department of Labor reported yesterday that initial jobless claims for the week ended June 30 came in at a seasonally adjusted 231,000. The subdued post-holiday start for the greenback comes ahead of the minutes of Federal Reserve’s June meeting expected to reveal clues on the central bank’s monetary policy outlook. A rising euro also added pressure on the greenback amid better-than-expected German factory orders and signs that the U.S. was easing its tough stance on tariffs towards European Union carmakers. The U.S. ambassador to Germany reportedly said that President Donald Trump would suspend threats to impose tariffs on cars imported from the EU if the bloc axed duties on U.S cars. The safe-haven yen and Swiss franc were out of favor, however, despite looming U.S. and China trade tariffs expected to take effect today.
Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 Japan Labor Cash Earnings (YoY) (MAY) Medium   0.9% 0.8%
05:00 Japan Coincident Index (MAY) Medium   116.1 117.5
06:00 German Industrial Production n.s.a. and w.d.a. (YoY) (MAY) Medium   1.5% 2.0%
07:30 U.K Halifax House Prices (MoM) (JUN) Low   0.2% 1.5%
08:30 U.K Unit Labor Costs (YoY) (1Q) Medium     2.1%
12:30 Canada Net Change in Employment (JUN) High   20.0k -7.5k
12:30 Canada Unemployment Rate (JUN) High   5.8% 5.8%
12:30 Canada Hourly Earnings Permanent Employees (YoY) (JUN) Medium   3.7% 3.9%
12:30 U.S Change in Non-farm Payrolls (JUN) High   195k 223k
12:30 U.S Change in Private Payrolls (JUN) Medium   190k 218k
12:30 U.S Unemployment Rate (JUN) High   3.8% 3.8%
12:30 U.S Average Hourly Earnings (YoY) (JUN) Medium   2.8% 2.7%
12:30 U.S Average Weekly Hours All Employees (JUN) Medium   34.5 34.5
12:30 U.S Trade Balance (MAY) Medium   -$43.6b -$46.2b
14:00 Canada Ivey Purchasing Managers Index s.a. (JUN) Low     62.5
17:00 Baker Hughes U.S Rig Count (JUL 06) Medium     1047
Euro

 

The single currency climbed half a per cent to near three-week highs following strong German data, though gains were capped before the release of Fed minutes later in the day. German industrial orders bounced back in May with a stronger-than-expected jump after four consecutive monthly drops, as demand from domestic customers picked up. Overall, the EUR/USD traded with a low of 1.1648 and a high of 1.1718 before closing the day around 1.1692 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 trade disputes. Overall, the USD/JPY traded with a low of 110.26 and a high of 110.70 before closing the day around 110.64 in the U.S session.

 

British Pound

The British Pound erased an earlier advance to slip as Chancellor Merkel’s government is said to see the U.K’s Brexit customs plan as unworkable. Sterling fell on the news, which may undermine May’s proposal on how customs will operate ahead of a meeting with her own cabinet. The pound had earlier climbed as BOE Governor said the U.K economy is supporting the case for higher rates. Overall, the GBP/USD traded with a low of 1.3202 and a high of 1.3272 before closing the day at 1.3225 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher against its U.S counterpart yesterday, holding near its strongest in nearly three weeks, as the greenback broadly fell and investors’ hopes rose that European car makers could be spared from U.S. tariffs. Canada runs a current account deficit so its economy could be hurt if the flow of trade or capital slows. Overall, USD/CAD traded with a low of 1.3113 and a high of 1.3158 before closing the day at 1.3132 in the New York session.

 

Australian Dollar

The Australian Dollar ambled its way through yesterday’s trading session, lifting modestly in Asia before giving back those gains in Europe. As has been the case throughout the week, it continues to be highly influenced by the gyrations in the Chinese Yuan. Conflicting reports about China’s intentions with regard to the currency have circulated in the last 36 hours, Overall, AUD/USD traded with a low of 0.7359 and a high of 0.7406 before closing the day at 0.7374 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 53 and lies above the neutral zone. In general, the pair has gained 0.43%.

 

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 48 reading and lies below the neutral zone. On the whole, the pair has gained 0.09%.

  

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 44 reading and lies below the neutral region. In general, the pair has gained 0.20%.

 

 

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 56 and lies above the neutral region. On the whole, the pair has gained 0.36%.

  

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 48 and lies below the neutral region. In general, the pair has lost 0.03%.

 

Appendix

  

FOREX Closing Prices for July 05, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16557 1.17188 1.16484 1.16924 0.0034
USD/JPY 110.487 110.706 110.269 110.645 0.1370
GBP/USD 1.32313 1.32728 1.32022 1.32254 -0.0007
USD/CHF 0.99234 0.99443 0.99082 0.99353 0.0005
USD/CAD 1.31403 1.31581 1.3113 1.31321 -0.0013
EUR/JPY 128.767 129.608 128.552 129.358 0.5540
GBP/JPY 146.241 146.844 145.813 146.35 0.1330
CHF/JPY 111.266 111.641 110.981 111.394 0.0780
AUD/JPY 81.541 81.9 81.242 81.752 0.1600
EUR/GBP 0.88098 0.88558 0.88051 0.88441 0.0032
EUR/CHF 1.15662 1.16173 1.15654 1.16148 0.0040
GBP/CHF 1.31359 1.31671 1.31072 1.31353 -0.0003

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1584 1.1616 1.1654 1.1687 1.1725 1.1757 1.1795
USD/JPY 109.94 110.10 110.37 110.54 110.81 110.98 111.25
GBP/USD 1.3124 1.3163 1.3194 1.3233 1.3265 1.3304 1.3335
USD/CHF 0.9878 0.9893 0.9914 0.9929 0.9950 0.9965 0.9986
USD/CAD 1.3066 1.3089 1.3111 1.3134 1.3156 1.3180 1.3201
EUR/JPY 127.68 128.12 128.74 129.17 129.79 130.23 130.85
GBP/JPY 144.80 145.30 145.83 146.34 146.86 147.37 147.89
CHF/JPY 110.38 110.68 111.04 111.34 111.70 112.00 112.36
AUD/JPY 80.70 80.97 81.36 81.63 82.02 82.29 82.68
EUR/GBP 0.8764 0.8784 0.8814 0.8835 0.8865 0.8886 0.8916
EUR/CHF 1.1529 1.1547 1.1581 1.1599 1.1633 1.1651 1.1685
GBP/CHF 1.3046 1.3077 1.3106 1.3137 1.3166 1.3196 1.3226

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.