18 Июл 2018

FOREX Newsletter

       

FOREX Newsletter

July 18, 2018

Pulse of the Market

·      Fed Chair said strong growth should keep the central bank on track to keep raising interest rates

·      The euro slid against the firmer dollar, with EUR/USD losing 0.2% to trade at 1.1685

·      Prime Minister Theresa May facing threats from both sides of the Brexit divide

·      U.S industrial production rebounded in June, boosted by a sharp rebound in manufacturing

The U.S Dollar rose against its rivals yesterday, as Federal Reserve Chairman Jay Powell gave lawmakers a positive assessment of the economy, and expects to continue raising interest rates gradually. The U.S dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.52% to 94.76. In his semi-annual testimony to Congress yesterday, Powell said the “best way forward” is to continue raising rates, as the job market has strengthened and inflation has moved above the Fed’s 2% target. Powell largely echoed the Fed’s recent comments from its June meeting, when the Fed raised interest rates, and hinted at two further rate hikes for this year. Powell could offer further clues on monetary policy when he testifies before the House Financial Services Committee today. Rate Monitor Tool, 85.6% of traders expects the Fed to hike rates in September, and 56.2% of traders expect the Fed to hike rates again in December. Economic data showing U.S. industrial production rebounded in June, boosted by a sharp rebound in manufacturing, and gains in mining output, had a somewhat muted impact on the greenback. Industrial production – a measure of output at factories, mines and utilities – rose to a seasonally-adjusted 0.6% in June from a revised 0.5% decline the prior month, the Federal Reserve said Tuesday. This was slightly above the 0.5% rise forecast by economists. The Dollar’s move higher was also supported by a fall in both the pound and euro. Sterling came under pressure amid soft UK data and expectations that Prime Minister Theresa May’s Brexit bill could face another challenge in Parliament. The pound was broadly weaker, with GBP/USD falling 0.55% to 1.3164 as fresh political uncertainty weighed ahead of another crunch vote in the UK parliament later in the day, with Prime Minister Theresa May facing threats from both sides of the Brexit divide. On Monday, the International Monetary Fund warned that escalating trade tensions are threatening to derail the economic recovery, adding that financial markets seem complacent to the mounting risk. USD/CAD rose as a rise in expectations for a Bank of Canada rate hike on the back of bullish factory sales data failed to lift the loonie.

 

   

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
08:30 U.K Consumer Price Index (YoY) (JUN) High 2.6% 2.4%
08:30 U.K Retail Price Index (YoY) (JUN) Low 3.5% 3.3%
08:30 U.K House Price Index (YoY) (MAY) Medium 3.7% 3.9%
09:00 Euro-Zone Consumer Price Index (YoY) (JUN) Medium 2.0% 1.9%
11:00 U.S MBA Mortgage Applications (JUL 13) Medium 2.5%
12:30 U.S Housing Starts (MoM) (JUN) Medium -2.2% 5.0%
12:30 U.S Building Permits (MoM) (JUN) Medium 2.2% -4.6%
14:00 U.S Fed Chairman Powell Appears Before House Panel High
14:30 DOE U.S. Crude Oil Inventories (JUL 13) Medium -12633k
18:00 U.S Federal Reserve Releases Beige Book Medium
23:50 Japan Trade Balance (JUN) Medium ¥531.2b -¥578.3b
23:50 Japan Adjusted Merchandise Trade Balance (Yen) (JUN) Low ¥155.0b -¥296.8b

 

 

Euro

The single currency posted gains yesterday. In economic news, there were no events in the Eurozone. The U.S releases manufacturing and housing indicators. Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee. Today, the Eurozone releases Final CPI and the U.S publishes building permits and housing starts. Overall, the EUR/USD traded with a low of 1.1648 and a high of 1.1743 before closing the day around 1.1659 in the New York session.

 

Yen

The Japanese Yen pair traded higher at 112.48 in yesterday’s session ahead of the Federal Reserve Chairman Jerome Powell’s semi-annual testimony on the economy and monetary policy. Overall, the dollar index was weaker against a basket of six major currencies (-0.03%) and is set to post the third consecutive negative day. Overall, the USD/JPY traded with a low of 112.20 and a high of 112.90 before closing the day around 112.86 in the U.S session.

 

British Pound

The British Pound touched a session high of 1.3267 after the Office for National Statistics revised April’s average earnings index (including bonuses) from 2.5% to 2.6%. The pair, though, soon fell later in the day as the BoE chief Mark Carney highlighted during his testimony that a no-Brexit deal could be a risk to interest rates.  Overall, the GBP/USD traded with a low of 1.3067 and a high of 1.3267 before closing the day at 1.3113 in the New York session.

 

Canadian Dollar

The Canadian Dollar was mostly weaker yesterday. The loonie is currently selling off against the US dollar and the Euro. Falling WTI crude oil prices are catching up to the Canadian dollar. Given the lack of significant economic developments from Canada, the loonie traded as a function of broader developments in financial markets. Overall, USD/CAD traded with a low of 1.3108 and a high of 1.3216 before closing the day at 1.3188 in the New York session.

 

Australian Dollar

The Australian Dollar was subdued yesterday as the country’s central bank expressed concern about the impact of high household debt on the economy while the New Zealand dollar maintained recent ranges. The currency is now down more than 5 per cent since the start of the year when it traded above 80 US cents. Overall, AUD/USD traded with a low of 0.7374 and a high of 0.7436 before closing the day at 0.7384 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 68 and lies above the neutral zone. In general, the pair has gained 0.08%.

 

 Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 59 reading and lies above the neutral zone. On the whole, the pair has lost 0.38%.

 

 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 60 reading and lies above the neutral region. In general, the pair has gained 11%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 61 and lies above the neutral region. On the whole, the pair has gained 0.49%.

 

 Sterling-Swiss

This cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 43 and lies below the neutral region. In general, the pair has lost 0.58%.

 

Appendix

 

FOREX Closing Prices for July 17, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.17137 1.17433 1.16487 1.16597 -0.0050
USD/JPY 112.27 112.905 112.206 112.862 0.5950
GBP/USD 1.32324 1.32671 1.30674 1.31133 -0.0120
USD/CHF 0.99661 1.00003 0.99251 0.99994 0.0034
USD/CAD 1.31384 1.32168 1.31086 1.31884 0.0055
EUR/JPY 131.513 131.969 131.433 131.6 0.1060
GBP/JPY 148.579 149.066 147.553 148.014 -0.5650
CHF/JPY 112.622 113.234 112.53 112.834 0.2110
AUD/JPY 83.281 83.571 83.181 83.37 0.0890
EUR/GBP 0.88498 0.8913 0.88382 0.88899 0.0043
EUR/CHF 1.16728 1.16795 1.16379 1.16606 -0.0011
GBP/CHF 1.31897 1.32069 1.30685 1.31134 -0.0076

   

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1530 1.1589 1.1625 1.1684 1.1719 1.1779 1.1814
USD/JPY 111.71 111.96 112.41 112.66 113.11 113.36 113.81
GBP/USD 1.2832 1.2950 1.3031 1.3149 1.3231 1.3349 1.3431
USD/CHF 0.9874 0.9900 0.9950 0.9975 1.0025 1.0050 1.0100
USD/CAD 1.3018 1.3063 1.3126 1.3171 1.3234 1.3279 1.3342
EUR/JPY 130.83 131.13 131.37 131.67 131.90 132.20 132.44
GBP/JPY 145.84 146.70 147.36 148.21 148.87 149.72 150.38
CHF/JPY 111.79 112.16 112.50 112.87 113.20 113.57 113.91
AUD/JPY 82.79 82.98 83.18 83.37 83.57 83.76 83.96
EUR/GBP 0.8773 0.8806 0.8848 0.8880 0.8923 0.8955 0.8997
EUR/CHF 1.1598 1.1618 1.1639 1.1659 1.1681 1.1701 1.1722
GBP/CHF 1.2914 1.2991 1.3052 1.3130 1.3191 1.3268 1.3329

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

 

 

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