28 Nov 2018

FOREX Newsletter

FOREX Newsletter

November 28, 2018

 

  Pulse of the Market

·      The U.S Conference Board’s consumer confidence gauge fell to a reading of 135.7 in November

·      President Trump said the Brexit agreement would hamper trade between the U.S and Britain

·      The British Pound fell after currency markets ignored positive UK data in favour of Brexit fears

·      Japanese officials will be keeping a close eye on the G-20 summit in Argentina later this week

 

The U.S Dollar rose against its rivals yesterday, shrugging off mostly bearish economic data, while a slump in the pound also lifted sentiment. The U.S dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.29% to 97.27. The S&P/Case-Shiller national house price index rose to a seasonally adjusted 0.3% in September, but rose just 5.1% compared to a year before, missing expectations for a 5.3% increase. The Conference Board’s consumer confidence gauge fell to a reading of 135.7 in November from 137.9 in last month, missing economists’ forecast for a reading of 135.9. Consumer sentiment is a leading indicator of consumer spending, which plays a major role in overall economic activity. The dollar was also swayed by remarks from Federal Reserve Vice Chairman Richard Clarida, who continued to back gradual rate hikes and said there were was no agreement on “how close” interest rates were to neutral. A slump in sterling helped the greenback hold gains after President Donald Trump said the Brexit agreement would hamper trade between the United States and Britain. Traders were also eyeing the Bank of England’s report on the economic impact of Brexit today. USD/JPY rose 0.17% to $113.78 as Wall Street rebounded from early-session weakness, reducing demand for safe-haven yen, even as White House chief economic advisor Larry Kudlow reportedly downplayed the prospect of U.S.-China trade deal at an upcoming G20 summit. The Canadian dollar edged lower against its U.S counterpart yesterday as concern about world trade tensions weighed on stocks and boosted the greenback. Canada exports many commodities, including oil, and runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows. The price of oil was supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:01 U.K BRC Shop Price Index (YoY) (NOV) Low     -0.2%
07:00 BOE Financial Stability Report and stress test results Medium      
09:00 Euro-Zone M3 Money Supply (YoY) (OCT) Low   3.5% 3.5%
12:00 U.S MBA Mortgage Applications (NOV 23) Medium     -0.1%
12:00 German GfK Consumer Confidence (DEC) Medium   10.5 10.6
13:30 U.S Advance Goods Trade Balance (OCT) High   -$77.0b -$76.3b
13:30 U.S Wholesale Inventories (MoM) (OCT) Medium   0.4% 0.4%
13:30 U.S Gross Domestic Product Annualized (QoQ) (3Q) High   3.5% 3.5%
13:30 U.S Personal Consumption (3Q) Medium   3.9% 4.0%
13:30 U.S Core PCE (QoQ) (3Q) Medium   1.6% 1.6%
15:00 U.S New Home Sales (MoM) (OCT) Medium   4.0% -5.5%
15:30 U.S Crude Oil Inventories (NOV 23) Medium 578.86k   4851k
17:00 U.S Fed’s Powell Speaks to Economic Club of New York High      
23:50 Japan Retail Trade (YoY) (OCT) Medium   2.7% 2.2%
23:50 Japan Large Retailers’ Sales (OCT) Medium   0.7% 0.4%

Euro

The single currency ceded ground to a resurgent Dollar, even after Italy’s government blinked in its budget standoff with the EU. The U.S Dollar on its front foot following President Donald Trump’s latest threats against China, and as markets grapple with a litany of political and economic risks looming over the Euro outlook. Overall, the EUR/USD traded with a low of 1.1275 and a high of 1.1342 before closing the day around 1.1285 in the New York session.

 

Yen

The Japanese Yen pair ticked higher yesterday. On the release front, Japanese SPPI ticked higher to 1.3%, above the estimate of 1.2%. It was a similar trend for BoJ Core CPI, the preferred inflation indicator for the Bank of Japan. The indicator edged higher to 0.6%, just above the forecast of 0.5%. This marked the highest level in seven months. Overall, the USD/JPY traded with a low of 113.39 and a high of 113.82 before closing the day around 113.77 in the U.S session.

 

British Pound

The British Pound fell against the U.S Dollar after currency markets ignored positive UK data in favor of Brexit fears. The CBI reported better retail trends in its Nov survey but sterling ignored the data and remains soft amid Brexit worries and following the verbal intervention of President Trump in the Brexit debate yesterday. Overall, the GBP/USD traded with a low of 1.2723 and a high of 1.2817 before closing the day at 1.2744 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower against its U.S counterpart yesterday as concern about world trade tensions weighed on stocks and boosted the greenback. The U.S. dollar rose to its highest level in almost two weeks against its major rivals, after President Donald Trump said he would push ahead with tariffs on Chinese goods.  Overall, USD/CAD traded with a low of 1.3233 and a high of 1.3326 before closing the day at 1.3294 in the New York session.

 

Australian Dollar

The Australian Dollar stabilized following an overnight slump yesterday but the outlook is growing more uncertain because commodity price headwinds are now returning to haunt the currency. Iron ore fell by 6% overnight in China, with the hard commodity now in bear market territory, dragging the Aussie down with it. Overall, AUD/USD traded with a low of 0.7197 and a high of 0.7267 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 46 and lies below the neutral zone. In general, the pair has lost 0.18%.

 

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 indicating a bullish stance. The Relative Strength Index is above 44 reading and lies below the neutral zone. On the whole, the pair has lost 0.29%.

  

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 55 reading and lies above the neutral region. In general, the pair has gained 0.24%.

  

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 55 and lies above the neutral region. On the whole, the pair has gained 0.21%.

 

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 38 and lies below the neutral region. In general, the pair has lost 0.48%.

 

Appendix

  

FOREX Closing Prices for November 27, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13259 1.13423 1.12759 1.12859 -0.0041
USD/JPY 113.566 113.824 113.396 113.774 0.2070
GBP/USD 1.28101 1.28179 1.27236 1.27445 -0.0063
USD/CHF 0.9983 1.00017 0.99736 0.99846 0.0000
USD/CAD 1.32498 1.3326 1.32333 1.32942 0.0042
EUR/JPY 128.629 128.824 128.332 128.407 -0.2340
GBP/JPY 145.475 145.554 144.572 145.026 -0.4210
CHF/JPY 113.724 113.963 113.492 113.917 0.1970
AUD/JPY 81.97 82.535 81.793 82.176 0.1960
EUR/GBP 0.88381 0.88857 0.88371 0.88585 0.0018
EUR/CHF 1.13074 1.13228 1.12716 1.1276 -0.0033
GBP/CHF 1.27897 1.27966 1.27071 1.27254 -0.0062

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1194 1.1235 1.1260 1.1301 1.1327 1.1368 1.1393
USD/JPY 113.08 113.24 113.51 113.66 113.93 114.09 114.36
GBP/USD 1.2612 1.2668 1.2706 1.2762 1.2800 1.2856 1.2895
USD/CHF 0.9943 0.9959 0.9972 0.9987 1.0000 1.0015 1.0028
USD/CAD 1.3150 1.3192 1.3243 1.3285 1.3336 1.3377 1.3428
EUR/JPY 127.73 128.03 128.22 128.52 128.71 129.01 129.20
GBP/JPY 143.57 144.07 144.55 145.05 145.53 146.03 146.51
CHF/JPY 113.15 113.32 113.62 113.79 114.09 114.26 114.56
AUD/JPY 81.06 81.43 81.80 82.17 82.54 82.91 83.29
EUR/GBP 0.8787 0.8812 0.8835 0.8860 0.8884 0.8909 0.8932
EUR/CHF 1.1206 1.1239 1.1257 1.1290 1.1309 1.1341 1.1360
GBP/CHF 1.2600 1.2654 1.2689 1.2743 1.2779 1.2833 1.2868

 

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

 

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