27 Nov 2018

FOREX Newsletter

FOREX Newsletter

November 27, 2018

 

Pulse of the Market

·      The U.S will publish CB Consumer Confidence, which is forecast to dip to 136.2 points

·      The euro gained against the dollar today on signs that Italy may cut its budget deficit target

·      Japanese Flash Manufacturing PMI dipped to 51.8, shy of the estimate of 53.0

·      The Pound steadied yesterday after Britain sealed a deal with the European Union

The Dollar inched down yesterday amid geopolitical tensions as investors pause ahead of a planned meeting between U.S.-China leaders later this week. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.04% to 96.785, retreating from one-week highs of 96.96 reached overnight. Trade worries weighed on the greenback, as investors wait for the G20 summit in Argentina on Friday. U.S President Donald Trump and Chinese President Xi Jinping are expected to meet on the sidelines to discuss a possible trade deal. The euro pared back earlier gains the dollar, with EUR/USD rising 0.12% to 1.1350, boosted by news that disagreements between Rome and Europe could be resolved. Italian Deputy Prime Minister Matteo Salvini indicated that his government could lower its borrowing targets, which the European Commission had said is against EU fiscal rules. Broader optimism over the euro was also reflected in the latest weekly positioning data, where long dollar positions have been declining slightly for the week ending November 16. The pound was also higher, with GBP/USD up 0.20% to 1.2839. On Sunday, EU leaders approved the terms of the UK’s withdrawal from the bloc, the Brexit deal will have to pass a vote in the British parliament in early December. The dollar was higher against the safe-haven Japanese yen, with USD/JPY rising 0.41% to 113.43. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. The Canadian dollar strengthened against its U.S. counterpart on Monday, paring some of last week’s decline, as oil prices and stocks rallied. Stocks were boosted by robust sales in the holiday season, after a steep selloff on Wall Street in the previous session. Canada exports many commodities, including oil, and runs a current account deficit, so its economy could benefit from an improved outlook for the global flow of trade or capital. The price of oil recovered some of the previous session’s near-7 per cent fall. U.S crude prices were up 2.7 per cent at $51.77 a barrel. The loonie gained despite a report that General Motors Co. plans to announce it will significantly cut car production in North America and stop building some low-selling car models.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  German Retail Sales (YoY) (OCT) Medium     -2.6%
11:00 U.K CBI Reported Sales (NOV) Low   10 5
14:00 U.S House Price Index (MoM) (SEP) Medium   0.4% 0.3%
14:00 U.S House Price Purchase Index (QoQ) (3Q) Medium     1.1%
14:00 S&P CoreLogic CS 20-City (MoM) SA (SEP) Medium   0.25% 0.09%
14:00 S&P/Case-Shiller Composite-20 (YoY) (SEP) Medium   5.3% 5.49%
14:00 S&P/Case-Shiller US Home Price Index (YoY) (SEP) Medium     5.77%
15:00 U.S Consumer Confidence Index (NOV) High   136.0 137.9
15:00 U.S Conf. Board Present Situation (NOV) Medium     172.8
15:00 U.S Conf. Board Expectations (NOV) Low     114.6
19:30 U.S Fed’s Bostic, Evan and George Speak on Panel Low      
20:00 RBNZ Publishes Financial Stability Report Medium      

 

Euro

The single currency gained against the dollar on signs that Italy may cut its budget deficit target to satisfy the European Union, and as a rebound in oil prices helped to improve risk sentiment. The Euro gained despite data showing that German business morale fell by more than expected in November as the country’s exporters get caught up in a trade dispute. Overall, the EUR/USD traded with a low of 1.1323 and a high of 1.1382 before closing the day around 1.1326 in the New York session.

 

Yen

The Japanese Yen pair ticked higher yesterday. On the release front, Japanese Flash Manufacturing PMI dipped to 51.8, shy of the estimate of 53.0. This marked a 4-month low. There were no U.S indicators on the schedule. Today, Japan releases BoJ Core CPI, the preferred inflation indicator of the Bank of Japan. Overall, the USD/JPY traded with a low of 112.86 and a high of 113.63 before closing the day around 113.56 in the U.S session.

 

British Pound

The British Pound steadied after Britain sealed a deal with the European Union on quitting the bloc, with the currency’s gains curbed by doubts about whether Prime Minister Theresa May can get the agreement through a divided parliament. Sterling traders are focused on a parliamentary vote on the deal likely to take place in mid-December. Overall, the GBP/USD traded with a low of 1.2794 and a high of 1.2862 before closing the day at 1.2807 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened against its U.S counterpart yesterday, paring some of last week’s decline, as oil prices and stocks rallied. Canada exports many commodities, including oil, and runs a current account deficit, so its economy could benefit from an improved outlook for the global flow of trade or capital.  Overall, USD/CAD traded with a low of 1.3184 and a high of 1.3259 before closing the day at 1.3251 in the New York session.

 

Australian Dollar

The Australian Dollar traded higher earlier in the session yesterday but ended the day slightly lower as the RBA described a deteriorating property market. The local currency last Friday has eased and was on track for its worst weekly performances since early October as a global sell-off in equities took the shine off risk assets. The Australian dollar, often traded as a liquid proxy for global trade prospects. Overall, AUD/USD traded with a low of 0.7222 and a high of 0.7274 before closing the day at 0.7224 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 48 and lies below the neutral zone. In general, the pair has gained 0.53%.

 

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 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 0.53%.

  

Aussie-Yen

Currently, the cross is trading above 14, 50 and 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 0.41%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 51 and lies above the neutral region. On the whole, the pair has lost 0.02%.

 

Sterling-Swiss

This cross is trading above 14 and below 50, 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 43 and lies above the neutral region. In general, the pair has gained 0.04%.

 

Appendix

  

FOREX Closing Prices for November 26, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13336 1.13823 1.13235 1.13266 -0.0007
USD/JPY 112.905 113.632 112.86 113.567 0.6600
GBP/USD 1.28221 1.28623 1.27942 1.28078 -0.0004
USD/CHF 0.99687 0.99915 0.99525 0.99841 0.0009
USD/CAD 1.32231 1.3259 1.31846 1.32518 0.0019
EUR/JPY 128.002 128.895 127.906 128.641 0.6720
GBP/JPY 144.753 145.716 144.626 145.447 0.7700
CHF/JPY 113.216 113.779 113.132 113.72 0.5620
AUD/JPY 81.634 82.35 81.553 81.98 0.3380
EUR/GBP 0.8839 0.88669 0.88344 0.88403 -0.0002
EUR/CHF 1.13044 1.13397 1.13001 1.13091 0.0002
GBP/CHF 1.27817 1.28295 1.27686 1.27869 0.0005

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1247 1.1285 1.1306 1.1344 1.1365 1.1403 1.1424
USD/JPY 112.30 112.58 113.07 113.35 113.85 114.13 114.62
GBP/USD 1.2712 1.2753 1.2781 1.2821 1.2849 1.2890 1.2917
USD/CHF 0.9922 0.9937 0.9961 0.9976 1.0000 1.0015 1.0039
USD/CAD 1.3130 1.3157 1.3205 1.3232 1.3279 1.3306 1.3353
EUR/JPY 127.08 127.49 128.07 128.48 129.06 129.47 130.04
GBP/JPY 143.72 144.17 144.81 145.26 145.90 146.35 146.99
CHF/JPY 112.66 112.90 113.31 113.54 113.96 114.19 114.60
AUD/JPY 80.78 81.16 81.57 81.96 82.37 82.76 83.17
EUR/GBP 0.8795 0.8815 0.8828 0.8847 0.8860 0.8880 0.8893
EUR/CHF 1.1253 1.1277 1.1293 1.1316 1.1333 1.1356 1.1372
GBP/CHF 1.2700 1.2734 1.2761 1.2795 1.2821 1.2856 1.2882

 

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

 

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